AMENDED AND RESTATED BUSINESS LOAN AGREEMENT

AMENDED AND RESTATED
BUSINESS LOAN AGREEMENT

THIS AMENDED AND RESTATED BUSINESS LOAN AGREEMENT (this “Agreement”) entered into as of March 30, 2009, is made and executed between PET DRx VETERINARY GROUP, INC., a Delaware corporation (“Borrower”), as successor in interest to XLNT VETERINARY CARE, INC., a Delaware corporation, and HUNTINGTON CAPITAL, L.P., a federally licensed small business investment company (“Lender”), on the following terms and conditions. Borrower has received a commercial loan from Lender (“Loan”). Borrower understands and agrees that: a) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement, and b) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM . Borrower is indebted to Lender pursuant to the Business Loan Agreement dated November 2, 2005 evidenced in part by a Promissory Note dated November 2, 2005 in the principal amount of $1,400,000. This Agreement is a complete amendment and restatement of the Business Loan Agreement dated November 2, 2005, and shall continue in full force and effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorney’s fees, and other fees and charges. The waivers and changes set forth herein and in the Change In Terms Agreement are contingent upon payment of the LOAN MODIFICATION FEES which are due on or before March 31, 2009.

CONDITIONS PRECEDENT . Lender’s obligations under this Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Payment of Fees and Expenses . Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties . The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

No Event of Default . There shall not exist at any time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.

LOAN AMOUNT. The amount of the Loan shall be the sum of One Million Four Hundred Thousand Dollars ($1,400,000.00).

LOAN MODIFICATION FEES . As consideration for the waiver of all defaults in the performance of covenants and representations through March 31, 2009, Borrower will pay Lender the sum of $100,000 on or before March 31, 2009. In consideration for Borrower’s agreement to change the payment terms of the Note and adopt this Agreement, Borrower agrees to (i) issue that certain Warrant to Purchase 250,000 Shares of Common Stock, Par Value $.0001 Per Share attached as Exhibit A and (ii) pay to Huntington the sum of $150,000 on December 1, 2010. Huntington agrees to the cancellation of the Warrant issued November 2, 2005.

WAIVER . Subject to payment of the applicable Loan Modification Fee, Borrower hereby waives all defaults, covenant violations and other breaches of the Loan Agreement or the Related Documents arising prior to March 31, 2009.

REPRESENTATIONS AND WARRANTIES . Borrower represents and warrants to Lender, as of the date of this Agreement, as of this date and at all times any Indebtedness exists:

Organization . Borrower is a corporation which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the state of its incorporation. Borrower is duly authorized to transact business in California and in all other states in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply in all material respects with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities.

Authorization . Borrower’s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and to do not conflict with, result in a violation of, or constitute a default under: a) any provision of Borrower’s operating agreement, articles of organization, member agreements, or any agreement or other instrument binding upon Borrower, b) or any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties.

Financial Information . Borrower’s financial statements and reporting has and shall comply with all material SEC or other applicable governmental agency filing and disclosure requirements.

Legal Effect . This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

Hazardous Substances . Borrower represents and warrants that all its activities shall be conducted in material compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower represents and warrants that to the best of its knowledge there has been no breach or violation of an Environmental Law relating to the properties owned by Borrower’s subsidiary, Tarvan & Lenehan, Inc., that would materially and adversely affect Lender’s collateral. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses (including reasonable attorney’s fees incurred before trial, at trial, on appeal or in any bankruptcy or arbitration proceeding) which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or a Hazardous Substance on the Collateral in violation of an Environmental Law. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

Binding Effect . This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS . Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation . Within three (3) business days, inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and, to Borrower’s actual knowledge, all actual litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower which could materially and adversely affect the financial condition of Borrower. Lender agrees and acknowledges that disclosure of any of the foregoing by the Company in a report filed with the Securities & Exchange Commission shall constitute compliance with this covenant.

Additional Information . Furnish such additional financial and other information and statements, as Lender may reasonably request from time to time.

Insurance . Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties and operations, in form, amounts, coverages and with insurance companies reasonably acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loan, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may require.

Insurance Reports . Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (a) the name of the insurer; (b) the risks insured; (c) the amount of the policy; (d) the properties insured; (e) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (f) the expiration date of the policy.

Other Agreements . Comply in all material respects with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any continuing default in connection with any other such agreements which could materially adversely affect the financial condition of Borrower or the financial condition of any Grantor.

Taxes, Charges, and Liens . Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower’s properties, income, or profits.

Performance . Perform and comply, in a timely manner, and within any applicable due dates, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify Lender immediately in writing of any default in connection with any agreement.

Inspection . Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan and Borrower’s other properties and to examine or audit Borrower’s books, accounts, and financial records and to make copies and memoranda of Borrower’s books, accounts, and financial records. If Borrower now or at any time hereafter maintains any financial records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower’s expense.

Additional Assurances . Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loan and to perfect all Security Interests.

LENDER’S EXPENDITURES . If any action or proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, subject to any applicable cure periods, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender reasonably deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note (including default interest) from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s option, will: (1) be payable on demand; (2) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (a) the term of any applicable insurance policy, or (b) the remaining term of the Note; or (3) be treated as a balloon payment which will be due and payable at the Note’s maturity.

ACKNOWLEDGMENTS BY LENDER . Lender hereby acknowledges and agrees that Borrower intends to use the proceeds of this Loan and one or more subsequent advances made by Lender to acquire the outstanding capital stock of the Initial Seller. Lender further acknowledges and agrees that, in connection with the stock acquisition of the Initial Seller, Lender’s security interest in the stock and assets of such transaction is and shall be subordinated in all respect to such purchase money security interest of the Initial Seller. Lender further acknowledges and agrees that Borrower may subsequently consummate prospective acquisitions (by purchase of stock or assets, merger, or otherwise) pursuant to which the seller’s thereof (each a “Subsequent Seller” collectively, the “Subsequent Sellers”) may take purchase money security interests in the assets and/or capital stock being acquired pursuant to such transaction and Lender further agrees that it, in connection with any such subsequent acquisition with a Subsequent Seller where the same takes a purchase money security interest in the capital stock and/or assets being sold pursuant to such transaction, Lender’s security interest in the collateral subject to such transaction is and shall be subordinated in all respect to any such purchase money security interest of the Subsequent Seller and/or any other secured acquisition financing. Lender further agrees that it execute a commercially reasonable subordination agreement required by any senior secured lender providing senior debt to Borrower; provided, however that any such senior lender shall be subject to the approval of Lender, which shall not be unreasonably withheld.

NEGATIVE COVENANTS . Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender which consent shall not be unreasonably withheld:

Continuity of Operations . (1) Engage in any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire, or consolidate with any other entity, change its name, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.

CESSATION OF ADVANCES . If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (1) Borrower is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower has with Lender, after taking into consideration all applicable notice and cure provisions; (2) Borrower becomes inso