Document:

Fourth Amendment to Credit Agreement and Loan Documents and Waiver

 Exhibit 4.4.6 
  
 FOURTH AMENDMENT TO CREDIT AGREEMENT AND LOAN DOCUMENTS AND 
 WAIVER OF DEFAULTS 
  
 This Fourth Amendment to Credit Agreement and Loan Documents and Waiver of Defaults (this “Agreement”) is entered into on September 23, 2004,
effective as of September 1, 2004, by and between COMERICA BANK successor by merger to COMERICA BANK - CALIFORNIA, successor in interest to IMPERIAL BANK, a California banking corporation (“Bank”), and SYNBIOTICS CORPORATION, a California
corporation (“Borrower”). This Agreement is made with reference to the following facts: 
  
 RECITALS 
  
 A. Borrower is currently indebted to Bank pursuant to the Loan Documents (as defined below). Borrower acknowledges that it is in default under the Loan Documents as set forth in Section I.C. below, and Borrower desires, inter
alia, that Bank restructure Borrower’s payment obligations and waive the specified defaults in exchange for: a) Borrower issuing Bank a warrant to purchase Borrower’s capital stock, b) Remington Capital, LLC (“Remington”)
purchasing certain of Borrower’s debt to Bank evidenced by the Loan Documents and c) Borrower receiving at least Two Hundred Thousand Dollars ($200,000) from the issuance of its Series C Preferred Stock to Redwood West Coast, LLC
(“Redwood”) or an affiliate of Redwood and certain other investors. 
  
 B. Bank is willing to waive such defaults and restructure Borrower’s payment obligations only to the degree set forth herein, and only in accordance with the terms and conditions set forth in this Agreement.

  
 C. THIS AGREEMENT ADDRESSES THE DEBTS AND/OR OBLIGATIONS OF
BORROWER TO BANK WHICH ARE FULLY DESCRIBED HEREIN. THIS AGREEMENT DOES NOT PERTAIN TO ANY OTHER INDEBTEDNESS AND/OR OBLIGATIONS OF BORROWER (OR ANY OTHER PARTIES) TO BANK NOT SPECIFICALLY ADDRESSED IN THIS AGREEMENT. ALL TERMS AND PROVISIONS OF ANY
AGREEMENTS BETWEEN BORROWER AND BANK INCLUDING, BUT NOT LIMITED TO, THE LOAN DOCUMENTS, NOT SPECIFICALLY MODIFIED HEREIN, SHALL REMAIN IN FULL FORCE AND EFFECT IN ACCORDANCE WITH THEIR ORIGINAL TERMS. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of (i) the above recitals and the mutual promises contained in this Agreement; (ii) the
execution of this Agreement and all documents, instruments and agreements required to be executed in accordance with this Agreement; (iii) the satisfaction of all Conditions Precedent set forth in Section VIII. below; and (iv) other and further
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed as follows: 
  

 I. Acknowledgment Of The Existing Indebtedness And The Loan Documents. 
  
 A. The Credit Agreement and Other Loan Documents. 
  
 1. On or about April 12, 2000, Borrower and Bank entered into that certain
Credit Agreement (as amended, restated, modified, supplemented or revised from time to time, the “Credit Agreement”), pursuant to which Borrower promised to pay Bank the principal amount of up to Ten Million Dollars ($10,000,000.00),
together with interest on the funds disbursed thereunder at the rate provided for in the promissory notes described below. The Credit Agreement was amended pursuant to a First Amendment to Credit Agreement dated as of April 18, 2000 (“First
Amendment”), by a Second Amendment to Credit Agreement dated as of November 14, 2000 (“Second Amendment”) by a Third Amendment to Credit Agreement and Loan Documents and Waiver of Defaults dated as of January 25, 2002, (“Third
Amendment”), by a Letter Agreement dated September 4, 2003 and by a Forbearance Agreement dated March 29, 2004. 
  
 2. Pursuant to the Credit Agreement, Borrower executed and delivered to Bank a (a) Promissory Note in the principal amount of Six Million Dollars
($6,000,000.00) (as amended, restated, modified, supplemented or revised from time to time, the “Term Note”) and a (b) Revolving Note in the principal amount of Four Million Dollars ($4,000,000.00) (as amended, restated, modified,
supplemented or revised from time to time, the “Revolving Note”). Pursuant to the Second Amendment, Borrower executed and delivered to Bank a new Term Note in the principal amount of Six Million Three Hundred Thousand Dollars
($6,300,000.00). Pursuant to the Third Amendment Borrower executed and delivered to Bank an Amended Promissory Note in the principal amount of Seven Million One Hundred and Thirty Two Thousand Dollars ($7,132,000.00) (The Term Note, Revolving Note
and Amended Promissory Note, as amended, restated, modified, supplemented or revised from time to time, are referred to herein collectively as the “Notes”). 
  
 3. Also pursuant to the Credit Agreement: (a) Borrower executed and delivered to Bank: (i) that certain Commercial Security
Agreement dated as of April 12, 2000 (as amended, restated, modified, supplemented or revised from time to time, the “Commercial Security Agreement”); (ii) that certain Commercial Pledge and Security Agreement dated as of April 12, 2000
(as amended, restated, modified, supplemented or revised from time to time, the “Commercial Pledge Agreement”); (iii) that certain Patent Security Agreement dated as of April 12, 2000 (as amended, restated, modified, supplemented or
revised from time to time, the “Patent Security Agreement”); and (iv) that certain Trademark Security Agreement dated as of April 12, 2000 (as amended, restated, modified, supplemented or revised from time to time, the “Trademark
Security Agreement”); and (b) W3Commerce LLC, a Delaware limited liability company, executed and delivered to Bank a Commercial Security Agreement dated as of April 12, 2000 (as amended, restated, modified, supplemented or revised from time to
time, the “W3C Commercial Security Agreement”). The Credit Agreement, Commercial Security Agreement, Commercial Pledge Agreement, Patent Security Agreement, Trademark Security Agreement and W3C Commercial Security Agreement each grant Bank
a valid, perfected, first priority security interest in the property described therein as collateral (the “Collateral”) securing the Borrower’s obligations to Bank under the Loan Documents. 
  

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 4. On or about April 12, 2000, Borrower executed and delivered to Bank two form UCC-1 financing
statements. Bank filed the financing statements with the office of the Secretary of State of California. Bank has filed the Patent Security Agreement and the Trademark Security Agreement with the United States Patent and Trademark Office.

  
 5. Borrower has delivered to Bank a warrant to purchase stock
dated December 1, 2000 granting to Bank stock warrants in Borrower for a total of 250,000 shares of Borrower’s Common Stock, on terms and conditions more fully set forth therein. 
  
 6. The documents referenced above and all documents, security agreements and written amendments, notes and so forth related
thereto are hereinafter collectively referred to as “Loan Documents.” Upon execution and delivery of the New Promissory Notes (as defined below) such New Promissory Notes shall be deemed to be Loan Documents. All capitalized terms not
defined herein shall have the meaning described in the Loan Documents. 
  
 7. The Borrower acknowledges that the Loan Documents constitute duly authorized, valid, binding, fully perfected and continuing agreements and obligations of Borrower to Bank, enforceable in accordance with their respective terms; and that
Borrower has no claims, cross-claims, counterclaims, setoffs or defenses of any kind or nature which would in any way reduce or offset its obligations to Bank under the Loan Documents as of the date of this Agreement. 
  
 B. Existing Indebtedness. Borrower and Bank acknowledge and agree that
the current outstanding principal balance, plus all accrued and unpaid interest through August 31, 2004 and all outstanding fees and expenses owed to Bank under the Loan Documents is Four Million Four Hundred Seventy Two Thousand Four Hundred
Sixteen and 78/100 Dollars ($4,472,416.78) (the “Existing Indebtedness”). The Existing Indebtedness shall be evidenced by the New Promissory Notes (defined below). All attorneys’ fees and costs incurred by Bank and Borrower in the
preparation and execution of this Agreement shall be borne by each of the respective parties. 
  
 C. Defaults Under Credit Agreement and Other Loan Documents; Remedies. Borrower acknowledges and agrees that Borrower is in default under the terms and conditions of the Loan Documents in that, inter
alia, Borrower failed to: a) pay to Bank all amounts of principal plus interest owing under the Loan Documents which are due in full, and b) maintain compliance with financial covenants (collectively, the “Defaults”). Borrower
acknowledges and agrees that but for this Agreement, the Bank is fully entitled to exercise all of its rights and remedies under the Loan Documents, including but not limited to foreclosing on its Collateral. Borrower has no defense at law or
equity, including the right of setoff, to the Bank’s claims for repayment of the Existing Indebtedness. 
  
 D. Borrower’s Plan. Borrower and its affiliate, Remington Capital, LLC (“Remington”), have requested that Bank enter into this
Agreement and certain related agreements in order to restructure the Existing Indebtedness and sell a portion of the Existing Indebtedness to Remington. Bank has agreed to restructure the Existing Indebtedness pursuant to such request by Borrower
and Remington and has agreed to sell a portion thereof to Remington pursuant to this Agreement and a Loan Purchase Agreement dated as of the date 
  

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 hereof. Simultaneous with the effectiveness of this Fourth Amendment to Credit Agreement, Comerica Bank will sell Term
Loan B to Remington pursuant to a Loan Purchase Agreement dated as of the date hereof. 
  
 II. Limited Scope of Agreement. Nothing contained in this Agreement shall be interpreted as or be deemed a release or a waiver by Bank of any of the terms and conditions of the Loan Documents, or any other documents, instruments and
agreements between the parties hereto except as specifically provided in this Agreement. Unless specifically modified herein, all other terms and provisions of the Loan Documents shall remain in full force and effect in accordance with their
original terms, and are hereby ratified and confirmed in all respects. This Agreement does not constitute a waiver or release by Bank of any obligations between Borrower and Bank, or a waiver by Bank of any defaults by Borrower under the Loan
Documents, unless expressly so provided herein, nor between Bank and any other person or entity. The Bank has no duty to advance any funds under the Loan Documents. 
  
 III. Waiver of Defaults. Subject to, and effective upon, satisfaction of the Conditions Precedent set forth in section VIII. hereof:

  
 A. Bank hereby waives all past defaults, including without
limitation those described in Section I.C. of this Agreement. 
  
 B. Borrower acknowledges and agrees that Bank’s waiver of Defaults set forth immediately above concerns only Borrower’s Defaults identified in Section I.C. hereof as existing as of the date of execution of this Agreement
(“Existing Defaults”), but not as to any defaults which may arise in the future, or which are unknown to Bank, or which are not specified in Section I.C. hereof. 
  
 IV. Amendments to Credit Agreement and Other Loan Documents. Subject to, and effective upon, satisfaction of the Conditions Precedent
set forth in section VIII. hereof: 
  
 A. Section 1.01 of the
Credit Agreement specifying the Term Loan Commitment is deleted and replaced with the following: 
  
 “1.01 Term Loan Commitment. Subject to the terms and conditions of this Agreement, Borrower’s Existing Indebtedness shall be consolidated
into, and evidenced by, two New Promissory Notes in the forms attached hereto as Exhibit A (“New Promissory Note A”) and Exhibit B (“New Promissory Note B” and together with New Promissory Note A the, “New Promissory
Notes”). The principal amount of New Promissory Note A shall be Five Hundred Ninety Nine Thousand Dollars ($599,000.00) and shall hereafter evidence Term Loan A. The principal amount of New Promissory Note B shall be equal to Three Million
Eight Hundred Seventy Three Thousand Four Hundred Sixteen and 78/100 Dollars ($3,873,416.78) and shall hereafter evidence Term Loan B. The interest rate, maturity date and other terms of Term Loan A and Term Loan B (collectively, the “Term
Loans”) are set forth in the New Promissory Notes.” 
  

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 B. Section 4.07 of the Credit Agreement is hereby amended in its entirety to read as follows: 

 
 “4.07 Tangible Net Worth. Maintain at all times a
consolidated Tangible Net Worth (defined as stockholder’s equity less any value for goodwill, trademarks, patents, copyrights, organization expense and other similar intangible items, and any amounts due from stockholders, officers and
affiliates) plus Subordinated Debt, meaning debt subordinated to the obligations of Borrower to Bank, in form and substance satisfactory to Bank, of at least a) negative Four Hundred Thousand Dollars (-$400,000.00) through December 31, 2004, and b)
negative Eight Hundred Thousand Dollars (-$800,000.00) thereafter.” 
  
 C. Section 4.16 of the Credit Agreement is hereby amended in its entirety to read as follows: 
  
 “4.16 Asset Sales. Borrower shall pay to Comerica on the first Business Day following Borrower’s receipt thereof, seventy percent (70%)
of the net cash proceeds derived from each and all of its asset sales occurring outside the ordinary course of business; provided, however, in accordance with Section 5.05 hereof Borrower shall not conduct or consummate any asset sales unless or
until the prior written consent of Comerica has been obtained. Comerica shall apply such net cash proceeds first toward the remaining scheduled principal reduction payments on Term Loan A in inverse order of their maturity, and second toward any
accrued interest or other expenses due under Term Loan A. Provided there are no Events of Default existing hereunder, any net cash proceeds on the sale of assets not payable to Comerica hereunder shall be retained by Borrower for working
capital.” 
  
 D. Section 5.05 of the Credit Agreement is
amended by adding the following to the existing text: 
  
 “Notwithstanding the foregoing, nothing in this Agreement shall prohibit, restrict or otherwise limit Borrower’s right to issue additional shares of either preferred stock or common stock in exchange for cash or other valuable
consideration so long as Redwood and its affiliates own or control at least fifty percent (50%) of the fully diluted shares of Borrower.” 
  
 E. Section 5.07 of the Credit Agreement is hereby amended in its entirety to read as follows: 
  
 “5.07 Operating Lease Expenditures. Make or incur obligations
for operating leases of personal property in excess of Two Hundred Thousand Dollars ($200,000) in any fiscal year.” 
  
 F. Section 5.08 of the Credit Agreement is hereby amended in its entirety to read as follows: 
  
 “5.08 Dividends. Until Term Loan A is paid in full, declare or pay any
dividends or make any other distributions on any of its capital stock now outstanding or hereafter issued or purchase, redeem or retire any of such stock other than in dividends or distributions payable in Borrower’s capital stock. 

 
 G. Sections 6.04 and 6.06 of the Credit Agreement are hereby deleted in
their entirety 
  

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 H. Section 6.05 of the Credit Agreement is hereby amended by adding the following to the existing text:

  
 “Notwithstanding the foregoing, a judgment, writ or
warrant of attachment for the benefit of Barnes-Jewish Hospital based on the existing amount Borrower owes to such entity as of the date hereof would not result in an Event of Default hereunder.” 
  
 I. Section 6.12 of the Credit Agreement is hereby amended in its entirety to
read as follows: 
  
 “6.12 Warrant Agreement. Failure
of Borrower to execute documents granting each of Comerica Bank and Remington Capital, LLC a warrant to purchase 250,000 shares of Borrower’s Common Stock in the form previously agreed to by Bank and Borrower.” 
  
 J. Section 7.11 is hereby added to the Credit Agreements as follows:

  
 “BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.” 
  
 K. Section 7.12 of the Credit Agreement is hereby amended in its entirety to read as follows: 
  
 “7.12 JUDICIAL REFERENCE. 
  
 (a) If and only if the jury trial waiver set forth in Section 7.11 of this
Agreement is invalidated for any reason by a court of law, statute or otherwise, the reference provisions set forth below shall be substituted in place of the jury trial waiver. So long as the jury trial waiver remains valid, the reference
provisions set forth in this Section shall be inapplicable. 
  
 (b) Each controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement, any security agreement executed by Borrower in favor of Bank, any note executed by Borrower in favor of
Bank or any other document, instrument or agreement executed by Borrower with or in favor of Bank (collectively in this Section, the “Loan Documents”), other than (i) all matters in connection with nonjudicial foreclosure of security
interests in real or personal property; or (ii) the appointment of a receiver or the exercise of other provisional remedies (any of which may be initiated pursuant to applicable law) that are not settled in writing within fifteen (15) days after the
date on which a party subject to the Loan Documents gives written notice to all other parties that a Claim exists 
  

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 (the “Claim Date”) shall be resolved by a reference proceeding in California in accordance with the provisions
of Section 638 et seq. of the California Code of Civil Procedure, or their successor sections (“CCP”), which shall constitute the exclusive remedy for the resolution of any Claim concerning the Loan Documents, including whether such Claim
is subject to the reference proceeding. Except as set forth in this section, the parties waive the right to initiate legal proceedings against each other concerning each such Claim. Venue for these proceedings shall be in the Superior Court in the
County where the real property, if any, is located or in a County where venue is otherwise appropriate under state law (the “Court”). By mutual agreement, the parties shall select a retired Judge of the Court to serve as referee, and if
they cannot so agree within fifteen (15) days after the Claim Date, the Presiding Judge of the Court (or his or her representative) shall promptly select the referee. A request for appointment of a referee may be heard on an ex parte or expedited
basis. The referee shall be appointed to sit as a temporary judge, with all the powers for a temporary judge, as authorized by law, and upon selection should take and subscribe to the oath of office as provided for in Rule 244 of the California
Rules of Court (or any subsequently enacted Rule). Each party shall have one peremptory challenge pursuant to CCP §170.6. Upon being selected, the referee shall a) be requested to set the matter for a status and trial-setting conference within
fifteen (15) days after the date of selection and b) if practicable, try any and all issues of law or fact and report a statement of decision upon them within ninety (90) days of the date of selection. The referee will have power to expand or limit
the amount of discovery a party may employ. Any decision rendered by the referee will be final, binding and conclusive, and judgment shall be entered pursuant to CCP §644 in any court in the State of California having jurisdiction. The parties
shall complete all discovery no later than fifteen (15) days before the first trial date established by the referee. The referee may extend such period in the event of a party’s refusal to provide requested discovery for any reason whatsoever,
including, without limitation, legal objections raised to such discovery or unavailability of a witness due to absence or illness. No party shall be entitled to “priority” in conducting discovery. Either party may take depositions upon
seven (7) days written notice, and shall respond to requests for production or inspection of documents within ten (10) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee
whose decision shall be final and binding upon the parties. Pending appointment of the referee as provided herein, the Superior Court is empowered to issue temporary and/or provisional remedies, as appropriate. 
  
 (c) Except as expressly set forth herein, the referee shall determine the
manner in which the reference proceeding is conducted including the time and place of all hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. Except for trial,
all proceedings and hearings conducted before the referee shall be conducted without a court reporter unless a party requests a court reporter. The party making such a request shall have the obligation to arrange for and pay for the court reporter.
Subject to the referee’s power to award costs to the prevailing party, the parties shall equally bear the costs of the court reporter at the trial and the referee’s expenses. 
  
 (d) The referee shall determine all issues in accordance with existing California case and statutory law. California rules
of evidence applicable to proceedings at law will apply to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, to provide all temporary and/or provisional remedies and to enter equitable orders that
shall be binding upon the parties. At the close of the reference proceeding, the 
  

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 referee shall issue a single judgment at disposing of all the claims of the parties that are the subject of the
reference. The parties reserve the right (i) to contest or appeal from the final judgment or any appealable order or appealable judgment entered by the referee and (ii) to obtain findings of fact, conclusions of laws, a written statement of
decision, and (iii) to move for a new trial or a different judgment, which new trial, if granted, shall be a reference proceeding under this provision. 
  
 (e) If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the
parties that would otherwise be determined by the reference procedure herein described will be resolved and determined by arbitration conducted by a retired judge of the Court, in accordance with the California Arbitration Act §1280 through
§1294.2 of the CCP as amended from time to time. The limitations with respect to discovery as set forth in this Section shall apply to any such arbitration proceeding.” 
  
 L. A new Section 7.13 is hereby added to the Credit Agreement as follows: 
  
 “7.13 After the date hereof and until such time as Term Loan A is paid
in full, any modifications or amendments to the Loan Documents shall require the written consent of both Lenders and Borrower.” 
  
 M. The definition of “Collateral” in the Commercial Pledge Agreement is hereby amended to add the following: 
  
 “308,750 shares of Synbiotics Europe SAS” 
  
 N. All references in the Loan Documents to the “Note”, the
“Promissory Note” or the “Amended Promissory Note” (singular or plural), other than such references in this Agreement, shall include the New Promissory Notes. All references in the Loan Documents to the “Loan Documents”
shall mean the Loan Documents including this Agreement and the New Promissory Notes. All references in the Loan Documents to the “Related Documents” shall mean the Related Documents including this Agreement and the New Promissory Notes.
All references in the Loan Documents to the “Indebtedness” shall include the indebtedness owing under the New Promissory Notes. 
  
 O. All references in the Credit Agreement, the Commercial Security Agreement, the Commercial Pledge Agreement and the W3C Commercial Security Agreement to
the “Lender” or “Bank” are hereby replaced with the term “Lenders” and the term “Lenders” shall mean Comerica Bank, successor by merger to Comerica Bank - California, successor in interest to Imperial Bank, a
California banking corporation and Remington Capital, LLC, an Ohio Limited Liability Company. Once Term Loan A is paid in full, the term “Lenders” will be automatically replaced with the term “Lender” and the term
“Lender” shall then mean Remington Capital, LLC, an Ohio Limited Liability Company. 
  
 P. All references in the Patent Security Agreement and the Trademark Security Agreement to the “Grantee” are hereby replaced with the term “Grantees” and the term “Grantees” shall mean
Comerica Bank, successor by merger to Comerica Bank - California, successor in interest to Imperial Bank, a California banking corporation and Remington Capital, LLC, an Ohio Limited Liability Company. 
  

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 V. Other Covenants. 
  
 A. Borrower shall not make any payments or transfer any consideration to Redwood or any affiliate of Redwood not authorized by this Agreement or consented
to by Bank, in writing, in its sole and absolute discretion. 
  
 B. Except as described in Paragraph V.C. below, Borrower shall not make any payments or transfer any consideration to any affiliates of Redwood (except for Remington) unless such affiliates have consented to this Agreement in the form
attached as Exhibit C and/or Exhibit D. 
  
 C. Subject to the
foregoing, Borrower may pay Redwood and /or its affiliates fees for management services in a total amount not exceeding $15,000 plus reimbursement of reasonable out-of-pocket expenses per month, provided, however, Borrower shall not pay any amounts
to Redwood and/or its affiliate for management services while there is an Event of Default under this Agreement or any condition, act or event which, with the passage of time or the giving of notice or both would constitute an Event of Default under
this Agreement. 
  
 D. Borrower hereby authorizes Bank to collect
all amounts due Bank under any of the Loan Documents by charging Borrower’s accounts at Bank. 
  
 E. Borrower shall provide to Bank all documents, instruments and agreements that Bank may reasonably request. 
  
 VI. Danam Note. Borrower has pledged a note from Danam Acquisition (“Danam”)
to Bank and payments from Danam have been sent directly to Bank and applied to reduce Borrower’s outstanding obligations to Bank. So long as no Uncured Default exists under the Credit Agreement, Bank will transfer payments from Danam to
Borrower’s DDA account held at Bank. 
  
 VII. Affirmative Covenants.

  
 A. In addition to any covenants, which exist in the Loan
Documents, Borrower shall immediately give written notice to Bank in reasonable detail of: 
  
 1. Any change in the name of Borrower, or any company or partnership in which Borrower is a principal or retains a majority interest. Borrower shall give Bank thirty days prior written notification of any such change;

  
 2. Any change in the state of Borrower’s incorporation,
or relocation of Borrower’s chief executive office. Borrower shall give Bank thirty days prior written notification of any such change or relocation; 
  
 3. Any change in the present location of the Collateral referred to herein; 
  

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 4. The occurrence of any Event of Default (as defined in Section XI. below), or any condition, event or
act which, with the giving of notice or the passage of time or both, would constitute an Event of Default under this Agreement; 
  
 5. Any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through
liability or property damage, or through fire, theft or other cause affecting the Collateral in excess of an aggregate sum of $100,000.00. 
  
 B. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be
requested by Bank to effect the purposes of this Agreement. 
  
 VIII.
Conditions Precedent. This Agreement shall not be binding upon Bank (including waiver of defaults and the restructuring of Borrower’s payment obligations) unless and until each of the following conditions precedent (“Conditions
Precedent”) are met, or are waived in writing by Bank: 
  
 A. Borrower shall have timely complied with and performed all of the acts and/or conditions specifically identified as conditions precedent in this Agreement; 
  
 B. Borrower shall have sold at least $200,000 of Series C Preferred Stock, which funds should be in Borrower’s accounts
at Comerica; 
  
 C. Borrower shall have duly executed and
delivered to Bank the New Promissory Notes in the form attached hereto as Exhibit A and Exhibit B; 
  
 D. Bank shall have received a Loan Purchase Agreement and Subordination Agreement duly executed by Remington; 
  
 E. Redwood shall have duly executed and delivered to Bank a consent in the
form hereto as Exhibit C; 
  
 F. Bank shall have received such
other documents, instruments and agreements, and all necessary internal approvals as Bank shall have requested prior to execution of this Agreement; and 
  
 G. Borrower shall have executed and delivered to Bank certified copies of corporate resolutions authorizing the execution of this Agreement, certificates
of incumbency, good standing, and such other matters as Bank in its sole and absolute discretion may require. 
  
 IX. Release of Claims. 
  
 As additional consideration for Bank to enter into this Agreement, Borrower, for itself, its executors, administrators, general partners, limited partners, employees, representatives, shareholders, predecessors, subsidiaries and/or
affiliates, parents, heirs, trustees, trustors, beneficiaries, successors-in-interest, transferees, assigns, officers, directors, managers, servants, employees, insurers, trustors, trustees, underwriters, successors, attorneys, and agents, now and

  

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 in the future, and all persons acting by, through, under or in concert with Borrower, hereby releases and discharges
Bank, and Bank’s past, present and future administrators, affiliates, agents, attorneys, directors, employees, executors, heirs, officers, parents, partners, predecessors, representatives, shareholders, subsidiaries and successors, and each of
them; and each of their respective administrators, affiliates, agents, assigns, attorneys, directors, employees, executors, heirs, officers, parents, partners, predecessors, representatives, shareholders, subsidiaries and successors, and each of
them; and all persons acting by, through, under or in concert with one or more of them, from any liabilities or claims arising out of, related to or in any connected any acts or omissions of Bank relating in any way to the Loan Documents, this
Agreement (except for matters relating to the performance of this Agreement following the date of its execution) and Borrower’s financial relationship with Bank and its predecessors-in-interest beginning of time through and including the date
of execution of this Agreement (collectively, “Released Matters”). 
  
 X. Representations and Waivers Concerning Release Provisions. 
  
 Borrower understands and has been advised by its legal counsel of the provisions of Section 1542 of the California Civil Code, which provides as follows: 
  
 A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his settlement with the debtor. 
  
 Borrower understands and hereby waives the provisions of California Civil Code Section 1542 and declares that it realizes it may have damages Borrower presently knows nothing about and that, as to them, Bank has been
released pursuant to these release provisions. Borrower also declares that it understands that Bank would not agree to enter into this Agreement if the release provisions set forth above did not cover damages and their results which may not yet have
manifested themselves or may be unknown to or not anticipated at the present time by Borrower. 
  
 Borrower represents and warrants that Borrower is the owner of the claims hereby compromised and that Borrower has not heretofore assigned or transferred, nor purported to assign or transfer, to any person or entity
(“Person”) any of the Released Matters. Borrower agrees to indemnify and hold harmless Bank from all liabilities, claims, demands, damages, costs, expenses, and attorneys’ fees incurred by Bank as the result of any Person asserting
any such assignment or transfer of any rights or claims. 
  
 XI. Events of
Default. In addition to any other Events of Default set forth in this Agreement or the Loan Documents, an “Event of Default” shall exist under this Agreement and under the Loan Documents if any one or more of the following events
occur: 
  
 A. All of the Conditions Precedent set forth in
Section VIII. hereof are not fully satisfied or waived, each in Bank’s sole and absolute discretion, on or before October 1, 2004; or 
  
 B. Borrower shall fail to pay any payment as provided herein within five (5) days of its due date, except that a payment default under Term Loan B shall
not constitute a Default or an Event of Default with respect to Term Loan A; or 
  

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 C. Any representation or warranty made under or in connection with this Agreement, or any certificate or
statement furnished or made to Bank pursuant thereto, shall prove to be untrue or misleading in any material respect as of the date on which such representation or is made; or 
  
 D. Borrower shall take any action to the effect that, or make any claim that any Loan Document, including without limitation
this Agreement, is/are not legal, valid, binding agreements enforceable against any party executing same; or attempt in any way to terminate or declare ineffective or inoperative the same; or shall in any way whatsoever cease to give or provide the
respective liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby; or 
  
 E. A default, other than the Existing Defaults, shall occur in the performance of any term, condition, covenant or agreement contained in the Loan
Documents, in this Agreement, or in connection with any other obligation owing by Borrower to Bank; or 
  
 F. Borrower shall do any of the following acts, or violate any other term or provision of this Agreement: (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor or liquidator of all or a substantial part of its assets; (ii) file a voluntary petition in bankruptcy court or admit in writing that it is unable to pay its debts as they become due; (iii) make a general
assignment for the benefit of creditors; (iv) file a petition or answer seeking reorganization or take advantage of any bankruptcy or insolvency laws; (v) file an answer admitting any of the material allegations of, or consent to, or default in
answering a petition filed against it, in any bankruptcy, reorganization or insolvency proceeding; or (vi) take any action for the purpose of effecting any of the foregoing; or 
  
 G. Any of the following acts or events occur: (i) an order for relief, judgment or shall be entered by any court of
competent jurisdiction or other competent authority approving a petition seeking reorganization of Borrower; (ii) an order shall be entered by any competent jurisdiction or other competent authority appointing a receiver, custodian, intervenor or
liquidator for Borrower as to all or substantially all of its assets, and such order, judgment or decree shall continue un-stayed and in effect for a period of forty five (45) days; or (iii) an involuntary petition seeking bankruptcy, reorganization
or receivership shall be filed against Borrower which is not dismissed within forty five (45) days of the filing thereof; or (iv) an default under any of Borrower’s obligations to the Bank; or 
  
 H. Any change should occur which, in the opinion of Bank, has resulted or
could result in a Material Adverse Change. 
  
 XII. Remedies. 

 
 A. If an Event of Default shall occur and be uncured under this
Agreement, any other Loan Document or any other agreement referenced herein or executed in connection herewith to which Borrower is a party, and such Event of Default shall remain uncured after ten days prior written notice to Borrower (such notice
to be delivered by U.S. Mail, facsimile or email), (an “Uncured Default”), Bank may exercise, at its election, in addition to all rights and remedies granted to it in the Loan Documents, any or all of the following (failure to specify any
remedy shall not limit Bank’s remedies, nor be deemed to create a conflict or contradiction with the Loan Documents): 
  
 1. Bank may exercise all of its rights and remedies and may declare all amounts owed under the Loan Documents immediately due and payable; 
  

 -12- 

 2. Bank may proceed to enforce the Loan Documents and this Agreement and exercise any or all of the
rights and remedies afforded to Bank by the California Commercial Code, the California Civil Code, the California Code of Civil Procedure or otherwise possessed by Bank; 
  
 3. Bank may, to the fullest extent permitted by law: (1) sell its Collateral or any interest therein at public or private
sale for cash or upon credit and for immediate or future delivery and for such price and on such terms as Bank shall deem appropriate, and negotiate endorse, assign, transfer and deliver to the purchaser or purchasers thereof (which may be Bank) the
Collateral so sold, and each purchaser at any sale shall hold the property sold absolutely free from any claim or right on the part of Borrower (and Borrower hereby waives, to the extent permitted by law, all rights of redemption, stay and/or
appraisal which Borrower now has or may at any time in the future have); and/or (2) obtain specific performance by Borrower of any covenant or undertaking of Borrower in the Loan Documents herein; and/or (3) without notice to Borrower, proceed by
suit or suits at law or in equity to foreclose its security interest and sell its Collateral or any portion thereof pursuant to judgment or decree of a court, courts or referee having competent jurisdiction; and/or (4) without notice to Borrower,
exercise any of its rights order, or foreclose its Collateral thereunder; 
  
 4. Without regard to the adequacy of Bank’s Collateral, or to the solvency of Borrower, Bank may institute legal proceedings for the appointment of a receiver or receivers with respect to any or all of its
Collateral pending foreclosure hereunder or for the sale of any or all of its Collateral under the order of a court of competent jurisdiction or under other legal process; 
  
 5. Either personally, or by means of a court-appointed receiver, Bank may enter onto the premises where its Collateral is
located and take possession of all or any of its Collateral and exclude therefrom Borrower and all others claiming under Borrower, and perform any acts necessary or appropriate to care for, maintain, preserve and protect its Collateral. In the event
Bank demands or attempts to take possession of its Collateral in he exercise of any rights hereunder, Borrower promises and agrees to turn over promptly and to deliver complete possession thereof to Bank; 
  
 6. Without notice to or demand upon Borrower, Bank may make such payments and
do such acts as Bank may deem necessary to protect its security interest in its Collateral including, without limitation, paying, purchasing, contesting or compromising any encumbrance, charge or lien which is prior to or superior to the security
interests granted in the Loan Documents and, in exercising any such powers or authority, to pay all expenses incurred in connection therewith; and/or 
  

 -13- 

 7. Enforce any of the rights and remedies available to it under the Loan Documents or this Agreement, or
according to applicable law. 
  
 B. All rights and remedies
granted to Bank hereunder are cumulative, and Bank shall have the right to exercise any one or more of such rights and remedies alternatively, successively or concurrently as Bank may, in its sole and absolute discretion, deem advisable. 

 
 C. Bank, in its reasonable discretion, shall have the sole right to
determine if an Event of Default has occurred under the Loan Documents. 
  
 D. Bank agrees not to exercise any rights or remedies granted to it under this Section XII or the Loan Documents in respect of an Event of Default which at the time of such exercise has not yet become an Uncured Default. 
  
 XIII. Revival Clause; Solvency. 
  
 If the incurring of any debt or the payment of money or transfer of property
made to Bank by or on behalf of Borrower should for any reason subsequently be declared to be “fraudulent” or “preferential” within the meaning of any state or federal law relating to creditor’s rights, including, without
limitation, fraudulent conveyances, preferences or otherwise voidable or recoverable payments of money or transfers of property, in whole or in part, for any reason (collectively, “Voidable Transfers”) under the Bankruptcy Code or any
other federal or state law, and Bank is required to repay or restore any such Voidable Transfer or the amount or any portion thereof, or upon the advice of its in-house counsel or outside counsel is advised to do so, then, as to such Voidable
Transfer or the amount repaid or restored (including all reasonable costs, expenses and attorneys’ fees of Bank related thereto), the liability of Borrower under the Credit Agreement and Loan Documents, and all of Bank’s rights and
remedies under the Credit Agreement and Loan Documents, shall automatically be revived, reinstated and restored and shall exist as though such Voidable Transfer had never been made to the extent of any harm to Bank. 
  
 Borrower represents and warrants that the execution, delivery and performance
of this Agreement will not (i) render Borrower insolvent as that term is defined below; (ii) leave Borrower with remaining assets which constitute unreasonably small capital given the nature of Borrower’s business; or (iii) result in the
incurrence of Debts (as defined below) beyond Borrower’s ability to pay them when and as they mature and become due and payable. For the purposes of this paragraph, “Insolvent” means that the present fair salable value of assets is
less than the amount that will be required to pay the probable liability on existing Debts as they become absolute and matured. For the purposes of this paragraph, “Debts” includes any legal liability for indebtedness, whether matured or
unmatured, liquidated or unliquidated, absolute, fixed or contingent. Borrower hereby acknowledges and warrants that it has derived or expects to derive a financial or other benefit or advantage from this Agreement. 
  

 -14- 

 XIV. Notices. 
  
 All notices required or permitted to be given to Bank under this Agreement shall be addressed as follows: 
  

	 	To:	Thomas G. Kinzel 

 Vice President 
 Comerica Bank – California 
 9920 South
La Cienega Boulevard, Suite 623 
 Inglewood, CA 90301 
 Fax No. (310) 338-6160 
  

	 	To:	Remington Capital LLC 

 9468 Montgomery Rd. 
 Cincinnati, OH 45242 
 Attn: Chris Hendy

 Fax No.: (513) 984-8121 
  

	 	Copy:	Sheppard Mullin Richter & Hampton LLP 

 501 W.
Broadway, 19th Floor 
 San Diego, CA 92101 
 Attn: Laura Taylor, Esq. 
 Fax No. (619) 234-3815 
  
 All notices required to or permitted to be given to Borrower under this
Agreement shall be addressed as follows: 
  

	 	To:	Paul R. Hays 

 President and Chief Operating Officer

 Synbiotics Corporation 
 11011 Via Frontera 
 San Diego, CA 92127 
 Fax No.: (858) 451-5719 
  

	 	Copy:	Heller Ehrman 

 4350 La Jolla Village Drive, 7th Floor

 San Diego, CA 92122-1246 
 Attn: Hayden J. Trubitt, Esq. 
 Fax No.: (858) 450-8499 
  

	 	Copy:	Remington Capital LLC 

 9468 Montgomery Rd. 
 Cincinnati, OH 45242 
 Attn: Chris Hendy

 Fax No.: (513) 984-8121 
  
 The above addresses may be changed effective upon receipt of a new address. Any notice required herein or permitted to be given shall be in writing and be
personally served or sent by facsimile or email (upon confirmation of receipt) and overnight United States mail and shall be deemed given when sent or, if mailed, when deposited in the United States mail so long as it is properly addressed.

  

 -15- 

 XV. Representations and Warranties. Borrower hereby represents and warrants that: 
  
 A. Representations and Warranties. All Representations and Warranties
contained in the Credit Agreement are true and correct as of the date of this Agreement, except that Section 2.5 of the Credit Agreement is deemed modified by the disclosures made in Borrower’s reports filed with the Securities and Exchange
Commission since the original date of the Credit Agreement. Except for Events of Default waived in this Agreement, no Event of Default has occurred and/or is continuing. 
  
 B. Further Representations. No representation or warranty of Borrower contained in this Agreement or in any documents
provided to Bank in connection herewith (including any financial statements and/or financial information) misstates any material fact or omits to state a material fact, the absence of which makes such representation, warranty or statement
misleading. 
  
 XVI. Authority. Each party hereto represents and warrants
to each other party that (i) it has authority to execute this Agreement; (ii) the execution, delivery and performance of this Agreement does not require the consent or approval of any person, entity, governmental body, trust, trustor or other
authority; (iii) this Agreement is a valid, binding and legal obligation of the undersigned enforceable in accordance with its terms, and does not contravene or conflict with any other agreement, indenture or undertaking to which any party hereto is
a party; and (iv) each party hereto is the sole and lawful owner of all right, title, and interest in and to every claim and other matter which the party purports to settle or compromise herein. 
  
 XVII. Payment of Expenses. In the event any action (whether or not in a court
proceeding) shall be required to interpret, implement, modify, or enforce the terms and provisions of this Agreement, or to declare rights under same, the prevailing party in such action shall recover from the losing party all of its fees and costs,
including, but not limited to, the reasonable fees and costs (if applicable) of Bank’s outside and in-house counsel. 
  
 XVIII. Governing Law. This Agreement shall be construed and interpreted in accordance with and shall be governed by the laws of the state of California. The
parties also hereby agree to submit to the jurisdiction of the California courts with respect to all matters relating to this Agreement. 
  
 XIX. Successors, Assigns. This Agreement shall be binding on and inure to the benefit of all of the parties hereto, and upon the heirs, executors, administrators,
legal representatives, successors and assigns of the parties hereto, and each of them. The terms and provisions of this Agreement are for the exclusive benefit of Borrower and Bank, and may not be transferred, pledged, set over or negotiated to any
person or entity without the prior express written of Bank. Notwithstanding any other provisions contained herein, Bank may sell, transfer, negotiate, assign or grant participations in all or a portion of its rights in any of the Loan Documents, in
this Agreement, to any person or entity without prior notice to Borrower, provided, however, that any such assignee shall be bound by the terms and provisions of the Loan Documents and this Agreement. 
  
 XX. Complete Agreement of Parties. This Agreement constitutes the entire agreement
between Bank and Borrower arising out of, related to or connected with the subject matter of this 
  

 -16- 

 Agreement. Any supplements, modifications, waivers or terminations of this Agreement shall not be binding unless executed
in writing by the parties to be bound thereby. No waiver of any provision of this Agreement shall constitute a waiver of any other provisions of this Agreement (whether similar or not), nor shall such waiver constitute a continuing waiver unless
otherwise expressly so provided. However, this Agreement does not alter or amend any provision of any of Loan Documents except to the extent of the provisions expressly set forth herein. 
  
 XXI. Execution In Counterparts. This Agreement may be executed in any number of counterparts each of which, when so executed and
delivered, shall be deemed an original, and all of which together shall constitute but one and the same agreement. 
  
 XXII. Contradictory Terms/Severability. In the event that any term or provision of this Agreement contradicts any term or provision of any other document,
instrument or agreement between the parties including, but not limited to, any of the Loan Documents, the terms of this Agreement shall control. If any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, such provision
shall be severable from all other provisions of this Agreement, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not be adversely affected or impaired, and shall thereby remain in full force and
effect. 
  
 XXIII. Headings. All headings contained herein are for
convenience purposes only, and not be considered when interpreting this Agreement. 
  
 XXIV. Continuing Cooperation. The parties hereto shall cooperate with each other in carrying out the terms and intent of this Agreement, and shall execute such other documents, instruments and agreements as are reasonably required to
effectuate the terms and intent of this Agreement. 
  
 XXV. Consultation With
Counsel. Each party hereto acknowledges that (i) it has been represented by counsel of its own choice at each stage in the negotiation of this Agreement; (ii) it relied on such counsel’s advice throughout all of the negotiations which
preceded the execution of this Agreement, and in connection with the preparation and execution of this Agreement; (iii) such counsel has read this Agreement; (iv) such counsel has advised such party concerning the validity and effectiveness of this
Agreement, and the transactions to be consummated in accordance therewith and/or each party has had the opportunity to consult with counsel and has voluntarily waived doing so; and (v) each party hereto is freely and voluntarily entering into this
Agreement. 
  

 -17- 

 AGREED AND ACCEPTED: 
  
 COMERICA BANK, successor by merger to 
 COMERICA
BANK – CALIFORNIA, 
 successor in interest to Imperial Bank, 
 a California banking corporation 
  

					
	By:	 	 /s/ Thomas G. Kinzel

	 	Dated: September 23, 2004
	 	 	Thomas G. Kinzel
Vice President	 	 
	
	SYNBIOTICS CORPORATION,
a California corporation
			
	By:	 	 /s/ Paul R. Hays

	 	Dated: September 23, 2004
	 	 	Paul R. Hays
President	 	 
		
	REMINGTON CAPITAL, LLC, an Ohio
Limited Liability Company, successor in
partial interest to Comerica Bank	 	Dated: 9-23-04
			
	By:	 	 /s/ Jerry L. Ruyan

	 	 
	Its:	 	President	 	 
	Name:	 	Jerry L. Ruyan	 	 

  

 -18- 

 EXHIBIT A 
  
 Term Note A 
  
 Incorporated herein by reference to Exhibit 4.4.7 to this current report on Form 8-K. 

 EXHIBIT B 
  
 Term Note B 
  
 Incorporated herein by reference to Exhibit 4.4.8 to this current report on Form 8-K. 

 EXHIBIT C 
  
 (Form of Consent) 
  
 Consent of Redwood West Coast, LLC 
  
 REDWOOD WEST COAST, LLC (“Redwood”) hereby consents to the execution and delivery of the foregoing Fourth Amendment to Credit Agreement and Loan
Documents and Waiver of Defaults (“Agreement”) dated September 23, 2004, effective as of September 1, 2004, by SYNBIOTICS CORPORATION (“Borrower”) to and between COMERICA BANK successor by merger to COMERICA BANK - CALIFORNIA,
successor in interest to IMPERIAL BANK, a California banking corporation, (“Comerica”). All capitalized terms not defined herein shall have the meaning attributed to them in the Agreement. 
  
 Redwood acknowledges the amount and validity of Borrower’s loan
obligations to Comerica as described in Sections I.A. and I.B. of the Agreement, and the existence, validity, perfection and priority of Comerica’s liens in the Collateral as described in Section I.A.3. of the Agreement. Redwood acknowledges
that Borrower is in default under the Loan Documents, subject to Comerica’s agreement to waive defaults upon the satisfaction or waiver of Conditions Precedent, as more fully specified in the Agreement. 
  
 Redwood agrees that its rights to receive compensation for services,
dividends and/or any other payment or consideration from Borrower are subject to the limitations set forth in Sections 5.08 of the Credit Agreement, as modified by the Agreement, and Sections V.A. and V.C. of the Agreement, and Redwood’s
agreements with the Borrower are deemed modified accordingly. 
  

					
	REDWOOD WEST COAST, LLC
a Delaware limited liability company	 	 
			
	By:	 	 /s/ Christopher P. Hendy

	 	Dated: September 23, 2004
	 	 	Christopher P. Hendy	 	 
	 	 	Its: Co-Manager	 	 

 EXHIBIT D 
  
 (Form of Consent) 
  
 Consent of Redwood Holdings, LLC 
  
 REDWOOD HOLDINGS, LLC (“Redwood”) hereby consents to the execution and delivery of the foregoing Fourth Amendment to Credit Agreement and Loan
Documents and Waiver of Defaults (“Agreement”) dated September 23, 2004, effective as of September 1, 2004, by SYNBIOTICS CORPORATION (“Borrower”) to and between COMERICA BANK successor by merger to COMERICA BANK - CALIFORNIA,
successor in interest to IMPERIAL BANK, a California banking corporation, (“Comerica”). All capitalized terms not defined herein shall have the meaning attributed to them in the Agreement. 
  
 Redwood acknowledges the amount and validity of Borrower’s loan
obligations to Comerica as described in Sections I.A. and I.B. of the Agreement, and the existence, validity, perfection and priority of Comerica’s liens in the Collateral as described in Section I.A.3. of the Agreement. Redwood acknowledges
that Borrower is in default under the Loan Documents, subject to Comerica’s agreement to waive defaults upon the satisfaction or waiver of Conditions Precedent, as more fully specified in the Agreement. 
  
 Redwood agrees that its rights to receive compensation for services,
dividends and/or any other payment or consideration from Borrower are subject to the limitations set forth in Sections 5.08 of the Credit Agreement, as modified by the Agreement, and Sections V.A. and V.C. of the Agreement, and Redwood’s
agreements with the Borrower are deemed modified accordingly. 
  

					
	REDWOOD HOLDINGS, LLC
a Delaware limited liability company	 	 
			
	By:	 	 /s/ Christopher P. Hendy

	 	Dated: September 23, 2004
	 	 	 Christopher P. Hendy

 Its: MemberPromissory Note from the Registrant to Comerica Bank

 Exhibit 4.4.7 
  
 PROMISSORY NOTE 
  

			
	 $599,000.00
	 	 San Diego, California
 September 1, 2004

  
 PROMISE TO PAY.
SYNBIOTICS CORPORATION, a California corporation, (“Borrower”) promises to pay to COMERICA BANK (“Lender”), or order, in lawful money of the United States of America, the principal amount of Five Hundred Ninety Nine Thousand
Dollars ($599,000.00) together with interest accrued on the outstanding principal balance of this Promissory Note (this “Note”) from the date of this Note at the rate specified below. 
  
 PRINCIPAL PAYMENT. Borrower will pay the principal amount of this Note as
follows: 
  

	 	(a)	Payments of Nine Thousand Dollars ($9,000.00) each due on the 1st day of each month beginning October 1, 2004, except for the months of September 1, 2005 and September 1,
2006. 

  

	 	(b)	Payments of One Hundred Fifty One Thousand Dollars ($151,000.00) each due on September 1, 2005 and September 1, 2006. 

  

	 	(c)	All unpaid principal and interest shall be due and payable in full on August 1, 2007. 

  
 PAYMENT OF INTEREST. Borrower will pay regular monthly payments of all accrued and unpaid interest beginning October 1,
2004, and all subsequent interest payments are due on the same day of each month after that. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown below or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs and any late charges, then to any unpaid interest, and any remaining amount to principal. 
  
 VARIABLE INTEREST RATE. The interest rate on this Note is subject to
change from time to time based on changes in an index which is the Comerica Bank Prime Rate (the 

 “Index”). The Prime Rate is the rate announced by Lender as its Prime Rate of interest from time to time.
Lender will tell Borrower the current Index rate upon Borrower’s request. Borrower understands that Lender may make loans based on other rates as well. The interest rate change will not occur more often than each day. The Index currently is
4.75% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 2.0 percentage points over the Index, resulting in an initial rate of 6.75% per annum. NOTICE: Under no circumstances will the
interest rate on this Note be more than the maximum rate allowed by applicable law. 
  
 PREPAYMENT. 
  
 A.
Optional Prepayment. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. 
  
 B. Mandatory Prepayment. Borrower shall make such mandatory prepayments as shall be required under the Credit Agreement dated as of April 12, 2000,
as amended from time to time (“Credit Agreement”), including the payments specified in Section 4.16 of the Credit Agreement, as modified by the Fourth Amendment to Credit Agreement and Loan Documents and Waiver of Defaults dated September
23, 2004, effective as of September 1, 2004. 
  
 C. Application
of Prepayments. Optional and Mandatory prepayments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued unpaid interest. Rather, all prepayments will reduce the
principal payments required under this Note in the inverse order that such payments are due hereunder 
  
 LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled
payment. 
  
 DEFAULT. Borrower will be in default if
any of the following happens: (a) Borrower fails to make any payment hereunder when due; and/or (b) An Uncured Default occurs and is continuing or is existing under the Credit Agreement. 
  
 LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all
accrued unpaid interest immediately due, without notice, and then Borrower will immediately pay that amount. Upon Borrower’s failure to pay all amounts declared due pursuant to this section, Lender may (a) increase the variable interest rate on
this Note to 7.00 percentage points over the Index, and (b) add any unpaid accrued interest to principal and such sum will bear interest therefrom until paid at the rate provided in this Note (including any increased rate). Lender may hire or pay
someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s attorneys’ fees and Lender’s legal expenses whether or not
there is a lawsuit, including attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post judgment collection services, and further
including the allocated cost of Lender’s in-house counsel. Borrower also will pay any court costs, in addition to all other sums provided by law. This Note has been delivered to Lender and accepted by Lender in the State of California. If
there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of San Diego County, the State of California. This Note shall be governed by and construed in accordance with the laws of the State of
California. 
  

 -2- 

 DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $25.00 if Borrower makes a payment on
this Note and the check or preauthorized charge with which Borrower pays is later dishonored. 
  
 RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in, and hereby assigns, conveys, delivers, pledges, and transfers to Lender all Borrower’s right, title and interest in and to,
Borrower’s accounts with Lender (whether checking, savings, or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh
accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such
accounts. 
  
 CREDIT AGREEMENT. This Note is subject to the
provisions of that certain Credit Agreement dated April 12, 2000 and all amendments thereto and replacements thereof. 
  
 GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by law, waive any applicable statute of limitations, presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan, or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. 
  
 JURY TRIAL WAIVER. LENDER AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT
THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED
UPON OR ARISING OUT OF THIS NOTE OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS NOTE OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY LENDER OR BORROWER, EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM. 
  

 -3- 

 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING
THE VARIABLE INTEREST RATE PROVISION. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE. 
  

			
	 Synbiotics Corporation, a California corporation

		
	 By:
	 	 /s/ Paul R. Hays

	 Name:
	 	 Paul R. Hays

	 Title:
	 	 President

  
 Borrower’s Address:

 11011 Via Frontera 
 San Diego, CA 92127 
  
 Lender’s Address: 
 Comerica Bank 
 2321 Rosecrans Ave., Suite 5000 
 El Segundo, CA 90245 
  

 -4-

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