SECURITY AGREEMENT
Exhibit
10.4
Date: February
19, 2008
THIS
SECURITY AGREEMENT (hereinafter, this “Agreement”) is made by and
between
FIFTH
STREET MEZZANINE PARTNERS II, L.P., a Delaware limited partnership (the
“Secured Party”),
and
PET
DRX CORPORATION, a Delaware Corporation,
BAY
AREA VETERINARY SPECIALIST, INC., a California corporation and XXXXXXXX
VETERINARY CLINIC, INC., a California corporation (jointly and severally,
individually and collectively, “Debtor”),
in
consideration of the mutual covenants contained herein and benefits to be
derived herefrom.
W
I T N E S S E T H:
ARTICLE
1. DEFINITIONS
All
capitalized terms used herein shall have the meanings set forth in that certain
Credit Agreement dated March 29, 2007 by and between Secured Party and XLNT
Veterinary Care, Inc., a Delaware corporation (“Lead Borrower”) and each of the
other Borrowers named therein (collectively, “Original Borrower”), as amended by
that certain First Amendment to Credit Agreement and Loan Documents of even date
hereof by and among Original Borrower, Debtor and Secured Party (collectively,
the “Loan Agreement”). In addition, as herein used, the following
terms have the following meanings or are defined in the section of this
Agreement so indicated:
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“Account
Debtor” has the meaning given that term in the
Code.
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“Agreement”
is defined in the Preamble.
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“Chattel
Paper” has the meaning given that term in the
Code.
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“Collateral” is
defined in Section 2.1.
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“Contract
Rights” includes, without limitation, “contract rights” as now or formerly
defined in the Code and also any right to payment under a contract not yet
earned by performance and not evidenced by an instrument or Chattel
Paper.
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“Costs
of Collection” includes, without limitation, all attorneys’ reasonable
fees and reasonable out-of-pocket expenses incurred by the Secured Party’s
attorneys (including in-house counsel), accounting, consulting, brokerage
or other similar professional fees or expenses, and all reasonable costs
incurred by the Secured Party in the administration of the Obligations
and/or the Loan Documents, including, without limitation, reasonable costs
and expenses associated with travel on behalf of the Secured Party, which
costs and expenses are directly or indirectly related to or in respect of
the Secured Party’s: administration and management of the Obligations;
negotiation, documentation, and amendment of any Loan Document; or efforts
to preserve, protect, collect, or enforce the Collateral, the Obligations,
and/or the Secured Party’s Rights and Remedies and/or any of the Secured
Party’s rights and remedies against or in respect of any guarantor or
other person liable in respect of the Obligations (whether or not suit is
instituted in connection with such efforts). The Costs of
Collection are Obligations, and at the Secured Party’s option may bear
interest at the highest post-default rate which the Secured Party may
charge the Debtor hereunder as if such had been lent, advanced, and
credited by the Secured Party to, or for the benefit of, the
Debtor.
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“Debtor”
is defined in the Preamble.
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“Deposit
Account” has the meaning given that term in the
Code.
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“Documents”
has the meaning given that term in the
Code.
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“Documents
of Title” has the meaning given that term in the
Code.
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“Financial
Asset” has the meaning given that term in the
Code.
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“Goods”
has the meaning given that term in the
Code.
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“Letter-of-Credit
Right” has the meaning given that term in Code and also refers to any
right to payment or performance under a letter of credit, whether or not
the beneficiary has demanded or is at the time entitled to demand payment
or performance.
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“Payment
Intangible” as defined in the Code and also any General Intangible under
which the Account Debtor’s primary obligation is a monetary
obligation.
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“Proceeds”
include, without limitation, “Proceeds” as defined in the Code, and each
type of property described in Section
2.1.
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“Receivables
Collateral”: the
Debtor’s Accounts, Accounts Receivable, Contract Rights, General
Intangibles, Payment Intangibles, Chattel Paper, Instruments, Documents of
Title, Documents, Securities, letters of credit for the benefit of the
Debtor, and bankers’ acceptances held by the Debtor, and any rights to
payment.
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“Secured
Party” is defined in Preamble.
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“Secured
Party’s Rights and Remedies” is defined in Section
6.6.
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“Securities”
has the meaning given that term in the
Code.
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“Supporting
Obligation” has the meaning given that term in the Code and also refers to
a Letter-of-Credit Right or secondary obligation which supports the
payment or performance of an Account, Chattel Paper, a Document, a General
Intangible, an Instrument, or Investment
Property.
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“Transfer”
is defined in Section 4.1.
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ARTICLE
2. GRANT OF SECURITY INTEREST
2.1 Grant
of Security Interest. To secure the Debtor’s prompt, punctual,
and faithful performance of all and each of the Obligations, the Debtor hereby
grants to the Secured Party a continuing security interest in and to, and
assigns to the Secured Party, the following, and each item thereof, whether now
owned or now due, or in which the Debtor has an interest, or hereafter acquired,
arising, or to become due, or in which the Debtor obtains an interest, and all
products, Proceeds, substitutions, and accessions of or to any of the following
(all of which, together with any other property in which the Secured Party may
in the future be granted a security interest, is referred to herein as the
“Collateral”): All assets of the Debtor, including, without limitation, all
Accounts and accounts receivable; Inventory; Contract Rights; Instruments;
Deposit Accounts; General Intangibles; Letter of Credit Rights, Payment
Intangibles, Supporting Obligations, Investment Property; Equipment; Goods;
Securities; Documents; Documents of Title; Fixtures; Chattel Paper; Financial
Assets, policies and certificates of insurance, money, cash, or other property;
all insurance proceeds, refunds, and premium rebates, including, without
limitation, proceeds of fire and credit insurance, whether any of such proceeds,
refunds, and premium rebates arise out of any of the foregoing; all liens,
guaranties, rights, remedies, and privileges pertaining to any of the foregoing
including the right of stoppage in transit all books, records, and information
relating to the Collateral and/or to the operation of the Debtor’s business, and
all rights of access to such books, records, and information, and all property
in which such books, records, and information are stored, recorded, and
maintained.
2.2 Commercial
Tort Claims. If the Debtor shall at any time acquire a commercial tort
claim, the Debtor shall promptly notify the Secured Party in a writing signed by
the Debtor of the brief details thereof and grant to the Secured Party in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Secured Party.
2.3 Extent
and Duration of Security Interest. The within grant of a security
interest is in addition to, and supplemental of, any security interest
previously granted by the Debtor to the Secured Party and shall continue in full
force and effect applicable to all Obligations until all Obligations have been
paid and/or satisfied in full.
2.4 Authorization
to File. The Debtor hereby authorizes the Secured Party to
file financing statements, without notice to the Debtor, with all appropriate
jurisdictions in order to perfect or protect the Secured Party’s interest or
rights hereunder, which financing statements may indicate the Collateral as “all
assets of the Debtor” or words of similar effect, or as being of an equal or
lesser scope, or with greater detail, all in the Secured Party’s
discretion.
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ARTICLE
3.
REPRESENTATIONS, WARRANTIES AND COVENANTS
The
Debtor, in addition to all other representations, warranties and covenants made
by the Debtor in any other Loan Document, makes those covenants included in this
Agreement. To induce Secured Party to enter into the Loan Documents
and to make the Loan, Debtor represents, warrants and covenants to Secured Party
that:
3.1 Due
Organization Authorization; No Conflicts.
(a) The
Debtor presently is and shall hereafter remain in good standing in its
jurisdiction of formation and is and shall hereafter remain duly qualified and
in good standing in every other State in which, by reason of the nature or
location of the Debtor’s assets or operation of the Debtor’s business, such
qualification may be necessary, except where the failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.
(b) The
Debtor has all requisite power and authority to execute and deliver to the
Secured Party all and singular the Loan Documents to which the Debtor is a party
and has and will hereafter retain all requisite corporate power to perform all
and singular the Obligations.
(c) The
Loan Documents have been duly executed and delivered by Debtor and are the
legal, valid and binding obligations of the Debtor, enforceable against the
Debtor in accordance with their respective terms, subject to limitations as to
enforceability which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.
3.2 Additional
Assurances. The Debtor shall execute and deliver to the
Secured Party such instruments, documents, and papers, and shall do all such
things from time to time hereafter as the Secured Party may reasonably request
to carry into effect the provisions and intent of this Agreement and to comply
with all applicable statutes and laws. The Debtor shall execute all
such instruments as reasonably may be required by the Secured Party with respect
to the recordation and/or perfection of the security interests created
herein.
ARTICLE
4. NEGATIVE
COVENANTS
Debtor
covenants and agrees that Debtor will not do any of the following:
4.1 Dispositions. Convey,
sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), all
or any part of its business or property, other than Transfers: (i) of inventory
in the ordinary course of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Debtor in the ordinary course of
business; (iii) that constitute payment of normal and usual operating expenses
in the ordinary course of business; (iv) of worn-out or obsolete equipment; or
(v) permitted by Section 3.7 of the Credit Agreement.
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4.2 Location
of Collateral. The Debtor hereby certifies that no Collateral
is in the possession of any third party bailee (such as at a
warehouse). In the event that the Debtor, after the date hereof,
intends to store or otherwise deliver the Collateral to such a bailee, then
Debtor shall use reasonable best efforts to secure in writing from such bailee
an acknowledgment that the bailee is holding such Collateral for the benefit of
the Secured Party.
ARTICLE
5. EVENTS
OF DEFAULT
Upon the
occurrence of any Event of Default, all Obligations of the Debtor to the Secured
Party shall become immediately due and payable, at the option of the Secured
Party and without notice or demand. The occurrence of any Event of
Default shall also constitute, without notice or demand, a default under all
other agreements between the Secured Party and the Debtor and instruments and
papers given the Secured Party by the Debtor, whether such agreements,
instruments, or papers now exist or hereafter arise.
ARTICLE
6. RIGHTS AND REMEDIES UPON DEFAULT
In
addition to all of the rights, remedies, powers, privileges, and discretions
which the Secured Party is provided under the Loan Documents or applicable law
prior to the occurrence of an Event of Default, the Secured Party shall have the
following rights and remedies upon the occurrence and during the continuance of
any Event of Default.
6.1 Rights
of Enforcement. The Secured Party shall have all of the rights and
remedies of a secured party upon default under the Code, in addition to which
the Secured Party shall have all and each of the following rights and
remedies:
(a) To
collect the Receivables Collateral with or without the taking of possession of
any of the Collateral.
(b) To
apply the Receivables Collateral or the proceeds of the Collateral towards (but
not necessarily in complete satisfaction of) the Obligations.
(c) To
take possession of all or any portion of the Collateral.
(d) To
sell, lease, or otherwise dispose of any or all of the Collateral, in its then
condition or following such preparation or processing as the Secured Party
reasonably deems necessary and with or without the taking of possession of any
of the Collateral.
(e) To
exercise all or any of the rights, remedies, powers, privileges, and discretions
under all or any of the Loan Documents.
(f) To
apply to the Obligations any balances and deposits in any Deposit Accounts of
the Debtor which the Secured Party holds or is in control of.
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6.2 Sale
of Collateral.
(a) Any
sale or other disposition of the Collateral may be at public or private sale
upon such terms and in such manner as the Secured Party deems advisable, having
due regard to compliance with any statute or regulation which might affect,
limit, or apply to the Secured Party’s disposition of the
Collateral.
(b) Unless
the Collateral is perishable or threatens to decline speedily in value, or is of
a type customarily sold on a recognized market (in which event the Secured Party
shall provide the Debtor with such notice as may be practicable under the
circumstances), the Secured Party shall give the Debtor at least
ten (10) days prior written notice of the date, time, and place of
any proposed public sale, and of the date after which any private sale or other
disposition of the Collateral may be made. The Debtor agrees that
such written notice shall satisfy all requirements for notice to the Debtor
which are imposed under the Code or other applicable law with respect to the
Secured Party’s exercise of the Secured Party’s rights and remedies upon
default.
(c) The
Secured Party may purchase the Collateral, or any portion of it at any sale held
under this Article.
(d) The
Secured Party shall apply the proceeds of any exercise of the Secured Party’s
Rights and Remedies under this Article towards the Obligations in such manner,
and with such frequency, as the Secured Party determines.
6.3 Occupation
of Business Location. In connection with the Secured Party’s exercise of
the Secured Party’s rights under this Article, the Secured Party may enter upon,
occupy, and use any premises owned or occupied by the Debtor, and may exclude
the Debtor from such premises or portion thereof as may have been so entered
upon, occupied, or used by the Secured Party. The Secured Party shall
not be required to remove any of the Collateral from any such premises upon the
Secured Party’s taking possession thereof, and may render any Collateral
unusable to the Debtor. In no event shall the Secured Party be liable
to the Debtor for use or occupancy by the Secured Party of any premises pursuant
to this Article, nor for any charge (such as wages for the Debtor’s employees
and utilities) incurred in connection with the Secured Party’s exercise of the
Secured Party’s Rights and Remedies.
6.4 Grant
of Nonexclusive License. The Debtor hereby grants to the Secured Party a
royalty free nonexclusive irrevocable license to use, apply, and affix any
trademark, tradename, logo, or the like in which the Debtor now or hereafter has
rights, such license being with respect to the Secured Party’s exercise of the
rights hereunder including, without limitation, in connection with any
completion of the manufacture of Inventory or sale or other disposition of
Inventory.
6.5 Assembly
of Collateral. The Secured Party may require the Debtor to assemble the
Collateral and make it available to the Secured Party at the Debtor’s sole risk
and expense at a place or places which are reasonably convenient to both the
Secured Party and Debtor.
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6.6 Rights
and Remedies. The rights, remedies, powers, privileges, and discretions
of the Secured Party hereunder (herein, the “Secured Party’s Rights and
Remedies”) shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delay or omission by the Secured Party in
exercising or enforcing any of the Secured Party’s Rights and Remedies shall
operate as, or constitute, a waiver thereof. No waiver by the Secured
Party of any Event of Default or of any default under any other agreement shall
operate as a waiver of any other default hereunder or under any other
agreement. No single or partial exercise of any of the Secured
Party’s Rights or Remedies, and no express or implied agreement or transaction
of whatever nature entered into between the Secured Party and any person, at any
time, shall preclude the other or further exercise of the Secured Party’s Rights
and Remedies. No waiver by the Secured Party of any of the Secured
Party’s Rights and Remedies on any one occasion shall be deemed a waiver on any
subsequent occasion, nor shall it be deemed a continuing waiver. All
of the Secured Party’s Rights and Remedies and all of the Secured Party’s
rights, remedies, powers, privileges, and discretions under any other agreement
or transaction are cumulative, and not alternative or exclusive, and may be
exercised by the Secured Party at such time or times and in such order of
preference as the Secured Party in its sole discretion may
determine. The Secured Party’s Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the
Obligations.
ARTICLE
7. GENERAL
7.1 Successors
and Assigns. This Agreement shall be binding upon the Debtor and the
Debtor’s representatives, successors and assigns and shall inure to the benefit
of the Secured Party and the Secured Party’s successors and assigns; provided,
however, no trustee or other fiduciary appointed with respect to the Debtor
shall have any rights hereunder.
7.2 Severability.
Any determination that any provision of this Agreement or any application
thereof is invalid, illegal, or unenforceable in any respect in any instance
shall not affect the validity, legality, or enforceability of such provision in
any other instance, or the validity, legality, or enforceability of any other
provision of this Agreement.
7.3 Integration;
Amendments; Course of Dealing. This Agreement and the other
Loan Documents are intended by the parties as the final, complete and exclusive
statement of the transactions evidenced by this Agreement and the other Loan
Documents. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, express or implied, are deemed to be
superceded by this Agreement and the other Loan Documents, and no party is
relying on any promise, agreement or understanding not set forth in this
Agreement and the other Loan Documents. No such discussions,
negotiations, custom, usage, or course of dealings shall limit, modify, or
otherwise affect the provisions thereof. This Agreement may not be
amended or modified except by a written instrument describing such amendment or
modification executed by Debtor and Secured Party. No failure by the
Secured Party to give notice to the Debtor of the Debtor’s having failed to
observe and comply with any warranty or covenant included in any Loan Document
shall constitute a waiver of such warranty or covenant or the amendment of the
subject Loan Document.
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7.4 Power
of Attorney. The Debtor hereby irrevocably constitutes and
appoints the Secured Party (acting through any officer of the Secured Party)
as Debtor’s true and lawful attorney, with full power of
substitution, following the occurrence and during the continuation of an Event
of Default. The rights and powers granted the Secured Party by this appointment
include but are not limited to the right and power to: (i) prosecute, defend,
compromise, or release any action relating to the Collateral; (ii) sign change
of address forms to change the address to which the Debtor’s mail is to be sent
to such address as the Secured Party shall designate; receive and open the
Debtor’s mail; (iii) endorse the name of the relevant Debtor in favor of the
Secured Party upon any and all checks, drafts, notes, acceptances, or other
items or instruments; sign and endorse the name of the relevant Debtor on, and
receive as secured party, any of the Collateral, any invoices, schedules of
Collateral, freight or express receipts, or bills of lading, storage receipts,
warehouse receipts, or other documents of title respectively relating to the
Collateral; (iv) sign the name of the Debtor on any notice to the Debtor’s
Account Debtors or; sign the Debtor’s name on any Proof of Claim in Bankruptcy
against Account Debtors, and on notices of lien, claims of mechanic’s liens, or
assignments or releases of mechanic’s liens securing the Accounts; (v) take all
such action as may be necessary to obtain the payment of any letter of credit
and/or banker’s acceptance of which the Debtor is a beneficiary; (vi) repair,
manufacture, assemble, complete, package, deliver, alter or supply goods, if
any, necessary to fulfill in whole or in part the purchase order of any customer
of the Debtor and (vii) use, license or transfer any or all General Intangibles
of the Debtor. In connection with all powers of attorney described
above, the Debtor hereby grants unto the Secured Party (acting through any of
its officers) full power to do any and all things necessary or appropriate in
connection with the exercise of such powers as fully and effectually as the
Debtor might or could do, hereby ratifying all that said attorney shall do or
cause to be done by virtue of this Agreement. No power of attorney
set forth above shall be affected by any disability or incapacity suffered by
the Debtor and each shall survive the same. All powers
conferred upon the Secured Party herein, being coupled with an interest, shall
be irrevocable until this Agreement is terminated by a written instrument
executed by a duly authorized officer of the Secured
Party. Notwithstanding anything herein to the contrary, Debtor hereby
appoints Secured Party its power of attorney to sign Debtor’s name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred until all
Obligations have been satisfied in full and Secured Party is under no further
obligation to make loans or advances hereunder.
7.5 Secured
Party’s Costs and Expenses. The Debtor shall pay on demand all Costs of
Collection and all reasonable expenses of the Secured Party in connection with
the preparation, execution, and delivery of this Agreement, and any and all
documents, instruments and agreements delivered to the Secured Party in
connection herewith, whether evidencing the Obligations, or granting the Secured
Party certain rights with respect to the Debtor, or its shares of stock, and of
any Loan Documents, whether now existing or hereafter arising, and all other
reasonable expenses which may be incurred by the Secured Party in preparing or
amending this Agreement and all other agreements, instruments, and documents
related thereto, or otherwise incurred with respect to the
Obligations.
7.6 Copies
and Facsimiles. This Agreement and all documents which relate thereto,
which have been or may be hereinafter furnished the Secured Party may be
reproduced by the Secured Party by any photographic, microfilm, xerographic,
digital imaging, or other process, and the Secured Party may destroy any
document so reproduced. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business).
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7.7 New
York Law. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. DEBTOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX,
XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE DEBTOR AND SECURED PARTY PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED
THAT DEBTOR AND SECURED PARTY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY AND;
PROVIDED,
FURTHER,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE SECURED
PARTY FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SECURED
PARTY. DEBTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND DEBTOR
HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. DEBTOR
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO DEBTOR AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF DEBTOR’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
7.8 Right
of Set-Off. Debtor and any guarantor hereby grant to Secured
Party, a lien, security interest and right of setoff as security for all
Obligations and obligations to Secured Party, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Secured Party or
any entity under the control of the Secured Party and its successors and assigns
or in transit to any of them. At any time, without demand or notice
(any such notice being expressly waived by Debtor), Secured Party may set off
the same or any part thereof and apply the same to any liability or obligation
of Debtor and any guarantor even though unmatured and regardless of the adequacy
of any other collateral securing the loan. ANY AND ALL RIGHTS TO
REQUIRE SECURED PARTY TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE DEBTOR, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
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7.9 Waivers.
(a) The
Debtor (and all guarantors, endorsers, and sureties of the Obligations) make
each of the waivers included in Subsection (b), below, knowingly, voluntarily,
and intentionally, and understands that the Secured Party, in entering into the
financial arrangements contemplated hereby and in providing loans and other
financial accommodations to or for the account of the Debtor as provided herein,
whether now or in the future, is relying on.
(b) THE
DEBTOR, AND EACH SUCH GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY KNOWINGLY,
VOLUNTARILY AND INTEN-TIONALLY WAIVE
THE FOLLOWING:
(i) Except
as otherwise specifically required hereby or by any other Loan Document, notice
of non-payment, demand, presentment, protest and all forms of demand and notice,
both with respect to the Obligations.
(ii) Except
as otherwise specifically required hereby or by any other Loan Document, the
right to notice and/or hearing prior to the Secured Party’s exercising of the
Secured Party’s rights upon the occurrence and continuation of an Event of
Default.
(iii) DEBTOR
AND SECURED PARTY MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST THE SECURED
PARTY OR IN WHICH THE SECURED PARTY IS JOINED AS A PARTY LITIGANT), INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF SECURED PARTY RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, DEBTOR HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.
“Debtor”
PET
DRX CORPORATION,
a
Delaware Corporation
By: /s/ Xxxxxx
Xxxxxxxxx
Name: Xxxxxx
Xxxxxxxxx
Title: Secretary
BAY
AREA VETERINARY SPECIALISTS, INC.,
a
California corporation
By: /s/ Xxxxxx
Xxxxxxxxx
Name: Xxxxxx
Xxxxxxxxx
Title: Secretary
XXXXXXXX
VETERINARY CLINIC, INC.,
a
California corporation
By: /s/ Xxxxxx
Xxxxxxxxx
Name: Xxxxxx
Xxxxxxxxx
Title: Secretary
“Secured
Party”
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: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Executive Vice President and
Secretary
Signature Page
to
Security Agreement
(Borrower)
