Document:

ENVIRONMENTAL COMPLIANCE AGREEMENT

THIS ENVIRONMENTAL COMPLIANCE AGREEMENT
(“Agreement”) is made as of June ___, 2007, by XLNT VETERINARY CARE INC., a
Delaware corporation (“Obligor”), for the benefit of FIFTH STREET MEZZANINE
PARTNERS II, L.P., a Delaware limited partnership (“Lender”). 

OBLIGOR ENTERS THIS AGREEMENT
on the basis of the following facts, understandings, and intentions: 

A. Lender is making
or continuing an extension of credit to, or other financing arrangements with
XLNT VETERINARY CARE INC., a Delaware corporation (“Borrower”). Such extension
of credit or other financing arrangements, together with any amendments,
replacements, substitutions, extensions or refundings thereof, are hereinafter
referred to as the “Loan”. 

B. In connection
with the Loan, Obligor (who may or may not be Borrower) will undertake or has
undertaken certain obligations to Lender. Said obligations of Obligor to
Lender, together with any amendments, replacements, substitutions, extensions
or refundings thereof, are hereinafter referred to as the “Obligation”. 

C. The term
“Collateral” shall mean any property to which Lender has been granted a
security interest by Obligor, Borrower, or any other person or entity in
connection with the Loan. 

D. The term
“Property” shall collectively mean those certain real properties located in (i)
the County of San Bernardino, State of California, commonly known as 70513
Twentynine Palms Highway, Twentynine Palms and 57185 Twentynine Palms Highway,
Yucca Valley, and more particularly described in Exhibit A-1 attached hereto;
(ii) the County of Santa Clara, State of California, commonly known as 4111 El
Camino Real, Palo Alto, and more particularly described in Exhibit A-2 attached
hereto; and (iii) the County of Riverside, State of California, commonly known
as 30695 Hill Street, Thousand Palms, and more particularly described in
Exhibit A-3 attached hereto.  

E. Lender would not
make the Loan if, as a result, Lender might incur any liability arising with
regard to any Hazardous Substance, as defined in Section 1, below, now or
hereafter present in, on, under or around any part of the Property. Lender
requires that Obligor execute this Agreement as a further assurance against
such liability. 

F. It is the
intention of Lender and Obligor that, as between Lender and Obligor, Obligor
shall be solely responsible for any and all liability arising with regard to
any Hazardous Substance now or hereafter present in, on, under or around any
portion of the Property, and Lender shall under no circumstances have any
liability therefor. Lender and Obligor intend this Agreement to be fully
enforceable to the maximum extent permitted by law. 

NOW THEREFORE, in
consideration of, and as an inducement for, Lender making the Loan and for
other good and valuable consideration, Obligor agrees as follows: 

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1. Definition of Hazardous Substance.
For purposes of this Agreement, a “Hazardous Substance” (any two or more,
“Hazardous Substances”) is defined to mean any substance or material
(including, without limitation, raw materials, building components, wastes, and
the products and byproducts of manufacturing or other activities) which is or
becomes designated, classified or regulated as being “toxic”, “hazardous” or
similarly designated, classified or regulated under any federal, state or local
law, ordinance, rule or regulation. The term “Hazardous Substance” shall
include, without limitation, (i) substances defined as “hazardous substances”
or “toxic substances” for purposes of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. or the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; (ii) substances
defined as “hazardous wastes” or “hazardous substances” for purposes of Section
25117 or Section 25316, respectively, of the California Health and Safety Code;
and (iii) petroleum, flammable explosives, urea formaldehyde insulation,
asbestos and radioactive materials.  

2. Indemnity Regarding Hazardous
Substances. Obligor agrees to indemnify and hold
Lender harmless from and against all liabilities, claims, actions, foreseeable
and unforeseeable consequential damages, costs and expenses (including sums
paid in settlement of claims and all consultant, expert and legal fees and
expenses, including allocated costs of in-house legal and technical services)
or loss directly or indirectly arising out of or resulting from any Hazardous
Substance being present at any time, whether before or after the date of this
Agreement, on or around any portion of the Property, or in the soil,
groundwater or soil vapor on or under any portion of the Property, including
those incurred in connection with any investigation of site conditions or any
clean-up, remedial, removal or restoration work, or any resulting damages or
injuries to the person or property of any third parties or to any natural
resources. Upon demand by Lender, Obligor shall defend any investigation,
action or proceeding alleging the presence of any Hazardous Substance in any
such location, which affects the Property or which is brought or commenced
against Lender, whether alone or together with Obligor or any other person or
entity, all at the cost of Obligor and by counsel and consultants to be
approved by Lender in the exercise of its reasonable judgment. In the
alternative, Lender may elect to conduct its own defense at the expense of
Obligor. 

3. Representation and Warranty Regarding
Hazardous Substances. Before signing this
Agreement, Obligor researched and inquired, or has had an opportunity to research
and inquire, into the previous uses and ownership of the Property. Based on
that due diligence, Obligor represents and warrants that to the best of
Obligor’s knowledge, no Hazardous Substance has been released onto or disposed
of or otherwise is present in, on, under or around the Property, except to the
extent specifically disclosed to Lender in writing by Obligor. 

4. Compliance Regarding Hazardous
Substances. Except for those Hazardous Substances
used in connection with the business presently being conducted on the Property
and listed on Exhibit B, attached hereto, Obligor shall not and shall not
permit any third party to use, generate, manufacture, store, release, discharge
or dispose of any Hazardous Substance in, on, under or about the Property, or
transport any Hazardous Substance to or from the Property without the prior
written consent of Lender, which consent shall not be unreasonably withheld so
long as (i) such use, generation, manufacture, storage, release, discharge or
transport does not arise from a proposed change in the character of the use of
the Property and (ii) Obligor demonstrates to the satisfaction of Lender that
such use, generation, manufacture, storage, release, discharge or transport
will be in full compliance with all laws, ordinances, rules and regulations
governing or applicable to Hazardous Substances. Obligor has complied and shall
comply and cause all occupants of the Property to  

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comply
(including, if necessary, by resort to and diligent pursuit of all available
legal, equitable and administrative remedies and proceedings) with all laws,
ordinances, rules and regulations governing or applicable to Hazardous
Substances, the orders and directives of all governmental authorities having
jurisdiction over the Property as well as the recommendations of any qualified
environmental engineer or other expert which apply or pertain to the Property. 

5. Notices Regarding Hazardous Substances.
Until full performance of the Obligation and repayment of the Loan, Obligor
shall promptly notify Lender if Obligor knows, suspects or believes there may
be any Hazardous Substance on or around the Property, or in the soil,
groundwater or soil vapor on or under the Property, or that Obligor, Borrower
or the Property may be subject to any threatened or pending investigation by
any governmental agency under any law, ordinance, rule or regulation pertaining
to any Hazardous Substance, or may be subject to any claim or litigation by a
third party regarding the presence of a Hazardous Substance. Obligor shall
furnish Lender with copies of any notice, summons, letter, report or other
written communication relating to the presence of Hazardous Substances on or
around the Property within three (3) business days after Obligor’s receipt
thereof. 

6. Remediation Work.
If any investigation, site monitoring, containment, cleanup, removal,
restoration or other remediation work of any kind or nature (the “Remediation
Work”) is or becomes necessary or required pursuant to any applicable federal,
state or local law, ordinance, rule or regulation or the order or directive of
any governmental authority having jurisdiction over the Property, the Hazardous
Substances or the Remediation Work, or recommended by any qualified
environmental engineer or consultant, because of, or in connection with, the
past, present or future presence, suspected presence, release or suspected
release of a Hazardous Substance on or around any portion of the Property or in
the soil, groundwater or soil vapor on or under any portion of the Property,
Obligor shall promptly commence to perform, or cause to be commenced, and
thereafter diligently prosecute to completion, all such Remediation Work. The
Remediation Work will be conducted in accordance with the documents, if any,
identified in Exhibit C, attached hereto, and in full compliance with all
applicable laws, ordinances, rules and regulations, the orders and directives
of all governmental authorities having jurisdiction over the Property, the
Hazardous Substances or the Remediation Work. Obligor shall cause all
Remediation Work to be performed in a good and workman like manner by one or
more qualified environmental engineers or contractors, and under the
supervision of one or more qualified consulting engineers. Obligor’s
obligations with regard to the Remediation Work shall include obtaining a
letter or other written statement from all governmental authorities exercising
jurisdiction over the Property, the Hazardous Substances or the Remediation
Work that no further action is required. Obligor shall pay for all Remediation
Work, including the costs of plans and specifications, utilities, permits,
fees, taxes and insurance premiums in connection therewith, and shall keep the
Property free from all mechanics’ or other liens arising out of the Remediation
Work. Obligor shall keep Lender fully apprised of all developments and findings
during the course of any Remediation Work and shall furnish to Lender, promptly
upon receipt or preparation, such information concerning the Remediation Work
as Lender may request from time to time in order to verify Obligor’s compliance
with this section and to protect Lender’s security, including, without
limitation, copies of all reports, studies, analyses, contracts, manifests,
orders and correspondence. Upon Lender’s request, Obligor shall also furnish
Lender with written confirmation in a form satisfactory to Lender showing that
all contaminated soil and other materials removed from the Property and any
other property affected by the Remediation Work have been properly disposed of
in accordance with all applicable laws, ordinances, rules and regulations and
the 

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orders and
directives of all governmental authorities having jurisdiction over the
Property, the Hazardous Substances or the Remediation Work. Lender shall have
the right, but not the obligation, to participate in any action or proceeding
relating to the presence or suspected presence of any Hazardous Substances in,
on, under or around the Property, or the necessity for or adequacy of any
Remediation Work. Such participation shall be solely for the purpose of
protecting Lender’s security, and shall not impose any liability on Lender or
result in a waiver of any default of Obligor. 

7. Site Visits, Observations and Testing.
Lender and its agents and representatives shall have the right at any
reasonable time to enter and visit the Property for the purposes of observing
the Property, taking and removing soil or groundwater samples, and conducting
tests on any part of the Property. Lender is under no duty, however, to visit
or observe the Property or to conduct tests, and any such acts by Lender shall
be solely for the purposes of verifying Obligor’s compliance with this
Agreement and protecting Lender’s security. No site visit, observation or
testing by Lender shall result in a waiver of any default of Obligor or impose
any liability on Lender. In no event shall any site visit, observation or
testing by Lender be a representation that Hazardous Substances are or are not
present in, on or under the Property, or that there has been or shall be
compliance with any law, regulation or ordinance pertaining to Hazardous
Substances or any other applicable law or regulation. Neither Obligor nor any
other party is entitled to rely on any site visit, observation or testing by
Lender. Lender owes no duty of care to protect Obligor or any other party
against, or to inform Obligor or any other party of, any Hazardous Substances
or any other adverse condition affecting the Property. Lender shall not be
obligated to disclose to Obligor or any other party any report or findings made
as a result of, or in connection with, any site visit, observation or testing
by Lender. In each instance, Lender shall give reasonable notice before
entering the Property or any place Lender is permitted to enter under this
Section. Lender shall make reasonable efforts to avoid interfering with the use
of the Property in exercising any rights provided in this Section. 

8. Subrogation.
Lender shall have full benefit of any and all rights which Obligor now or
hereafter may have against third parties with regard to Hazardous Substances,
whether such rights arise by contract or by operation of law, and shall have
the right, but not the obligation, to enforce such rights for the sole benefit
of Lender directly against any such third party. If the consent of any such
third party is necessary to fully effectuate the foregoing subrogation and
assignment of Obligor’s rights, Obligor shall promptly obtain such consent. 

9. Event of Default.
A breach by Obligor of any representation, covenant, warranty or other
provision of this Agreement shall constitute, at the election of Lender in its
sole discretion, an event of default under the Obligation. 

10. Separate Unsecured Obligations.
This Agreement shall not be secured by any deed of trust securing the
Obligation or the Loan or encumbering all or any portion of the Property. The
liability of Obligor under this Agreement shall not be limited to or measured
by the amount, if any, outstanding under the Loan or Obligation or by reference
to the value of any of the Property or Collateral. No action for the
enforcement of or recovery of damages under this Agreement shall constitute an
“action” within the meaning of Section 726 of the California Code of Civil
Procedure, and no judgment against Obligor in any action hereunder shall
constitute a money judgment or deficiency judgment within the meaning of
Sections 580(a), 580(b), 580(d) or 726 of the California Code of Civil
Procedure, to the extent California law is applicable. The rights of Lender
under this Agreement shall be cumulative and in addition to any other rights
and remedies of Lender under any other document
or instrument or at law or in equity.

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11. Waiver of Suretyship Defenses.
If Obligor is a surety or a guarantor hereunder for any obligation of the
Borrower and the owner of the Property, or either of them (“Principal”),
Obligor expressly waives and relinquishes any and all rights and remedies
Obligor may have or be able to assert by reason of laws relating to the rights
and remedies of sureties or guarantors. Obligor authorizes Lender, without
notice to or consent from Obligor and without affecting Obligor’s liability
under this Agreement, from time to time to (a) modify, waive, extend, renew or
enforce any obligation of Principal; (b) take, hold, enforce, waive, impair,
compromise or release security for the performance of any obligation of
Principal; (c) apply any security and direct the order or manner of sale as
Lender in its sole discretion may determine; (d) release or substitute, in
whole or in part, any person or entity liable for any obligation of Principal;
and (e) settle or compromise any obligation of Principal. Obligor waives (i)
all rights to require Lender to proceed against Principal or any other party,
or proceed against or exhaust any security held by Lender or pursue any other
remedy in Lender’s power, (ii) any defense arising by reason of any disability
or other defense of Principal or by reason of the cessation from any cause of
the liability of Principal; (iii) any defense based on or arising out of any
setoff, defense or counterclaim which Principal may have or claim to have
against Lender, and (iv) any defense arising out of the impairment or loss of
any right of reimbursement or subrogation or any other right or remedy of
Obligor against Principal or any such security, regardless of the cause.
Obligor understands that if Lender forecloses by trustee’s sale on a deed of
trust given by Principal securing the Obligation or the Loan, Obligor might
then have a defense preventing Lender from thereafter enforcing Obligor’s
obligations under this Agreement. This defense arises because the trustee’s
sale would eliminate Obligor’s right of subrogation, and therefore Obligor
would be unable to obtain reimbursement from Principal. Obligor specifically
waives this defense and all rights and defenses that Obligor may have because
the Obligation or the Loan are secured by real property pledged by Principal.
This means, among other things: (1) Lender may exercise any rights or remedies
which Lender has under this Agreement without first foreclosing on any real or
personal property collateral pledged by Principal; and (2) if Lender forecloses
on any real property collateral pledged by Principal securing the Obligation or
the Loan: (A) the amount of the Obligation or the Loan may be reduced only by
the price for which the collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; and (B) Lender may exercise its rights
and remedies under this Agreement, even if Lender, by foreclosing on any real
property collateral pledged by Principal, has destroyed any right Obligor may
have to collect from Principal. This is an unconditional and irrevocable waiver
of any rights and defenses Obligor may have because the Obligation or the Loan
is secured by real property pledged by Principal. These rights and defenses
include, but are not limited to, any rights or defenses based upon Section
580a, 580b, 580d or 726 of the California Code of Civil Procedure, to the
extent California law is relevant, or similar laws in other states. 

12. Survival.
This Agreement and the obligations and liabilities of Obligor hereunder shall
survive and remain in full force and effect following the performance,
repayment or discharge of the Obligation and the Loan, including, without
limitation, by a full or partial reconveyance of all or any portion of the
Property or by amounts paid or credit bid at a foreclosure sale or by discharge
in connection with a deed in lieu of foreclosure. Obligor waives the right to
assert any statute of limitations as a bar to the enforcement of this
Agreement. 

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13. Severability.
If any of Obligor’s obligations hereunder shall be held to be unenforceable,
the remainder of
this Agreement and its application to all obligations other than those with
respect to which it is held unenforceable shall not be affected thereby and
shall remain in full force and effect. All rights, powers and remedies provided
in this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provisions of law and are intended to be
limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable or not entitled to be recorded, registered or filed
under the provisions of any legal requirements. 

14. Attorneys’ Fees.
If Lender is required to enforce Obligor’s obligations hereunder, Obligor shall
pay to Lender all costs incurred, whether or not suit is filed, including, but
not limited to, reasonable attorneys’ fees (including allocated costs of
in-house legal services) and court costs. 

15. Governing Law.
This Agreement shall be deemed to be a contract entered into pursuant to the
laws of the State of New York and shall in all respects be governed, construed,
applied and enforced in accordance with the laws of the State of New York. 

16. Joint and Several Obligations.
If more than one person or entity has executed this Agreement as Obligor, their
liability shall be joint and several. 

17. Successors and Assigns.
All of the provisions hereof shall inure to the benefit of Lender and Lender’s
successors and assigns and be binding upon Obligor and Obligor’s successors and
assigns; provided, however, that no assignment of this Agreement by Obligor
shall release Obligor from Obligor’s obligations hereunder. 

18. No Third-Party Beneficiary.
The terms of this Agreement are for the sole and exclusive protection and
benefit of Lender. No party shall be a third-party beneficiary hereunder and no
provision hereof shall operate or inure to the use or benefit of any third
party. 

19. Entire Agreement.
There are no oral or side agreements between Lender and Obligor affecting this
Agreement, and this Agreement contains the entire agreement of the parties with
regard to the subject matter contained herein. No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing and signed by both Lender and Obligor. 

[Signature Page Follows]

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IN WITNESS WHEREOF,
Obligor has executed this Agreement as of the date first above written with the
intent to be legally bound thereby. 

“Obligor” 

XLNT VETERINARY CARE INC.,
a Delaware corporation 

	
 

	
 

	
 

	
By: 

	
 

	
 

	 

	
 

	
 

	
 

	
Name: 

	
 

	
 

	 

	
 

	
 

	
 

	
Title: 

	
 

	
 

	 

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EXHIBIT A-1

PROPERTY

[See Attached]

EXHIBIT A-2

PROPERTY

[See Attached]

EXHIBIT A-3

PROPERTY

[See Attached]

EXHIBIT B

KNOWN HAZARDOUS SUBSTANCES

List known Hazardous
Substances below or write “None”.

	
 

	
NONE. 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

	
 

	 

EXHIBIT C

REMEDIATION PLANS

Describe Remediation
Plans below or write “None”.

	
 

	
NONE.RIGHT OF FIRST OFFER AND LAST LOOK

          THIS
RIGHT OF FIRST OFFER AND LAST LOOK (this “Agreement”) is entered into as of
June 29, 2007, by and between XLNT VETERINARY CARE, INC., a Delaware
corporation (“XLNT”) and FIFTH STREET MEZZANINE PARTNERS II, L.P., a Delaware
limited partnership, and its successors and assigns (“Fifth Street”). 

RECITALS

          A.
Concurrently herewith, XLNT and Fifth Street are entering into a certain loan
arrangement (the “Loan”) evidenced by, among other documents, instruments and
agreements, a certain Credit Agreement and Note. 

          B.
In consideration of the Loan and for other good and valuable consideration,
XLNT has agreed to grant to Fifth Street, its successors, transferees and
assigns (hereinafter, the “Holder”), a right of first offer and last look with
respect to certain real property to be acquired after the date hereof by XLNT
or its affiliates, subsidiaries, parent entities or their respective
successors, assigns and transferees (the “Owner”), all as further set forth
herein. 

          NOW,
THEREFORE, incorporating the foregoing recitals, the parties further agree as
follows: 

          1.
Defined Terms. As used herein, the following terms have the following
meanings: 

                    (a)
“Better Offer” shall mean such offer has one or more of the following as
compared to the First Offer (as hereinafter defined): (i) a decrease in the
purchase price by more than five percent (5%); (ii) an extension in the due
diligence period or closing date for more than sixty (60) days; (iii) an
increase in the monthly rent charged for the lease back of more than five
percent (5%). 

                    (b)
“Excluded Property” means any real property currently owned by XLNT, which real
property is listed on Exhibit A hereto. 

                    (c)
“Property” means any and all real property hereafter acquired by Owner,
directly or indirectly, in fee, as beneficial owner or contract holder, other
than the Excluded Property. 

                    (d)
“Transfer” shall mean any sale, transfer or disposition of any Property,
including, without limitation, any sale, assignment, lease with an option to
purchase or other transfer or disposition of all or any part of the Property. 

          2.
Right of First Offer. Owner hereby grants to Holder a right of first
offer and last look to purchase any and all Property for which Owner desires to
Transfer and then lease back from such buyer (a “Sale/Leaseback”). Owner shall
not Transfer any portion of any Property in connection with a Sale/Leaseback
without first offering to Holder a first offer to acquire the Property from
Owner in order to provide a Sale/Leaseback on the terms and conditions set
forth 

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herein.
Notwithstanding anything to the contrary contained herein, in the event Owner
desires to dispose of any Property without conducting a Sale/Leaseback (that
is, Owner desires to Transfer the Property and thereafter vacate the Property),
Owner may Transfer such Property without first offering such Property to Holder
(provided, however, nothing herein shall modify any restrictions on
dispositions set forth in any and all loan documents by and between Owner and
Holder, including, without limitation, the loan documents executed in
connection with the Loan). 

          3.
First Offer. Before Owner Transfers or agrees to Transfer any Property
or portion thereof in connection with a Sale/Leaseback (a “Sale Property”),
Owner shall offer in writing to sell the Sale Property for a Sale/Leaseback to
Holder on terms and conditions substantially identical to those proposed for
the sale of the Sale Property to a prospective purchaser (the “First Offer”).
The First Offer shall, at a minimum, include the following information: (i) the
purchase price proposed for the sale of the Sale Property; (ii) the method of
purchase price payment; (iii) the amount of any earnest money deposit; (iv) the
time and location for the close of escrow; (v) the rent, term, and other
material provisions for the leaseback of the Sale Property to Owner; and (vi)
the other material terms and conditions of the proposed sale of the Sale
Property. 

          4.
Acceptance or Rejection of First Offer. Holder shall have ten (10) days
from the date of the First Offer to accept the First Offer by delivering to
Owner such acceptance (the “Exercise Notice”) on or before 11:59 P.M. on the
last day of such 10-day period. If Holder delivers a timely Exercise Notice,
then Holder shall have not less than forty-five (45) days to consummate the
purchase of the Sale Property pursuant to the terms and conditions of the First
Offer. If Holder fails to deliver the Exercise Notice on or before the last day
of such 10-day period or otherwise delivers a rejection notice (in either case,
hereinafter, a “Rejection”), then the First Offer shall be deemed to be
rejected and Owner may thereafter attempt to sell such Sale Property to a
bona-fide, third party purchaser at arms length pursuant to the terms and
conditions set forth in the First Offer or on such other terms so long as such
other terms are not a Better Offer. In the event such Sale Property is not sold
to such a third party purchaser within one hundred twenty (120) days after the
Holder rejects such First Offer (or if Owner otherwise desires to change the
terms of the First Offer), Owner must offer such Sale Property again to Holder
prior to continuing to market the Sale Property and the terms of this Agreement
with respect to such Sale Property shall remain in full force and effect
notwithstanding Holder’s delivery of a Rejection. 

          5.
Last Look/Second Offer. If at any time after Holder delivers a Rejection
with respect to any Sale Property, Owner enters into negotiations with a third
party for the Transfer of such Property and the offer to sell the Sale Property
to such third party is a Better Offer, then Owner shall offer to sell such
Property to Holder on those same terms agreed to by and between Owner and such
third party by giving Holder written notice of the same (the “Second Offer”).
Holder shall have ten (10) days from the date of the Second Offer to accept the
Second Offer by delivering to Owner such acceptance (the “Second Exercise
Notice”) on or before 11:59 P.M. on the last day of such 10-day period. If
Holder fails to deliver the Second Exercise Notice within such 10-day period or
rejects the Second Offer in writing (in either case, hereinafter, a “Second
Rejection”), then Owner shall be free to consummate the transaction with such
identified third party. If Holder delivers a timely Second Exercise Notice,
then Holder shall consummate the transaction with Owner on or before the date
for the close of escrow specified in the Second Offer and pursuant to the terms
and conditions specified in the Second Offer. In the event that 

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Holder
delivers a Second Rejection with respect to such Sale Property and thereafter
Owner does not consummate the proposed Transfer on substantially the same terms
described in the Second Offer with such identified third party, then Holder’s
right of first offer and first look with respect to such Sale Property shall
continue in full force and effect as if no Rejection or Second Rejection was
given. 

          6.
Term; Intention to Enter into a Master Lease Arrangement. The term of
this Agreement shall commence on the date hereof and end on December 31, 2007.
The parties hereto acknowledge and agree that they shall negotiate in good
faith during the term of this Agreement toward the execution of a mutually
acceptable master sale/leaseback agreement. 

          7.
Ownership of Properties; Joinder. Owner hereby represents and warrants
to Holder that XLNT is the fee owner of each of the properties listed on Exhibit
A hereto. In the event that title to any Property acquired by Owner is not
taken in the name of XLNT, such other Owner shall join this Agreement and
execute a joinder agreement in form and substance reasonably satisfactory to
Holder. 

          8.
Notices. Notices given under this Agreement shall be in writing and
shall either be served personally or delivered by reputable overnight courier
(i.e., FedEx). Notices may also effectively be given by facsimile, and such
notices shall be deemed received upon sender’s receipt of a computer generated
confirmation of successful transmission, provided a complete copy of any notice
so transmitted shall also be sent by one of the other approved methods stated
above. Notices delivered by courier shall be deemed received at the earlier of
actual receipt or twenty-four (24) hours after deposit with a reputable
overnight courier service. Notices shall be directed to the parties and
addresses below, provided that a party hereto may change his address for notice
by giving written notice to the other party in accordance with this Section: 

	
 

	
 

	
 

	
 

	
If to any
 Owner:

	
XLNT
 Veterinary Care, Inc. 

	
 

	
 

	
560 South
 Winchester Boulevard, Suite 500 

	
 

	
 

	
San Jose, CA
 95128 

	
 

	
 

	
Attn: Robert
 Wallace, Chairman & CEO 

	
 

	
 

	
Fax: (408)
 236-7421

	
 

	
 

	
 

	
 

	
If to
 Holder:

	
c/o Fifth
 Street Capital, LLC 

	
 

	
 

	
White
 Plains Plaza 

	
 

	
 

	
445 Hamilton
 Avenue, Suite 1103 

	
 

	
 

	
White
 Plains, NY 10601 

	
 

	
 

	
Attn:
 General Counsel 

	
 

	
 

	
Fax: (914)
 328-4214

          9.
Enforcement. Any Transfer or attempted Transfer not in conformity with
the provisions of this Agreement shall be null and void as against Holder and
Holder shall also have all other remedies available to Holder in law or in
equity including, without limitation, at its option, injunctive relief against
such Transfer or attempted Transfer. 

          10.
Successors and Assigns. The rights and obligations of Owner and Holder
under this Agreement shall inure to the benefit of, and bind, their respective
successors and assigns. 

-3-

          11.
Time of Essence. Time is of the essence of each and all of the
agreements, covenants and conditions of this Agreement. 

          12.
Attorneys’ Fees. In the event of any litigation between the parties
arising out of the subject matter of this Agreement, the prevailing party in
such litigation shall be entitled to recover from the other party its
reasonable attorneys’ fees and costs (including expert witness fees and costs of
appeal, if any). 

          13.
Entire Agreement; Modification. This Agreement constitutes the entire
agreement between Owner and Holder with respect to the subject matter hereof
and supersedes all prior offers and negotiations, oral and written. This Agreement
may not be amended or modified in any respect whatsoever except by an
instrument in writing signed by Owner and Holder. 

          14.
Counterparts. This Agreement may be executed in counterparts which, when
taken together, shall constitute a fully executed original. 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

-4-

          IN
WITNESS WHEREOF, Owner and Holder have executed this Agreement as of the date
first above written. 

	
 

	
 

	
 

	
 

	
OWNER:

	
 

	
 

	
 

	
XLNT
 VETERINARY CARE, INC.,

	
 

	
a Delaware
 corporation

	
 

	
 

	
 

	
 

	
   By: 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
Name: 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
Title: 

	
 

	
 

	
 

	 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
HOLDER:

	
 

	
 

	
 

	
 

	
FIFTH STREET MEZZANINE
 PARTNERS II, L.P.,

	
 

	
a Delaware limited
 partnership

	
 

	
 

	
 

	
 

	
By: 

	
Fifth Street Mezzanine
 Partners II GP, LLC,

	
 

	
 

	
a Delaware limited
 liability company,

	
 

	
 

	
its general partner

	
 

	
 

	
 

	
 

	
 

	
By: 

	
 

	
 

	
 

	
 

	 

	
 

	
 

	
Name: Bernard D. Berman

	
 

	
 

	
Title:   Executive Vice
 President and Secretary

-5-

EXHIBIT A

Currently Owned Properties/Excluded
Properties

	
 

	
Stanford Pet
 Clinic 

	
 

	
4111 El
 Camino Real

	
 

	
 Palo
 Alto, California 94306 

	
 

	
High Dessert
 Animal Hospital of 29 Palms

	
 

	
70513 29
 Palm Highway

	
 

	
29 Palms,
 California 92277 

	
 

	
High Dessert
 Animal Hospital of Yucca Valley

	
 

	
57185 29
 Palm Highway

	
 

	
Yucca
 Valley, California 92284

	
 

	
(2 adjacent
 parcels) 

	
 

	
Thousand
 Palms Hospital

	
 

	
30-695 Hill
 Street

	
 

	
Thousand
 Palms, California

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]