S-1/A

As filed with the Securities and Exchange Commission on October 5, 2005.

Registration No. 333-127888

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

DOVER SADDLERY, INC.

(Exact name of Registrant as specified in its charter)

Delaware	5941	04-3438294
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

P. O. Box 1100

525 Great Road

Littleton, MA 01460

(Address, including zip code, and telephone number,

including area code, of Registrant’s principal executive offices)

Stephen L. Day

Chief Executive Officer

Dover Saddlery, Inc.

525 Great Road

P. O. Box 1100

Littleton, MA 01460

(978) 952-8062

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Please send copies of all communications to:

Justin P. Morreale, Esq.
John J. Concannon III, Esq.
Bingham McCutchen LLP
150 Federal Street
Boston, MA 02110
(617) 951-8245 Jeffrey S. Marcus, Esq.
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, NY 10104-0012
(212) 468-8137

     Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

     If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

     If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.    o

CALCULATION OF REGISTRATION FEE

	Proposed Maximum
Title of Each Class of	Aggregate	Amount of
Securities to be Registered	Offering Price(1)	Registration Fee
Common Stock, $0.0001 par value	$40,000,000	$4,708

(1)  Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) promulgated under the Securities Act of 1933, as amended.

     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

          You should rely only on the information contained in this prospectus. We have not, the selling shareholders have not, and the underwriter has not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, the selling shareholders are not, and the underwriter is not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

TABLE OF CONTENTS

Prospectus Summary	1
Risk Factors	6
Special Note Regarding Forward-Looking Statements	20
Market Data	20
Use of Proceeds	21
Dividend Policy	21
Capitalization	22
Selected Financial Data	26
Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Business	43
Management	61
Certain Relationships and Related Transactions	68
Principal and Selling Shareholders	69
Description of Capital Stock	71
Shares Eligible for Future Sale	74
Plan of Distribution	76
Legal Matters	85
Experts	85
Where You Can Find More Information	86
Index to Financial Statements	F-1
EX-3.2 Certificate of Amendment to Certificate of Incorporation
EX-3.5 Amended and Restated By-Laws
EX-4.3 Second Amendment to Shareholders Agreement
EX-4.4 Instrument of accession, dated as of September 16, 2005
EX-4.6 Warrant to purchase common stock
EX-4.7 Amended and Restated 11.50% Senior Secured Subordinated Note
EX-10.9 Letter dated February 9, 2005
EX-10.11 Letter dated January 25, 2005
EX-10.22 Letter Agreement, dated as of September 16, 2005
EX-10.23 Security Agreement, dated as of December 11, 2003
EX-10.25 Redemption Agreement, dated as of August 25, 2005
EX-10.26 Letter Agreement, dated as of September 14, 2005
EX-10.31 Amended and Restated Subordination Agreement
EX-10.32 Amended and Restated Senior Subordinated Note
EX-10.33 Amended and Restated Security Agreement
EX-14.1 Code of Business Conduct and Ethics
EX-23.2 Consent of Ernst & Young LLP
EX-99.1 William F. Meagher Consent to be Named

          The Source®, Dover Saddlery® and Smith Brothers® are registered marks of Dover Saddlery, Inc. Miller’s® and Miller’s Harness^tm are trademarks licensed to Dover Saddlery, Inc. Other service marks, trademarks and trade names referred to in this prospectus are the property of their respective owners. OpenIPO® is a registered service mark of WR Hambrecht + Co, LLC.

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PROSPECTUS SUMMARY

          This summary highlights selected information contained elsewhere in this prospectus. This summary may not contain all the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including “Risk Factors” and our Consolidated Financial Statements and related notes included elsewhere in this prospectus, before making an investment decision.

          The terms “Dover Saddlery,” “Dover,” “the Company,” “we,” “us” and “our” as used in this prospectus refer to the registrant, Dover Saddlery, Inc., a Delaware corporation.

Overview

Dover Saddlery

          We are a leading specialty retailer and the largest direct marketer of equestrian products in the United States. For over 20 years, Dover Saddlery has been a premier upscale brand in the English-style riding industry. We sell our products through a multi-channel strategy, including catalogs, the Internet and retail stores.

          We offer a comprehensive selection of products ranging in price from $1 to $4,000 in three main categories of saddles and tack, specialized apparel and horse care and stable products. Dover is known for providing the highest quality products for English-style riding including premier brands such as Hermes^tm, Ariat^tm, Grand Prix^tm, Mountain Horse^tm, Passier^tm and Prestige^tm, as well as private label and non-branded products. In 2002 we also began selling into the Western-style riding market under the Smith Brothers name.

          Our management team is highly experienced in direct marketing and retail with an average of more than 20 years of equestrian experience. Since joining Dover in 1998 as our President and Chief Executive Officer, Stephen L. Day and his team have grown annual revenues from $15.6 million to $58.7 million and annual operating income from $1.4 million to $4.7 million, representing compound annual growth rates of 27.7% and 25.4%, respectively.

          We have positioned ourselves to capitalize on the synergies of combining catalog and Internet operations with a retail store channel. Our experience to date has demonstrated two very important factors: (i) customers who purchased items using all three channels (catalog, Internet and retail stores) have, on average, historically bought nearly three times more than customers who purchased only from a single channel; and (ii) direct sales to customers within a 30 mile radius of a new retail store have, within two years of that retail store opening, exceeded direct sales prior to the new store opening. We have also experienced overall sales growth when we have opened a new store in areas where we have an existing strong customer base. For example, when we opened our Hockessin, DE store in 2002, sales in the area grew from $496,441 to $3,107,617 in the second year after opening the store, or approximately 150% compounded annual growth.

          Our strategy for growth involves the opening of additional retail stores in targeted locations nation-wide. Through our subsidiaries, we currently operate three Dover Saddlery retail stores and one Smith Brothers retail store. We have identified additional locations using our proprietary mathematical store optimization model that selects sites nationwide with the strongest sales potential and optimizes distances between stores to enhance revenue potential. Our initial target of 50 locations will each utilize one of three different store formats depending on the location and sales potential.

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          Based on our experience to date with opening new retail stores in areas where we have a high level of existing direct customers, we believe that expanding the number of retail store locations and focusing on our multi-channel business strategy are key to our continued success.

Competitive Strengths

          We believe that we are uniquely positioned in the equestrian tack, specialized apparel and horse care and stable products industry to grow through our multi-channel strategy. We believe that we have numerous competitive strengths including the following:

•  Experienced management with a track record of growth and profitability

•  Established brand in English-style riding and a leading direct marketer

•  Large, detailed database of nearly two million equestrian enthusiasts, including nearly 300,000 email addresses and approximately 200,000 Dover customers

•  Successful multi-channel strategy

•  Excellent customer service

•  Attractive customer demographics

•  Significant barriers to entry

•  Highly fragmented equestrian products retail market

•  Broad and distinctive selection of high quality products at competitive prices with rapid fulfillment capability

Growth Strategies

•  Open new Dover Saddlery retail stores in targeted locations

•  Expand our direct sales channel

•  Enhance our product mix

•  Expand further in the Western-style equestrian products market

Our Corporate Information

          We were formed as Dover Saddlery, Inc., a Delaware corporation, in 1998 and acquired Dover Saddlery, Inc., a Massachusetts corporation, which was founded in 1975 and operates as our wholly-owned subsidiary. In 2002 we acquired Smith Brothers, Inc., a Texas corporation, which also operates as our wholly-owned subsidiary. Our principal executive office is located at 525 Great Road, Littleton, MA 01460 and our telephone number is (978) 952-8062 at that address. We maintain websites on the Internet at www.doversaddlery.com and www.smithbrothers.com. Our websites, and the information contained or accessible through our websites, are not part of this prospectus.

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THE OFFERING

Common Stock

Common stock offered:

By Dover Saddlery	shares
By selling shareholders	shares
Total	shares
Common stock outstanding after this offering	shares
Proposed Nasdaq National Market Symbol	DOVR
Use of proceeds	To execute our retail store expansion and multi-channel growth strategy, to reduce outstanding debt balances and for other general working capital purposes.

          See “Risk Factors” and the other information included in this prospectus for a discussion of the factors you should consider carefully before deciding to invest in shares of our common stock.

          The number of shares of our common stock to be outstanding following this offering is based on                      shares of our common stock outstanding as of                     , and excludes:

•                      shares of our common stock reserved as of                     for future issuance pursuant to outstanding grants under our equity incentive plans at a weighted average exercise price of $                     per share; and

•                      additional shares of common stock reserved for issuance pursuant to future grants under our 2005 Equity Incentive Plan.

In addition, except where we state otherwise, the information we present in this prospectus reflects:

• a                     for                      stock split to be effected before the completion of this offering;

•  the adoption of our Amended and Restated Certificate of Incorporation and By-laws to be effective upon the closing of this offering; and

•  the conversion of our Class A common stock into common stock.

OpenIPO®

          This offering will be made through the OpenIPO® process, in which the allocation of shares and the public offering price are primarily based on an auction in which prospective purchasers are required to bid for the shares. This process is described under “Plan of Distribution.” Except as otherwise indicated, the information in this prospectus assumes no exercise of the underwriter’s over-allotment option.

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SUMMARY HISTORICAL FINANCIAL INFORMATION

          The following tables summarize the financial data for our business. For a more detailed explanation of our financial condition and operating results, you should read “Selected Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus. Our historical results and pro forma historical information do not necessarily indicate the results that we can expect for any future periods.

											Six Months
		Year Ended December 31,									Ended June 30,
		2002			2003			2004			2004			2005
		(dollars in thousands, except per share data)(2)
Consolidated Statement of Operations:
Revenues, net		$	42,670		$	52,455		$	58,698		$	28,560		$	30,580
Cost of revenues			26,632			32,712			36,857			18,245			19,495
Gross profit			16,038			19,744			21,841			10,315			11,085
Selling, general and administrative expenses			12,301			15,544			17,139			8,111			9,130
Operating income			3,738			4,200			4,702			2,204			1,955
Interest expense			1,489			1,825			1,324			628			801
Income before provision for income taxes			2,248			2,375			3,377			1,576			1,154
Provision for income taxes			999			1,111			1,481			691			505
Net income		$	1,249		$	1,264		$	1,896		$	885		$	649
Preferred stock dividend			160			160			160			80			80
Net income attributed to common stockholders		$	1,089		$	1,104		$	1,736		$	805		$	569
Net income per common share
Basic		$	0.52		$	0.53		$	0.80		$	0.38		$	0.25
Diluted		$	0.40		$	0.40		$	0.58		$	0.28		$	0.19
Number of shares used in per share calculations
Basic			2,095			2,095			2,161			2,095			2,294
Diluted			3,155			3,182			3,255			3,203			3,429
Other Operating Data:
	Number of catalogs mailed (000’s)		3,587			5,810			5,355			3,195			3,839
	Number of retail stores		2			2			3			3			4
	Gross profit margin		37.6	%		37.6	%		37.2	%		36.1	%		36.2	%
	EBITDA(1)	$	4,212		$	4,829		$	5,254		$	2,472		$	2,276
	EBITDA Margin(1)		9.9	%		9.2	%		9.0	%		8.7	%		7.4	%
Consolidated Balance Sheet Data:
Cash and cash equivalents		$	72		$	58		$	64		$	71		$	51
Total assets			23,534			25,503			26,763			27,686			29,768
Total long-term liabilities			12,080			12,460			11,778			14,916			14,403

⁽¹⁾  When we use the term “EBITDA”, we are referring to net income minus interest income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also use EBITDA to determine our compliance with some of the covenants under our revolving credit facility and subordinated notes.

(footnotes continued on following page)

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EBITDA has some limitations as an analytical tool and you should not consider it in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities or any other measure calculated in accordance with generally accepted accounting principles. Some of the limitations are:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;

• EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA does not reflect the interest expense or cash requirements necessary to service interest or principal payments on our debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

     The following table reconciles EBITDA to net income.

	Year Ended						Six Months
	December 31,						Ended June 30,
	2002		2003		2004		2004		2005
	(in thousands)
Net income	$	1,249	$	1,264	$	1,896	$	885	$	649
Depreciation and amortization		475		630		553		268		322
Interest expense		1,489		1,824		1,324		628		801
Income taxes		999		1,111		1,481		691		505
EBITDA	$	4,212	$	4,829	$	5,254	$	2,472	$	2,276

⁽²⁾  Certain of these amounts may not properly sum due to rounding.

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RISK FACTORS

          You should carefully consider the risks described below and all of the other information included in this prospectus before deciding whether to invest in our common stock. The risks described below are those that we currently believe may materially affect our Company. Additional risks of which we are unaware or that we deem immaterial also may become important factors that affect our Company in the future. If any of the following risks actually occur, our business, financial condition or operating results could suffer. In this case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risks Related To Our Business

If we cannot successfully execute our planned retail store expansion, our growth and profitability would be adversely impacted.

          We currently have four retail stores and have identified additional locations throughout the U.S. where we plan to open new stores over the next several years. A significant percentage of our projected future growth is expected to be generated from these new locations. If we experience delays in opening new stores, fail to select appropriate sites, encounter problems in opening new locations, or have trouble achieving anticipated sales volume in new locations, our growth and profitability will be adversely impacted. We have only opened three new stores in areas previously served by direct sales and so our experience observing the effects of new stores on our overall sales revenues is limited. Any one or more of the new stores we intend to open may not be profitable, in which event our operating results may suffer.

          Our ability to expand our retail presence depends in part on the following factors:

• our ability to identify suitable locations in key markets with attractive demographics and which offer attractive returns on our investments;

• our ability to negotiate favorable lease and construction terms for such locations;

• our ability to execute sale/leaseback transactions on satisfactory terms, if at all;

• competition for such locations;

• the timely construction of such retail stores;

• our ability to receive local and state government permits and approvals in connection with such locations;

• our ability to attract, train and retain skilled and knowledgeable store personnel;

• our ability to provide a product mix that meets the needs of our customers; and

• favorable economic conditions.

          In addition, each retail store is expected to require approximately $0.7 to $1.1 million of capital, including start up costs, leasehold improvements and inventory, and excluding the cost of the real estate. If actual costs are higher than expected or if sales in such stores are lower than expected, we may not be able to open as many retail stores as anticipated or we will need to raise additional capital in order to continue our growth.

If we cannot continue to successfully manage our direct sales channel, it would negatively impact our growth and profitability.

          Our direct sales generated 88.9% of our revenues in 2004 and we expect such operations to continue to represent a majority of our sales for at least the next several years. Our success

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depends on our ability to market, advertise and sell our products effectively through our various catalogs and Internet sites. We believe that the success of our direct sales depends on:

• our ability to offer a product mix that is attractive to our customers;

• the price point of our products relative to our competitors;

• our ability to achieve adequate response rates to our mailings;

• our ability to add new customers in a cost-effective manner;

• timely delivery of catalog mailings to our customers;

• an efficient Internet interface;

• a seamless buying experience for our customers across each of our channels; and

• cost effective and efficient order fulfillment.

          Catalog production, mailings and paper-based packing products, such as shipping cartons, entail substantial paper, postage, human resource and other costs, including costs of catalog development. We incur most of these costs prior to the mailing of each catalog. Increases in costs of mailing, paper or printing would increase our costs and adversely affect our earnings if we are unable to pass such cost increases on to our customers.

          Sales through our websites generated 18.7% of our revenues in 2004. The success of our online business depends in part on factors over which we have limited control. These factors include changing customer preferences, changing buying trends related to Internet usage, changes in technology interfaces, technology failures or human errors, security breaches and consumer privacy concerns. Any failure to respond successfully to these risks and uncertainties might adversely affect sales through our websites, impair our reputation and increase our operating costs.

          The success of our direct sales hinges on the achievement of adequate response rates to mailings, merchandising and catalog and website presentations that appeal to our customers and the expansion of our potential customer base in a cost-effective manner. Lack of consumer response to particular catalog or flier mailings or Internet marketing efforts may increase our costs and decrease the profitability of our business.

Our retail store rollout could cannibalize existing sales from our direct sales channel or existing retail locations.

          Our strategy to increase the number of retail store locations is based on finding optimal locations where demand for equestrian products is high. When we open a retail store in an area that has a high concentration of our existing customers, we expect that such customers will purchase products in the retail location as well as through our catalogs and websites, ultimately increasing their total purchases as multi-channel customers. Direct sales in the geographic area surrounding our Hockessin, DE store declined 4.0% in the first year of such store’s operation from $496,441 to $476,517. In the future, in areas where we open retail stores, the customers located within the area of such store may not spend more than they would have from the catalog and websites and therefore there may be a transfer of sales from our direct sales business to our retail stores. In such case, we may incur significant costs associated with opening a store and mailing catalogs while not generating incremental revenue.

With a significant portion of our growth strategy dependent upon our planned retail store expansion, our quarterly revenues and earnings could be variable and unpredictable and inventory levels will increase.

          We plan to increase the rate at which we open new stores. As we open new stores, (i) revenues may fluctuate and (ii) pre-opening expenses are incurred which may not be offset by a corresponding increase in revenues during the same financial reporting period. These factors may contribute to variable operating results.

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          Some of the expenses associated with openings of our new retail stores, such as headcount and lease occupancy expenses will increase. Additionally, as we increase inventory levels to provide stores with merchandise, we may not be able to manage this inventory without incurring additional costs. If retail store sales are inadequate to support these new costs, our earnings will decrease.

We rely on service providers to operate our business and any disruption of their supply of services could have an adverse impact on our revenues and profitability.

          We rely on a number of service providers to operate our business such as:

• a printer and a database processor to produce our catalogs;

• a website hosting service provider to host and manage our websites;

• telephone companies to provide telephone and fax service to our customer service centers; and

• shipping companies such as DHL/ Airborne, UPS, Fedex, the U.S. Postal Service and common carriers for timely delivery of our catalogs, shipment of merchandise to our customers and delivery of merchandise from our suppliers to us and from our warehouse to our retail stores.

          Any disruption in these services may have a negative impact on our ability to market and sell our products and serve our customers and could result in increased costs to us.

We rely on merchandise suppliers to operate our business and any disruption of their supply of products could have an adverse impact on our revenues and profitability.

          We rely on merchandise suppliers to supply our products in saleable condition, in sufficient quantities, at competitive prices and in a timely manner. In 2004, our five largest merchandise suppliers collectively provided approximately 29%, and our single largest merchandise supplier accounted for 7%, of our total purchases. Our current merchandise suppliers may not be able to accommodate our anticipated needs in a timely matter or at all. If we are unable to acquire suitable merchandise in a timely manner or lose one or more key merchandise suppliers, we may not be able to offer products that are important to our merchandise assortment, which would have a material adverse effect on our business. While we believe our merchandise supplier relationships are satisfactory, we have no contractual arrangements providing for continued supply from our key merchandise suppliers and our merchandise suppliers may discontinue selling to us at any time or may raise the cost of merchandise and we may be unable to pass such price increases along to our customers.

If we do not properly manage our inventory levels, our operating results and available funds for future growth will be adversely affected.

          We currently maintain a high level of inventory consisting of approximately 28,000 SKUs in order to limit out of stock items and have a broad depth of products for our customers. The investment associated with this high level of inventory is substantial. If we fail to adequately predict the amount or mix of our inventory, we will incur costs associated with stocking inventory that is not being sold or fails to meet the demands of our customers or we may be required to write off or write down inventory which would hurt our operating results. If we do not meet the needs of our customers, they may decide to purchase products from our competitors. Although we have some ability to return merchandise to our suppliers, we incur additional costs in doing so and we may not be able to return merchandise in the future.

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If our information technology systems fail to perform as designed or if we need to make system changes in order to support our growing direct and retail store businesses, there may be disruptions in operations.

          The efficient operation of our business is dependent on our information technology systems and our point of sale, or POS, systems. Our information technology systems are located in Littleton, MA, and our POS systems are located in each retail store. These systems, which operate our website, process transactions, respond to customer inquiries, manage inventory, purchase, sell and ship goods on a timely basis and maintain cost-effective operations, are subject to damage from natural disasters, power failures, hardware and software failures, security breaches, network failures, computer viruses and operator negligence. The failure of our information technology systems and our POS systems to perform as designed, even if temporary, could adversely affect inventory levels, shipments to customers and customer service. Any such event would have a material adverse effect on our operating results.

          We may experience operational problems with our information systems as a result of system failures, viruses, computer “hackers” or other causes. Any material disruption or slowdown of our systems could cause information, including data related to customer orders, to be lost or delayed, which could hurt our business, financial condition and results of operations. Moreover, we may not be successful in developing or acquiring technology that is competitive and responsive to the needs of our customers and might lack sufficient resources to make the necessary investments in technology to compete with our competitors. Accordingly, if changes in technology cause our information systems to become obsolete, or if our information systems are inadequate to handle our anticipated growth, we could lose customers.

          While we believe that our systems are adequate to support our planned opening of additional retail stores over the next several years and the future growth of our direct sales business, we may need to upgrade and modify our information technology capabilities. Any upgrades to our information technology systems and our POS systems may not be successful or may cause substantial expenses. In addition, there are inherent risks associated with upgrading our core systems, including disruptions that affect our ability to deliver products to our customers. If we were unable to adequately handle these disruptions, it could adversely affect inventory levels, shipments to customers and customer service. Any such event would have a material adverse effect on our operating results.

A decline in discretionary consumer spending could reduce our revenues.

          Our revenues depend to a degree on discretionary consumer spending, which may decrease due to a variety of factors beyond our control. These include unfavorable general business conditions, increases in interest rates, increases in inflation, stock market uncertainty, war, terrorism, fears of war or terrorism, increases in consumer debt levels and decreases in the availability of consumer credit, adverse or unseasonable weather conditions, adverse changes in applicable laws and regulations, increases in taxation, adverse unemployment trends and other factors that adversely influence consumer confidence and spending. Any one of these factors could result in adverse fluctuations in our revenues generally. Our revenues also depend on the extent to which discretionary consumer spending is directed towards recreational activities generally and equestrian activities and products in particular. Reductions in the amounts of discretionary spending directed to such activities would reduce our revenues.

          Our customers’ purchases of discretionary items, including our products, may decline during periods when disposable income is lower or periods of actual or perceived unfavorable economic conditions. If this occurs, our revenues would decline, which may have a material adverse effect on our business.

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Our results may fluctuate as a result of seasonal changes associated with the equestrian products industry.

          We experience seasonal fluctuation in our revenues and operating results. We typically realize a higher portion of our revenues and operating results during the fourth quarter. As a result of this seasonality, we believe that quarter to quarter comparisons of our operating results are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of future performance.

Competition in the equestrian products market could reduce our revenue and profitability.

          The equestrian products market is highly fragmented with approximately 10,000 retail store locations nationwide. Many of these are small businesses that have a loyal customer base. We may therefore not be able to generate sufficient sales to support our new retail store locations. We also compete directly with State Line Tack, which is owned by Petsmart and has greater financial resources than we have. There are also a significant number of sporting goods stores, mass merchandisers and other better funded companies that could decide to enter into or expand their equestrian products offerings. In addition, if our competitors reduce their prices, we may have to reduce our prices in order to compete. We may also be forced to increase our advertising or mail a greater number of catalogs in order to generate the same or even lower level of sales. Any one of these competitive factors could adversely affect our revenues and profitability.

A natural disaster or other disruption at our Littleton, MA warehouse fulfillment center could cause us to lose merchandise and be unable to deliver products to our direct sales customers and our retail stores.

          We currently rely on our Littleton, MA warehouse to handle our fulfillment needs. Any natural disaster or other serious disruption to this center due to fire, flood, tornado, earthquake or any other calamity could damage a significant portion of our inventory, and materially impair our ability to adequately stock our retail stores, deliver merchandise to customers, and process returns to merchandise suppliers and could result in lost revenues and increased costs.

If we lose key members of management or are unable to retain the talent required for our business, our operating results could suffer.

          Our future success depends to a significant degree on the skills, experience and efforts of Stephen Day, our President and Chief Executive Officer, Jonathan Grylls, our Chief Operating Officer and other key personnel including our senior executive management. We currently maintain four million dollars of key-man life insurance on Mr. Day, the proceeds of which are required to pay down outstanding debt. Effective as of September 1, 2005, we have entered into employment agreements with Mr. Day and Mr. Grylls which contain provisions for non-competition, non-solicitation and severance. In addition, our future success depends upon our ability to attract and retain highly-skilled and motivated, full-time and temporary sales personnel with appropriate equestrian products industry knowledge and retail experience to work in management and in our retail stores. The loss of the services of any one of these individuals or the inability to attract and retain qualified individuals for our key management and retail sales positions may have a material adverse effect on our operating results.

We may need additional financing to execute our growth strategy, which may not be available on favorable terms or at all, which could increase our costs, limit our ability to grow and dilute the ownership interests of existing shareholders.

          Our current revolving credit facility is due in full on September 16, 2008. The total amount raised in this offering will not be enough to finance the opening of all of our planned

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additional stores over the next several years. In order to satisfy our revolving credit facility when due and to execute our retail store expansion strategy, we may need to borrow additional funds, raise additional equity financing or finance our planned expansion from profits. We may also need to raise additional capital in the future to respond to competitive pressures or unanticipated financial requirements. We may not be able to obtain additional financing, including the extension of refinancing of our revolving credit facility, on commercially reasonable terms or at all. A failure to obtain additional financing or an inability to obtain financing on acceptable terms could require us to incur indebtedness at high rates of interest or with substantial restrictive covenants, including prohibitions on payment of dividends.

          We may obtain additional financing by issuing equity securities that will dilute the ownership interests of existing shareholders. If we are unable to obtain additional financing, we may be forced to scale back operations or be unable to address opportunities for expansion or enhancement of our operations.

The terms of our revolving credit facility impose operating and financial restrictions on us, which may impair our ability to grow our business or respond to changing business and economic conditions and could have an adverse impact on our business.

          Our current revolving credit facility contains provisions which restrict our ability to, among other things, incur or repay additional indebtedness, make particular types of investments, incur liens, pay dividends, consummate mergers and consolidations, enter into transactions with affiliates or make substantial asset sales. In addition, our obligations under the revolving credit facility are secured by interests in substantially all of our personal property excluding store and distribution center equipment and fixtures. In the event of our insolvency, liquidation, dissolution or reorganization, the lenders under our revolving credit facility would be entitled to payment in full from our assets before distributions, if any, were made to our stockholders.

We rely on foreign sources for many of our products which subjects us to various risks.

          We currently source approximately 24% of our products from foreign manufacturers located in Europe, Asia and South America. As such, we are subject to risks and uncertainties associated with changing economic and political conditions in foreign countries. These risks and uncertainties include currency rate fluctuations, import duties and quotas, work stoppages, economic uncertainties including inflation, foreign government regulations, wars and fears of war, acts of terrorism and fear of acts of terrorism, political unrest and trade restrictions. Additionally, countries in which our products are currently manufactured or may be manufactured in the future may become subject to trade restrictions imposed by the U.S. or foreign governments. Any event affecting prices or causing a disruption or delay of imports from foreign merchandise suppliers, including the imposition of additional import restrictions, currency rate fluctuations, restrictions on the transfer of funds or increased tariffs or quotas, or both, could increase the cost or reduce the supply of merchandise available to us and adversely affect our operating results.

          We do not currently, and we do not plan to, hedge against increases or decreases in the value of the U.S. dollar against any foreign currencies. Our product sourcing from foreign merchandise suppliers means, in part, that we may be affected by declines in the value of the U.S. dollar relative to other foreign currencies. Specifically, as the value of the U.S. dollar declines relative to other currencies, our effective cost of products increases. As a result, declines in the value of the U.S. dollar relative to foreign currencies would adversely affect our operating results.

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Our retail store expansion strategy may result in our direct sales business establishing a nexus with additional states which may cause our direct sales business to pay additional income and sales taxes and have an adverse effect on the revenues and cash flows of our direct sales business.

          As we open retail stores in additional states, the necessary relationship between the retail stores and our direct sales business may be deemed by certain state tax authorities to create a nexus for state income and sales taxation of our direct sales business in those states. This could result in an increase in the tax collection and payment obligations of our direct sales business, which would have an adverse effect on the profitability and cash flows of our direct sales business and our overall business. Such sales tax collection obligations, if any, would increase the total cost of our products to our customers. This increased cost to our customers could negatively affect the revenues of our direct sales business if we are required to reduce the underlying prices for the products sold through our direct sales channel. The occurrence of either of these events would have an adverse effect on the revenues, costs and cash flows of our direct sales business. This area of law is uncertain and changing and we could be subject to paying back taxes and penalties.

If we fail to adequately protect our trademarks, our brand and reputation could be impaired or diluted and we could lose customers.

          We have, or have rights to, four marks that we consider to be material to the successful operation of our business: Dover Saddlery, Smith Brothers, Miller’s Harness and The Source. We currently use all of these marks in our direct sales business. We also have several additional pending trademark applications. We also regard our copyrights, service marks, trade dress, trade secrets and similar intellectual property as critical to our success. In addition to our registered marks and pending applications, our principal intellectual property rights include copyrights in our catalogs, rights to our domain names and our databases and information management systems. As such, we rely on trademark and copyright law, trade secret protection and confidentiality agreements to protect our proprietary rights. Nevertheless, the steps we take to protect our proprietary rights may be inadequate. Our trademark applications may not be granted, and we may not be able to secure significant protection for our marks. Our competitors or others may adopt trademarks or service marks similar to our marks or try to prevent us from using our marks, thereby impeding our ability to build brand identity and possibly leading to customer confusion. In addition, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights. If we are unable to protect or preserve the value of our trademarks, copyrights, trade secrets or other proprietary rights for any reason, our brand and reputation could be impaired or diluted and we may lose customers.

We may have disputes with, or be sued by, third parties for infringement or misappropriation of their proprietary rights, which could have a negative impact on our business.

          Other parties may assert claims with respect to patent, trademark, copyright or other intellectual property rights that are important to our business, such as our Dover Saddlery, Smith Brothers and Miller’s Harness trademarks. Other parties might seek to block the use of, or seek monetary damages or other remedies for the prior use of, our intellectual property or the sale of our products as a violation of their trademark, patent or other proprietary rights. Defending any claims, even claims without merit, could be time-consuming, result in costly settlements, litigation or restrictions on our business and could damage our reputation.

          In addition, there may be prior registrations or use of intellectual property in the U.S. or foreign countries (including, but not limited to, similar or competing marks or other proprietary rights) of which we are not aware. In all such countries, it may be possible for any third-party owner of a

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trademark registration in that country or other proprietary right to enjoin or limit our expansion into those countries or to seek damages for our use of such intellectual property in such countries. In the event a claim against us were successful and we could not obtain a license to the relevant intellectual property or redesign or rename our products or operations to avoid infringement, our business, financial condition or results of operations could be harmed. In addition, securing registrations does not fully insulate us against intellectual property claims, as another party may have rights superior to our registration or our registration may be vulnerable to attack on various other grounds.

          Any such claims of infringement or misappropriation, whether meritorious or not, could:

• be expensive and time consuming to defend;

• prevent us from operating our business, or portions of our business;

• cause us to cease selling certain products;

• result in the loss of one or more key customers;

• require us to re-label or re-design certain products, if feasible;

• result in significant monetary liability;

• divert management’s attention and resources;

•  potentially require us to enter into royalty or licensing agreements in order to obtain the right to use necessary intellectual property; and

• force us to stop using valuable trademarks under which we market our products.

          Third parties might assert infringement claims against us in the future with respect to any of our products. Any such assertion might require us to enter into royalty arrangements or litigation that could be costly to us. Any of these events could have a material adverse effect on our business.

We are subject to numerous regulations and regulatory changes that could impact our business or require us to modify our current business practices.

          We are subject to numerous regulations governing the Internet and e-commerce, retailers generally, the importation, promotion and sale of merchandise and the operation of retail stores and warehouse facilities. These regulations include customs, privacy, truth-in-advertising, consumer protection, shipping and zoning and occupancy laws and ordinances. Many of these laws and regulations may specifically impede the growth of the Internet or other online services. If these laws were to change, or are violated by our management, employees, suppliers, buying agents or trading companies, we could experience delays in shipments of our goods or be subject to fines or other penalties which could hurt our business, financial condition and results of operations.

          The growth and demand for online commerce has resulted, and may continue to result, in more stringent consumer compliance burdens on companies that operate in the e-commerce segment. Specifically, certain states have enacted various legislation with respect to consumer privacy. In addition, the Federal Trade Commission and certain state agencies have been investigating various Internet companies regarding their use of personal information. The costs of compliance with federal and state privacy laws and the costs that might be incurred in connection with any federal or state investigations could have a material adverse affect on our business and operating results. Our direct mail operations are subject to regulation by the U.S. Postal Service, the Federal Trade Commission and various state, local and private consumer protection and other regulatory authorities. In general, these regulations govern the manner in which orders may be solicited, the form and content of advertisements, information which must be provided to prospective customers, the time within which orders must be filled, obligations to customers if orders are not

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shipped within a specified period of time and the time within which refunds must be paid if the ordered merchandise is unavailable or returned. From time to time, we have modified our methods of doing business and our marketing operations in response to such regulation. To date, such regulation has not had a material adverse effect on our business or operating results. However, future regulatory requirements or actions may have a material adverse effect on our business or operating results.

          Legal requirements are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. We may be required to make significant expenditures or modify our business practices to comply with laws and regulations. Compliance with existing or future laws and regulations may materially limit our ability to operate our business and increase our costs.

Our 100% satisfaction guarantee exposes us to the risk of an increase in our return rates which could adversely affect our profitability.

          Part of our marketing and advertising strategy focuses on allowing customers to return products ordered from our catalogs at any time if they are not satisfied and obtain a refund of the purchase price. As we expand our sales, our return rates may not remain within our historically low levels and could significantly impair our profitability.

Our marketing expenditures may not result in increased sales or generate the levels of product and brand name awareness we desire and we may not be able to manage our marketing expenditures on a cost-effective basis.

          A significant component of our marketing strategy involves the use of direct marketing to generate sales. Future growth and profitability will depend in part on the effectiveness and efficiency of our marketing expenditures, including our ability to:

• create greater awareness of our products and brand name;

• determine the appropriate creative message and media mix for future marketing expenditures;

• effectively manage marketing costs, including creative and media, to maintain acceptable costs per inquiry, costs per order and operating margins; and

• convert inquiries into actual orders.

          Our marketing expenditures may not result in increased sales or generate sufficient levels of product and brand name awareness and we may not be able to manage such marketing expenditures on a cost effective basis.

Risks Related To This Offering

There is no established trading market for our common stock, and the market price of our common stock may be highly volatile or may decline regardless of our operating performance. You may never be able to sell your shares at or above the initial public offering price.

          There has not been a public market for our common stock prior to this offering. We cannot predict the extent to which a trading market will develop or how liquid that market might become. If you purchase shares of common stock in this offering, you will pay a price that was not established in the public trading markets. The initial public offering price will be determined primarily by an auction process to be conducted by the underwriter and other securities dealers participating in this offering and by negotiations between representatives of the underwriter and us. You may not be able

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to resell your shares above the initial public offering price and may suffer a loss of all or part of your investment.

          The trading price of our common stock following this offering may fluctuate substantially. The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you pay, depending on many factors, some of which are beyond our control. Broad market and industry factors may adversely affect the market price of our common stock, regardless of our actual operating performance. The fluctuations could cause you to lose all or part of your investment in our shares of common stock.

          The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including:

• actual or anticipated fluctuations in our results of operations;

• price and volume fluctuations in the overall stock market from time to time;

• significant volatility in the market price and trading volume of retail companies generally or specialty retail or sporting goods retail companies in particular;

• the content and recommendations contained in investment industry research reports issued on our company, competitors or industry;

• our failure to meet or exceed our financial performance estimates or those of investment industry research analysts, investors or others;

• market conditions or trends in our industry and the economy as a whole;

• announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;

• announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;

• capital commitments;

• changes in our pricing policies or the pricing policies of our competitors;

• the actual or anticipated introduction of new products or product enhancements by us or our competitors;

• additions or departures of key personnel;

• our actual or anticipated sale or issuance of common stock or other securities in the future;

• actual or expected sales of our common stock, including sales of large blocks of our common stock or sales by our directors and officers;

• changes in market valuation or earnings of our competitors;

• the trading volume of our common stock;

• changes in the estimation of the future size and growth rate of our markets; and

• general economic conditions.

          In addition, companies in the stock market in general, and those traded on the Nasdaq National Market in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. These broad market and industry factors may materially harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price

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of a company’s securities, securities class-action litigation has often been instituted against that company. Such litigation, if instituted against us, would likely result in substantial costs and a significant diversion of management’s attention and resources, regardless of the outcome of any such litigation.

Because of their significant stock ownership, our existing shareholders will be able to exert substantial control over us and our significant corporate decisions.

          Upon completion of this offering, members of our executive management team and the Board of Directors will, in the aggregate, beneficially own approximately      % of our outstanding common stock, or      % if the underwriter’s over-allotment option is exercised in full. As a result, these persons, if acting together, will have the ability to significantly affect the outcome of all matters submitted to our shareholders for approval, including the election and removal of Directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, these persons, acting together, will have the ability to control the management and affairs of our Company, including the election of our Directors. This concentration of ownership may harm the market price of our common stock by, among other things:

• delaying, deferring, or preventing a change in control of our Company;

•  impeding a merger, consolidation, takeover or other business combination involving our Company;

• causing us to enter into transactions or agreements that are not in the best interests of all of our shareholders; or

• discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our Company.

Our management team may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

          We cannot specify with certainty how we will use the net proceeds of this offering or our existing cash balance. Presently, we intend to use the net proceeds to us from this offering to execute our retail store expansion and multi-channel growth strategy, to reduce outstanding debt balances and for other general working capital purposes.

          Accordingly, our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity to assess whether the proceeds are being used appropriately. The net proceeds may be used for corporate purposes that do not increase our operating results or market value. Until the net proceeds are used, they may be placed in investments that do not produce income or that lose value.

Shares of our common stock are relatively illiquid.

          As of the date of this prospectus, we have                      shares of common stock outstanding, and will have                      shares of common stock outstanding after this offering. As a result of our relatively small public float, our common stock may be less liquid than the common stock of companies with broader public ownership. Among other things, trading of a relatively small volume of our common stock may have a greater impact on the trading price for our shares than would be the case if our public float were larger.

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If securities analysts do not publish research or reports about us or our business or if they downgrade our stock, the price of our common stock may decline.

          The trading market for our common stock may be affected by research and reports that industry or financial analysts may publish about us or our business. We do not control these analysts. If one or more of the analysts who cover us downgrade our stock, our stock price could decline rapidly. If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline.

Substantial future sales or expected future sales of our common stock in the public market may cause the price of our common stock to decline.

          Our current shareholders hold a substantial number of shares of our common stock that they will be able to sell in the public market in the near future. Sales by our current shareholders of a substantial number of shares after this offering, or the expectation that such sales may occur, could significantly reduce the market price of our common stock. The holders of approximately                     of our capital stock outstanding as the date of this offering have agreed with WR Hambrecht + Co, the underwriter of this offering, to be bound by 180-day lock-up agreements that prohibit such holders from selling or transferring their stock other than in specific circumstances, and as part of this offering. However, WR Hambrecht + Co, at its discretion, can waive the restrictions of any one or more of the lock-up agreements at an earlier time without prior notice or announcement and allow some or all of our shareholders to sell their shares of our common stock in the public market subject only to applicable securities rules and regulations. Further, at the end of the 180-day lock-up period, such shareholders may sell their shares of our common stock subject only to applicable securities rules and regulations.

As a new investor, you will experience immediate and substantial dilution in the net tangible book value of your shares.

          The offering price of our common stock in this offering is considerably more than the net tangible book value per share of our outstanding common stock. Accordingly, investors purchasing shares of common stock in this offering will pay a price per share that substantially exceeds the value of our tangible assets after subtracting liabilities, and will incur substantial dilution in pro forma net tangible book value per share of $          at an assumed offering price of $           per share. If outstanding options to purchase shares of our common stock or other derivative instruments are exercised, our shareholders will experience additional dilution. Any further equity issuances will result in further dilution to our shareholders.

We do not intend to pay dividends on our common stock in the foreseeable future.

          We currently intend to retain all available funds to support our operations and to finance the growth and development of our business. We do not anticipate paying any cash dividends in the foreseeable future. Any future determination relating to dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects and other factors as our Board of Directors may deem relevant.

We will incur increased expenses as a result of recently enacted laws and regulations affecting public companies.

          As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”, the Sarbanes-Oxley Act of 2002 and the rules of the National Association of Securities Dealers, Inc. Automated Quotation System, or “Nasdaq”. The requirements of these new rules and regulations will increase our legal and financial

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compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we evaluate and report on the effectiveness of our disclosure controls and procedures, and internal controls over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures, and internal controls over financial reporting, significant resources and management oversight will be required. As a result, management’s attention may be diverted from other business concerns, which could have a material adverse effect on our business and operating results. In addition, we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and we might not be able to do so in a timely fashion, if at all.

          These new rules and regulations could also make it more difficult for us to attract and retain qualified independent members of our Board of Directors and executive officers. We also expect these new rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance. We may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. The Nasdaq marketplace rules require that a majority of our Board of Directors and all of certain committees of our Board of Directors consist of independent Directors within one year of the offering.

Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control and could also limit the market price of our stock.

          Our Amended and Restated Certificate of Incorporation and By-laws that we will adopt in connection with this offering will contain provisions that could delay or prevent a change of control of our Company or changes in our Board of Directors that our shareholders might consider favorable. These provisions include:

• authorizing the issuance of preferred stock that can be created and issued by the Board of Directors without prior stockholder approval, with rights senior to those of our common stock;

• providing for a classified Board of Directors, with each Director serving a staggered three-year term;

•  prohibiting shareholders from filling Board of Directors vacancies, calling special stockholder meetings or taking action by written consent; and

• requiring advance written notice of stockholder proposals and Director nominations.

          In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with shareholders owning 15% or more of our outstanding voting stock. These and other provisions in our Amended and Restated Certificate of Incorporation and By-laws and Delaware law could make it more difficult for shareholders or potential acquirers to obtain control of our Board of Directors or initiate actions that are opposed by the then-current Board of Directors, including to delay or impede a merger, tender offer, or proxy contest involving our Company. Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline. See “Description of Capital Stock.”

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Risks Relating To The Auction Process

Potential investors should not expect to sell our shares for a profit shortly after our common stock begins trading.

          Prior to this offering, there has been no public market for our common stock. We will determine the initial public offering price for the shares sold in this offering primarily through an auction conducted by us and the underwriter. We believe the auction process will reveal a clearing price for the shares of our common stock offered in this offering. The clearing price is the highest price at which all of the shares offered, including the shares subject to the underwriter’s over-allotment option, may be sold to potential investors. Although we and the underwriter may elect to set the initial public offering price below the auction clearing price, the public offering price may be at or near the clearing price. If there is little to no demand for our shares at or above the initial public offering price once trading begins, the price of our shares would decline following this offering. You may not be able to resell your shares at or above the initial public offering price. If your objective is to make a short term profit by selling the shares you purchase in this offering shortly after trading begins, you should not submit a bid in the auction.

Some bids made at or above the initial public offering price may not receive an allocation of shares.

          The underwriter for this offering may require that bidders confirm their bids before the auction for this offering closes. If a bidder is requested to confirm a bid and fails to do so within a required timeframe, that bid will be rejected and will not receive an allocation of shares even if the bid is at or above the initial public offering price. In addition, we, in consultation with the underwriter, may determine, in our sole discretion, that some bids that are at or above the initial public offering price are manipulative and disruptive to the bidding process or are not creditworthy, in which case such bids may be reduced or rejected. For example, in previous transactions for other issuers in which the auction process was used, the underwriter has rejected or reduced bids when the underwriter, in its sole discretion, deemed the bids not creditworthy or had reason to question the bidder’s intent or means to fund its bid. In the absence of other information, an underwriter or participating dealer may assess a bidder’s creditworthiness based solely on the bidder’s history with the underwriter or participating dealer. The underwriter has also reduced or rejected bids that it deemed, in its sole discretion, to be potentially manipulative or disruptive or because the bidder had a history of alleged securities law violations. Eligibility standards and suitability requirements of participating dealers may vary. As a result of these varying requirements, a bidder may have its bid rejected by a participating dealer while another bidder’s identical bid is accepted.

Potential investors may receive a full allocation of the shares they bid for if their bids are successful and should not bid for more shares than they are prepared to purchase.

          If our initial public offering price is at or near the clearing price for the shares offered in this offering, the number of shares represented by successful bids may equal or nearly equal the number of shares offered by this prospectus. Successful bidders may therefore be allocated all or nearly all of the shares that they bid for in the auction. Therefore, we caution investors against submitting a bid that does not accurately represent the number of shares of our common stock that they are willing and prepared to purchase.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          This prospectus, including the sections titled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business,” contains forward-looking statements, including without limitation statements relating to:

• plans for expansion of retail stores;

• expected operating results;

• need for additional funds to finance retail store build-out;

• effect on revenues and success of multi-channel growth strategy;

• estimates of revenues and sales per square foot; and

• return of the initial investment on new retail stores.

          These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other comparable terminology. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control and that could materially affect actual results, levels of activity, performance, or achievements.

          If any of these risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary significantly from what we projected. Any forward-looking statement you read in this prospectus reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategies and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

MARKET DATA

          We use market and industry data throughout this prospectus, which we have obtained from market research, publicly available information and industry publications. These sources generally state that the information that they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. The market and industry data is often based on industry surveys and the preparers’ experience in the industry. Although we believe that the surveys and market research included in this prospectus that others have performed are reliable, we have not independently verified this information.

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USE OF PROCEEDS

          The net proceeds from the sale of the                      shares of our common stock that we are selling in this offering are expected to be approximately $ million after deducting underwriting discounts and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by selling shareholders in this offering.

          We intend to use the net proceeds to us from this offering to execute our retail store expansion and multi-channel growth strategy, to reduce outstanding debt balances and for other general working capital purposes.

          Our debt retirement and retail store expansion plans include the following:

•  $                    to retire a portion of our 11.50% subordinated debt due September 16, 2009;((1)) and

• $                    to $                    to open                     new retail stores in the Northeast and Mid-Atlantic regions of the U.S.

          We do not have more specific plans for any net proceeds to us from this offering. We may seek to acquire, invest in, or establish joint ventures with respect to businesses, products, services, or technologies that complement or expand our existing business, and we may use a portion of the net proceeds of this offering for such acquisitions, investments, or joint ventures. We do not, however, have any present arrangements, understandings, or agreements with respect to any such acquisitions, investments, or joint ventures. Pending use for the corporate operating purposes described above, we may use proceeds of this offering to reduce the outstanding balance of our revolving credit facility((2)) and invest in direct or guaranteed obligations of the U.S. government, cash or short-term, investment grade securities.

DIVIDEND POLICY

          We do not intend to pay any dividends on our common stock in the foreseeable future. We currently intend to retain our future earnings, if any, to finance our business, for retail store expansion and for general corporate purposes. Our Board of Directors has the authority to declare and pay dividends on our common stock, in its discretion, as long as there are funds legally available to do so.

(1)  The 11.50% senior secured subordinated note may be prepaid at our option at 103% of its principal amount until September 16, 2006 and at a higher percentage thereafter.

(2)  The revolving credit facility provides for revolving loans up to $16 million. The total amount of availability is subject to limitations based on cash flows and other covenants.

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CAPITALIZATION

          The following table sets forth our capitalization as of June 30, 2005:

• on an actual basis;

•  on a pro forma basis to account for the conversion of the outstanding preferred stock and the subsequent repurchase of 603,889 shares of the Company’s common stock on September 16, 2005. The table also includes the financial restructuring executed to facilitate the transaction as well as the collection of outstanding employee notes; and

• on a pro forma as adjusted basis to reflect the pro forma adjustments and the sale of the shares of our common stock offered by this prospectus at an assumed initial public offering price of $           per share and after deducting the underwriting discount and estimated offering expenses payable by us.

          This table does not include:

•                      shares of our common stock issuable upon the exercise of stock options outstanding as of                     , 2005 with a weighted average exercise price of $                     per share, of which options to purchase                      shares of our common stock were then exercisable;

•  any shares reserved for issuance under our 1999 Stock Option Plan, as the terms of such plan will be amended as of the closing of this offering such that no shares will be available for issuance under that plan as of the closing;

•                       shares of our common stock that will be reserved for future grant under our 2005 Equity Incentive Plan as of the closing of this offering; and

•                       shares of our common stock issuable upon exercise of a warrant to purchase up to 23,503 shares of our common stock at an exercise price of $0.01 per share issued to Patriot Capital Funding, Inc.

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          This table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes appearing elsewhere in this prospectus.

		June 30, 2005
								Pro Forma As
		Actual			Pro Forma			Adjusted
		(in thousands)
Long-term liabilities:
	Revolving line of credit	$	10,300		$	12,019
	Subordinated notes payable		3,769			8,050
	Capital lease obligation, net of current portion		334			334
Total long-term liabilities		$	14,403		$	20,403		$	—
Redeemable convertible preferred stock, $0.0001 par value; 1,100,000 shares authorized, 1,015,000 issued and outstanding at redemption value			3,087			—			—
Put rights available to preferred stock holders(1)			7,710			—			—
Put rights available to common stock holders(1)			22,792			26,877
Employee notes receivable in exchange for option exercise			(282	)		—			—
Stockholders’ equity:
	Class A & B Common Stock, par value $0.0001 per share; 5,400,000 shares authorized; outstanding — 2,294,000 as of June 30, 2005, actual, and 2,705,111 as of June 30, 2005 pro forma		—			—			—
	Additional paid in capital		—			6,712			—
	Less treasury stock of 603,889 shares		—			(6,000	)		—
	Accumulated other comprehensive income		14			14			—
	Retained deficit		(23,214	)		(23,214	)		—
		$	10,107		$	4,389		$	—
	Total	$	24,510		$	24,792		$	—

⁽¹⁾  As discussed in Note 6 to the Consolidated Financial Statements, due to certain redemption and put rights attributable to our existing redeemable convertible preferred stock and common stock, we have recorded the redemption value outside of stockholders’ equity (deficit). The accretion to fair market value has been facilitated by a reduction of additional paid in capital and retained earnings (deficit). The redemption and put rights will be eliminated prior to or as a result of this offering.

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DILUTION

          If you invest in our common stock, your ownership interest will be immediately diluted by the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock upon the completion of this offering.

          The historical net tangible book value of our common stock as of                     , 2005 was $                     million, or $           per share. The historical net tangible book value per share of our common stock is the difference between our tangible assets and our liabilities, divided by the number of common shares outstanding. The pro forma net tangible book value of our common stock as of                     , 2005 was $                     million, or $           per share. The pro forma net tangible book value per share of our common stock is the difference between our tangible assets and our liabilities, divided by the number of shares of our common stock outstanding as of                     , 2005, after giving effect to the conversion of all outstanding shares of our preferred stock into                      shares of our common stock and the repurchase of                      shares of our common stock prior to the closing of this offering.

          For new investors in our common stock, dilution is the per share difference between the initial public offering price of our common stock and the pro forma net tangible book value of our common stock immediately after completing this offering. Dilution in this case results from the fact that the per share offering price of our common stock is substantially in excess of the per share price paid by our current shareholders.

          As of                     , 2005, after giving effect to the sale of the shares of our common stock offered by the prospectus at an assumed initial public offering price of $           per share and after deducting the underwriting discount and estimated offering expenses payable by us, the pro forma net tangible book value per share of our common stock would have been $           per share. Therefore, new investors in our common stock would have paid $          for a share of common stock having a pro forma net tangible book value of approximately $           per share after this offering. That is, their investment would have been diluted by approximately $           per share. At the same time, our current shareholders would have realized an increase in pro forma net tangible book value of $           per share after this offering without further cost or risk to themselves. The following table illustrates this per share dilution:

Assumed initial public offering price per share		$
	Pro forma net tangible book value per share as of         , 2005
	Increase in pro forma net tangible book value per share attributable to investors in this offering
Pro forma net tangible book value per share after this offering		$
Dilution per share to new investors		$

          The following table sets forth, on a pro forma as adjusted basis as of                     , 2005, the number of shares of our common stock purchased, the total consideration paid and the average price per share paid by existing and new shareholders:

		Shares Purchased					Total Consideration
												Average Price
		Number		Percent			Amount		Percent			Per Share
Existing stockholders			—		0	%	$	—		0	%	$	—
New investors			—		0	%		—		0	%		—
	Total		—		0	%	$	—		0	%	$	—

          The foregoing discussion and tables assume no exercise of any outstanding options or warrants to acquire common stock. As of                     , 2005, there were options outstanding to

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purchase a total of                      shares of our common stock with a weighted average exercise price of $           per share. To the extent that any of these options or warrants are exercised, your investment will be further diluted. In addition, on                     , we granted options to purchase a total of                      shares of our common stock with an exercise price of $           per share under our 2005 Equity Incentive Plan.

          If the underwriter exercises its over-allotment option in full, our existing shareholders will own                %, and our new investors will own           %, of the total number of shares of our common stock outstanding after this offering.

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SELECTED FINANCIAL DATA

          The selected historical financial data shown below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related notes included elsewhere in this prospectus. We have derived our Consolidated Statements of Operations Data and certain of our Other Consolidated Financial Data for the years ended December 31, 2002, 2003 and 2004 and Consolidated Balance Sheet Data as of December 31, 2003 and 2004 from our audited Consolidated Financial Statements included elsewhere in this prospectus. The Consolidated Statements of Operations Data and certain of our Other Consolidated Financial Data for the years ended December 31, 2000 and 2001 and Consolidated Balance Sheet Data as of December 31, 2000, 2001 and 2002 were derived from our audited Consolidated Financial Statements that are not included in this prospectus. We have derived the consolidated statement of operations data and certain other of our operating data for the six months ended June 30, 2004 and 2005 and consolidated balance sheet data as of June 30, 2004 and 2005 from our unaudited consolidated financial statements. Historical results do not necessarily indicate the results you should expect for future periods.

											Six Months
	Year Ended December 31,										Ended June 30,
	2000		2001		2002		2003		2004		2004		2005
	(dollars in thousands, except per share data)(2)
Consolidated Statement of Operations:
Revenues, net	$	32,626	$	34,614	$	42,670	$	52,455	$	58,698	$	28,560	$	30,580
Cost of revenues		20,481		21,473		26,632		32,712		36,857		18,245		19,495
Gross profit		12,145		13,141		16,038		19,744		21,841		10,315		11,085
Selling, general and administrative expenses		9,008		10,868		12,301		15,544		17,139		8,111		9,130
Operating income		3,137		2,273		3,738		4,200		4,702		2,204		1,955
Interest expense		1,600		1,425		1,489		1,825		1,324		628		801
Income before provision for income taxes		1,537		848		2,248		2,375		3,377		1,576		1,154
Provision for income taxes		956		665		999		1,111		1,481		691		505
Net Income	$	581	$	183	$	1,249	$	1,264	$	1,896	$	885	$	649
Preferred stock dividend		160		160		160		160		160		80		80
Net income attributed to common stockholders	$	421	$	23	$	1,089	$	1,104	$	1,736	$	805	$	569
Net Income per common share basic	$	0.20	$	0.01	$	0.52	$	0.53	$	0.80	$	0.38	$	0.25
Diluted	$	0.19	$	0.01	$	0.40	$	0.40	$	0.58	$	0.28	$	0.19
Number of shares used in per share calculations
Basic		2,095		2,095		2,095		2,095		2,161		2,095		2,294
Diluted		3,129		2,095		3,155		3,182		3,255		3,203		3,429
Other Operating Data:
Number of catalogs mailed (000’s)		2,718		2,829		3,587		5,809		5,355		3,195		3,839
Number of retail stores		1		1		2		2		3		3		4
Capital expenditures	$	105	$	469	$	338	$	209	$	661	$	380	$	431
Gross profit margin		37.2%		38.0%		37.6%		37.6%		37.2%		36.1%		36.2%
EBITDA(1)	$	4,199	$	3,399	$	4,212	$	4,829	$	5,254	$	2,472	$	2,276
EBITDA margin(1)		12.9%		9.8%		9.9%		9.2%		9.0%		8.7%		7.4%
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	36	$	35	$	72	$	58	$	64	$	71	$	51
Total assets		21,824		20,768		23,534		25,503		26,763		27,686		29,768
Total long-term liabilities		13,403		12,023		12,080		12,460		11,778		14,916		14,403

(footnotes on following page)

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⁽¹⁾  When we use the term “EBITDA”, we are referring to net income minus interest income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. We also use EBITDA to determine our compliance with some of the covenants under our revolving credit facility and subordinated notes.

     EBITDA has some limitations as an analytical tool and you should not consider it in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities or any other measure calculated in accordance with generally accepted accounting principles. Some of the limitations are:

• EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or capital commitments;

• EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• EBITDA does not reflect the interest expense or cash requirements necessary to service interest or principal payments on our debt;

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and

• other companies in our industry may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.

     The following table reconciles EBITDA to net income.

											Six Months
	Year Ended December 31,										Ended June 30,
	2000		2001		2002		2003		2004		2004		2005
	(in thousands)
Net income	$	581	$	183	$	1,249	$	1,264	$	1,896	$	885	$	649
Depreciation and amortization		1,062		1,126		475		630		553		268		322
Interest expense		1,600		1,425		1,489		1,824		1,324		628		801
Income taxes		956		665		999		1,111		1,481		691		505
EBITDA	$	4,199	$	3,399	$	4,212	$	4,829	$	5,254	$	2,472	$	2,276

⁽²⁾  Certain of these amounts may not properly sum due to rounding.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear elsewhere in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”

Overview

          We are a leading specialty retailer and the largest direct marketer of equestrian products in the U.S. For over 20 years, Dover Saddlery has been a premier upscale marketing brand in the English-style riding industry. We sell our products through a multi-channel strategy, including catalogs, the Internet and retail stores. This multi-channel strategy has allowed us to use catalogs and our proprietary database of nearly two million names of equestrian enthusiasts, including nearly 300,000 email addresses and approximately 200,000 Dover customers, as a primary marketing tool to increase catalog sales and to drive additional business to our e-commerce websites and retail stores.

Historical Development

          Our business was started in 1975 by top-ranked English-style riding champions, Jim and David Powers. Our Wellesley, MA retail store opened in 1975 and our catalog operations began in 1982. In September 1998, Stephen Day, our current President and Chief Executive Officer and a veteran of the equestrian products direct marketing industry, and certain other investors acquired a controlling interest in Dover. In 2000, we launched our main website, www.doversaddlery.com. In 2002, we opened our second Dover Saddlery store in Hockessin, DE and we expanded into the Western-style market by acquiring the Smith Brothers catalog and website, www.smithbrothers.com. In 2003, we acquired rights to the Miller’s Harness brand for use in catalog and Internet sales to target entry-level and lower-cost equestrian products customers. We opened a Smith Brothers store in Denton, TX in 2004 and our third Dover Saddlery store in Plaistow, NH in 2005.

          We offer a comprehensive selection of more than 5,800 products required to own, train and compete with a horse, costing from $1 to over $4,000. Our products fall into the three main categories of saddles and tack, specialized apparel, and horse care and stable products. We have historically focused on the English-style riding market. Dover is known for providing the highest quality products for English-style riding, including premier brands such as Hermes, Ariat, Grand Prix, Mountain Horse, Passier, and Prestige. To broaden our product offerings, we began selling into the Western-style riding market in 2002 under the Smith Brothers name.

          We have carefully built a multi-channel platform for growth by developing an extensive consumer database of equestrian enthusiasts and Dover customers. We have positioned ourselves to capitalize on the synergies of combining catalog and Internet operations with a retail store channel. By marketing our products across integrated, multiple sales channels, we have strengthened our brand visibility and brand equity, expanded our customer database and increased revenues, profits and market share. While our catalog acts as the primary marketing vehicle to increase Internet and store traffic, each of our channels reinforces the other and generates additional customers. Because we sell equestrian products through multiple channels to the same customer base, we operate in one reportable business segment.

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Revenues

          We market and sell the most comprehensive selection of products in the equestrian industry. We currently derive our revenues from product sales through three integrated distribution channels: catalog, Internet and our retail stores. Our direct sales consist of product sales generated from both catalog mailings and Internet marketing, and our retail store sales consist of products sold through our retail stores. We sell to the English-style riding market through our Dover Saddlery brand and to the Western-style riding market through our Smith Brothers brand.

          In 2004, approximately 88.9% of our revenues resulted from sales through our direct channel, and 11.1% resulted from sales at our three retail stores. For the six months ended June 30, 2005, our retail store sales increased to 13.9% of revenues which reflects the opening of our fourth retail store. All revenues are recorded net of product returns.

          Revenues from our product sales are seasonal. In addition, our revenues can be affected by the timing of our catalog mailings. In 2004, 28.4% of our revenues were generated in the fourth quarter.

Cost of Revenues

          The most significant components of our cost of revenues are product costs, purchasing, handling and transportation costs to obtain the products and ship them to our customers. We manage our integrated merchandising efforts by forming positive relationships with over 600 suppliers to ensure competitive costs and the most complete product offering for our customers. We have implemented procedures to promote labor efficiencies in the handling of our products. In addition, we work closely with transportation companies in negotiating competitive rate structures to manage our freight costs.

Gross Profit

          Our gross profit as a percentage of revenues varies according to the season of the year and the mix of products sold. Our gross profit may not be comparable to other specialty retailers, as some companies include all of the costs related to distribution in cost of revenues while others, like us, exclude all or a portion of the costs related to distribution from cost of revenues and include them in selling, general and administrative expenses.

Selling, General and Administrative Expenses

          Our selling, general and administrative expenses consist primarily of:

• advertising, marketing and other brand-building costs, primarily associated with developing, printing and distributing our catalogs;

•  labor and related costs for order processing, and salaries and related costs for marketing, creative and executive personnel;

• infrastructure costs and information system costs;

• credit card processing fees; and

• occupancy and other overhead costs.

As we focus on increasing our market penetration and continuing to build brand awareness, we anticipate that selling, general and administrative expenses will continue to increase in absolute dollars for the foreseeable future. Selling, general and administrative costs as a percentage of our revenues are not likely to decrease in the foreseeable future as we intend to continue to take advantage of our market-leading position in the equestrian industry by building on the Dover Saddlery and Smith Brothers brands. We also expect our general and administrative expenses will

29

increase due to our preparations to become and to operate as a public company, including costs associated with compliance with Section 404 of the Sarbanes-Oxley Act, directors’ and officers’ liability insurance, increased professional services and investor relations.

Fiscal Periods

          Our fiscal year ends on December 31 and our fiscal quarters end on March 31, June 30, September 30 and December 31.

Results of Operations

          The following table sets forth our results of operations for the periods shown:

		Fiscal Year Ended									Six Months
		December 31,									Ended June 30,
		2002			2003			2004			2004			2005
		(dollars in thousands)(2)
Revenues, net — direct		$	39,424		$	47,328		$	52,160		$	25,560		$	26,318
Revenues, net — retail stores			3,246			5,127			6,538			3,000			4,261
Revenues, net — total			42,670			52,455			58,698			28,560			30,580
Cost of revenues			26,631			32,712			36,857			18,245			19,495
Gross profit			16,038			19,744			21,841			10,315			11,085
Selling, general and administrative expenses			12,301			15,544			17,139			8,111			9,130
Operating income			3,738			4,199			4,702			2,204			1,955
Interest expense			1,489			1,825			1,324			628			801
Income before provision for income taxes			2,248			2,375			3,377			1,576			1,154
Provision for income taxes			999			1,111			1,481			691			505
Net income		$	1,249		$	1,264		$	1,896		$	885		$	649
Other Operating Data:
	Number of catalogs mailed (000’s)		3,587			5,809			5,355			3,195			3,839
	Number of retail stores		2			2			3			3			4
	Capital expenditures	$	338		$	209		$	661		$	380		$	431
	Gross profit margin		37.6	%		37.6	%		37.2	%		36.1	%		36.2	%
	EBITDA(1)	$	4,212		$	4,829		$	5,254		$	2,472		$	2,276
	EBITDA margin(1)		9.9	%		9.2	%		9.0	%		8.7	%		7.4	%

(1)	When we use the term “EBITDA”, we are referring to net income minus interest income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
(2)	Certain of these amounts may not properly sum due to rounding.

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          The following table sets forth our results of operations as a percentage of revenues for the periods shown:

	Fiscal Year Ended						Six Months
	December 31,						Ended June 30,
	2002		2003		2004		2004		2005
Revenues, net — direct		92.4%		90.2%		88.9%		89.5%		86.1%
Revenues, net — retail stores		7.6%		9.8%		11.1%		10.5%		13.9%
Revenues, net — total		100.0%		100.0%		100.0%		100.0%		100.0%
Cost of revenues		62.4%		62.4%		62.8%		63.9%		63.8%
Gross profit		37.6%		37.6%		37.2%		36.1%		36.2%
Selling, general and administrative expenses		28.8%		29.6%		29.2%		28.4%		29.9%
Operating income		8.8%		8.0%		8.0%		7.7%		6.4%
Interest expense		3.5%		3.5%		2.3%		2.2%		2.6%
Income before provision for income taxes		5.3%		4.5%		5.8%		5.5%		3.8%
Provision for income taxes		2.3%		2.1%		2.5%		2.4%		1.6%
Net income		2.9%		2.4%		3.2%		3.1%		2.1%

Comparison of Six Months Ended June 30, 2005 to Six Months Ended June 30, 2004

Revenues

          Our total revenues increased 7.1% to $30.6 million in the six months ended June 30, 2005, from $28.6 million in the six months ended June 30, 2004. Revenues increased approximately $1.3 million, or 42.0%, in our retail store channel and $0.8 million or 3.0%, in our direct sales channel. The increase in revenues from our retail store channel was driven primarily by the successful opening of our new Plaistow, NH store, which generated $1.2 million in revenues in the second quarter of 2005 after its grand opening on April 15, 2005. Our increase in direct sales was softened by a weak spring season consistent with the overall consumer confidence level for that period.

Gross Profit

          Gross profit increased 7.4% to $11.1 million in the six months ended June 30, 2005, from $10.3 million in the six months ended June 30, 2004. Gross profit as a percentage of revenues increased to 36.2% in the six months ended June 30, 2005, from 36.1% of revenues in the six months ended June 30, 2004. This increase in gross profit was due to increased revenues, primarily in our retail store channel. This increase, as a percentage of revenues, was due to realized benefits from our merchandising strategies.

Selling, General and Administrative

          Selling, general and administrative expenses increased 12.6% to $9.1 million (29.9% of revenues) in the six months ended June 30, 2005, from $8.1 million (28.4% of revenues) in the six months ended June 30, 2004. The increase in selling, general and administrative expenses was primarily due to increased advertising and catalog expenses of $0.3 million, labor expenses of $0.3 million and occupancy costs of $0.2 million in support of both our direct sales channel and our new retail store.

Interest Expense

          Interest expense, including amortization of deferred financing costs attributed to our subordinated debt and revolving credit facility, amounted to $0.8 million in the six months ended

31

June 30, 2005 compared to approximately $0.6 million in the six months ended June 30, 2004. The increase was primarily due to higher borrowing levels and higher average rates of interest on our revolving credit facility during the six months ended June 30, 2005.

Income Tax Provision

          The provision for income taxes was $0.5 million for the six months ended June 30, 2005, reflecting an effective tax rate of 43.7%, as compared to $0.7 million in 2004, reflecting an effective tax rate of 43.8%.

Net Income

          Net Income of $0.6 million decreased by $0.2 million for the six months ended June 30, 2005 due primarily to new retail store pre-opening expenses, as well as softness in our direct sales and increased interest expense.

Comparison of Years Ended December 31, 2004 and 2003

Revenues

          Our total revenues increased 11.9% to $58.7 million in 2004, from $52.5 million in 2003, a total increase of $6.2 million. Revenues in our direct sales channel increased $4.8 million, or 10.2%, and revenues in our retail store channel increased $1.4 million, or 27.5%. The increase in revenues from our direct sales channel was attributed to higher unit volumes through both catalog and the Internet from both the Dover Saddlery and the Smith Brothers brands. The higher volumes are attributed to more efficient and targeted mailings. The increase in revenues from our retail store channel was due primarily to the successful opening of our Smith Brothers store in Denton, TX in April 2004 which contributed approximately $0.7 million during 2004, as well as sales growth of $0.5 million from the Hockessin, DE store.

Gross Profit

          Gross profit increased 10.6% to $21.8 million in 2004, from $19.7 million in 2003. Gross profit as a percentage of revenues slightly decreased to 37.2% in 2004, from 37.6% of revenues in 2003. The increase of $2.1 million in gross profit was due primarily to increased revenues in both the direct sales and retail store channels. The reduction in gross profit as a percentage of revenues was due primarily to a slight variation in overall product mix.

Selling, General and Administrative

          Selling, general and administrative expenses increased to $17.1 million (29.2% of revenues) in 2004 from $15.5 million (29.6% of revenues) in 2003. The $1.6 million increase includes advertising and catalog spending of approximately $0.7 million to support the growth of both our direct sales and retail store channels. Labor and related costs increased approximately $0.5 million to support the new Smith Brothers store, increased direct channel sales and administrative support functions. Occupancy costs increased approximately $0.2 million due to the 32,000 square foot expansion of our central warehouse, as well as the new Plaistow, NH store.

Interest Expense

          Interest expense of $1.3 million in 2004, including amortization of deferred financing costs attributed to our subordinated debt and revolving credit facility, was approximately $0.5 million less than 2003 interest expense of $1.8 million, due primarily to a reduction in the interest expense attributable to our subordinated debt, which we refinanced in December 2003.

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Income Tax Provision

          The provision for income taxes was $1.5 million in 2004, reflecting an effective tax rate of 43.9%, as compared to $1.1 million in 2003, reflecting an effective tax rate of 46.8%.

Net Income

          Net income for the year 2004 increased 50% to $1.9 million, due primarily to our combined 11.9% revenue growth across both sales channels during the year.

Comparison of Years Ended December 31, 2003 and 2002

Revenues

          Our total revenues increased 22.9%, to $52.5 million in 2003, from $42.7 million in 2002, a total increase of $9.8 million. Revenues from the direct sales channel increased $7.9 million, or 20.0%, and was attributable to the first full year of the Smith Brothers catalog acquired in 2002 (an increase of $2.9 million, or 80.0%), the launch of our Miller’s Harness sales flier targeted to entry-level equestrians (which generated revenues of $2.3 million), as well as continued growth in the core Dover Saddlery brand of $2.7 million. The Dover Saddlery increase was attributed to enhanced product mix and new targeted catalog mailings. Revenues from our retail stores increased approximately $1.9 million, or 57.9%, due primarily to the first full year of operation for the Hockessin, DE store, which opened in October 2002.

Gross Profit

          Gross profit increased 23.1% to $19.7 million in 2003, from a gross profit of $16.0 million in 2002. The increase in gross profit of $3.7 million is attributable to the substantial increases in revenues of 22.9% in 2003. Gross profit as a percentage of revenues was unchanged, at 37.6% of revenues in both 2003 and 2002.

Selling, General and Administrative

          Selling, general and administrative expenses increased 26.4% to $15.5 million (29.5% of revenues) in 2003 from $12.3 million (28.8% of revenues) in 2002. During 2003, we increased catalog mailings by $0.7 million in order to rapidly gain market share in our new Western-style riding market, as well as $0.6 million for the development and launch of our newly acquired Miller’s Harness brand. We also expanded our call center and fulfillment capacity which increased costs by approximately $0.2 million as revenues increased. In addition, the first full year of our new Hockessin, DE store increased both occupancy ($0.1 million) and labor costs ($0.2 million).

Interest Expense

          Interest expense, including amortization of deferred financing costs attributed to our subordinated debt and revolving credit facility, increased in 2003, to $1.8 million, from $1.5 million in 2002. The increase was attributable to higher borrowing levels required by the first full year of operations of Smith Brothers and the Miller’s Harness sales flier and increased working capital needs as well as higher than average rates of interest on our revolving credit facility during 2003.

Income Tax Provision

          Income taxes were $1.1 million in 2003, reflecting an effective tax rate of 46.8%, as compared to $1.0 million in 2002, reflecting an effective tax rate of 44.5%.

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Net Income

          Net income for the year 2003 was $1.3 million, compared with $1.2 million in the previous year, where increased revenue and profitability was offset by the increased operating and interest costs of our newly acquired Western-style equestrian products catalog.

Quarterly Results of Operations

          Since 2001, our quarterly product sales have ranged from a low of approximately 20% to a high of approximately 32% of any calendar year’s results. The beginning of the spring outdoor riding season in the northern half of the country has typically generated a slightly stronger second quarter of the year, and the holiday buying season has generated additional demand for our normal equestrian product lines in the fourth quarter of the year. Revenues for the first and third quarters of the calendar year have tended to be somewhat lower than the second and fourth quarters. We anticipate that our revenues will continue to vary somewhat by season.

          The timing of our new retail store openings has had and is expected to continue to have a significant impact on our quarterly results. We will incur one-time expenses related to the opening of each new store. As we open new stores (i) revenues may spike and then settle and (ii) pre-opening expenses, including such expenses as occupancy and management overhead, are incurred, which may not be offset by correlating revenues during the same financial reporting period. As a result of these factors, new retail store openings may result in temporary declines in operating profit, both in dollars and as a percentage of sales.

          The following tables presenting our unaudited quarterly results of operations should be read in conjunction with the consolidated financial statements and related notes contained elsewhere in this prospectus. We have prepared the unaudited information on the same basis as our audited consolidated financial statements. You should also keep in mind, as you read the following tables, that our operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year.

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          The following table presents our unaudited quarterly results of operations for the ten fiscal quarters ended June 30, 2005. This table includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for fair statement of our financial position and operating results for the quarters presented.

		Fiscal Quarter Ended
		March 31,			June 30,			Sept 30,			Dec 31,			March 31,			June 30,			Sept 30,			Dec 31,			March 31,			June 30,
		2003			2003			2003			2003			2004			2004			2004			2004			2005			2005
		(dollars in thousands)
Revenues, net — direct		$	9,746		$	12,222		$	10,799		$	14,561		$	12,685		$	12,875		$	11,772		$	14,828		$	12,875		$	13,443
Revenues, net — retail stores			915			1,306			1,449			1,457			1,263			1,737			1,707			1,831			1,370			2,891
Revenues, net — total			10,661			13,528			12,248			16,018			13,948			14,612			13,479			16,659			14,245			16,334
Cost of revenues			6,741			8,544			7,663			9,764			8,924			9,321			8,560			10,053			9,172			10,323
Gross profit			3,920			4,984			4,585			6,254			5,024			5,291			4,919			6,606			5,073			6,011
Selling, general and administrative expenses			3,282			3,934			3,622			4,706			3,986			4,125			4,143			4,885			4,455			4,675
Operating income			638			1,050			963			1,548			1,038			1,166			776			1,721			618			1,336
Interest expense			433			448			454			489			303			325			344			352			392			409
Income before provision for income taxes			205			602			509			1,059			735			841			432			1,369			226			927
Provision for income taxes			96			281			238			496			322			369			188			602			99			405
Net income		$	109		$	321		$	271		$	563		$	413		$	472		$	244		$	767		$	127		$	522
Other Operating Data:
	Number of catalogs mailed (000’s)		1,797			1,690			1,082			1,240			1,815			1,379			1,149			1,012			2,177			1,661
	Number of retail stores		2			2			2			2			2			3			3			3			3			4
	Gross profit margin		36.8	%		36.8	%		37.4	%		39.0	%		36.0	%		36.2	%		36.5	%		39.7	%		35.6	%		36.8	%
	EBITDA(1)	$	764		$	1,212		$	1,110		$	1,743		$	1,172		$	1,300		$	910		$	1,872		$	780		$	1,496
	EBITDA margin(1)		7.2	%		9.0	%		9.1	%		10.9	%		8.4	%		8.9	%		6.8	%		11.2	%		5.5	%		9.2	%

⁽¹⁾  When we use the term “EBITDA”, we are referring to net income minus interest income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.

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          The following table sets forth our results of operations as a percentage of revenues for the periods shown:

	Fiscal Quarter Ended
	March 31,		June 30,		Sept 30,		Dec 31,		March 31,		June 30,		Sept 30,		Dec 31,		March 31,		June 30,
	2003		2003		2003		2003		2004		2004		2004		2004		2005		2005
Revenues, net — direct		91.4%		90.3%		88.2%		90.9%		90.9%		88.1%		87.3%		89.0%		90.4%		82.3%
Revenues, net — retail stores		8.6%		9.7%		11.8%		9.1%		9.1%		11.9%		12.7%		11.0%		9.6%		17.7%
Revenues, net — total		100.0%		100.0%		100.0%		100.0%		100.0%		100.0%		100.0%		100.0%		100.0%		100.0%
Cost of revenues		63.2%		63.2%		62.6%		61.0%		64.0%		63.8%		63.5%		60.3%		64.4%		63.2%
Gross profit		36.8%		36.8%		37.4%		39.0%		36.0%		36.2%		36.5%		39.7%		35.6%		36.8%
Selling, general and administrative expenses		30.7%		29.1%		29.6%		29.4%		28.6%		28.2%		30.7%		29.3%		31.3%		28.6%
Operating income		6.0%		7.8%		7.9%		9.7%		7.4%		8.0%		5.8%		10.3%		4.3%		8.2%
Interest expense		4.1%		3.3%		3.7%		3.1%		2.2%		2.2%		2.6%		2.1%		2.8%		2.5%
Income before provision for income taxes		2.0%		4.5%		4.2%		6.6%		5.3%		5.8%		3.2%		8.2%		1.6%		5.7%
Provision for income taxes		1.0%		2.1%		1.9%		3.1%		2.3%		2.5%		1.4%		3.6%		0.7%		2.5%
Net income		1.1%		2.4%		2.2%		3.5%		3.0%		3.2%		1.8%		4.6%		0.9%		3.2%

Liquidity and Capital Resources

          Our primary sources of liquidity are cash flows generated from our operations, availability under our revolving credit facility and available cash and cash equivalents. We intend to use these sources of liquidity to fund our working capital requirements, capital expenditure requirements and third-party debt service requirements. We may in the future need to obtain additional financing from banks, or through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements.

Operating Activities

          The cash used by our operating activities in the first six months of 2005 was primarily inventory of $1.0 million, mostly for the new Plaistow, NH store, as well as seasonal increases in prepaid catalogs of $1.2 million. In the first six months of 2004, cash used by our operating activities was $1.8 million, including inventory of $0.5 million (primarily from a new retail store), seasonal prepaid catalog production of $0.7 million and payables and accrued expenses totaling $1.1 million.

          In 2004, cash provided by our operating activities was primarily due to net income of $1.9 million and non-cash expenses of $0.9 million, which were partially offset by an increase in inventory of $0.9 million, and a decrease in accounts payable of $0.2 million. The increase in inventory was due to the opening of a new retail store, in addition to our normal revenues-related increases. In 2003, the cash provided by our operating activities was primarily due to net income of $1.3 million, and non-cash expenses of $1.1 million, which were partially offset by an increase in inventory of $1.4 million and a decrease in accounts payable of $0.5 million. The increase in inventory was due to the substantial increase in Western-style riding inventory in support of the first full year of operations for the new Smith Brothers catalog, in addition to our normal revenues-related increases. In 2002, the cash provided by our operating activities was primarily generated by net income of $1.3 million and an increase in accounts payable of $1.5 million which were partially offset

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by an increase in inventory of $1.7 million, due to the new inventory required for the support of the new Smith Brothers catalog, and the opening of the Hockessin, DE retail store.

Investing Activities

          Cash used in our investing activities was $0.5 million in the first half of 2005, $0.4 million in the first half of 2004, $0.8 million in the full year of 2004, $0.6 million in 2003 and $0.8 million in 2002. Investment activities throughout the period represent the purchase of capital equipment in support of our growth, including leasehold improvements, computer equipment, internal use software, furniture and fixtures and the purchase of other assets.

Financing Activities

          Net cash provided by our normal seasonal financing activities in the six month periods ending June 30, 2005 and June 30, 2004 consisted of $2.4 million and $2.2 million, respectively, in borrowings under our revolving credit facility. In 2004, net cash used in our financing activities consisted primarily of $0.9 million for repayment of borrowings under our revolving credit facility and $0.2 million in capital lease payments. In 2003, net cash used in our financing activities consisted primarily of net payments of $0.3 million related to the refinancing of our senior subordinated debt and revolving credit facility. In 2002, net cash used in our financing activities in 2002 consisted primarily of $0.3 million for repayment of borrowings under our revolving credit facility.

Revolving Credit Facility

          In September 2005, we renewed and increased our revolving credit facility with Bank of America, N.A., under which we can borrow up to $16.0 million, including $2.0 million for letters of credit. Interest accrues at a variable rate based on both prime and published LIBOR rates. The credit facility expires on September 16, 2008 at which time all advances will be immediately due and payable. As of June 30, 2005, the revolving credit facility borrowing limit was $14.0 million and the amount outstanding under the credit facility was $10.3 million at a blended rate of 6.1% and the unused amount available was $3.7 million. On September 16, 2005, we drew on our credit facility for $2.0 million to finance a portion of a $6.0 million purchase price of 603,889 shares of our common stock. We maintain a derivative financial instrument to hedge the risk of interest rate fluctuations on a portion of our outstanding bank debt. Borrowings are secured by substantially all of our assets. Under the terms of our credit facility, we are subject to certain covenants including, among others, maximum funded debt ratios and capital expenditures, and minimum operating cash flows and profitability. At October 5, 2005, we were in compliance with all covenants under the credit facility. To the extent we are unable to satisfy those covenants in the future, we will need to obtain waivers to avoid being in default of the terms of this credit facility. If a default occurs, the bank may require that we repay all amounts then outstanding. Any amounts which we may be required to repay prior to a scheduled repayment date, however, would reduce funds that we could otherwise allocate to other opportunities that we consider desirable.

Senior Subordinated Note and Warrant

          On September 16, 2005, we and each of our subsidiaries closed an Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement with Patriot Capital Funding, Inc., which provided for our issuance of a senior subordinated note payable, which is due in full on September 16, 2009 for aggregate proceeds of $8.05 million. Of such proceeds, $3.5 million was used to pay off a previously existing subordinated note payable and $4.0 million was used to pay a portion of a $6.0 million purchase price of 603,889 shares of our common stock. The note is a general senior subordinated obligation, is subordinated in right of payment to our existing and future senior debt, ranks equal in right of payment with any of our future senior subordinated debt and is senior in right of payment to any of our future subordinated debt. Interest at an annual rate of 11.50% is payable monthly on the fifth business day of the month. Prepayment on the principal

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amount due under the note may voluntarily be made at any time in multiples of $100,000, plus accrued and unpaid interest and a prepayment fee equal to the principal amount prepaid multiplied by 3.0% if prepayment is made prior to September 16, 2006, by 4.0% if prepayment is made prior to September 16, 2007, 5.0% if prepayment is made prior to September 16, 2008 and 6.0% if prepayment is made prior to September 16, 2009. Mandatory prepayment is required upon a change in control. We intend to prepay all or a portion of the debt due under the note with the proceeds of this offering. Simultaneously with the issuance of this note, we issued a warrant to Patriot Capital Funding, Inc. exercisable at any time after March 31, 2006 for up to 23,503 shares of our common stock at an exercise price of $0.01 per share.

Treasury Stock Transaction

          On September 16, 2005, the holder of all 1,015,000 shares of our outstanding preferred stock converted all of its shares of preferred stock into 1,015,000 shares of our common stock. We repurchased 603,889 of such shares of common stock for a purchase price of $6.0 million. We funded $4.0 million of the $6.0 million purchase price by increasing our existing interest-bearing note payable to a third party to $8.05 million and drew on our amended credit facility for the remaining $2.0 million. We intend to use a portion of the proceeds of this offering to repay a portion of the $8.05 million note.

Working Capital and Capital Expenditure Needs

          We believe our existing cash, cash equivalents, expected cash to be provided by our operating activities, funds available through our revolving credit facility and the net proceeds from this offering will be sufficient to meet our currently planned working capital and capital expenditure needs over at least the next 24 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our marketing and sales activities, the expansion of our retail stores, the acquisition of new capabilities or technologies and the continuing market acceptance of our products. To the extent that existing cash, cash equivalents, cash from operations and cash from short-term borrowings are insufficient to fund our future activities, we may need to raise additional funds through public or private equity or debt financing. Although we are currently not a party to any agreement or letter of intent with respect to potential investments in, or acquisitions of, businesses, services or technologies, we may enter into these types of arrangements in the future, which could also require us to seek additional equity or debt financing. Additional funds may not be available on terms favorable to us or at all.

Contractual Obligations

          We generally do not enter into binding purchase commitments. Our principal commitments consist of obligations under our credit facility and leases for our headquarters and distribution facility, as well as our retail stores and miscellaneous office space. The following table describes our commitments to settle contractual obligations in cash as of June 30, 2005, unless otherwise noted:

	Payments Due by Period
	2005		2006		2007		2008		2009		Total
	(in thousands)
Short-term bank borrowings	$	1,023	$	—	$	—	$	—	$	—	$	1,023
Capital leases(1)		175		151		97		64		21		508
Operating leases(1)		1,020		581		201		160		120		2,082
Revolving credit facility		—		10,300		—		—		—		10,300
Senior subordinated notes		—		—		3,769		—		—		3,769
Total	$	2,218	$	11,032	$	4,067	$	224	$	141	$	17,682

⁽¹⁾  Based on December 31, 2004 commitments.

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          As of June 30, 2005, our total contractual obligations had increased by $2.6 million from December 31, 2004 as a result of advances on the revolving credit facility.

Off-Balance Sheet Arrangements

          As of June 30, 2005, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of the Securities and Exchange Commission’s Regulation S-K.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Risk

          Nearly all of our revenues are derived from transactions denominated in U.S. dollars. We purchase products in the normal course of business from foreign manufacturers. As such, we have exposure to adverse changes in exchange rates associated with those product purchases, but this exposure has not been significant.

Impact of Inflation

          We believe the effects of inflation, if any, on our results of operations and financial condition have not been material in recent years.

Interest Rate Sensitivity

          We had cash and cash equivalents totaling $0.1 million at June 30, 2005. The unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Some of the securities in which we invest, however, may be subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investments to fluctuate. To minimize this risk in the future, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial paper, money market funds, debt securities and certificates of deposit. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. As of June 30, 2005, all of our investments were held in money market accounts.

          Our exposure to market risk also relates to the increase or decrease in the amount of interest expense we must pay on our outstanding debt instruments, primarily certain borrowings under our revolving credit facility. The advances under this revolving credit facility bear a variable rate of interest determined as a function of the prime rate and the published LIBOR rate at the time of the borrowing. We maintain a derivative financial instrument to hedge the risk of interest rate fluctuations on a portion of our outstanding bank debt. If interest rates were to increase by one percent, the additional interest expense as of June 30, 2005 would be approximately $100,000 annually prior to any potential benefit from our interest rate protection. At June 30, 2005, there was $10.3 million outstanding under our revolving credit facility.

Critical Accounting Policies and Estimates

          Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates.

          We believe that of our significant accounting policies, which are described in the notes to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, we believe that the following accounting policies are the most

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critical to fully understanding and evaluating our consolidated financial condition and results of operations.

Revenue Recognition

          Revenues from product sales are recognized at the time of shipment to catalog and Internet customers and at the point of sale to retail store customers. At the time of recognition, we provide a reserve for projected product returns based on prior return experience. Merchandise return rates have historically been consistent, with period-end reserves of $561,000, $663,000, $616,000 and $580,000 for the years ended December 31, 2002, 2003 and 2004, and the six months ended June 30, 2005, respectively.

          Shipping and handling fees charged to the customer are recognized at the time the products are shipped to the customer and are included in net revenues. Shipping costs are included in cost of goods sold.

Inventory Valuation

          Inventory consists of finished goods in our warehouse and retail stores. Our inventory is stated at the lower of cost, with cost determined by the first-in, first-out (FIFO) method, or net realizable market value. We continuously monitor the costs allocated to ensure adequate valuation of the related products. Our reserve for inventory obsolescence was $64,000, $64,000 and $70,000 for the years ended December 31, 2002, 2003 and 2004, respectively. The related reserve at the six month period ended June 30, 2005 was $70,000.

Advertising Costs and Catalog Expenses

          The costs of direct-response advertising materials, primarily catalog production and distribution costs, are deferred in accordance with Statement of Position (SOP) 93-7, Reporting on Advertising Costs. These costs are recognized over the period of expected future revenues, which is less than one year. Advertising costs not related to our direct response catalogs and marketing activities are expensed as incurred.

Income Taxes

          We account for income taxes under the liability method wherein the deferred tax assets and liabilities are based on the difference between the financial statements and tax bases of assets and liabilities, multiplied by the expected tax rate in the year the differences are expected to reverse. Deferred tax expense results from the change in the net deferred tax asset or liability between periods.

Stock Based Compensation

          We account for employee stock-based compensation under APB Opinion No. 25, Accounting for Stock Issued to Employees, and elect the disclosure-only alternative under Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, and the enhanced disclosures as required by SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure. We have one stock-based employee compensation plan, which is more fully described in Note 6.

          Under the intrinsic-value method, compensation expense is measured on the date of grant as the difference between the deemed fair value of our common stock and the option exercise price multiplied by the number of options granted. Generally, we grant stock options with exercise prices equal to the estimated fair value of our common stock, however, to the extent the deemed fair value of the common stock exceeds the exercise price of stock options granted to employees on the date

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of grant, we record deferred stock-based compensation and amortize the expense over the vesting schedule of the options, generally four years. The fair value of our common stock is determined by our Board of Directors. In the absence of a public trading market for our common stock, our Board considers objective and subjective factors in determining the fair value of the common stock and related options. Consistent with the guidance provided by the AICPA’s Technical Practice Aid on The Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the TPA), such considerations included, but were not limited to, the following factors:

          • Historical and expected future earnings performance

          • The liquidation preferences and dividend rights of our preferred stock

          • Milestones achieved by the Company

          • Marketplace and major competition

          • Market barriers to entry

          • Our workforce and related skills

          • Our customer and vendor characteristics

          • Strategic relationships with our suppliers

          • Risk factors and uncertainties facing us

          In order to provide further support for the fair value determination made by the Board at the time of grant, we hired an independent valuation firm to conduct a retrospective valuation as of December 31, 2004. The valuation firm has experience in appraisal services, fairness opinions and advice in mergers and acquisitions. This important additional valuation process provides increased support based on the Hierarchy of Valuation Alternatives, as outlined in the TPA.

          We provided the valuation firm with all requested information relating to our business, competition, prospects and future outlook and additional information deemed relevant for the purpose of generating a valuation analysis, including liquidation preferences and dividend rights of our preferred stock. Under the guidelines of the TPA, the valuation specialist considered all of the market, income and asset based approaches. It was determined that the asset based approach was not appropriate given our business and capital structure. The specialist applied a probability-weighted expected return method to value our common stock. The resulting valuation of our common stock was $2.55 per share, as of December 31, 2004.

          The enterprise value of our company increased moderately from 1998 to 2004 based upon reasonable growth and profitability. This included the opening of two small retail stores complimenting our internet and catalog sales channels. However, it was not until the Plaistow, NH retail store opened in April 2005 and the successful results confirmed our retail expansion strategy, that our enterprise value increased substantially. This critical milestone enhanced our enterprise value and was essential in our ability to obtain outside financing to pursue our retail expansion strategy. We solicited financing offers from private equity firms and formally engaged WR Hambrecht + Co in July 2005. The valuation discussions with each of these firms were entirely driven by the retail expansion strategy as confirmed by the success of the Plaistow, NH store.

          No stock-based compensation expense was recorded for the periods presented as the exercise price of our stock options was equal to or in excess of the estimated fair value of our common stock on the date of grant.

Impairment of Long-lived Assets

          We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be

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held and used is measured by a comparison of the carrying amount of an asset to discounted future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. We do not believe that any of our long-lived assets were impaired as of December 31, 2003 and 2004 and June 30, 2005.

          We account for goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, which requires that goodwill be reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is evaluated for potential impairment. Management has determined, based on the guidance of SFAS No. 142, there is one reporting unit, the Company as a whole. We performed our annual test of impairment of goodwill as of December 31, 2004. Based on the results of the first step of the goodwill impairment test, we have determined that no impairment had occurred, as the fair value of the reporting unit exceeded the respective carrying value. Therefore, the second step of the goodwill impairment test was not necessary.

Recent Accounting Pronouncements

          In December 2004, the FASB issued SFAS No. 123R, which requires the measurement of all share-based payments to employees, including grants of employee stock options, using a fair-value-based method and the recording of such expense in our consolidated statement of operations. The accounting provisions of SFAS No. 123R are effective for fiscal years beginning after June 15, 2005. We will be required to adopt SFAS No. 123R for our fiscal quarter beginning January 1, 2006. The pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition. We have not yet determined whether the adoption of SFAS No. 123R will result in amounts that are similar to the current pro forma disclosures under SFAS No. 123. We are evaluating the requirements under SFAS No. 123R and expect the adoption could have a significant adverse impact on our future consolidated operating results.

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BUSINESS

Overview

          We are a leading specialty retailer and the largest direct marketer of equestrian products in the U.S. For over 20 years, Dover Saddlery has been a premier upscale brand in the English riding industry. We sell our products through a multi-channel strategy, including catalogs, the Internet and retail stores. This multi-channel strategy has allowed us to use catalogs and our proprietary database of nearly two million names of equestrian enthusiasts, including nearly 300,000 email addresses and approximately 200,000 Dover customers, as a primary marketing tool to increase catalog sales and to drive additional business to our e-commerce websites and retail stores.

          We offer a comprehensive selection of more than 5,800 products required to own, train and compete with a horse, costing from $1 to over $4,000. Our products fall into the following three main categories:

• saddles and tack;

• specialized apparel; and

• horse care and stable products.

          We have historically focused on the English-style riding market. Dover is known for providing the highest quality products for English riding, including premier brands such as Hermes, Ariat, Grand Prix, Mountain Horse, Passier and Prestige. In addition, we have developed direct sources for private label and non-branded products which accounted for approximately 21% of our 2004 revenues. We offer what we believe is the largest selection of exclusive and semi-exclusive equestrian products in the industry. To further broaden our offerings, we began selling into the Western-style riding market in 2002 under the Smith Brothers name.

          Our management team is highly experienced in both the direct marketing and retail channels with an average of more than 20 years of equestrian experience. Since Stephen Day acquired an ownership interest in Dover and joined as our President and Chief Executive Officer, he and the rest of the management team have grown revenues from $15.6 million to $58.7 million and operating income from $1.4 million to $4.7 million, representing compound annual growth rates of 27.7% and 25.4%, respectively, from 1998 through 2004. Prior to joining Dover, Mr. Day was responsible for building the only other national English-style equestrian products direct marketing and retail company, State Line Tack.

          We have positioned ourselves to capitalize on the synergies of combining catalog and Internet operations with a retail store channel. By marketing our products across integrated, multiple shopping channels, we have strengthened our brand visibility and brand equity, expanded our customer database and increased revenues, profits and market share. While our catalog has been our primary marketing vehicle to increase Internet and store traffic, each of our channels has reinforced the other and generates additional customers.

          Our experience based on the stores we have opened to date has shown two key factors: (i) customers who purchased products across all three channels (catalog, Internet and retail stores) have, on average, historically bought nearly three times more than customers who purchased only from a single channel and (ii) direct sales to customers within a 30 mile radius of a new store have, within two years of that store opening, exceeded direct sales levels prior to the new store opening. In the 12 month period ended July 10, 2005, our average customer purchases by individuals using only one channel was approximately $301, whereas the average customer purchases by individuals using all three channels was approximately $882. This is also reflected in the overall growth in revenue when we have opened a new store in areas where we have a strong customer base. When we opened our Hockessin, DE store in 2002, direct sales to customers within a 30 miles radius of the

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store declined by 4.0% from $496,441 to $476,517 in the first year of the store’s operation, but fully recovered and grew by 8.8% to $539,981 by the end of the second year of the store’s operation. At the same time, total retail sales for that store grew from $2.0 million for the first year to $2.6 million for the second year or 28.2%. Therefore, opening the Hockessin, DE store led to sales growth in that operating area from $496,441 to $3,107,617 in the first two years, or approximately 150% compounded annual growth.

          Through our subsidiaries, we currently operate three retail stores under the Dover Saddlery name and one retail store under the Smith Brothers name. We have identified additional locations throughout the U.S. which we believe are attractive for our planned retail store expansion and can allow us to capitalize on the highly fragmented nature of the retail equestrian products market and to take advantage of our strong brand name recognition. These additional locations have been identified using our proprietary mathematical store-optimization model which selects the locations nationwide with the strongest potential and optimizes distances between stores to enhance revenue potential. Our initial targets are based on an optimization model of 50 locations, each utilizing one of three different store formats, depending on the location and revenue potential of the area. We believe that our proprietary mathematical store-optimization model, assists us in locating retail sites and gives us a competitive advantage in finding optimal new store locations.

          Based on our experience to date with opening new retail stores in areas where we have a high level of existing direct customers, as well as the experience of other multi-channel retailers, we believe that expanding the number of retail store locations and focusing on our multi-channel business strategy are key to our continued success.

          Our mission is to grow our business by providing the most comprehensive offering of the highest quality, broadest range and most technically advanced equestrian tack, specialized apparel, horse care and stable products to serious equestrians, with a profitable and efficient operating model.

Our History

          Dover was founded in 1975 by Jim and David Powers who were top ranked English riding champions on the U.S. Equestrian team. Jim Powers was also a member of the 1972 U.S. Olympic equestrian team. The brothers aimed to bring their unique understanding of higher level equestrian competitive needs to better serve the industry’s customers. As a result of their focus on quality and premium positioning, Dover Saddlery has been a premier upscale brand in the English riding industry for over 20 years. The Powers opened our Wellesley, MA retail store in 1975 and began catalog operations in 1982.

          By 1998, our revenues had grown to approximately $15.6 million. In September 1998, Stephen Day, our current President and Chief Executive Officer and a veteran of the equestrian products direct marketing industry, and certain other new investors took a controlling interest in Dover. We launched our main website, www.doversaddlery.com, in 2000. In 2001, we moved our headquarters to Littleton, MA, and into a 68,000 square foot warehouse and office facility. Our second retail location under the Dover Saddlery name was opened in Hockessin, DE in 2002.

          Our management team has identified the large Western-style equestrian market as a growth opportunity and, in 2002, we acquired the Smith Brothers catalog and website, www.smithbrothers.com. In 2003, we also acquired rights in the Miller’s Harness brand for use in catalog and Internet sales to target entry-level and lower-cost equestrian products customers. In 2004, we opened a Smith Brothers store in Denton, TX.

          In April 2004, we expanded our Littleton, MA warehouse and office facility to 100,000 square feet and, in April 2005, we opened our third Dover Saddlery store in Plaistow, NH.

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Competitive Strengths

          We believe that we are uniquely positioned in the equestrian tack, specialized apparel and horse care and stable products industry to grow through our multi-channel strategy. We believe that we have numerous competitive strengths, including:

          Experienced Management with a Track Record of Growth and Profitability: We were founded in 1975 and have a 30 year operating history. Stephen Day joined Dover after successfully building and growing another equestrian products catalog and retailer, State Line Tack. Our management team has extensive experience in direct marketing and retail as well as an average of more than 20 years of equestrian experience. Since Stephen Day became President and Chief Executive Officer in 1998, we have been profitable and have grown annual revenues from $15.6 million to $58.7 million and annual operating income from $1.4 million to $4.7 million, representing compound annual rates of 27.7% and 25.4%, respectively through 2004.

          Established Brand in English-Style Riding Equipment and Apparel: We are known for offering the highest quality products, the most comprehensive selection and excellent customer service. Since our founding over 30 years ago by Jim and David Powers, we have built a reputation with a large and growing following in the equestrian products marketplace. Dover Saddlery is one of only two large nationally recognized retail brands in the English-style equestrian products industry and we believe our Dover Saddlery brand is a significant asset as we continue our retail store expansion and multi-channel growth strategy.

          Leading English-Style Equestrian Products Direct Marketer: With $52.2 million in 2004 revenues from our direct sales channel, we believe we hold the largest market share among equestrian products catalogers for equestrian tack, specialized apparel and horse care and stable products. The Dover Saddlery catalog is known by many customers as a leading source for English-style equestrian products and the Smith Brothers catalog is becoming a strong force in the Western-style riding market. As the largest direct marketer in the U.S. in the equestrian products industry, our leading position sets us apart from other retailers.

          Large, Detailed Customer Database: We believe that our proprietary database is one of the largest and most detailed in the industry. The database contains names of nearly two million equestrian enthusiasts, including nearly 300,000 email addresses, approximately 200,000 customers who have purchased from us within the last 12 months, including detailed purchasing history and demographic information of such customers, and the names and addresses of individuals who have requested our catalogs. This is a key competitive advantage and business planning tool. It is also a barrier to entry since it could take years and could be very costly to duplicate.

          Successful Multi-Channel Strategy: Our multi-channel strategy of using catalog, Internet and retail store sales channels has enabled us to capture customer data, achieve operational synergies, provide a seamless and convenient shopping experience for our customers, cross-market our products and reinforce our brand across channels. Through our sophisticated customer database, we have observed in the two Dover stores that were open during 2004 that multi-channel customers have bought, on average, nearly three times more product per year than single-channel customers. Our success in our Hockessin, DE store where the overall revenue from the surrounding area after opening the store increased from $496,441 in direct sales prior to opening to $539,981 in direct sales and $2.6 million in retail store revenues by the second year after opening the store, and our initial results from our recently opened Plaistow, NH store support our belief that an expanded retail presence is an attractive growth opportunity for us.

          Excellent Customer Service: Our Company-wide focus on exceptional customer service is integral to our success. We promote a culture of prompt, knowledgeable and courteous service and strive for a consistent customer experience across all channels of purchase. Over 90% of our customer service and sales representatives are horse enthusiasts. Additionally, our representatives

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receive ongoing product training weekly or bi-weekly from either merchandise suppliers or internal product specialists. We also have a policy of offering customers a 100% satisfaction guarantee. We believe that our well-trained knowledgeable staff and our historical ability to fill approximately 95% of the items ordered within an average of 1.7 business days from our in-stock inventory are some of the reasons why we have had historically low return rates and high repeat customer rates. In a recent customer survey, we received a 9 out of 10 average rating for product quality and service.

          Attractive Customer Demographics: Dover Saddlery customers are primarily affluent females with a passion for the English-style riding sport. We believe them to be discerning, luxury oriented customers who often choose to buy from us because of the high quality offering and prestige of owning the premier brands. Based on demographic data available to us, we believe that more than two-thirds of households that own horses have incomes above the national median household income of $43,318. Our customer base has been very loyal as demonstrated by high repurchase rates — approximately 86% of our 2004 Dover Saddlery direct sales came from customers who purchased from us in the past.

          Significant Barriers to Entry: We enjoy significant barriers to entry including substantial costs of developing a useful customer database, efficient merchandising and fulfillment infrastructure, breadth of product offering and in-stock inventory levels, as well as the costs and time involved in building customer trust and brand recognition. The investments we have made in our brand, our customer and proprietary mathematical store-optimization model and inventory replenishment set us apart from others in the industry.

          Highly Fragmented Equestrian Products Market: The current marketplace for equestrian products is highly fragmented and mostly consists of small, one-location tack shops. There are approximately 10,000 different retailers in the U.S. selling equestrian products. Although there are a number of places to find equestrian products, there are no large companies focused on the English-style equestrian products market with any significant number of retail store locations with the exception of State Line Tack. We bring a level of merchandising, marketing, on-hand inventory and operational discipline that is unique in the industry.

          Broad and Distinctive Selection of High Quality, Need-based Products at Competitive Prices with Rapid Order Fulfillment Capability: We have feature-rich, need-based, functional offerings encompassing virtually every product necessary to own, train and compete with a horse. We differentiate ourselves from our competition by our vast breadth and depth of inventory, with more than 5,800 items comprising approximately 28,000 different SKUs. We offer products ranging from entry-level price points to the premium high-end. We carry premium brands, private label brands and non-branded products to meet the broad range of customer expectations and needs. Because a percentage of our products are characterized as “need-based” for the continued care of a horse, we believe that this contributes to a high degree of predictable buying patterns by our customers. In addition to this, approximately 85% of our products are non-obsolescent items. Close-outs at less than 20% gross margin represent approximately 1% of sales. This allows us to maintain our high levels of inventory with minimal impact on our profitability.

          Our large inventory has allowed us to ship approximately 95% of the items ordered within an average of 1.7 business days. We are also able to ship any product we offer to our retail stores within an average of 1.7 business days, effectively increasing our retail store inventory to match that of our Littleton, MA warehouse. This provides our customers with the ability to walk into any of our retail stores and access our entire product offering. Competitors who maintain only one or even a few stores are unable to match the breadth, depth and ready availability of our $10.3 million in total inventory (as of June 30, 2005). Despite the high level of inventory we have historically maintained, we have historically turned inventory approximately four times per year and we have had no material inventory write-downs in the past five years.

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Growth Strategies

          Having established ourselves as the largest direct marketer in the equestrian products market, we are continuing our strategy to capitalize on our strong brand equity, take advantage of our comprehensive customer database, achieve operational synergies, cross market products and provide a seamless and convenient shopping experience across channels. We have observed from the two Dover stores that were open in 2004 that our multi-channel customers have bought, on average, nearly three times more product per year than single-channel customers, and therefore a multi-channel model is a key part of our strategy to grow our revenues, profits and market share. Our growth strategy includes several key components.

          Open Dover Saddlery Retail Stores in Targeted Locations: We currently operate four retail stores, three under the Dover Saddlery name targeted at the English-style riding segment and one under the Smith Brothers name targeted at the Western-style riding segment. The equestrian products market is estimated at $5.7 billion, yet no national, equestrian products specialty retail chains exist and there are only a limited number of small, regional, multi-unit English equestrian products retailers. State Line Tack, which operates as a store within a store in selected Petsmart locations, is the only retailer of size. We have identified 50 initial locations throughout the U.S. which we believe are attractive for our initial retail store expansion and allow us to capitalize on the highly fragmented nature of the retail equestrian products market and our strong brand name recognition. These locations have been identified using our proprietary mathematical store-optimization model which selects the locations nationwide with the strongest potential and optimizes distances between stores to enhance revenue potential. The model optimizes distances between stores with concentrations of current customers and recalibrates when actual stores are targeted and added. Our direct marketing operations have provided detailed customer data regarding location and sales performance which has given us the ability to plan and perform extensive site analysis. Our initial targets are based on an optimization model of 50 locations, each utilizing one of three different store formats, depending on the location and revenue potential of the area. We believe that our proprietary mathematical store-optimization model, which assists us in locating retail sites, should give us a competitive advantage in finding attractive locations.

          Expand our direct sales channel: Our catalog business drives traffic to our Internet and retail store channels. During 2004, we mailed approximately 5.4 million catalogs to approximately 700,000 separate equestrian enthusiasts and Dover customers and had nearly 2.7 million unique visitors (based on unique daily visits) on our websites. We plan to expand our direct sales business through initiatives to existing and new customers. We seek to increase the number of customers and prospects that receive a catalog, increase the numbers of customers buying through our catalog or other channels and increase the amount each customer spends for our merchandise through the continued introduction of new products. We plan to continue to utilize web-based opportunities with promotional, targeted e-mails programs, refer-a-friend programs and on-line search engines. We intend to continue our practice of using banner advertising on qualified equestrian web sites, of having links to and from qualified equestrian web sites and of sending prospect emails to qualified equestrian email lists, which have historically resulted in significant sales and catalog requests.

          Enhance our product mix: We carry premium branded, private label branded and non-branded equipment and accessories with more than 5,800 items comprising approximately 28,000 different SKUs. We believe we have the largest collection of exclusive and semi-exclusive brands in the industry. We continually seek to expand our product offering to meet the needs of our customers and will seek to expand and enhance our product mix to increase revenues and the profitability of the business. Currently we offer a broad selection of products under the Dover and other trademarks. We believe that these products offer a great value to our customers who have come to trust our quality. Private label and non-branded products represented approximately 21% of our revenues in the 12 month period ended July 2005, and generated higher margins than our branded products.

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          Expand further in the Western-style equestrian products market: While it is difficult to track industry data, the number of Western-style riders is believed to be at least four times the number of English-style riders in the U.S. We entered the Western-style equestrian products market through our acquisition of Smith Brothers in 2002 and opened a Smith Brothers retail store in 2004. Total revenues from Smith Brothers grew from approximately $1.4 million in 2001 to $8.5 million in 2004. We intend to expand our direct marketing and, eventually, our retail store presence in the Western-style riding segment.

Industry

Equestrian Products Market

          The North American market for equestrian tack, saddles, specialized apparel, grooming and healthcare products, horse clothing, equestrian-related media and other horse supplies is estimated by the American Horse Council at $7.6 billion for 2004. According to the Fountain Agricounsel USA Horse Industry Business Report 2004, in 2003, the total industry sales for the markets we target was $5.7 billion. A 2005 American Horse Council survey estimated that there are 9.2 million horses in the U.S.

          According to American Sports Data, over 5.6% of the U.S. population, or 16.8 million people, ride horses with an average of 21.7 participating days per year, which exceeds participation in other popular outdoor sports, such as downhill skiing at 4.6% and 6.3 days and mountain biking at 2.0% and 18.1 days. There are many indicators that point to the continued growth of the equestrian products industry. A study by NFO Research indicated that 10% of U.S. households are involved in riding, an additional 5% were involved at one time and 18% would like to become involved. There has also been a recent increase in the number of nationally televised programs dedicated exclusively to the equestrian viewer, such as Horse TV and Horsecity.com TV. The Equestrian Media Network has also been gaining traction with national television stations, which is expected to help increase the popularity of the equestrian products industry even further.

          There are very few dominant manufacturers, and no dominant distributors or retailers in the equestrian products industry, creating a highly fragmented market. Of the approximately 10,000 U.S. equestrian products retailers, we believe that a majority of them are too small to develop multiple sales channels, deep inventories, automated inventory-control systems, extensive customer databases and brand equity and are therefore unable to effectively control a significant portion of market share. These inefficiencies are prevalent in the industry, as it is estimated that approximately 68% of equestrian products retail stores have no automated inventory-control system, approximately 60% of such stores have no more than one full-time employee and over 40% do not use a computer. Additionally, 93% of stores do not employ catalog marketing, and 48% of stores lack websites. In 2002, only an estimated 12.5% of equestrian products retailers had annual sales over $1 million, according to Tack ‘n Togs, an industry trade journal.

Direct Marketing

          Direct marketing is a fast-growing, dynamic industry that includes sales generated through direct mail and the Internet. Sales generated through catalogs, both offline and on the Internet, have grown at an annual rate of 9.3% since 1997. Total sales attributed to catalogs in the U.S. reached $143 billion in 2004, and the Direct Marketing Association (DMA) projects they will grow to over $169 billion by 2007. The DMA projects annual growth of sales attributed to catalogs of 5.7%, which will continue to outpace the overall projected retail sales growth of 4.5%.

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US Direct Sales

Source: Direct Marketing Association, 1999 and 2000 estimated

          Sales from catalog retailing grew rapidly during the 1990s at an annual rate of approximately 10% — twice the rate of conventional retailing. This growth was driven by several factors, including the emergence of strong direct marketing brands (e.g., Dell Computer, Lands’ End, and L.L. Bean); consumers’ busier lifestyles, due in part to the substantial increase in the number of professional women; and the recent introduction of specialty catalogs tailored to niche audiences combined with more sophisticated mailing and customer targeting techniques.

          Established catalogers enjoy significant barriers to entry including substantial costs of developing useful customer databases, efficient merchandising and fulfillment infrastructure and consumer trust and brand recognition. The expense of acquiring, perfecting and maintaining an extensive and accurate customer database specific to each company’s target market is expensive, and such a database can take years to build to levels competitive with established catalogs.

          The Internet is a key driver of growing direct marketing sales. Industry research estimates that online sales in the U.S. reached $65.1 billion in 2004. As the price of personal computing declines and Americans become more technologically savvy, many are choosing to browse and buy over the Internet. Moreover, an increasing number of Internet users are turning to broadband service that allows faster, more convenient access to online shopping. Online retail sales are projected to grow 16% from 2004 to 2008, accounting for 5% of total U.S. retail sales by 2008.

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U.S. Online Retail Sales

Note: Retail does not include auto, travel, and prescription drugs.

Source: Jupiter Research Online Shopping Model, 10/03 (US only)

Copyright 2004 Jupiter Research, a division of Jupitermedia Corporation

          We believe that a large, highly fragmented industry with affluent, passionate horse enthusiasts presents us with the opportunity to use our reputation and multi-channel strategy to increase our market share and revenues in the future.

Customers

          Our English riding customers are primarily affluent females with a passion for the English riding sport. We believe them to be discerning, luxury-oriented customers who often choose to buy from us because of the high quality offering and prestige of owning the premier brands. Based on demographic data from the American Horse Council (AHC), we believe that more than two-thirds of households that own horses have incomes above the national median household income of $43,318 as reported by the 2003 U.S. Census. Our customer database provides for each customer a summary of the recency, frequency and monetary value of that customer’s orders as well as a detailed listing of each item the customer has ordered for the past five years. Our customers have been very loyal as demonstrated by high repurchase rates — approximately 86% of our 2004 Dover Saddlery direct sales came from customers that purchased from us in the past.

Our Multi-Channel Strategy

          Having established ourselves as the largest direct marketer of equestrian tack, specialized apparel and horse care and stable products in the U.S., we plan to continue our multi-channel retail strategy to capitalize on our strong brand equity, and utilize our customer database. This multi-channel strategy enables us to capture customer data, achieve operational synergies, provide a seamless and convenient shopping experience for our customers, cross-market our products and reinforce our brand across channels. We believe that our strategy is working. Through the data captured by our sophisticated customer database, we have determined that multi-channel customers buy, on average, nearly three times more product per year than customers who only purchase through a single channel. This is supported by the experiences of other successful multi-channel retailers such as Eddie Bauer and JC Penney. Eddie Bauer’s multi-channel customers spend, on average, approximately six times more than its single-channel customers and JC Penney’s multi-

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channel customers spend, on average, approximately five times more than its single-channel customers.

Increase in Multi-Channel Purchasing

Retailer	Channels		Annual Purchases per Shopper
Eddie Bauer		One		$100 - $200
		Two		300 - 500
		Three		800 - 1,000
JC Penney		One		$157 - $201
		Two		446 - 608
		Three		887
Dover(1)		One		$301
		Two		520
		Three		882

⁽¹⁾  Data reflects purchases within the 12-month period ended July 10, 2005.

Sources: Retailing Management, 5th Edition, Levy, Michael and Barton A. Weitz (2004), RichFX.com, Dover Management

          Our multi-channel business model has several key elements:

• our catalogs are targeted marketing tools which we use to generate customers, gather customer demographic data, increase the visibility of the Dover Saddlery and Smith Brothers brands, increase visits to the Internet and drive traffic to our retail stores;

•  we utilize our large, information-rich customer database to cross-market our products, prospect for customers, forecast sales, manage inventory, tailor catalog mailings and plan for our retail store expansion; and

• we use our proprietary mathematical store-optimization model to target the strongest markets nationwide and optimize store spacing for our retail location selection. Based on the latest customer data and actual store openings, our proprietary software maps out the entire country with our catalog sales and extrapolates ideal locations for our stores such that we can capture the greatest density of potential customers. The model is dynamic such that any change in a single location or number of total locations will impact site selection and estimated performance system wide.

Based on research of other similar multi-channel concepts, we believe that, when mature, the natural channel balance of a multi-channel retailer tends to stabilize with 60% to 80% of the sales coming from the retail store channel. This retail purchasing preference on the part of consumers is even more pronounced in the equestrian industry. Research by Frank N. Magid Associates, Inc. indicates that 80% of tack customers shop at retail stores. We have also observed, especially in higher-end and luxury goods markets, that a large percentage of sales are purchased in a retail location and not over the web or through a catalog. Since we currently have just over 10% of our total revenues coming from retail stores, we believe that there is significant opportunity to continue to develop our multi-channel strategy and pursue our targeted retail store expansion. See “Retail Store Operations and Expansion.”

          Our experience from our Hockessin, DE store has shown that direct sales from customers within a 30 mile radius of the store exceeded levels prior to the store opening within two years of that store opening. For example, when we opened our Hockessin, DE store in 2002, direct sales in the 30 mile radius surrounding the store declined by 4.0% from $496,441 to $476,517 in the first

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year of the store’s operation, but fully recovered and grew by 8.8% to $539,981 by the end of the second year. At the same time, retail sales at that store grew from $2.0 million for the first year of operation to $2.6 million for the second year of operation or 28.2%. Therefore, opening the Hockessin, DE store led to sales growth in that area from $496,441 to $3,107,617 in the first two years of operation, or approximately 150% compounded annual growth.

Hockessin Store Multi-Channel Sales Increases

			Retail
	Direct (1)		Store		Total
1 year prior to opening	$	496,441		$0		$496,441
1st year after opening	$	476,517		$2,003,146		$2,479,663
2nd year after opening	$	539,981		$2,567,636		$3,107,617

⁽¹⁾  For customers within 30 miles of store.

          Although our Wellesley, MA store has been in operation for 30 years, we have maintained an impressive mix of both direct and retail store sales in the area. The direct sales in the area surrounding the store demonstrate that even though we have a retail location, the convenience of multi-channel shopping over the Internet or by catalog has been appealing to our customers located within 30 miles of the store. We believe that this provides further support to the potential value created by opening up retail stores in areas that already have a strong customer base.

Wellesley Store Multi-Channel Sales

		Retail
	Direct (1)	Store	Total
Last twelve months ended July 2005	$944,929	$2,939,472	$3,884,401

⁽¹⁾  For customers within 30 miles of store.

          We seek to continually improve our operating efficiencies across our multiple channels through our integrated planning, order management, fulfillment systems and economies of scale in cross-channel inventory processing and advertising. We continuously strive to enhance our efficiencies to provide a seamless cross-channel experience to our customers, and achieve greater profitability.

Direct Sales Channel

          Since we mailed our first catalog in 1982, we have grown our direct sales channel to include three separate catalogs and two e-commerce websites. As we implement our plan to expand our retail stores, we expect the revenues generated from the retail stores to comprise a greater percentage and possibly a majority of our revenues. However, the direct sales channel will continue to be the core component of our brand identity and the driving force behind the customer data utilized to promote each of our sales channels.

          Our direct sales channel generated approximately $52.2 million in revenues in 2004 or 88.9% of our total revenues. Of this amount, we generated approximately $11.0 million in revenues from Internet orders, or 18.7% of our total. Our proprietary database currently contains nearly two million names, including nearly 300,000 email addresses and approximately 200,000 Dover customers who purchased from us during the past 12 months. We expect this database to continue to grow as we open additional retail locations.

          Our direct sales have grown at a compound annual growth rate of 28.3% since 1998, with average orders in excess of $150 in 2004.

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Catalog

          We mail our catalogs to individuals who have made purchases during the past five years. We also mail catalogs to new prospects obtained through our proprietary database of names we have compiled through sponsorships, trade associations, subscriber lists for equestrian publications, and grassroots name gathering efforts as well as limited outside rented lists.

          We currently maintain two primary catalogs and a sales flier. The Dover Saddlery catalog caters to the mid to high-end English-style equestrian products customer. The Smith Brothers catalog is aimed at the Western-style equestrian products customer. The Miller’s Harness sales flier is used to reach the entry-level and lower-cost English-style equestrian products customer.

          Catalogs are sent regularly throughout the year to a carefully selected circulation list. We develop annually four distinct Dover Saddlery catalogs and four distinct Smith Brothers catalogs including a large annual catalog for each line. We mailed approximately 5.4 million catalogs during 2004.

          We produce three riding discipline editions and one general edition of the Dover Saddlery catalog, including one each targeting the Dressage, Hunter/ Jumper and Eventing segments. Each of these catalogs share core pages, but are modified to target each of the specific customer segments. The creative and printing costs are minimized by sharing approximately 95% of the content from the core catalog, while the front eight pages and back four pages contain unique content for the specific target market. A similar strategy is employed with the Smith Brothers catalog.

Dover Saddlery

          The annual Dover Saddlery catalog at 260 pages is the most comprehensive source for the English-style equestrian products market. In addition to the general catalog, the three targeted editions of the Dover Saddlery annual catalog specialize in the dressage, eventing and hunter/jumper segments.

• Dressage. This edition introduces the latest in new products for the dressage rider as well as promoting dressage as a form of riding. Dressage is a form of exhibition riding in which the horse performs a pre-programmed ride demonstrating highly schooled training.

• Eventing. This edition focuses on the cross-country phase of three day Eventing, a triathlon of equestrian sports including dressage, cross-country and show jumping. The specialized saddles and equipment necessary for conditioning and competing the event horse for this endurance test are emphasized in this edition.

• Hunter/Jumper. This edition showcases the best saddles and tack used by world-class riders in the hunter/jumper ranks, whose participants jump fences in a stadium jumping arena. At the highest level, these riders compete in Grand Prix jumping events, for prize money of up to $1,000,000 per event.

Smith Brothers

          The annual catalog for Smith Brothers is positioned as the “Premier Catalog for the Western Horseman.” At 180 pages, it is one of the more comprehensive offerings in the Western-style equestrian products market. We offer one general edition and three targeted editions of the Smith Brothers annual catalog. The targeted editions specialize in the competitive roping, barrel racing and show riding segments.

• Competitive roping. This edition focuses on competitive roping, in which riders attempt to lasso steers on horseback, and offers gloves, pads, ropes and specialized products needed for the event.

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• Barrel racing. This edition offers the saddles, tack and saddle pads needed for barrel racing, in which riders vie for the fastest time in running a triangular, cloverleaf pattern around three barrels.

• Show riding. This edition offers tunics, blouses, tiaras and chaps. Show riding is a form of Western-style exhibition riding in which the rider guides the horse through regimented movement.

Internet

          In July of 2000, we launched our website, www.doversaddlery.com. In February 2002, we acquired the Smith Brothers website, www.smithbrothers.com. Our Internet revenues have grown at a compounded annual growth rate of 45.7% from 2001, our first full year of Internet operations, to 2004 and was approximately $11.0 million, or 18.7% of total revenues in 2004.

          Our websites are integral to our multi-channel strategy. The websites reinforce our relationship with current catalog customers and are a growing source of new customers. New customers acquired through the websites have historically been highly responsive to subsequent catalog mailings.

          Our websites feature our entire product offering and enable us to better market to our customers and visitors by allowing different pages to be automatically shown to different types of individuals. This allows us to segment visitors into smaller, targeted groups, which in turn increases conversion rates. Visitors are able to shop by their riding style, providing them with images of their passion and products suited to their niche.

          We plan to continue to utilize web-based opportunities with promotional, targeted e-mails programs, refer-a-friend programs, and on-line search engines. We intend to continue using banner advertising on qualified equestrian web sites, providing links to and from qualified equestrian web sites, and of sending prospect emails to qualified equestrian email lists, which have historically resulted in significant sales and catalog requests.

Retail Store Operations and Expansion

          We currently operate three stores under the Dover Saddlery name in Wellesley, MA, Hockessin, DE and Plaistow, NH. In addition, we operate one store under the Smith Brothers brand in Denton, TX. We intend to expand our retail store operations going forward, primarily under the Dover Saddlery brand.

Retail Store Locations

	Dover Saddlery Stores
								Smith Brothers Store
	Wellesley, MA		Hockessin, DE		Plaistow, NH			Denton, TX
Selling square footage		2,737		8,750		12,106			7,764
Latest 12 months ended July 31, 2005 net sales	$	2,939,472	$	2,688,080	$	1,499,474	(1)	$	954,789
Net annual sales Per square foot	$	1,074	$	307	$	425	(2)	$	123
Opening year		1975		2002		2005			2004

(1)	Plaistow store represents results from April 15, 2005 through July 31, 2005.
(2)	Annualized based on 3.5 months of operations.

          Our retail stores carry largely the same product mix as our catalogs and websites to promote convenience and shopping frequency. The broad selection of retail product and the ready availability of inventory from our warehouse allow for superior customer service. To the extent that a certain item is not physically available at a retail store, store personnel will work with the customer to ensure prompt in-store or home delivery of the item, according to the customer’s preference. Each

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store’s mission is to foster loyalty and provide face-to-face answers to customers’ questions. Sales staff are carefully selected and trained to provide accurate and helpful product information to the customer. In most cases, they are experienced equestrians.

New Retail Store Model

          Our proprietary mathematical store-optimization model will help us select each store location by projecting sales based on real-time catalog customer purchases surrounding the potential location. Our initial targeted locations will be positioned in key markets exhibiting the highest concentration of current direct sales customers and equestrian enthusiasts. Existing customers within the proposed locations are expected to support and accelerate the maturation curve of new stores. Prior experience with existing stores has demonstrated an increase in the number of catalog customers within stores’ trade areas.

          We have developed two primary prototype store models for nationwide rollout — ‘A’ and ‘B’. Our ‘A Store’ model contains approximately 12,000 square feet and assumes an average initial net investment of approximately $1.1 million, including approximately $110,000 of pre-opening costs and $900,000 of inventory. We estimate that net sales per square foot will average $360 in the third year of operations but may vary substantially depending on the location of the store.

Dover Store Prototype

          A 6,000 square foot ‘B Store’ model assumes an initial investment of approximately $700,000, including approximately $80,000 in pre-opening expenses and $550,000 in inventory, and is projected to generate approximately the same level of sales per square foot as the A Store model.

          We expect that our new stores will generate operating profit, before allocation of company overhead expenses, immediately upon opening due to strong expected sales to existing customers in the area. The payback on initial investment based on the operating profit before allocation of company overhead expenses is expected to be approximately 2.5 to 3 years.

          A ‘C’ store model is currently in development, and will be targeted to be a smaller footprint, filling in key markets as appropriate.

          Our new stores have been designed in conjunction with Morton Buildings, a nationwide builder of upscale barns. The economical design incorporates a clear span wood truss that allows the interior space to be completely open. From the three cupolas to the barn-style dutch doors,

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every architectural detail has been created to maximize the affinity with the horsemen and horsewomen who will shop there.

          Once inside the store, a post and beam loft structure around the edges will create a hayloft environment for the saddle shop and other destination products. The hayloft in our A Stores will add up to 4,000 square feet of selling space. At one end of the store in the barn and stable section, a guest stall will be built using all Dover products. This stall will illustrate Dover quality and can occasionally be used to stable famous international competition horses.

          We expect that there will be an exhibition and saddle fitting arena outside where customers can bring their horses for a custom saddle fitting or attend a Dover-sponsored exhibition. Each of our A Stores, are expected to have interior retail space and outdoor display space under the eaves for barn and stable products such as wheel barrows, stall mats, and gates. We also plan to have yard space for the potential future sales of horse trailers, manure spreaders and other stable equipment.

Site Optimization

          We have developed a proprietary mathematical store-optimization model to select locations for new stores. The model continuously optimizes distances between stores within concentrations of current customers and equestrian enthusiasts and recalibrates, as necessary, when actual stores are targeted and added. Our direct sales operations and proprietary database provide detailed customer data regarding location and sales performance, which give us a significant competitive advantage over other traditional equestrian products retailers. This data, combined with our proprietary mathematical store-optimization model, helps us accurately and effectively identify markets and target specific locations that maximize potential revenue out of selected markets. Once we identify an optimal location by ZIP code, extensive site analysis follows, including major highway access and real estate considerations, to enhance the profitability potential for our stores.

Marketing

          Our Dover Saddlery and Smith Brothers catalogs are our primary branding and advertising vehicles. We believe our catalogs reinforce our brand image and drive sales in all of our sales channels. Our direct sales channel enables us to maintain a database of customer sales patterns and thus target segments of our customer base with specific marketing. Our customer database provides for each customer a summary of the recency, frequency and monetary value of that customer’s orders as well as a detailed listing of each item the customer has ordered over the past five years. Depending on the spending habits we identify through our customer database, we send certain customers special catalog editions and/or emails.

          We market our websites by the use of paid key words and augmented natural search. We actively seek beneficial links and are currently linked to over 1,900 equine websites. Banner advertising is presently placed on the leading four equestrian content sites and we have an active refer-a-friend program.

          Other branding and advertising vehicles we employ include running print ads in local newspapers and trade magazines, sponsoring equestrian events and issuing press releases for major new product offerings. We also offer a Dover Saddlery branded credit card operated by National City Bank that allows our frequent customers to accumulate reward points that can be redeemed for discounts toward future purchases.

Order Processing and Fulfillment

          A majority of our orders are received by telephone, but Internet orders have rapidly increased since the introduction of our first website in 2000. We operate three customer service call centers located in Littleton, MA, North Conway, NH, and Denton, TX. All of our centers are linked to

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the same network and share a single customer database that includes a real-time recency, frequency and monetary value summary for each customer as well as a direct link to each customer’s line-item order history over the last five years. The order entry system is also directly linked to our inventory management system to ensure that product availability is real time.

          Our 100,000 square foot Littleton, MA warehouse and office facility also serves as our fulfillment center. We currently have the capacity to fill over 8,000 packages per day, six days per week. Our current peak demand has been approximately 3,000 packages per day, five days per week, leaving us with significant capacity for growth. Our warehouse currently has enough capacity to handle the additional inventory required for our retail store rollout plan and expected growth in our direct sales for the foreseeable future.

Inventory

          An additional way that we differentiate ourselves from our competition is through our breadth and depth of inventory. We believe our inventory is deeper than our competitors with $10.3 million in on-hand inventory as of June 30, 2005 and more than 5,800 items comprising approximately 28,000 different SKUs. With our extensive inventory position and rapid fulfillment capability, we have historically been able to fill approximately 95% of the items ordered within an average of 1.7 business days. Based on our inventory management systems, continuous monitoring of the products we carry and the fact that we carry very few fashion products, we have historically had very little obsolete inventory. Despite the high level of inventory we have historically maintained, we have turned inventory approximately four times per year and we historically have had no material inventory write-downs.

          All of the products that are presented in our catalogs are available online and customers can use our websites to enter orders, shop online and check order status and inventory availability. On average, our retail stores stock inventory items represent over 70% of the merchandise sales we make available through our direct sales channel. All items are available to customers entering our stores by either direct shipment to a customer’s home or for in-store pickup.

Product Mix and Merchandising

          We offer feature-rich, need-based, functional products encompassing virtually every product necessary to own, train and compete with a horse. We differentiate ourselves from our competition by our vast breadth and depth of product offerings with more than 5,800 items comprising approximately 28,000 different SKUs. We offer products ranging from entry-level price points to the premium high-end and carry leading brands, niche brands and private label brands to meet the broad range of customer expectations and needs.

          Our product mix encompasses saddles and tack, specialized apparel and horse care and stable products.

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Product Mix

• saddles and tack includes a broad range of riding equipment such as saddles, bridles, bits, breastplates, reins, girths, halters and leads, horse clothing, bandages and wraps, horse boots, whips and spurs.

• specialized apparel includes riding jackets, boots, breeches, gloves, helmets, shirts and undergarments.

• horse care and stable products includes such items as vitamins, deworming medicine and other stable equipment.

          Our senior buying team has a total of over 50 years of equestrian experience and carefully reviews each product for quality and value. We are continuously increasing the breadth of our offering to meet customers’ demands and provide for a consistent one-stop shopping experience. We have been able to accomplish this goal while still maintaining annual inventory turns of approximately four times over the last four years.

          We carry the premier names and the most comprehensive offering of the highest quality, broadest range and most technically advanced tack and related gear for serious equestrians. A selection of some of the high quality brands we carry is shown in the following chart:

Selected High Quality Brands

		Horse Care and Stable
Saddles and Tack	Specialized Riding Apparel	Products
Amerigo	Ariat	Absorbine
Crosby	GPA	Farnam
Hermes	Grand Prix	Rambo
Herm Sprenger	Mountain Horse	Taka
Passier	Pikeur
Pessoa	Tailored Sportsman
Prestige	Vogel Boots
Stubben

          The sales pattern for equestrian products is fairly consistent from year to year. Introductions of new fashions are generally limited, making sales per item more relatively predictable.

          The heritage of English-style riding is very conservative and apparel and equipment rarely go out of style. As an example, the best selling colors of riding breeches for each of the last

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20 years have been beige, black and white. Dover Saddlery’s English-style riding offerings incorporate approximately 15% in new products each year to create a fresh feel to the merchandising. Western-style riding involves a higher fashion element than English-style riding so our Smith Brothers offerings incorporate a higher percentage of up to 25% in new products each year. The low SKU turnover eliminates inventory obsolescence and overstock risks. Close-outs at less than 20% gross margin represent approximately 1% of sales.

Product Sourcing

          Approximately 24% of our products are sourced directly from overseas manufacturers. Premium branded merchandise represents about 12% of this amount, coming primarily from the U.K., Germany and France. The remaining 88% is generally niche branded, private label or non-branded and is sourced from China, India and Argentina.

          As a result of our purchasing volumes, we have been able to work directly with many manufacturers while many of our competitors have often been forced to buy through distributors. This creates a significant competitive advantage for us by reducing overall costs, increasing product availability and product quality.

Competition

          We compete based on offering a broad selection of high quality products at competitive prices and superior customer service with knowledgeable staff for our customers. We believe that our annual direct sales and breadth of product offering are each over twice the size of our closest competitor. We believe that we benefit from significant barriers to entry with our established Dover Saddlery brand and with what we believe to be the industry’s most comprehensive database of nearly two million names including nearly 300,000 email addresses.

          The retail market for equestrian products is highly fragmented. There are no national retail chains. State Line Tack operates departments within selected Petsmart stores with limited inventory and a direct sales business and is the only competitor of size. Moreover, only a few regional multi-outlet stores compete in the market for equestrian products. According to Tack ’n Togs, an industry trade journal, approximately 10,000 stores sell tack and/or horse health items across the U.S. The 2003 Tack ’n Togs State of the Industry Report indicates that 87.5% of stores selling equestrian products had annual sales of under $1 million. Approximately 8.3% had annual sales between $1 million and $2 million and only 4.2% had sales of $2 million or more. The 2004 Tack ’n Togs State of the Industry Report states that 67.8% of stores selling equestrian products do not use an automated inventory control system. Further, approximately 60% of these stores had no more than one full-time employee.

Seasonality

          We experience seasonal fluctuations in our revenues and operating results. Due to buying patterns around the holiday season and a general slowdown during the later part of the summer months, our revenues are traditionally higher in the fourth quarter. In fiscal 2004, we generated 28.4% of our annual revenues during the fourth quarter.

Information Technology and Systems

          The computer system at our main office in Littleton, MA consists of Windows 2000 servers connecting approximately 100 PC based workstations via a local area network. The call centers in North Conway, NH and Denton, TX are tied into the Littleton servers via a wide area network. This configuration allows all users in these three locations to access the centrally located MvBase database system, which controls the order fulfillment, purchasing, and inventory control applications. Each retail store system consists of a Windows 2000 server connecting four POS terminals and a

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number of back office PC’s to its own MvBase database system, which supports a customized retail order processing application. The wide area network configuration allows communication and data

59.1

transfer between the main office and the retail stores. The equipment consists of a variety of Cisco routers, Adtran and Cisco CSU-DSU units, Symantec Firewall devices and Allied-Telesyn switches. The PC’s are a combination of HP, Dell, IBM and Apple devices.

          We use Total Order Processing Systems (TOPS), a catalog software package that is a derivation of one of the first software packages developed specifically for direct marketing companies, and have modified it for additional reporting capabilities. TOPS provides a stable foundation with virtually no downtime and significant scalability. The TOPS database can be easily interfaced with numerous other applications, allowing us to integrate third-party specialty peripheral software for those functions where TOPS does not offer the required functionality. These include shipping and manifesting software, our websites, and accounting.

Trademarks and Trade Secrets

          Our service marks and trademarks and variations thereon are registered, licensed or are subject to pending trademark applications with the United States Patent and Trademark Office. We believe our marks have significant value and we intend to continue to vigorously protect them against infringement.

          We maintain, as trade secrets, our database of nearly two million potential customers, including nearly 300,000 email addresses and approximately 200,000 Dover Saddlery customers, and our proprietary mathematical store-optimization modeling software. We believe that these trade secrets provide a competitive advantage and a significant barrier to competition from equestrian marketers and retailers.

Employees

          At July 31, 2005, we had 304 employees, approximately 155 of whom were employed full time. None of our employees are represented by a labor union or are parties to a collective bargaining agreement. We have not experienced any work stoppages and consider our relationship with our employees to be good.

Properties

          We currently lease an approximately 100,000 square foot facility in Littleton, MA for our corporate headquarters, main call center, warehouse and fulfillment center. Approximately 92,000 square feet is for warehouse space and the remaining is for office space. The lease expires in April 2009 and we have three five-year options to renew thereafter at market rates. We believe that this facility will provide us with adequate space for growth for the foreseeable future.

          We lease approximately 1,800 square feet of space in North Conway, NH for use as a satellite call center and for our creative offices. We lease approximately 5,100 square feet of space in Denton, TX for use as a satellite call center and additional offices.

          Currently, we lease approximately 3,000 square feet for our Wellesley, MA store, approximately 10,315 square feet for our Hockessin, DE store, approximately 12,000 square feet for our Plaistow, NH store and approximately 8,500 square feet for our Denton, TX store.

Legal Proceedings

          From time to time, we may be exposed to litigation relating to our products and operations. We are not currently engaged in any legal proceedings that are expected, individually or in the aggregate, to have a material adverse effect on our financial conditions or results of operations.

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MANAGEMENT

Executive Officers, Significant Employees and Directors

          The following table sets forth certain information with respect to our executive officers, directors and certain other of our key employees immediately following the offering:

Name	Age		Position
Stephen L. Day(2)(3)		59	Chief Executive Officer, President, Treasurer, Chairman
Jonathan A.R. Grylls		40	Vice President, Chief Operating Officer, Secretary, Director
William Schmidt		56	Vice President of Operations
Michael W. Bruns		48	Chief Financial Officer
David J. Powers(3)		55	Director
James F. Powers(1)(2)		55	Director
Gregory F. Mulligan		52	Director
William F. Meagher, Jr.(1)		66	Director(4)

(1)	Member of the audit committee.
(2)	Member of the compensation committee.
(3)	Member of the nominating and corporate governance committee.
(4)	Mr. Meagher has agreed to join the Board of Directors and the audit committee effective upon the closing of this offering.

          Stephen L. Day has been our President, Chief Executive Officer, Treasurer and Chairman of our Board of Directors since 1998. Mr. Day previously was the controlling member of EquiSearch.com LLC, a leading Internet equine content site. Prior to his acquisition of EquiSearch, he was the Chief Executive Officer of State Line Tack from 1991 until the acquisition of State Line by Petsmart. He holds an MBA from Harvard University and a BS in Industrial Management from Purdue University. As an avid equestrian, he has founded two riding schools and trained many young horses to become successful show horses.

          Jonathan A.R. Grylls has been our Chief Operating Officer and a member of our Board of Directors since 1998. Mr. Grylls currently serves as Vice President and Secretary. Prior to joining Dover, Mr. Grylls was Chief Operating Officer of Equestrian Products Corporation, a distributor of equestrian products, and held various other positions in MIS, sales, credit and operations at Eisers, the predecessor to Equestrian Products Corp. He previously was Vice President of Merchandising at State Line Tack from 1992 until 1996. Mr. Grylls graduated from the University of Manchester’s Institute of Science and Technology with a BS with Joint Honors in Mathematics and Management Sciences.

          William Schmidt has been our Vice President of Operations since 2001. Prior to joining Dover, Mr. Schmidt held senior positions with catalog companies Duncraft, Bay Country Wood Crafts and Garden Way, and established the Direct division of Eastern Mountain Sports. Mr. Schmidt previously worked at State Line Tack from 1991 to 1997 in various positions including Chief Financial Officer, Chief Operations Officer, Vice President and General Manager. He has served as President of the New England Mail Order Association and on the Board of Advisors for the National Catalog Conference and the National Catalog Operations Forum. He holds a BS in Accounting from Bentley College.

          Michael W. Bruns has been our Chief Financial Officer since August 2005 and joined our company as Corporate Controller in 1999. Prior to joining Dover, Mr. Bruns served as Vice President of Finance for CPS Direct, a communications marketing company from 1997 to 1999. He was

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Controller for Northeast Mobile Communications, a specialty retailer, from 1995 to 1997. Prior to that he served as Director of Financial Reporting for St. Johnsbury Trucking Company and as Corporate Controller for R&S Corporation. He also was an Auditor for McGladrey Pullen & Co. Mr. Bruns holds a BA in Accounting and English from Simpson College, and is a Certified Public Accountant (CPA).

          David J. Powers has served as a member of our Board of Directors since 1998. Mr. Powers co-founded Dover Saddlery in 1975 and held various positions there until 1998, including Vice President of Operations. He assumed responsibility for the development of Dover’s catalog business in 1982. Mr. Powers is a former member of the United States Equestrian Team. He holds a BA from the University of Pennsylvania. David Powers is the brother of James Powers.

          James F. Powers was a founder, and President of Dover Saddlery from 1975 until 1998. Mr. Powers has served as a member of our Board of Directors since 1998. He is a former member of both the United States Equestrian Team and the 1972 U.S. Olympic Team. Mr. Powers is a current member of the USET Foundation Gold Medal Club and an active rider. He attended Babson College. James Powers is the brother of David Powers.

          Gregory F. Mulligan has served as a member of our Board of Directors since 2004. Since 2002, Mr. Mulligan has been the President of Bay Investment Advisors, an investment banking firm. From 1996 to 2002, Mr. Mulligan worked as Managing Director at Citizens Capital, Inc., a mezzanine and equity investing company.

          William F. Meagher, Jr. was the Managing Partner of the Boston Office of Arthur Andersen LLP from 1982 until 1995 and spent a total of 38 years with Arthur Andersen. Mr. Meagher was a member of the American Institute of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. Mr. Meagher is a trustee of Living Care Villages of Massachusetts, Inc. d/b/a North Hill and the Dana Farber Cancer Institute and the Greater Boston YMCA. Mr. Meagher also serves as a director of SkillSoft Public Limited Co.

Directors and Executive Officers

Board of Directors

          Our Board of Directors currently consists of five directors. Upon completion of this offering, our Board of Directors will consist of six directors, three of whom our Board of Directors has determined will then satisfy the independence criteria set forth under the rules of the National Association of Securities Dealers, Inc. Automated Quotation System, the Nasdaq. Upon the closing of this offering and the effectiveness of our Amended and Restated Certificate of Incorporation and By-laws, one third of the Directors will be subject to election at each annual meeting of shareholders. The authorized number of Directors may be changed only by resolution of the Board of Directors or a vote of the shareholders.

          We do not intend to rely on the “controlled company” exception to the Nasdaq rules. Accordingly, we intend to comply with the rules generally requiring that companies listed on the Nasdaq National Market system have a majority of independent Directors within one year from the closing of this offering, the phase-in time period allowed by Nasdaq. We also intend to maintain a compensation committee and a nominating and corporate governance committee composed entirely of independent directors within the time periods required by Nasdaq rules.

          Upon completion of this offering, our Amended and Restated Certificate of Incorporation will provide for a classified Board of Directors consisting of three classes, with each class being as nearly equal in number as possible. The term of one class will expire, and their successors are elected for a term of three years, at each annual meeting of the shareholders. Upon completion of this offering, we will have designated two Class I Directors, Gregory Mulligan and William Meagher; two Class II Directors, Jonathan Grylls and David Powers; and two Class III Directors, Stephen Day

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and James Powers. These Class I, Class II and Class III Directors will serve until the annual meetings of shareholders to be held in 2006, 2007 and 2008, respectively, and until their respective successors are duly elected and qualified, or until their earlier resignation or removal. Upon any vacancy, our Board of Directors appoints officers until the next annual meeting of the Board of Directors.

Audit Committee

          In conjunction with this offering, our Board of Directors is designating an audit committee. The composition of the audit committee will satisfy the independence requirements of the Nasdaq rules requiring that, upon the completion of this offering, one member will meet the requirements as an independent director, within 90 days after the completion of this offering at least a majority of members will meet the requirements as independent directors and, within one year after the completion of this offering, all members will meet the requirements as independent directors. Upon the completion of this offering, the audit committee will be composed of William Meagher and James Powers, each of whom (i) are “independent” as defined under Nasdaq Rules or meet any applicable exceptions in the Nasdaq Rules, (ii) meet the criteria for independence set forth in Rule 10A-3 promulgated under the Exchange Act, (iii) have not participated in the preparation of our financial statements within the last three years and (iv) are able to read and understand fundamental financial statements, including our balance sheet, income statement and cash flow statement, all as determined by our Board of Directors. In addition, Mr. Meagher has financial sophistication as described in The Nasdaq Rules as determined by our Board of Directors and is a financial expert as defined in the rules promulgated under the Exchange Act. No audit committee member will receive from us any compensation other than that paid with respect to such member’s service as a Director, including service on committees of our Board of Directors. In addition, after the completion of the offering, no member of our audit committee will own or control more than 10% of our common stock.

          The audit committee will have at least four regular meetings each year. The results of each meeting will be reported at the next regular meeting of our Board of Directors. Responsibilities of the audit committee include:

• assessing the competence and qualifications of outside auditors and retaining outside auditors based on that assessment;

• overseeing the work of our outside auditors;

• approving the audit and non-audit services to be performed by our outside auditors;

• reviewing the qualifications and experience of members of our internal audit team;

• reviewing the internal audit function and plans;

• discussing with management and outside auditors timely analysis of significant financial reporting issues and practices;

• reviewing with management and our auditors planning for audits and the results of audits, prior to the release thereof;

• ensuring that audits are conducted in a manner consistent with all applicable laws;

• establishing procedures for receipt, retention and treatment of complaints and concerns regarding accounting or auditing matters; and

• reviewing all related party transactions.

          We intend to comply with future audit committee requirements as they become applicable to us.

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Compensation Committee

          In conjunction with this offering, our Board of Directors is designating a compensation committee. The composition of the compensation committee will satisfy the independence requirements of the Nasdaq rules which require that, upon the completion of this offering, one member will meet the requirements as an independent director, within 90 days after the completion of this offering at least a majority of members will meet the requirements as independent directors and, within one year after the completion of this offering, all members will meet the requirements as independent directors. The purpose of the compensation committee will be to discharge certain responsibilities of the Board of Directors relating to compensation, including equity-based compensation for our executive officers, and to administer and oversee incentive, equity-based and other compensatory, retirement and pension plans. The compensation committee will be composed of Stephen Day and James Powers. This committee’s responsibilities will include:

•  reviewing and approving goals and objectives relevant to the chief executive officer’s compensation, and evaluating, with other independent directors (if directed by the Board of Directors), the chief executive officer’s performance in light of those goals to determine and approve the chief executive officer’s compensation and benefits;

• reviewing and approving compensation and benefits packages recommended by the chief executive officer for other executive officers;

• reviewing and overseeing the administration of our incentive, equity-based and other compensatory plans;

• providing oversight on all other equity-based arrangements; and

• reporting its activities to the Board of Directors.

Compensation Committee Interlocks and Insider Participation

          No interlocking relationship exists between our Board of Directors or compensation committee and the Board of Directors or compensation committee of any other entity, nor has any interlocking relationship existed in the past. Stephen Day is a member of the Compensation Committee and he is our Treasurer, President and Chief Executive Officer. No other member of our compensation committee is currently an officer or employee of our Company.

Nominating and Corporate Governance Committee

          In connection with this offering, our Board of Directors is designating a nominating and corporate governance committee. Upon the completion of this offering, the composition of the nominating committee will satisfy the independence requirements of the Nasdaq rules which require that, upon the completion of this offering, one member will meet the requirements as an independent director, within 90 days after the completion of this offering at least a majority of members will meet the requirements as independent directors and, within one year after the completion of this offering, all members will meet the requirements as independent directors. The purpose of the nominating committee will be to assist the Board of Directors in identifying individuals qualified to become Directors, to review periodically Director compensation and benefits and to recommend to the Board of Directors any improvements to our corporate governance guidelines as it deems appropriate. As of the completion of this offering, the nominating committee will be composed of David Powers and Stephen Day. This committee’s responsibilities will include:

• evaluating the suitability of potential nominees for membership on the Board of Directors, and recommending proposed nominees;

• reviewing relationships of the members of the Board of Directors with our Company;

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• monitoring trends and best practices with respect to director compensation, director responsibilities and corporate governance; and

• reviewing and making recommendations to the Board of Directors regarding its effectiveness.

Director Compensation

          We currently compensate our Directors in cash for their service as members of our Board of Directors at the rate of $750 per meeting for outside Directors. We also reimburse our Directors for reasonable expenses in connection with attendance at Board of Directors and committee meetings. After the consummation of this offering, we will pay each of our independent Directors $7,000 per year plus $3,000 per year for the chairman of the audit committee, and $750 for each meeting of the Board of Directors that he or she attends.

          Additionally, we pay all personal health plan insurance premiums of, and offer merchandise at cost to, James F. Powers and David J. Powers. The aggregate incremental cost of such perquisites in fiscal 2004 was $9,146 for James F. Powers and $8,907 for David J. Powers.

          Each new Director will also receive an initial option grant of            shares and each director will receive an annual option grant on the date of each annual meeting, including the annual meeting at which such Director is first elected, of            shares, with an exercise price equal to the fair market value of our common stock on the date of grant. Each of these grants will fully vest upon the first anniversary of the date of grant thereof.

Executive Compensation

          The following table sets forth compensation paid by us for fiscal 2004:

• to our chief executive officer during fiscal 2004, and

• to each of the other executive officers serving as of the end of fiscal 2004.

          We refer to these individuals as the named executive officers elsewhere in this prospectus.

Summary Compensation Table

						Long-Term Compensation
		Annual
		Compensation				Securities
						Underlying		All Other
Name and Principal Position		Salary		Bonus		Options		Compensation
Stephen L. Day		$	217,800	$	40,400		58,379		—
	Chief Executive Officer
Jonathan A.R. Grylls			158,400		58,800		29,339		—
	Chief Operating Officer
William Schmidt			154,000		54,400		—		—
	Vice President of Operations
Michael W. Bruns			107,650		8,332		4,000		—
	Chief Financial Officer

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          The following table shows information concerning options to purchase shares of our common stock granted to each of the named executive officers during fiscal 2004.

Option Grants in Last Fiscal Year

										Potential
										Realizable Value
										at Assumed
										Annual Rates of
	Number of		% of Total							Stock Price
	Securities		Options							Appreciation for
	Underlying		Granted to			Exercise				Option Term(1)
Individual Grants	Options		Employees in			Price Per		Expiration
Name	Granted		2004			Share		Date		5%		10%
Stephen L. Day		58,379		63.7	%	$	2.82		Dec 2009	$	26,112	$	76,062
Jonathan A.R. Grylls		29,339		32.0	%		2.56		Dec 2014		47,235		119,703
William Schmidt		—		0.0	%		—		—		—		—
Michael W. Bruns		4,000		4.4	%		2.56		Dec 2014		6,440		16,320

⁽¹⁾  The potential realizable value is calculated based on the term for the option at the time of grant. The assumed rates of appreciation are prescribed by the SEC for illustrative purposes only and are not intended to forecast or predict future stock prices. The potential realizable value at 5% and 10% appreciation is calculated by assuming that fair market price appreciates at the indicated rate for the entire term of the option and that the option is exercised at the exercise price and sold on the last day of its term at its appreciated price.

          The following table shows the number of shares of our common stock acquired on exercise of options, and options to purchase shares of our common stock, held by our named executive officers at the end of fiscal 2004.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

					Number of Securities				Value of Unexercised
					Underlying Unexercised				In-the-Money
	Number of				Options at				Options at
	Shares				December 31, 2004				December 31, 2004
	Acquired		Value
Name	on Exercise		Realized		Exercisable		Unexercisable		Exercisable		Unexercisable
Stephen L. Day		105,000	$	123,900		25,184		33,195	$	—	$	—
Jonathan A.R. Grylls		70,000		91,700		29,339		—		—		—
William Schmidt		8,000		4,080		4,000		8,000	$	2,040	$	4,080
Michael W. Bruns		—		—		4,000		—		—		—

Employment Agreements

          Effective as of September 1, 2005, we have entered into an employment agreement with Stephen Day, our Chief Executive Officer, which has a rolling 24 month term. Under this agreement, Mr. Day is entitled to receive an annual base salary of $350,000, subject to annual increases based on the Consumer Price Index. Mr. Day is eligible to participate in all of our employee benefit programs and is also eligible to receive an annual bonus based on achievement of certain Company performance goals, participate in Company retirement plans and receive reimbursement for additional annual benefits selected by him up to $25,000. Mr. Day is entitled to 24 months of severance in the event we terminate his employment without cause or if Mr. Day terminates his employment for good reason. Mr. Day is subject to an agreement not to compete with the Company during his employment and for a period of 24 months thereafter.

          Effective as of September 1, 2005, we have entered into an employment agreement with Jonathan Grylls, our Chief Operating Officer, which has a rolling 24 month term. Under this agreement, Mr. Grylls is entitled to receive an annual base salary of $250,000, subject to annual increases based on the Consumer Price Index. Mr. Grylls is eligible to participate in all of our

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employee benefit programs and is also eligible to receive an annual bonus based on achievement of certain Company performance goals, participate in Company retirement plans and receive reimbursement for additional annual benefits selected by him of up to $25,000. Mr. Grylls is entitled to 24 months of severance in the event we terminate his employment without cause or if Mr. Grylls terminates his employment for good reason. Mr. Grylls is subject to an agreement not to compete with the Company during his employment and for a period of 24 months thereafter.

1999 Stock Option Plan

          Our 1999 Stock Option Plan was adopted and became effective on April 22, 1999. The 1999 Stock Option Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to employees and non-qualified stock options, awards of common stock, and opportunities to make direct purchases of common stock to our employees, directors, and consultants. Upon the closing of this offering, the 1999 Stock Option Plan will be amended to provide that no additional options or shares will be granted under the 1999 Stock Option Plan.

2005 Equity Incentive Plan

          In August 2005, our Board of Directors approved our 2005 Equity Incentive Plan, to become effective on the closing of this offering. The 2005 Equity Incentive Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to employees and non-qualified stock options, awards of common stock, and opportunities to make direct purchases of common stock to our employees, directors, and consultants.

          The aggregate number of shares of our common stock that may be issued under the 2005 Equity Incentive Plan is                     . The aggregate number of shares of common stock that may be granted in any calendar year to any one person pursuant to the 2005 Equity Incentive Plan may not exceed 50% of the aggregate number shares of our common stock that may be issued pursuant to the 2005 Equity Incentive Plan.

          The 2005 Equity Incentive Plan will be administered by the compensation committee of our Board of Directors. Subject to the provisions of the 2005 Equity Incentive Plan, the compensation committee has been granted the discretion to determine when awards are made, which directors, employees or consultants receive awards, whether an award will be in the form of an incentive stock option, a nonqualified stock option or restricted stock, the number of shares subject to each award and all other relevant terms of the award, including vesting and acceleration of vesting. The compensation committee also has been granted broad discretion to construe and interpret the 2005 Equity Incentive Plan and adopt rules and regulations thereunder. Generally, options granted to employees and consultants under the 2005 Equity Incentive Plan are expected to vest over a five-year period from the date of grant.

          Our Board of Directors may amend, modify, or terminate our 2005 Equity Incentive Plan at any time, subject to applicable rules and law and the rights of holders of outstanding awards. Our 2005 Equity Incentive Plan will automatically terminate in August 2015 unless our Board of Directors terminates it prior to that time.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

          On March 31, 2004 the Board of Directors authorized the exercise of stock options by certain employees, including Messrs. Day, Grylls and Schmidt, through the issuance to us of promissory notes. Mr. Day exercised options to purchase 105,000 shares; Mr. Grylls exercised options to purchase 70,000 shares; and Mr. Schmidt exercised options to purchase 8,000 shares; at exercise prices ranging from $1.25 to $2.05 per share. Each note carried interest at 3%. As of December 31, 2004, outstanding principal and accrued and unpaid interest on the notes was as follows: Mr. Day — $148,175; Mr. Grylls — $89,478; and Mr. Schmidt — $16,771. In accordance with the Sarbanes-Oxley Act of 2002, the principal and interest on such loans was repaid in full by Messrs. Day, Grylls and Schmidt prior to August 26, 2005.

          On September 16, 2005, pursuant to a Redemption Agreement dated as of August 25, 2005, Citizens Ventures, Inc. converted its 1,015,000 shares of our preferred stock into 1,015,000 shares of common stock and we purchased 603,889 shares of such common stock from Citizens Ventures for a purchase price of $6.0 million.

          In October, 2004 we entered into a lease agreement with a minority shareholder who owns less than two percent of our capital stock. The lease is for five years with our options to extend for up to an additional fifteen years. For the six months ended June 30, 2005, we paid $80,000 in lease payments. In addition, a related deposit of $18,750 is held by the landlord.

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PRINCIPAL AND SELLING SHAREHOLDERS

          The following table sets forth certain information regarding beneficial ownership of our common stock as of October 5, 2005, and as adjusted to reflect the sale of the shares of our common stock offered pursuant to this prospectus by:

• each of our directors;

• each of our named executive officers;

• all of our directors and executive officers as a group; and

• each person or group of affiliated persons whom we know owns beneficially more than 5.0% of our common stock.

          Except as otherwise noted below, the address for those individuals for which an address is not otherwise indicated is c/o Dover Saddlery, Inc., 525 Great Road, Littleton, MA 01460.

          Beneficial ownership is determined in accordance with the rules of the SEC. To compute the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable or will become exercisable within 60 days after October 5, 2005 are deemed outstanding. However, the shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and/or investment power with respect to all shares beneficially owned.

          As of October 5, 2005, there were 2,719,111 shares of our common stock issued and outstanding and, after giving effect to this offering, there will be                      shares of our common stock outstanding.

	Shares Beneficially						Shares Beneficially
	Owned Prior to the						Owned After the
	Offering						Offering
						Shares
Beneficial Owner	Number		Percent			Offered	Number	Percent
5% Stockholders:
Citizens Ventures Inc.(1)		411,111		15.1	%
Directors and Named Executive Officers:
Stephen L. Day(2)		812,986		29.3	%
Jonathan A.R. Grylls(3)		243,956		8.9	%
William Schmidt(4)		12,000		0.4	%
Michael W. Bruns(5)		4,000		0.1	%
David J. Powers		394,327		14.5	%
James F. Powers		394,327		14.5	%
Gregory F. Mulligan(6)		17,500		0.6	%
Executive officers and directors as a group (seven persons)(7)		1,879,096		66.3	%
Other Selling Stockholders:
Michele R. Powers(8)		415,703		15.1	%
David Post(9)		64,101		2.4	%
Donald Motsenbocker(10)		32,050		1.2	%
Thomas Gaines(11)		32,050		1.2	%
Nicholas Holland(12)		14,000		0.5	%
Cole Smith(13)		12,000		0.4	%
Scott Soule(14)		12,000		0.4	%

 ⁽¹⁾  Reflects the conversion on September 16, 2005 of 1,015,000 shares of redeemable convertible preferred stock held by Citizens Ventures Inc. into 1,015,000 shares of common stock and our repurchase of 603,889 shares of such common

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stock. Investment or voting power of the shares owned by Citizens Ventures, Inc. is shared among Gail Long, President, Greg Roy, Senior Managing Director, David Morris, Managing Director and Joshua Franklin, Director. Citizens Ventures’ address is 28 State Street, 15th floor, Boston, MA 02109

(2)	Includes 58,379 shares issuable to Mr. Day upon exercise of stock options.
(3)	Includes 29,339 shares issuable to Mr. Grylls upon exercise of stock options.
(4)	Includes 4,000 shares issuable to Mr. Schmidt upon exercise of stock options.
(5)	Consists of 4,000 shares issuable to Mr. Bruns upon exercise of stock options.
(6)	Consists of 17,500 shares issuable to Mr. Mulligan upon exercise of stock options, including options for 14,000 shares vesting upon the closing of this offering.
(7)	Includes, in the aggregate, 113,218 shares issuable upon exercise of stock options held by four executive officers and directors.
(8)	Includes 31,782 shares issuable to Ms. Powers upon exercise of stock options, 88,888 shares held in trust for the benefit of certain of her family members and 88,888 shares held by Richard Powers, Ms. Powers’ husband.
(9)	Mr. Post’s address is 16 Atkinson Depot Road, Plaistow, NH 03865.
(10)	Mr. Motsenbocker’s address is 300 Appalachian Way, McKinney, TX 75070.
(11)	Mr. Gaines’ address is 140 Venture Court Suite 1, Lexington, KY 40511.
(12)	Mr. Holland’s address is 332 Highland Ave., Winchester, MA 01890.
(13)	Includes 4,000 shares issuable to Mr. Smith upon exercise of stock options.
(14)	Includes 4,000 shares issuable to Mr. Soule upon exercise of stock options.

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DESCRIPTION OF CAPITAL STOCK

          Upon the closing of this offering, our Amended and Restated Certificate of Incorporation will provide for authorized capital stock consisting of                      shares of common stock, $0.0001 par value per share, and                      million shares of preferred stock, $0.0001 par value per share. After completion of this offering,                      shares of our common stock and no shares of our preferred stock will be issued and outstanding. The following description of our capital stock and certain provisions of our Amended and Restated Certificate of Incorporation and By-laws is a summary. The description below is qualified in its entirety by the provisions of our Amended and Restated Certificate of Incorporation and By-laws which will be in effect upon the closing of this offering, which have been filed as exhibits to the registration statement, which includes this prospectus.

Common Stock

          The issued and outstanding shares of our common stock are, and the shares of our common stock being offered by us in this offering will be, upon payment for the shares, validly issued, fully paid and nonassessable. Holders of shares of our outstanding common stock are entitled to receive dividends if our Board of Directors decides to declare any dividends. See “Dividend Policy.” Our common stock is neither redeemable nor convertible. Upon liquidation, dissolution, or winding up of our Company, holders of shares of our common stock are entitled to receive, pro rata, our assets that are legally available for distribution, after payment of all debts and other liabilities. Each outstanding share of common stock is entitled to one vote on all matters submitted to a vote of our shareholders. Our Amended and Restated By-laws do not allow for cumulative voting in the election of directors.

Preferred Stock

          Our amended and restated certificate of incorporation, upon the closing of the offering, will authorize the issuance of            million shares of preferred stock, $0.0001 par value per share. Our Board of Directors is authorized to provide for the issuance of shares of preferred stock in one or more series, and to fix for each series voting rights, if any, designation, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions as provided in a resolution or resolutions adopted by our Board of Directors.

          The purpose of authorizing our Board of Directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a shareholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings, and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock. Upon completion of this offering, there will be no shares of preferred stock outstanding, and we have no present plans to issue any shares of preferred stock.

Options, Warrants and Restricted Stock

          In August 2005, we adopted the 2005 Equity Incentive Plan, subject to the closing of this offering. Under the 2005 Equity Incentive Plan, we may award incentive stock options to employees and may also award non-qualified stock options and stock to our employees, directors, consultants and advisors. The 2005 Equity Incentive Plan permits the issuance of up to                      shares of common stock pursuant to awards under the 2005 Equity Incentive Plan.

          Effective upon the closing of this offering, we are amending our 1999 Stock Option Plan to provide that no further awards may be made under such plan.

          Options to acquire                      shares of our common stock were outstanding as of                     , 2005, of which                     were exercisable at a weighted average exercise price of $           per share

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and                     of which were not exercisable and had a weighted average exercise price of $           per share. No options to acquire any additional shares of common stock have been approved for grant in 2005 under our 1999 Stock Option Plan. No additional shares of common stock are reserved for issuance under our 1999 Stock Option Plan.

          Upon the closing of the offering, we will grant options to purchase an aggregate of                   shares of our common stock to 17 of our employees pursuant to our 2005 Equity Incentive Plan. Such options will be awarded subject to one-year vesting and at an option price equal to the price at which shares will be sold in this offering.

          On September 16, 2005 we issued a warrant to purchase common stock to Patriot Capital Funding, Inc. exercisable for up to 23,503 shares of our common stock at a price of $0.01 per share.

Anti-Takeover Effects of Delaware Law and our Amended and Restated Certificate of Incorporation and By-laws

          Delaware law and our Amended and Restated Certificate of Incorporation and By-laws contain several provisions that may make it more difficult for another person to acquire control of us by means of tender offer, open market purchases, proxy contest or otherwise. Set forth below is a description of those provisions.

Delaware Law

          We are subject to Section 203 of the Delaware General Corporation Law, which prohibits persons deemed interested shareholders from engaging in a business combination with a Delaware corporation for three years following the date such persons become interested shareholders. Generally, an interested stockholder is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by our Board of Directors.

Elimination of Liability in Certain Circumstances

          Our Amended and Restated Certificate of Incorporation eliminates the liability of our Directors to us or our shareholders for monetary damages resulting from breaches of their fiduciary duties as Directors. Our Directors remain liable for breaches of their duty of loyalty to us or our shareholders, as well as for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, and transactions from which a Director derives improper personal benefit. Our Amended and Restated Certificate of Incorporation also does not absolve Directors from liability under provisions of Delaware General Corporation Law, which makes Directors personally liable for unlawful distributions to shareholders if the Director did not act in good faith.

          The effect of this provision is to eliminate the personal liability of our Directors for monetary damages for actions involving a breach of their fiduciary duty of care, including any such actions involving gross negligence. We believe that this provision does not eliminate the liability of our Directors to us or our shareholders for monetary damages under Federal securities laws. Our Amended and Restated Certificate of Incorporation and By-laws also provide indemnification for the benefit of our Directors and officers to the fullest extent permitted by Delaware law, as it may be amended from time to time, including most circumstances under which indemnification otherwise would be discretionary.

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Number of Directors; Removal; Vacancies

          Our Amended and Restated By-laws provide that we will have such number of Directors as may be determined by resolution of our Board of Directors. Vacancies on our Board of Directors, or any directorship to be filled by reason of an increase in the number of Directors, may be filled by our Board of Directors. Our Directors may not be removed except for cause at a meeting of our shareholders by the affirmative vote of the holders of a majority of the outstanding shares that are entitled to vote at an election of Directors.

Special Meetings of Shareholders

          Our Amended and Restated Certificate of Incorporation provides that special meetings of our shareholders may be called only by the chairman of our Board of Directors, our President or a majority of our Board of Directors.

Authorized but Unissued Shares

          The authorized but unissued shares of common stock and preferred stock are available for future issuance without shareholder approval. These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions, and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger, or otherwise.

Transfer Agent and Registrar

          The transfer agent and registrar for our common stock, upon the closing of this offering, will be Stock Trans, Inc.

Listing

          We have applied for quotation on the Nasdaq National Market under the symbol “DOVR”.

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SHARES ELIGIBLE FOR FUTURE SALE

          Following this offering, we will have                      shares of common stock outstanding. The                      shares (or                      shares if the underwriter exercises its over-allotment option in full) sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except that any shares purchased by our affiliates, as that term is defined in Rule 144 promulgated under the Securities Act, may generally only be sold in compliance with the limitations of Rule 144 as described below.

          The remaining                      shares of common stock outstanding following this offering will be “restricted securities” as such term is defined under Rule 144. We issued and sold these restricted securities in private transactions in reliance on exemptions from registration under the Securities Act. Restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption under Rule 144 or Rule 701 promulgated under the Securities Act, as summarized below.

          We have agreed with WR Hambrecht + Co, that we will not, without the prior written consent of WR Hambrecht + Co, issue any additional shares of common stock or securities convertible into, exercisable for or exchangeable for shares of common stock for a period of 180 days after the date of this prospectus, except that we may grant options to purchase shares of common stock under our stock incentive plans, and issue shares of common stock upon the exercise of outstanding options.

          Our executive officers and Directors and the holders of substantially all of our shares of common stock have agreed subject to certain exceptions that they will not, without the prior written consent of WR Hambrecht + Co, directly or indirectly, sell, offer, contract to sell, assign, transfer the economic risk of ownership in, make any short sale, pledge or otherwise dispose of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for, or any rights to acquire or purchase, any of our capital stock for a period of 180 days after the date of this prospectus without the prior written consent of WR Hambrecht + Co. Notwithstanding the foregoing, if (a) during the last 17 days of the 180-day period after the date of this prospectus, we issue an earnings release or publicly announce material news or if a material event relating to us occurs or (b) prior to the expiration of the 180-day period after the date of this prospectus, we announce that we will release earnings during the 16-day period beginning on the last day of the 180-day period, the above restrictions will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

          Taking into account the lock-up agreements, and assuming WR Hambrecht + Co does not release shareholders from these agreements, the following shares will be eligible for sale in the public market at the following times:

• on the date of this prospectus,                      shares (including the                      shares sold in this offering) will be immediately available for sale in the public market;

• 90 days after the date of this prospectus, approximately                      shares will be eligible for sale pursuant to Rule 144 and Rule 701, none of which will be subject to volume, manner of sale, and other limitations under Rule 144;

• 180 days after the date of this prospectus, approximately                      shares will be eligible for sale,                     of which will be subject to volume, manner of sale, and other limitations under Rule 144; and

• the remaining                      shares will be eligible for sale under Rule 144 from time to time upon the expiration of various one-year holding periods applicable to those shares.

Shares issuable upon exercise of options we granted prior to the date of this prospectus will also be available for sale in the public market pursuant to Rule 701 under the Securities Act, subject to certain Rule 144 limitations, and, in the case of some holders, to the lock-up agreements. Rule 701

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permits resales of these shares beginning 90 days after the date of this prospectus by persons other than affiliates unless such persons have entered into lockup agreements.

          In general, under Rule 144, a shareholder who owns restricted shares that have been outstanding for at least one year is entitled to sell, within any three-month period, a number of these restricted shares that does not exceed the greater of:

• 1% of the then outstanding shares of common stock, or approximately                      shares immediately after this offering; or

• the average weekly trading volume in the common stock on the Nasdaq National Market during the four calendar weeks preceding the sale.

          Our affiliates must comply with the restrictions and requirements of Rule 144, other than the one-year holding period requirement, to sell any shares of common stock they may own or acquire which are not restricted securities.

          Under Rule 144(k), a shareholder who is not currently, and who has not been for at least three months before the sale, an affiliate of ours and who owns restricted shares that have been outstanding for at least two years may resell these restricted shares held by such shareholders without compliance with the above requirements. The one- and two-year holding periods described above do not begin to run until the full purchase price is paid by the person acquiring the restricted shares from us or an affiliate of ours.

          Through                     , 2005, we have granted options to purchase                      shares of common stock to specified persons pursuant to our stock incentive plans. We intend to file, after the effective date of this offering, a registration statement on Form S-8 to register the sale of approximately                      shares of common stock upon exercises of options granted under our stock incentive plans. The registration statement on Form S-8 will become effective automatically upon filing. Shares issued under our stock incentive plans, after the filing of a registration statement on Form S-8, may be sold in the open market, subject, in the case of some holders, to the Rule 144 limitations applicable to affiliates and subject to lock-up agreements similar to those described above which we have entered into with certain of our option holders.

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PLAN OF DISTRIBUTION

          In accordance with the terms of the underwriting agreement among WR Hambrecht + Co, the selling shareholders and us, the underwriter named below has agreed to purchase from the selling shareholders and us that number of shares of common stock set forth opposite each underwriter’s name below at the public offering price less the underwriting discounts and commissions described on the cover page of this prospectus.

	Number of
Underwriter	Shares
WR Hambrecht + Co, LLC
Total

          The underwriting agreement provides that the obligations of the underwriter are subject to various conditions, including the absence of any material adverse change in our business, and the receipt of certificates, opinions and letters from us and our counsel. Subject to those conditions, the underwriter is committed to purchase all of the shares of our common stock offered by this prospectus if any of the shares are purchased.

Commissions and Discounts

          The underwriter proposes to offer the shares of our common stock directly to the public at the offering price set forth on the cover page of this prospectus, as this price is determined by the OpenIPO process described below, and to certain dealers at this price less a concession not in excess of $           per share. The underwriter may allow, and dealers may reallow, a concession not to exceed $           per share on sales to other dealers. Any dealers that participate in this distribution of our common stock may be deemed to be an underwriter within the meaning of the Securities Act, and any discount, commission or concession received by them and any provided by the sale of the shares by them may be deemed to be underwriting discounts and commissions under the Securities Act. After completion of the initial public offering of the shares, to the extent that the underwriter is left with shares that successful bidders have failed to pay for, the underwriter may sell those shares at a different price and with different selling terms.

          The following table shows the per share and total underwriting discount to be paid to the underwriter by us in connection with this offering. The underwriting discount has been determined through negotiations between us and the underwriter, and has been calculated as a percentage of the offering price. These amounts are shown assuming both no exercise and full exercise of the over-allotment option.

	Per Share	No Exercise	Full Exercise
Public offering price	$	$	$
Underwriting discount	$	$	$
Proceeds, before expenses, to us	$	$	$
Proceeds, before expenses, to selling shareholders	$	$	$

          We estimate that the costs of this offering, exclusive of the underwriting discount and commissions, will be approximately $          . These fees and expenses are payable entirely by us. An electronic prospectus is available on the website maintained by WR Hambrecht + Co and may also be made available on websites maintained by selected dealers and selling group members participating in this offering.

The OpenIPO Auction Process

          The distribution method being used in this offering is known as the OpenIPO auction, which differs from methods traditionally used in underwritten public offerings. In particular, as described under the captions “— Determination of Public Offering Price” and “— Allocation of Shares,” the

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public offering price and the allocation of shares are determined by an auction conducted by the underwriter and other factors as described below. All qualified individual and institutional investors may place bids in an OpenIPO auction and investors submitting valid bids have an equal opportunity to receive an allocation of shares.

          The following describes how the underwriter and some selected dealers conduct the auction process and confirm bids from prospective investors:

Prior to Effectiveness of the Registration Statement

          Before the registration statement relating to this offering becomes effective, but after a preliminary prospectus is available, the auction will open and the underwriter and participating dealers will solicit bids from prospective investors through the Internet and by telephone and facsimile. The bids shall specify the number of shares of our common stock the potential investor proposes to purchase and the price the potential investor is willing to pay for such shares. These bids may be above or below the range set forth on the cover page of this prospectus. The minimum size of any bid is 100 shares.

          The shares offered by this prospectus may not be sold, nor may offers to buy be accepted, prior to the time that the registration statement filed with the SEC becomes effective. A bid received by the underwriter or a dealer involves no obligation or commitment of any kind prior to the closing of the auction. Bids can be modified or revoked at any time prior to the closing of the auction.

          Approximately two business days prior to the registration statement being declared effective, prospective investors will receive, by e-mail, telephone or facsimile, a notice indicating the proposed effective date. Potential investors may at any time expressly request that all, or any specific, communications between them and the underwriter and participating dealers be made by specific means of communication, including e-mail, telephone and facsimile. The underwriter and participating dealers will contact the potential investors in the manner they request.

Effectiveness of the Registration Statement

          After the registration statement relating to this offering has become effective, potential investors who have submitted bids to the underwriter or a dealer will be contacted by e-mail, telephone or facsimile. Potential investors will be advised that the registration statement has been declared effective and that the auction may close in as little as one hour following effectiveness. Bids will continue to be accepted in the time period after the registration statement is declared effective but before the auction closes. Bidders may also withdraw their bids in the time period following effectiveness but before the close of the auction.

Reconfirmation of Bids

          The underwriter will require that bidders reconfirm the bids that they have submitted in the offering if any of the following events shall occur:

• more than 15 business days have elapsed since the bidder submitted its bid in the offering;

• there is a material change in the prospectus that requires recirculation of the prospectus by us and the underwriter; or

• the initial public offering price is more than 20% above the high end of the price range or below the low end of the price range. In this event, the underwriter will circulate a revised preliminary prospectus with its request for reconfirmation.

          If a reconfirmation of bids is required, the underwriter will send an electronic notice (or communicate in an alternative manner as requested by a bidder) to everyone who has submitted a

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bid notifying them that they must reconfirm their bids by contacting the underwriter or participating dealers with which they have their brokerage accounts. Bidders will have a minimum of four hours to reconfirm their bids. Bidders will have the ability to cancel, modify or reconfirm their bids at any time until the auction closes. If bidders do not reconfirm their bids before the auction is closed (which will be no sooner than four hours after the request for reconfirmation is sent), we and the underwriter will disregard their bids in the auction, and they will be deemed to have been withdrawn. If appropriate, the underwriter may include the request for reconfirmation in a notice of effectiveness of the registration statement.

Changes in the Price Range Prior to Effectiveness of the Registration Statement

          If, prior to the date on which the SEC declares our registration statement effective, there is a change in the price range or the number of shares to be sold in this offering, in each case in a manner that is not otherwise material to this offering, we and the underwriter or participating dealers will:

• provide notice on our respective websites of the revised price range or number of shares to be sold in this offering, as the case may be;

• issue a press release announcing the revised price range or number of shares to be sold in this offering, as the case may be; and

• send an electronic notice (or communicate in an alternative manner as requested by a bidder) to everyone who has submitted a bid notifying them of the revised price range or number of shares to be sold in this offering, as the case may be.

In these situations, the underwriter may accept an investor’s bid after the SEC declares the registration statement effective without requiring a bidder to reconfirm. However, the underwriter may decide at any time to require potential investors to reconfirm their bids, and if they fail to do so, unconfirmed bids will be invalid.

Closing of the Auction and Pricing

          The auction will close and a public offering price will be determined after the registration statement becomes effective at a time agreed to by us and WR Hambrecht + Co, which we anticipate will be after the close of trading on the Nasdaq National Market on the same day on which the registration statement is declared effective. The auction may close in as little as one hour following effectiveness of the registration statement. However, the date and time at which the auction will close and a public offering price will be determined cannot currently be predicted and will be determined by us and WR Hambrecht + Co based on general market conditions during the period after the registration statement is declared effective. If we are unable to close the auction, determine a public offering price and file a final prospectus with the SEC within 15 days after the registration statement is initially declared effective, we will be required to file with the SEC and have declared effective a post-effective amendment to the registration statement before the auction may be closed and before any bids may be accepted.

          Once a potential investor submits a bid, the bid remains valid unless subsequently withdrawn by the potential investor. Potential investors are able to withdraw their bids at any time before the close of the auction by notifying the underwriter or a participating dealer.

          Following the closing of the auction, the underwriter determines the highest price at which all of the shares offered, including shares that may be purchased by the underwriter to cover any over-allotments, may be sold to potential investors. This price, which is called the “clearing price,” is determined based on the results of all valid bids at the time the auction is closed. The clearing price is not necessarily the public offering price, which is set as described in “— Determination of Public Offering Price” below. The public offering price determines the allocation of shares to potential

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investors, with all valid bids submitted at or above the public offering price receiving a pro rata portion of the shares bid for.

          Potential investors will have the ability to withdraw their bids at any time until the closing of the auction. The underwriter will accept successful bids by sending notice of acceptance after the auction closes and a public offering price has been determined, and bidders who submitted successful bids will be obligated to purchase the shares allocated to them regardless of (1) whether such bidders are aware that the registration statement has been declared effective and that the auction has closed or (2) whether they are aware that the notice of acceptance of that bid has been sent. The underwriter will not cancel or reject a valid bid after the notices of acceptance have been sent.

          Once the auction closes and a clearing price is set as described below, the underwriter or a participating dealer accepts the bids from those bidders whose bids are at or above the public offering price but may allocate to a prospective investor fewer shares than the number included in the investor’s bid, as described in “— Allocation of Shares” below.

Determination of Public Offering Price

          The public offering price for this offering is ultimately determined by negotiation between the underwriter and us after the auction closes and does not necessarily bear any direct relationship to our assets, current earnings or book value or to any other established criteria of value, although these factors are considered in establishing the initial public offering price. Prior to this offering, there has been no public market for our common stock. The principal factor in establishing the public offering price is the clearing price resulting from the auction, although other factors are considered as described below. The clearing price is used by the underwriter and us as the principal benchmark, among other considerations described below, in determining the public offering price for the stock that will be sold in this offering.

          The clearing price is the highest price at which all of the shares offered, including the shares that may be purchased by the underwriter to cover any over-allotments, may be sold to potential investors, based on the valid bids at the time the auction is closed. The shares subject to the underwriter’s over-allotment option are used to calculate the clearing price whether or not the option is actually exercised. Based on the auction results, we may elect to change the number of shares sold in the offering. Depending on the public offering price and the amount of the increase or decrease, an increase or decrease in the number of shares to be sold in the offering could affect the clearing price and result in either more or less dilution to potential investors in this offering.

          Depending on the outcome of negotiations between the underwriter and us, the public offering price may be lower, but will not be higher, than the clearing price. The bids received in the auction and the resulting clearing price are the principal factors used to determine the public offering price of the stock that will be sold in this offering. The public offering price may be lower than the clearing price depending on a number of additional factors, including general market trends or conditions, the underwriter’s assessment of our management, operating results, capital structure and business potential and the demand and price of similar securities of comparable companies. The underwriter and we may also agree to a public offering price that is lower than the clearing price in order to facilitate a wider distribution of the stock to be sold in this offering. For example, the underwriter and we may elect to lower the public offering price to include certain institutional or retail bidders in this offering. The underwriter and we may also lower the public offering price to create a more stable post-offering trading price for our shares.

          The public offering price always determines the allocation of shares to potential investors. Therefore, if the public offering price is below the clearing price, all valid bids that are at or above the public offering price receive a pro rata portion of the shares bid for. If sufficient bids are not received, or if we do not consider the clearing price to be adequate or if the underwriter and we are

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not able to reach agreement on the public offering price, then the underwriter and we will either postpone or cancel this offering. Alternatively, we may file with the SEC a post-effective amendment to the registration statement in order to conduct a new auction.

          The following simplified example illustrates how the public offering price is determined through the auction process:

          Company X offers to sell 1,500 shares in its public offering through the auction process. The underwriter, on behalf of Company X, receives five bids to purchase, all of which are kept confidential until the auction closes.

          The first bid is to pay $10.00 per share for 1,000 shares. The second bid is to pay $9.00 per share for 100 shares. The third bid is to pay $8.00 per share for 900 shares. The fourth bid is to pay $7.00 per share for 400 shares. The fifth bid is to pay $6.00 per share for 800 shares.

          Assuming that none of these bids are withdrawn or modified before the auction closes, and assuming that no additional bids are received, the clearing price used to determine the public offering price would be $8.00 per share, which is the highest price at which all 1,500 shares offered may be sold to potential investors who have submitted valid bids. However, the shares may be sold at a price below $8.00 per share based on negotiations between Company X and the underwriter.

          If the public offering price is the same as the $8.00 per share clearing price, the underwriter would accept bids at or above $8.00 per share. Because 2,000 shares were bid for at or above the clearing price, each of the three potential investors who bid $8.00 per share or more would receive approximately 75% (1,500 divided by 2,000) of the shares for which bids were made. The two potential investors whose bids were below $8.00 per share would not receive any shares in this example.

          If the public offering price is $7.00 per share, the underwriter would accept bids that were made at or above $7.00 per share. No bids made at a price of less than $7.00 per share would be accepted. The four potential investors with the highest bids would receive a pro rata portion of the 1,500 shares offered, based on the 2,400 shares they requested, or 62.5% (1,500 divided by 2,400) of the shares for which bids were made. The potential investor with the lowest bid would not receive any shares in this example.

          As described in “— Allocation of Shares” below, because bids that are reduced on a pro rata basis may be rounded down to round lots, a potential investor may be allocated less than the pro rata percentage of the shares bid for. Thus, if the pro rata percentage was 75%, the potential investor who bids for 200 shares may receive a pro rata allocation of 100 shares (50% of the shares bid for), rather than receiving a pro rata allocation of 150 shares (75% of the shares bid for).

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          The following table illustrates the example described above, after rounding down any bids to the nearest round lot in accordance with the allocation rules described below, and assuming that the initial public offering price is set at $8.00 per share. The table also assumes that these bids are the final bids, and that they reflect any modifications that have been made to reflect any prior changes to the offering range, and to avoid the issuance of fractional shares.

Initial Public Offering of Company X

	Bid Information						Auction Results
									Approximate
			Cumulative						Allocated
	Shares		Shares				Shares		Requested		Clearing		Amount
	Requested		Requested		Bid Price		Allocated		Shares		Price		Raised
		1,000		1,000	$	10.00		700		75%	$	8.00	$	5,600
		100		1,100	$	9.00		100		75%	$	8.00	$	800
Clearing Price		900		2,000	$	8.00		700		75%	$	8.00	$	5,600
		400		2,400	$	7.00		0		0%		—		—
		800		3,200	$	6.00		0		0%		—		—
Total:								1,500					$	12,000

Allocation of Shares

          Bidders receiving a pro rata portion of the shares they bid for generally receive an allocation of shares on a round-lot basis, rounded to multiples of 100 or 1,000 shares, depending on the size of the bid. No bids are rounded to a round lot higher than the original bid size. Because bids may be rounded down to round lots in multiples of 100 or 1,000 shares, some bidders may receive allocations of shares that reflect a greater percentage decrease in their original bid than the average pro rata decrease. Thus, for example, if a bidder has confirmed a bid for 200 shares, and there is an average pro rata decrease of all bids of 30%, the bidder may receive an allocation of 100 shares (a 50% decrease from 200 shares) rather than receiving an allocation of 140 shares (a 30% decrease from 200 shares). In addition, some bidders may receive allocations of shares that reflect a lesser percentage decrease in their original bid than the average pro rata decrease. For example, if a bidder has submitted a bid for 100 shares, and there is an average pro rata decrease of all bids of 30%, the bidder may receive an allocation of all 100 shares to avoid having the bid rounded down to zero.

          Generally the allocation of shares in this offering will be determined in the following manner, continuing the first example above:

• any bid with a price below the public offering price is allocated no shares.

• the pro-rata percentage is determined by dividing the number of shares offered (including the over-allotment option) by the total number of shares bid at or above the public offering price. In our example, if there are 2,000 shares bid for at or above the public offering price, and 1,500 shares offered in the offering, then the pro-rata percentage is 75%.

• all of the successful bids are then multiplied by the pro-rata percentage to determine the allocations before rounding. For example, the three winning bids for 1,000 shares (Bid 1), 100 shares (Bid 2) and 900 shares (Bid 3) would initially be allocated 750 shares, 75 shares and 675 shares, respectively, based on the pro rata percentage.

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• the bids are then rounded down to the nearest 100 share round lot, so the bids would be rounded to 700, 0 and 600 shares respectively. This creates a stub of 200 unallocated shares.

• the 200 stub shares are then allocated to the bids. Continuing the example above, because Bid 2 for 100 shares was rounded down to 0 shares, 100 of the stub shares would be allocated to Bid 2. If there were not sufficient stub shares to allocate at least 100 shares to Bid 2, Bid 2 would not receive any shares in the offering. After allocation of these shares, 100 unallocated stub shares would remain.

• because Bid 3 for 900 shares was reduced, as a result of rounding, by more total shares then Bid 1 for 1,000 shares, Bid 3 would then be allocated the remaining 100 stub shares up to the nearest 100 round lot (from 600 shares to 700 shares).

If there are not sufficient remaining stub shares to enable a bid to be rounded up to a round lot of 100 shares the remaining unallocated stub shares would be allocated to smaller orders that are below their bid amounts. The table below illustrates the allocations in the example above.

Initial Public Offering of Company X

			Pro-Rata
			Allocation (75%				Allocation of
	Initial Bid		of Initial Bid)		Initial Rounding		Stub Shares		Final Allocation
Bid 1		1,000		750		700		0		700
Bid 2		100		75		0		100		100
Bid 3		900		675		600		100		700
Total		2,000		1,500		1,300		200		1,500

Requirements for Valid Bids

          Valid bids are those that meet the requirements, including eligibility, account status and size, established by the underwriter or participating dealers. In order to open a brokerage account with WR Hambrecht + Co, a potential investor must deposit $2,000 in its account. This brokerage account will be a general account subject to WR Hambrecht + Co’s customary rules, and will not be limited to this offering. Other than the $2,000 described above, prospective investors are not required to deposit any money into their accounts until after the registration statement becomes effective. No funds will be transferred to WR Hambrecht + Co, and any amounts in excess of $2,000 may be withdrawn at any time until the auction closes and the bid is accepted. The auction may close in as little as one hour after the registration statement is declared effective. Of course, any potential bidder that decides not to participate in the auction may close its account at WR Hambrecht + Co and withdraw its funds at any time. The underwriter reserves the right, in its sole discretion, to reject or reduce any bids that they deem manipulative or disruptive or not creditworthy in order to facilitate the orderly completion of the offering. For example, in previous transactions for other issuers in which the auction process was used, the underwriter has rejected or reduced bids when the underwriter, in its sole discretion, deemed the bids not creditworthy or had reason to question the bidder’s intent or means to fund its bid. In the absence of other information, an underwriter or participating dealer may assess a bidder’s creditworthiness based solely on the bidder’s history with the underwriter or participating dealer. The underwriter has also rejected or reduced bids that they deemed, in their sole discretion, to be potentially manipulative or disruptive or because the bidder had a history of alleged securities law violations. Suitability and eligibility standards of participating dealers may vary. As a result of these varying requirements, a bidder may have its bid rejected by the underwriter or a participating dealer while another bidder’s identical bid is accepted.

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The Closing of the Auction and Allocation of Shares

          The auction will close on a date and at a time estimated and publicly disclosed in advance by the underwriter on the websites of WR Hambrecht + Co at www.wrhambrecht.com and www.openipo.com. The auction may close in as little as one hour following effectiveness of the registration statement. The                      shares offered by this prospectus, or                      shares if the underwriter’s over-allotment option is exercised in full, will be purchased from us and the selling shareholders by the underwriter and sold through the underwriter and participating dealers to investors who have submitted valid bids at or higher than the public offering price.

          The underwriter or a participating dealer will notify successful bidders by sending a notice of acceptance by e-mail, telephone, facsimile or mail (according to any preference indicated by a bidder) informing bidders that the auction has closed and that their bids have been accepted. The notice will indicate the price and number of shares that have been allocated to the successful bidder. Other bidders are notified that their bids have not been accepted.

          Each participating dealer has agreed with the underwriter to sell the shares it purchases from the underwriter in accordance with the auction process described above, unless the underwriter otherwise consents. The underwriter does not intend to consent to the sale of any shares in this offering outside of the auction process. The underwriter reserves the right in its sole discretion to reject or reduce any bids that it deems manipulative or disruptive in order to facilitate the orderly completion of this offering, and reserves the right, in exceptional circumstances, to alter this method of allocation as it deems necessary to ensure a fair and orderly distribution of the shares of our common stock. For example, large orders may be reduced to ensure a public distribution and bids may be rejected or reduced by the underwriter or participating dealers based on eligibility or creditworthiness criteria. Once the underwriter has accepted a bid and closed the auction, the allocation of shares sold in this offering will be made according to the process described in “— Allocation of Shares” above, and no shares sold in this offering will be allocated on a preferential basis or outside of the allocation rules to any institutional or retail bidders. In addition, the underwriter or the participating dealers may reject or reduce a bid by a prospective investor who has engaged in practices that could have a manipulative, disruptive or otherwise adverse effect on this offering.

          Some dealers participating in the selling group may submit firm bids that reflect indications of interest from their customers that they have received at prices within the initial public offering price range. In these cases, the dealer submitting the bid is treated as the bidder for the purposes of determining the clearing price and allocation of shares.

          Price and volume volatility in the market for our common stock may result from the somewhat unique nature of the proposed plan of distribution. Price and volume volatility in the market for our common stock after the completion of this offering may adversely affect the market price of our common stock.

Over-Allotment Option

          The selling shareholders have granted to the underwriter an option, exercisable no later than 30 days after the date of this prospectus, to purchase up to an aggregate of                     additional shares of our common stock from the selling shareholders at the offering price, less the underwriting discounts and commissions set forth on the cover page of this prospectus. To the extent that the underwriter exercises this option, it will have a firm commitment to purchase the additional shares and the selling shareholders will be obligated to sell the additional shares to the underwriter. The underwriter may exercise the option only to cover over-allotments made in connection with the sale of shares offered.

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Lock-up Agreements

          Our executive officers and Directors and the holders of substantially all of our shares of common stock have agreed not to, directly or indirectly, sell, offer, contract to sell, assign, transfer the economic risk of ownership in, make any short sale, pledge or otherwise dispose of any shares of our capital stock or any securities convertible into or exercisable or exchangeable for, or any rights to acquire or purchase, any of our capital stock for a period of 180 days after the date of this prospectus without the prior written consent of WR Hambrecht + Co. Notwithstanding the foregoing, if (a) during the last 17 days of the 180-day period after the date of this prospectus, we issue an earnings release or publicly announce material news or if a material event relating to us occurs or (b) prior to the expiration of the 180-day period after the date of this prospectus, we announce that we will release earnings during the 16-day period beginning on the last day of the 180-day period, the above restrictions will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

          The holders of approximately      % of our common stock, options and warrants, including each of our Directors and executive officers, have agreed not to (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our common stock for a period of 180 days after the date of this prospectus without the prior written consent of WR Hambrecht + Co, other than (a) shares that will be sold by the selling shareholders in this offering (b) transfers or distributions of shares of our common stock acquired from the underwriter in this offering, (c) transfers of shares of common stock or any security convertible into our common stock as a bona fide gift or gifts, (d) transfers to any trust for the direct or indirect benefit of the persons bound by the foregoing terms or the immediate family of the persons bound by the foregoing terms or (e) distributions of shares of our common stock or any security convertible into our common stock to the partners, members or shareholders of the persons bound by the foregoing terms, provided that in the case of any transfer or distribution described in (c) through (e) above, the transferees, donees or distributees agree to be bound by the foregoing terms and the transferor, donor or distributor would not be required to, or voluntarily, file a report under Section 16(a) of the Exchange Act. These restrictions will remain in effect beyond the 180-day period under the same circumstances described in the immediately preceding paragraph.

          There are no specific criteria that WR Hambrecht + Co requires for an early release of shares subject to lock-up agreements. The release of any lock-up, if at all, will be on a case-by-case basis. Factors in deciding whether to release shares may include the length of time before the lock-up expires, the number of shares involved, the reason for release, including financial hardship, market conditions and the trading price of the common stock. WR Hambrecht + Co has no present intention or understanding, implicit or explicit, to release any of the shares subject to the lock-up agreements prior to the expiration of the 180-day period.

Short Sales, Stabilizing Transactions and Penalty Bids

          In connection with this offering, the underwriter may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Any short sales made by the underwriter would be made at the public offering price. Short sales involve the sale by the underwriter of a greater number of shares than they are required to purchase in this offering. “Covered” short sales are sales made in an amount not greater than the underwriter’s option to purchase additional shares from the selling shareholders in this offering. The underwriter may close out any covered short position by either exercising its option to purchase additional shares or purchasing shares in the

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open market. As described above, the number of shares that may be sold pursuant to the underwriter’s over-allotment option is included in the calculation of the clearing price. In determining the source of shares to close out the covered short position, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. “Naked” short sales are any sales in excess of such option. To the extent that the underwriter engages in any naked short sales, the naked short position would not be included in the calculation of the clearing price. The underwriter must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriter in the open market prior to the completion of this offering.

          The underwriter may also impose a penalty bid. This occurs when a particular member of the selling group repays to the underwriter a portion of the underwriting discount or selling concession received by it because the underwriter has repurchased shares sold by or for the account of the member of the selling group in stabilizing or short covering transactions.

          These activities by the underwriter may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, the underwriter may discontinue them at any time. These transactions may be effected on the Nasdaq National Market, in the over-the-counter market or otherwise.

          WR Hambrecht + Co currently intends to act as a market maker for the common stock following this offering. However, it is not obligated to do so and may discontinue any market making at any time.

Indemnity

          The underwriting agreement provides that we and the underwriter have agreed to indemnify each other against specified liabilities, including liabilities under the Securities Act, or contribute to payments that each other may be required to make relating to these liabilities.

LEGAL MATTERS

          The validity of the common stock offered by Dover hereby will be passed upon for us by Bingham McCutchen LLP, for the common stock sold by the selling shareholders by Preti Flaherty Beliveau Pachios & Haley LLP, and for the underwriter by Morrison & Foerster LLP, New York, New York.

EXPERTS

          The consolidated financial statements of Dover Saddlery, Inc., as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, appearing in this prospectus and Registration Statement have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

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WHERE YOU CAN FIND MORE INFORMATION

          We have filed with the SEC a registration statement on Form S-1 (including exhibits, schedules, and amendments) under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus does not contain all the information set forth in the registration statement. For further information about us and the shares of common stock to be sold in this offering, you should refer to the registration statement. Statements contained in this prospectus relating to the contents of any contract, agreement or other document are not necessarily complete and are qualified in all respects by the complete text of the applicable contract, agreement or other document, a copy of which has been filed as an exhibit to the registration statement. Whenever this prospectus refers to any contract, agreement, or other document, you should refer to the exhibits that are a part of the registration statement for a copy of the contract, agreement, or document.

          You may read and copy all or any portion of the registration statement or any other information we file at the SEC’s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information about the operation of the public reference rooms. Our SEC filings, including the registration statement, are also available to you on the SEC’s Website (http://www.sec.gov).

          Upon completion of this offering, we will become subject to the information and periodic reporting requirements of the Exchange Act. Under the Exchange Act, we will file annual, quarterly and current reports, as well as proxy statements and other information with the SEC. These periodic reports, proxy statements, and other information will be available for inspection and copying at the SEC’s Public Reference Room and the website of the SEC referred to above.

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INDEX TO FINANCIAL STATEMENTS

Dover Saddlery, Inc.	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets		F-3
Consolidated Statements of Operations		F-4
Consolidated Statements of Redeemable Preferred Stock, Stockholders’ Equity (Deficit) and Comprehensive Income (Loss)		F-5
Consolidated Statements of Cash Flows		F-6
Notes to Consolidated Financial Statements (Including Data Pertaining to Interim Periods)		F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of Dover Saddlery, Inc.:

          We have audited the accompanying consolidated balance sheets of Dover Saddlery, Inc. (the Company) and subsidiaries as of December 31, 2003 and 2004 and the related consolidated statements of operations, redeemable convertible preferred stock, stockholders’ equity (deficit) and comprehensive income (loss) and cash flows for each of the three years in the period ended December 31, 2004. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

          We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dover Saddlery, Inc. and subsidiaries as of December 31, 2003 and 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts	/s/  Ernst & Young LLP
April 15, 2005

F-2

DOVER SADDLERY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		December 31
								June 30,
		2003			2004			2005
								(unaudited)
Assets
Current assets:
	Cash and cash equivalents	$	58,240		$	64,276		$	51,451
	Accounts receivable		57,595			147,260			797,298
	Inventory		8,332,783			9,277,340			10,274,942
	Prepaid catalog costs		1,497,691			1,340,592			2,076,858
	Prepaid expenses and other current assets		245,845			434,940			889,541
Total current assets			10,192,154			11,264,408			14,090,090
	Furniture and fixtures		1,122,800			1,251,694			1,381,097
	Office and other equipment		182,852			227,842			232,847
	Leasehold improvements		839,837			1,467,654			1,918,130
			2,145,489			2,947,190			3,532,074
	Less accumulated depreciation and amortization		(1,049,184	)		(1,420,248	)		(1,660,532	)
			1,096,305			1,526,942			1,871,542
Other assets:
	Deferred tax assets		117,700			21,800			68,700
	Other assets, net		961,542			814,186			602,599
	Goodwill		13,135,221			13,135,221			13,135,221
Total other assets			14,214,463			13,971,207			13,806,520
Total assets		$	25,502,922		$	26,762,557		$	29,768,152
Liabilities and stockholders’ equity
Current liabilities:
	Current portion of capital lease obligations and short term bank borrowings	$	1,093,485		$	397,089		$	1,190,892
	Accounts payable		2,144,921			2,603,628			1,993,106
	Accrued expenses and other current liabilities		1,860,195			2,146,672			1,687,699
	Income tax payable		211,451			307,814			—
	Deferred tax liability		184,300			118,824			385,559
Total current liabilities			5,494,352			5,574,027			5,257,256
Long-term liabilities:
	Revolving line of credit		8,700,000			7,800,000			10,300,000
	Subordinated notes payable		3,508,151			3,681,328			3,769,236
	Capital lease obligation, net of current portion		252,291			296,442			334,028
Total long-term liabilities			12,460,442			11,777,770			14,403,264
Redeemable convertible preferred stock, $0.0001 par value; 1,100,000 shares authorized, 1,015,000 issued and outstanding at redemption value			2,846,640			3,006,634			3,086,631
Put Rights available to preferred stock holders			—			—			7,709,701
Put Rights available to common stock holders			4,294,750			5,872,640			22,792,268
Employee notes receivable in exchange for option exercise			—			(281,600	)		(281,600	)
Stockholders’ equity (deficit):
	Class A & B Common Stock, par value $0.0001 per share; 5,400,000 shares authorized, 2,095,000 shares issued as of December 31, 2003, and 2,294,000 as of December 31, 2004 and June 30, 2005		—			—			—
Accumulated other comprehensive (loss) income			—			(33,338	)		14,268
Retained earnings (deficit)			406,738			846,424			(23,213,636	)
			7,548,128			9,410,760			10,107,632
Total liabilities and stockholders’ equity		$	25,502,922		$	26,762,557		$	29,768,152

See accompanying notes.

F-3

DOVER SADDLERY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

								For the
								Six Months Ended
		For the Year Ended December 31						June 30
		2002		2003		2004		2004		2005
								(unaudited)
Revenues, net		$	42,669,982	$	52,455,482	$	58,697,937	$	28,560,230	$	30,579,558
Cost of revenues			26,631,542		32,711,819		36,856,972		18,244,893		19,494,747
Gross profit			16,038,440		19,743,663		21,840,965		10,315,337		11,084,811
Selling, general, and administrative expenses			12,300,755		15,543,842		17,139,367		8,111,008		9,130,289
Income from operations			3,737,685		4,199,821		4,701,598		2,204,329		1,954,522
Interest expense, including amortization of deferred financing fees			1,489,233		1,824,833		1,324,327		627,882		800,756
Income before provision for income taxes			2,248,452		2,374,988		3,377,270		1,576,447		1,153,766
Provision for income taxes			999,437		1,110,500		1,481,300		691,430		504,500
Net income		$	1,249,015	$	1,264,488	$	1,895,970	$	885,017	$	649,266
Net income per share (Note 2)
	Basic	$	0.52	$	0.53	$	0.80	$	0.38	$	0.25
	Diluted	$	0.40	$	0.40	$	0.58	$	0.28	$	0.19
Number of shares used in per share calculation (Note 2)
	Basic		2,095,000		2,095,000		2,161,000		2,095,000		2,294,000
	Diluted		3,155,000		3,182,000		3,255,000		3,203,000		3,429,000

See accompanying notes.

F-4

DOVER SADDLERY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED STOCK, STOCKHOLDERS’ EQUITY (DEFICIT)

AND COMPREHENSIVE INCOME (LOSS)

	Redeemable				Class A
	Convertible				Common Stock
	Preferred Stock				Put Rights
									Employees			Other			Retained
	Number		Redemption		Number		Redemption		Notes			Comprehensive			Earnings
	of Shares		Value		of Shares		Value		Receivable			Income/(Loss)			(Deficit)			Total
Balance at December 31, 2002		1,015,000	$	2,686,646		2,095,000	$	4,294,750	$	—		$	(117,996	)	$	(697,756	)	$	6,165,644
Net income																1,264,488			1,264,488
Effective cash flow hedge													117,996						117,996
Accretion of redeemable convertible preferred stock dividends				159,994												(159,994	)		—
Balance at December 31, 2003		1,015,000		2,846,640		2,095,000		4,294,750		—			—			406,738			7,548,128
Net income																1,895,970			1,895,970
Effective cash flow hedge													(33,338	)					(33,338	)
Accretion of redeemable convertible preferred stock dividends				159,994												(159,994	)		—
Accretion of common stock put rights								1,296,290								(1,296,290	)		—
Employee stock option exercises						199,000		281,600		(281,600	)								—
Balance at December 31, 2004		1,015,000		3,006,634		2,294,000		5,872,640		(281,600	)		(33,338	)		846,424			9,410,760
Net income																649,266			649,266
Effective cash flow hedge													47,606						47,606
Accretion of redeemable convertible preferred stock dividends				79,997												(79,997	)		—
Accretion of common stock put rights								16,919,628								(16,919,628	)		—
Accretion of preferred stock put rights				7,709,701												(7,709,701	)		—
Balance at June 30, 2005 (Unaudited)		1,015,000	$	10,796,332		2,294,000	$	22,792,268	$	(281,600	)	$	14,268		$	(23,213,636	)	$	10,107,632

See accompanying notes.

F-5

DOVER SADDLERY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

			For the									For the
			Year Ended December 31									Six Months Ended June 30
			2002			2003			2004			2004			2005
												(unaudited)
Operating activities
Net income			$	1,249,015		$	1,264,488		$	1,895,970		$	885,017		$	649,266
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
	Depreciation and amortization			474,837			630,232			553,092			268,219			321,720
	Deferred income tax			80,800			53,400			57,700			26,933			188,200
	Noncash interest expense and amortization of deferred finance fees			454,912			415,928			295,073			145,205			285,527
	Changes in current assets and liabilities:
		Accounts receivable		(25,667	)		48,356			(89,665	)		(823,392	)		(650,038	)
		Inventory		(1,748,205	)		(1,410,023	)		(944,557	)		(466,382	)		(997,602	)
		Prepaid catalog costs and other expenses		(568,972	)		(195,397	)		(31,998	)		(684,365	)		(1,172,140	)
		Accounts payable & short term borrowings		1,541,739			(465,446	)		(210,489	)		(729,109	)		154,540
		Accrued expenses and other current liabilities		(144,282	)		736,804			342,224			(445,702	)		(706,288	)
Net cash provided by (used in) operating activities				1,314,177			1,078,342			1,867,350			(1,823,576	)		(1,926,815	)
Investing activities
Purchases of property and equipment				(338,100	)		(209,226	)		(660,512	)		(379,603	)		(430,896	)
Purchase of other assets				(430,911	)		(363,750	)		(113,819	)		(3,113	)		(67,461	)
Cash used in investing activities				(769,011	)		(572,976	)		(774,331	)		(382,716	)		(498,357	)
Financing activities
Payments under revolving line of credit				8,950,000			9,500,000			6,450,000			4,400,000			5,200,000
Borrowings under revolving line of credit				(9,250,000	)		(9,500,000	)		(7,350,000	)		(2,100,000	)		(2,700,000	)
Proceeds from issuance of senior subordinated notes				—			3,500,000			—			—			—
Payments to redeem senior subordinated notes				—			(3,378,326	)		—			—			—
Payments of commitment and financing fees				—			(378,600	)		—			—			—
Payments on capital leases				(124,128	)		(143,719	)		(186,983	)		(80,453	)		(87,653	)
Change in fair value of cash flow hedge				(84,363	)		(117,996	)		—
Net cash (used in) provided by financing activities				(508,491	)		(518,641	)		(1,086,983	)		2,219,547			2,412,347
Net increase (decrease) in cash and cash equivalents				36,675			(13,275	)		6,036			13,255			(12,825	)
Cash and cash equivalents at beginning of period				34,840			71,515			58,240			58,240			64,276
Cash and cash equivalents at end of period			$	71,515		$	58,240		$	64,276		$	71,495		$	51,451
Supplemental disclosure of cash flow information
Cash paid during the period for:
	Interest		$	1,059,760		$	2,846,420		$	1,029,252		$	482,675		$	515,230
	Income taxes		$	1,375,000		$	868,715		$	1,327,524		$	831,000		$	406,450
Supplemental disclosure of noncash financing activities
Equipment acquired under capital leases			$	215,982		$	130,308		$	203,934		$	141,374		$	153,982
Accretion of dividends on redeemable convertible preferred stock			$	159,994		$	159,994		$	159,994		$	79,997		$	79,997

See accompanying notes.

F-6

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Including Data Pertaining to Interim Periods)

1. Operations and Organization

          Dover Saddlery, Inc., a Delaware corporation (the “Company”), is a leading retailer of quality riding apparel and equipment through nationally distributed catalogs, Internet-based e-commerce and retail stores located in Massachusetts, New Hampshire, Delaware and Texas. The Company provides a complete line of products, as well as specially developed private label offerings from its direct marketing headquarters, warehouse, and call center facility in Littleton, Massachusetts.

          The accompanying consolidated financial statements comprise those of the Company and its wholly owned subsidiaries, Dover Saddlery, Inc., a Massachusetts corporation, and Smith Brothers, Inc., a Texas corporation. All intercompany accounts and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

          The accompanying financial statements reflect the application of certain accounting policies described in this note and elsewhere in the accompanying notes to financial statements.

Unaudited Interim Data

          The accompanying consolidated financial statements as of June 30, 2005 and for the six-month periods ended June 30, 2005 and 2004 are unaudited and include the accounts of the Company and its wholly owned subsidiaries. In our opinion, these unaudited consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2004 and include all adjustments, consisting of only usual recurring adjustments, necessary for a fair presentation of the results for such interim periods. The results of operations for the six-month period ended June 30, 2005 are not necessarily indicative of the results expected for the full year ending December 31, 2005.

Use of Estimates

          The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segment Information

          Statements of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in interim financial reports issued to stockholders. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business as one operating segment utilizing a multi channel distribution strategy.

F-7

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

Revenue Recognition

          Revenues from merchandise sales, including shipping and handling, are recognized at the time of shipment to catalog and Internet customers and at the point of sale to retail store customers. At the time of recognition, the Company provides a reserve for projected merchandise returns. The reserve, which is based on prior return experience, is recorded in accrued expenses and other liabilities (see Note 8).

Shipping and Handling Fee Costs

          The Company has classified amounts billed to customers for shipping and handling as revenue, and shipping and handling costs as cost of revenue in the accompanying statement of operations.

Cost of Revenues and Selling, General and Administrative Expenses

          The Company’s consolidated cost of revenues primarily consists of merchandise costs, purchasing, handling and transportation costs to obtain the merchandise and ship it to customers. The Company’s consolidated selling, general and administrative expenses primarily consist of selling and marketing expenses, including amortization of deferred catalog costs, retail occupancy cost, depreciation, amortization and general and administrative expenses.

Cash and Cash Equivalents

          The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Unpresented checks net of bank balances in a single bank account are classified as short term bank borrowings.

Capital Assets, Depreciation and Amortization

          Property and equipment are recorded at cost. Expenditures for additions, renewals and betterments of property are capitalized. Expenditures for repairs and maintenance are charged to expense as incurred.

          The Company provides for depreciation and amortization of assets recorded under capitalized leases using the straight-line method by charges to operations in amounts that allocate the cost of the assets over their estimated useful lives as follows:

Asset Classification	Estimated Useful Life
Office and other equipment	5-7 years
Furniture and fixtures	7 years
Leasehold improvements	Shorter of the estimated life or lease term

          Depreciation and amortization of leasehold improvements and assets recorded under capital leases were approximately $345,000, $395,000 and $414,000 for the years ended December 31, 2004, 2003, and 2002, respectively. The related expense for the six months ended June 30, 2004 and 2005 was $208,000 and $240,000, respectively.

F-8

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

Inventory

          Inventory consists of finished goods in the Company’s mail-order warehouse and retail stores. The Company’s inventories are stated at the lower of cost, with cost determined by the first-in, first-out method, or net realizable market value. The Company maintains a reserve for excess and obsolete inventory. This reserve was $64,000 as of December 31, 2003 and $70,000 as of December 31, 2004 and June 30, 2005. The Company continuously monitors the saleability to ensure adequate valuation of the related merchandise.

Advertising

          The costs of direct-response advertising materials, primarily catalog production and distribution costs, are deferred in accordance with Statement of Position (SOP) 93-7, Reporting on Advertising Costs. These costs are recognized over the period of expected future revenue, which is less than one year. Deferred costs as of December 31, 2003 and 2004 and June 30, 2005 were $1,497,691, $1,340,592, and $2,076,858, respectively. The combined marketing and advertising costs charged to selling, general, and administrative expenses for the years ended December 31, 2002, 2003, and 2004 were approximately $4,765,000, $6,747,000, and $7,489,000, respectively. The related amount for the six months ended June 30, 2004 and 2005 was approximately $3,476,327 and $3,853,000 respectively. There has been no impairment charges related to such assets.

Other Assets and Intangibles

          Other assets consist of the following:

		December 31						June 30
		2003			2004			2005
Deferred financing fees		$	378,600		$	438,807		$	515,267
Purchased catalog and related assets			745,850			783,380			783,380
Other misc. assets			92,621			108,703			99,704
Total cost			1,217,071			1,330,890			1,398,351
Accumulated amortization:
	Deferred financing fees		(6,810	)		(128,706	)		(326,321	)
	Purchased catalog and related assets		(248,719	)		(388,000	)		(469,431	)
Total accumulated amortization			(255,529	)		(516,706	)		(795,752	)
Total		$	961,542		$	814,186		$	602,599

          Deferred financing costs are amortized over the shorter of the contractual or estimated life of the related debt. Purchased catalog and related assets are amortized on a straightline basis over the estimated useful lives of the underlying assets, generally between two and five years.

          Amortization expense for the Company’s intangible assets for the years ended December 31, 2002, 2003 and 2004 was approximately $272,000, $286,000 and $261,000, respectively. Amortization expense for the six months ended June 30, 2004 and 2005 was

F-9

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

approximately $121,000 and $279,000, respectively. The estimated aggregate amortization expense for each of the next five years is as follows:

	Intangibles
	Amortization
Year Ending December 31	Expense
2005	$	346,000
2006		251,000
2007		75,000
2008		16,000
2009		6,000
2010 and thereafter		11,000

Goodwill

          The Company accounts for its goodwill in accordance with SFAS No. 142, Goodwill and Other Intangible Assets, which requires that goodwill be reviewed for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of a reporting unit exceeds its estimated fair value, goodwill is evaluated for potential impairment.

          Management has determined, based on the guidance of SFAS No. 142, that there is one reporting unit, the Company as a whole. The Company performed its annual test of impairment of goodwill as of December 31, 2004. Based on the results of the first step of the goodwill impairment test, the Company has determined that no impairment had occurred, as the fair value of the reporting unit exceeded the respective carrying value. Therefore, the second step of the goodwill impairment test was not necessary.

Accounting for Impairment of Long-Lived Assets

          The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to discounted future net cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company does not believe that any of its long-lived assets were been impaired as of the periods presented.

Preopening Store Expenses

          All non capital costs associated with the opening of new retail stores are expensed as incurred.

Financial Instruments

          SFAS No. 107, Disclosures About Fair Value of Financial Instruments, requires disclosure about fair value of financial instruments. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, line of credit advances, notes payables, a

F-10

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

related interest rate swap agreement, redeemable preferred stock and common stock with put rights. The estimated fair value of these instruments approximates the carrying value.

Concentration of Credit Risk

          Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash equivalents and accounts receivable. The Company places its cash and cash equivalents in highly rated financial institutions. In addition, accounts receivable consists primarily of customer credit card transactions that are fully authorized with payment in transit as of period end and therefore no allowance for doubtful accounts is deemed necessary. For the periods presented there were no customers that comprised more than 10% of revenue or accounts receivable.

Derivative Instruments and Hedging Activities

          The Company uses derivative financial instruments to manage the risk of interest rate fluctuations on a portion of its outstanding debt. The Company accounts for derivative financial instruments in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, which requires that all derivative instruments be reported on the balance sheet at fair value and establishes criteria for designation and effectiveness of hedging relationships. Changes in the fair value of derivatives are recorded each period in current operations or in stockholders’ equity (deficit) as other comprehensive income (loss) depending upon whether the derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

          The Company has entered into an interest rate swap agreement to hedge a portion of the variable cash flows resulting from fluctuations in the benchmark interest rate on its outstanding revolving credit facility. This agreement involves the exchange of variable interest rates for fixed interest rates over the life of the agreement without an exchange of the notional amount upon which the payments are based. The differential to be received or paid as interest rates change is recorded in interest expense or income in the accompanying consolidated income statements or as a change to stockholders’ equity, depending on whether the transaction qualifies as a hedge. The related receivable or payable is included as an asset or liability in the Company’s consolidated balance sheets (See Note 3).

          Hedges of underlying exposure are designated as part of a hedge transaction and documented at the inception of the hedge. Whenever it qualifies, the Company uses the shortcut method to satisfy hedge effectiveness requirements. Under this approach, the Company exactly matches the terms of the interest rate swap to the terms of the underlying debt and therefore may assume 100% hedge effectiveness with no formal quarterly assessment of effectiveness or measurement of ineffectiveness. The entire in fair value change is recorded in the stockholders’ equity (deficit), net of tax, as other comprehensive income (loss).

Comprehensive Income (loss)

          SFAS No. 130, Reporting Comprehensive Income, establishes standards for reporting and displaying comprehensive income (loss) and its components in the consolidated financial statements. Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Other than reported net income, the only other item of comprehensive income (loss) is the effectively hedged interest rate swap adjustment, which is disclosed in the accompanying consolidated statements of redeemable preferred stock, stockholders’ equity (deficit) and comprehensive income (loss).

F-11

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

Net Income Per Share

          Basic and diluted net income per share is presented in conformity with SFAS No. 128, “Earnings per Share”, for all periods presented. In accordance with SFAS No. 128, basic net income per share is determined by dividing net income available to common stockholders by the weighted average common shares outstanding during the period. Diluted net income per share is determined by dividing net income by the dilutive weighted average common shares outstanding. The dilutive weighted average common shares outstanding assumes a full conversion of preferred shares and includes the potential incremental common shares from the exercise of stock options using the treasury stock method, if dilutive.

          A reconciliation of the number of shares used in the calculation of basic and diluted net income per share is as follows:

								For the Six Months Ended
		For the Year Ended December 31						June 30
		2002		2003		2004		2004		2005
Basic weighted average common shares outstanding			2,095,000		2,095,000		2,161,000		2,095,000		2,294,000
Add: Dilutive effect of converted preferred shares			1,015,000		1,015,000		1,015,000		1,015,000		1,015,000
	Dilutive effect of assumed stock option exercises less potential incremental shares purchased under the treasury method		45,000		72,000		79,000		93,000		120,000
Diluted weighted average commons shares outstanding			3,155,000		3,182,000		3,255,000		3,203,000		3,429,000

          A reconciliation of the net income available to common stockholders used in the calculation of basic and diluted net income per share is as follows:

							For the Six Months
	For the Year Ended December 31						Ended June 30
	2002		2003		2004		2004		2005
Net income	$	1,249,015	$	1,264,488	$	1,895,970	$	885,017	$	649,266
Preferred stock dividends		159,994		159,994		159,994		79,997		79,997
Net income available to common stockholders	$	1,089,021	$	1,104,494	$	1,735,976	$	805,020	$	569,269

Stock-Based Compensation

          The Company accounts for employee stock-based compensation under APB Opinion No. 25, Accounting for Stock Issued to Employees, and elect the disclosure-only alternative under Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, and the enhanced disclosures as required by SFAS No. 148, Accounting for Stock-Based Compensation Transition and Disclosure. The Company has one stock-based employee compensation plan, which is more fully described in Note 6.

F-12

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

          Under the intrinsic-value method, compensation expense is measured on the date of grant as the difference between the deemed fair value of the Company’s common stock and the option exercise price multiplied by the number of options granted. Generally, the Company grants stock options with exercise prices equal to the estimated fair value of its common stock, however, to the extent that the deemed fair value of the common stock exceeds the exercise price of stock options granted to employees on the date of grant, the Company records deferred stock-based compensation and amortizes the expense over the vesting schedule of the options, generally four years. The fair value of the Company’s common stock is determined by the Company’s Board of Directors (the Board). In the absence of a public trading market for the Company’s common stock, the Company’s Board considers objective and subjective factors in determining the fair value of the Company’s common stock and related options. Consistent with the guidance provided by the AICPA’s Technical Practice Aid on The Valuation of Privately-Held-Company Equity Securities Issued as Compensation (the TPA), such considerations included, but were not limited to, the following factors:

          • Historical and expected future earnings performance

          • The liquidation preferences and dividend rights of the preferred stock

          • Milestones achieved by the company

          • Marketplace and major competition

          • Market barriers to entry

          • The Company’s workforce and related skills

          • Customer and vendor characteristics

          • Strategic relationships with suppliers

          • Risk factors and uncertainties facing the Company

          In order to provide further support for the fair value determination made by the Board at the time of grant, the Company hired an independent valuation firm to conduct a retrospective valuation as of December 31, 2004. The valuation firm has experience in appraisal services, fairness opinions and advice in mergers and acquisitions. This important additional valuation process provides increased support based on the Hierarchy of Valuation Alternatives, as outlined in the TPA.

          The Company provided the valuation firm with all requested information relating to its business, competition, prospects and future outlook and additional information deemed relevant for the purpose of generating a valuation analysis, including liquidation preferences and dividend rights of the preferred stock. Under the guidelines of the TPA, the valuation specialist considered all of the market, income and asset based approaches. It was determined that the asset based approach was not appropriate given the Company’s business and capital structure. The specialist applied a probability-weighted expected return method to value the common stock. The resulting valuation of the common stock was $2.55 per share as of December 31, 2004.

          No stock-based compensation expense was recorded for the periods presented as the exercise price of the Company’s stock options was equal to or in excess of the estimated fair value of the Company’s common stock on the date of grant.

F-13

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

          The following tables illustrate the assumptions used and the effect on net income if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation. The Company has computed the pro forma disclosures required under SFAS No. 123 for all employees stock options granted using the Black-Scholes option-pricing model prescribed by SFAS No. 123.

	For the Year Ended								For the Six Months
	December 31								Ended June 30
	2002			2003		2004			2004			2005
Weighted-average risk-free interest rate		4.47	%		—		3.8	%		3.8	%		—
Expected life		5 years			—		5 years			5 years			—
Volatility		20	%		—		40	%		60	%		—
Expected dividend yield		0	%		—		0	%		0	%		—
Weighted-average fair value of options granted	$	0.40			—	$	0.44		$	0.44			—

          There were no stock options granted in 2003 or 2005.

          Had compensation cost for these awards been determined consistent with SFAS No. 123, the Company’s net income would have been as follows:

											For the Six Months
		For the Year Ended December 31									Ended June 30
		2002			2003			2004			2004			2005
Net income, as reported		$	1,249,015		$	1,264,488		$	1,895,970		$	885,017		$	649,266
Add: Employee stock-based compensation expense included in reported net income			—			—			—			—			—
Deduct: Stock-based compensation expense determined under fair value-based method for all employee awards			(9,408	)		(11,196	)		(8,886	)		(4,888	)		(6,420	)
Pro forma net income		$	1,239,607		$	1,253,292		$	1,887,084		$	880,129		$	642,846
Pro forma net income per share
	Basic	$	0.52		$	0.52		$	0.80		$	0.38		$	0.24
	Diluted	$	0.39		$	0.39		$	0.58		$	0.27		$	0.18

          As stock options vest over several years and additional stock option grants are expected to be made each year, the above pro forma disclosures are not necessarily representative of pro forma effects on results of operations for future periods.

Recent Accounting Pronouncements

          In December 2004, the FASB issued SFAS No. 123R, which requires the measurement of all share-based payments to employees, including grants of employee stock options, using a fair-value-based method and the recording of such expense in the Company’s consolidated statement of operations. The accounting provisions of SFAS No. 123R are effective for fiscal years beginning after June 15, 2005. The Company will be required to adopt SFAS No. 123R for its fiscal quarter

F-14

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

beginning January 1, 2006. The pro forma disclosures previously permitted under SFAS No. 123 no longer will be an alternative to financial statement recognition.

          The Company expects to follow the “modified prospective” method of adoption of SFAS 123R whereby earnings for prior periods will not be restated as though stock-based compensation has been expensed, rather than the “modified retrospective” method of adoption which would entail restatement of previously published earnings. The Company plans to adopt SFAS 123R for its 2006 fiscal year.

          As permitted by SFAS 123, the Company currently accounts for share-based compensation to employees under the APB 25 intrinsic value method and generally recognizes no compensation cost for employee stock options. Accordingly, the adoption of the SFAS 123R fair value method will impact the Company’s results of operations, although it will have no impact on overall financial position. The impact of adoption of SFAS 123R will depend on levels of share-based compensation granted in the future and the fair value assigned thereto. The Company has not yet determined whether the future impact of SFAS 123R is likely to approximate the pro forma compensation expense reported under SFAS 123 as described in the disclosure of pro forma net earnings and earnings per share to the Consolidated Financial Statements.

3. Financing Agreement

          In December 2003, the Company completed a debt refinancing, closing simultaneously on a $14,000,000 revolving credit facility and $3,500,000 senior subordinated notes. The transaction provided additional credit availability through the senior debt refinancing and reduced interest on its subordinated facility.

Revolving Credit Facility

          The $14,000,000 revolving credit facility, of which up to $2,000,000 can be in the form of letters of credit, shall bear interest at the base rate, announced from time to time by the bank plus an applicable margin determined by the Company’s funded debt ratio. As of December 31, 2003, and 2004 and June 30, 2005, the bank rates were 4.00%, 5.25% and 6.25%, respectively. The applicable margins were 1.00%, 0.50% and 0.50%, respectively. Interest shall be payable quarterly on the last business day of each fiscal quarter. The Company is obligated to pay commitment fees of 0.25% per annum on the average daily, unused amount of the line of credit during the preceding quarter on the revolving credit facility.

          At its option, the Company may have all or a portion of the unpaid principal under the credit facility bear interest at a one, two, three, or six month LIBOR rate options. The LIBOR rate was 1.12%, 2.43% and 3.31% at December 31, 2003 and 2004 and June 30, 2005, respectively, plus an applicable margin determined by the Company’s funded debt ratio. The ratios, 3.25%, 2.75% and 2.75%, at and December 31, 2003, December 31, 2004 and June 30, 2005, respectively, was fixed for the LIBOR rate option period. Interest related to the LIBOR rate option is payable at the maturity of the LIBOR agreement. At December 31, 2003 and 2004 and June 30, 2005, the Company had a one month LIBOR rate option agreement outstanding for $7,000,000.

          All assets of the Company collateralize the revolving credit facility. Under the terms of the credit facility, the Company is subject to certain covenants including, among others, maximum funded debt ratios, operating cash flows, profitability, and capital expenditures. For the periods

F-15

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

presented, the Company was in compliance with all covenants. The revolving line of credit is due in full on December 11, 2006.

          At June 30, 2005, the Company had the ability to borrow $3,700,000 on the revolving line of credit, of which up to $2 million can be in the form of letters of credit.

Subordinated Notes Payable

          On December 11, 2003, the Company issued senior subordinated notes payable in the amount of $3,500,000, due in full March 11, 2007. The proceeds were used to pay off the prior subordinated notes payable. Interest at an annual rate of 17.25% is payable monthly on the fifth day of the month commencing January 5, 2004. The Company, at its option, in lieu of paying cash, may pay up to 27.5% of the amount of interest payable by increasing the principal amount of the note. At December 31, 2003 and 2004 and June 30, 2005, there was $8,149, $181,328 and $269,236 of accumulated interest in the principal of subordinated notes, respectively.

          Under the terms of the subordinated notes agreement, the Company is subject to certain covenants, including, among others, maximum funded debt ratios, operating cash flows, profitability and capital expenditures. As of all periods presented, the Company was in compliance with each covenant.

          The estimated aggregate principal payments as of June 30, 2005 for each of the next five fiscal years is as follows:

	Principal Debt Payments
2005	$	1,022,723
2006		10,300,000
2007		3,769,236
2008		—
2009		—
2010 and thereafter		—

Interest Rate Swap Agreement

          In conjunction with the revolving credit facility, the Company entered into a three-year interest rate swap agreement with an aggregate notional amount of $5,000,000. The purpose of this interest rate swap is to reduce the future impact of fluctuating interest rates changes. The swap agreement caps the Company’s interest rate exposure at 3.05% for the outstanding balance under the notional amount through December 10, 2006. Such transaction qualifies for the shortcut method to satisfy hedge effectiveness requirements. The unfavorable fair value of the hedge instrument as of December 31, 2004 was $60,615 and is recorded in accrued expense and other liabilities, which net of tax of $27,277 has been shown as a decrease of other comprehensive income (loss) for the year ended December 31, 2004. The favorable fair market value of the hedge instrument as of June 30, 2005 was $18,727 and is recorded in prepaid expenses and other current assets.

4. Commitments

          The Company leases its facilities and certain fixed assets that may be purchased for a nominal amount on the expiration of the leases under noncancelable operating and capital leases

F-16

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

that extend through 2009. These leases, which may be renewed for periods ranging from one to five years, include fixed rental agreements as well as agreements with rent escalation clauses.

          Property and equipment includes the following amounts related to capitalized capital leases and the related accumulated depreciation:

		December 31						June 30
		2003			2004			2005
Furniture and fixtures		$	74,066		$	74,066		$	74,066
Office and equipment			501,475			447,287			493,914
Leasehold improvements			131,868			315,663			423,016
	Total cost of leased equipment		707,409			837,016			990,996
	Less allowances for depreciation		(363,158	)		(443,880	)		(518,389	)
Net book value of assets under capital lease		$	344,251		$	393,136		$	472,607

          The amortization expense for the assets recorded under capital leases is included in the depreciation expense.

          Future minimum commitments as of December 31, 2004 are as follows:

		Capital			Operating
		Leases			Leases
Year Ending December 31,
	2005	$	175,000		$	1,020,045
	2006		151,000			581,371
	2007		97,000			200,518
	2008		64,000			160,000
	2009		21,000			120,000
Total minimum lease payments			508,000		$	2,081,934
Amount representing interest			(71,000	)
Present value of net minimum lease payments			437,000
Less current portion			(140,558	)
Long-term capital lease obligation		$	296,442

          Total rental expense under the operating agreements included in the accompanying consolidated statements of operations for the years ended December 31, 2002, 2003 and 2004 was $556,500, $687,513 and $876,860, respectively. For the six months ended June 30, 2004 and 2005 such expenses were $406,387 and $541,822, respectively.

F-17

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

5. Income Taxes

          Income taxes are provided for in accordance with SFAS No. 109, Accounting for Income Taxes. Accordingly, a deferred tax asset or liability is recorded based on the differences between the financial reporting and tax bases of assets and liabilities and is measured by the enacted tax rates expected to be in effect when these differences reverse. The deferred tax provision results from the net change during the year of deferred tax assets and liabilities. The income tax provision is as follows:

								For the Six Months
		For the Year Ended December 31						Ended June 30
		2002		2003		2004		2004		2005
Current:
	Federal	$	620,999	$	702,400	$	976,000	$	455,570	$	214,400
	State		297,638		354,700		447,600		208,927		101,900
Total current			918,637		1,057,100		1,423,600		664,497		316,300
Deferred:
	Federal		60,900		40,200		43,500		20,305		141,800
	State		19,900		13,200		14,200		6,628		46,400
Total deferred			80,800		53,400		57,700		26,933		188,200
Total provision for income tax		$	999,437	$	1,110,500	$	1,481,300	$	691,430	$	504,500

          Deferred income taxes relate to the following temporary differences as of

		December 31						June 30
		2003			2004			2005
Current deferred tax (liability) asset:
	Accruals not currently deductible	$	(419,000	)	$	(391,153	)	$	(639,204	)
	Reserves not currently deductible		244,900			278,516			263,900
	Property basis differences		(10,200	)		(6,187	)		(10,155	)
			(184,300	)		(118,824	)		(385,559	)
Noncurrent deferred tax asset:
	Depreciation and amortization		117,700			21,800			68,700
		$	66,600		$	(97,024	)	$	(316,859	)

F-18

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

          The effective income tax rate varies from the amount computed using the statutory U.S. income tax rate as follows:

										For the
	For the Year Ended									Six Months
	December 31									Ended June 30
	2004			2003			2002			2004			2005
Federal statutory rate		34	%		34	%		34	%		34	%		34	%
Increase in taxes resulting from state income taxes, net of federal income tax benefit		10	%		13	%		10	%		10	%		10	%
		44	%		47	%		44	%		44	%		44	%

6. Stockholders’ Equity (Deficit)

Common Stock

          The Company has authorized 5,400,000 shares of $0.0001 par value common stock, consisting of 4,300,000 and 1,100,000 shares designated as Class A and Class B common stock, respectively. Commencing December 31, 2006, the common stockholders will have a right to sell their stock back to the Company at the then fair value. As a result of this put right, the Company has recorded the redemption value of these instruments outside of stockholders’ equity (deficit). The accretion to fair value is facilitated by a reduction of additional paid-in capital and retained earnings (deficit) to the extent required.

Preferred Stock

          The Company has authorized 1,100,000 shares of redeemable convertible preferred stock (Preferred Stock), and has issued 1,015,000 shares of Preferred Stock for proceeds of $2,000,000. Through December 11, 2003, the holder of the Preferred Stock was also the holder of the Company’s subordinated notes.

          The holder of the Preferred Stock has the following rights:

Dividends

          The holder of the outstanding shares of Preferred Stock shall be entitled to receive, when and if declared by the Board, cumulative dividends in cash at an annual rate of $0.15763 per share of the Preferred Stock. The dividends have been accrued from the date of original issuance of such shares. The accrued dividends were $846,640, $1,006,634 and $1,086,631 as of December 31, 2003 and 2004, and June 30, 2005, respectively.

Liquidation

          In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, as defined, the holder of each share of Preferred Stock is entitled to a cash payment equal to $1.97 per share, plus all accrued and unpaid dividends whether or not earned or declared, to be paid from the assets of the Company available for distribution.

F-19

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

          Transactions constituting a liquidation event include a capital stock reorganization, a consolidation or merger, which affects a change in control, and a sale of a majority of the Company’s assets. Upon a 51% vote by the holders, such transactions will not constitute a liquidation event.

Voting

          The holder of Preferred Stock shall have no right to vote for the election of directors or for any other purpose or on any other subject. Except as otherwise restricted, the holder of Preferred Stock shall have the right to notice and visitation of meetings of the stockholders.

Redemption

          On September 20, 2005, the Company shall redeem all then-outstanding shares of the Preferred Stock, upon payment in cash of $1.97 per share, subject to equitable adjustment as defined, plus all accrued but unpaid dividends whether or not earned or declared. As a result of this redemption provision, the preferred stock has been presented outside of stockholders’ equity (deficit).

Conversion

          The shares of Preferred Stock may, at the election of the holder, at any time, be converted in whole or in part into 1,015,000 common shares. Any unpaid accrued dividends may also be converted at a cost of $1.97 per common share. Each share of Preferred Stock shall automatically be converted into shares of common stock at the then effective conversion rate immediately upon the consummation of an underwritten public offering, provided that aggregate net proceeds to the Company of such offering are not less than $15,000,000.

          Upon conversion, the preferred shareholders are entitled to the put rights provided common stockholders noted above. Accordingly, the Company records the fair value accretion of such puts rights to the extent they exceed the redemption value of the underlying preferred stock.

Stock Option Plan

          In 1999, the Company’s Board approved the 1999 Stock Option Plan (the Plan), which provides for the granting of Incentive Stock Options (ISOs) and nonqualified stock options. Under the Plan, the Board may grant ISOs and nonqualified stock options to selected key employees and directors of the Company. ISOs may be granted only to employees, with an exercise price of not less than 100% of the fair value of the common stock on the date of grant, or in the case of 10% or greater stockholders, not less than 110% of the fair value of the common stock. Nonqualified options shall have an exercise price of not less than 100% of the fair value of the common stock as of the date of grant. Options generally vest over a period of up to five years.

F-20

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

          All stock options issued under the Plan expire within ten years or, in the case of 10% or greater shareholders, within five years. The following table summarizes all stock option activities.

											For the Six Months
		For the Year End December 31									Ended June 30
		2003				2004					2005
				Weighted					Weighted				Weighted
				Average					Average				Average
				Exercise					Exercise				Exercise
		Shares		Price		Shares			Price		Shares		Price
Beginning balance			279,282	$	1.46		279,282		$	1.46		191,000	$	2.34
	Granted		—		—		114,218			2.72		—		—
	Forfeited		—		—		(3,500	)		1.49		—		—
	Exercised		—		—		(199,000	)		1.42		—		—
Ending balance			279,282	$	1.46		191,000		$	2.34		191,000	$	2.34
Exercisable			232,282	$	1.29		119,805		$	2.23		153,000	$	2.36

	Outstanding Options
			Weighted
	Options		Average		Options
Range of Exercise Prices	Outstanding		Remaining Life		Exercisable
1.49		33,782		4.3		33,782
2.05		43,000		6.5		19,000
2.56 – 2.82		114,218		6.6		100,218
		191,000		6.1		153,000

          The Company has reserved a total of 390,000 shares of common stock for issuance under the Plan. As of December 31, 2003, 110,718 shares were available for future grants, which were all utilized in the 2004 grants. There were no available shares as of December 31, 2004 and June 30, 2005.

7. Employee Savings Plan

          The Company maintains the Dover Saddlery, Inc. 401k Profit Sharing Plan (the 401k Plan). Employees of the Company may participate in the 401k Plan after one year of service, which allows employees to defer a percentage of their salary under Section 401k of the Internal Revenue Code. The 401k Plan also allows for the Company to make discretionary contributions determined annually based on a percentage of the employee’s compensation. No employer contributions were made during the periods presented.

F-21

DOVER SADDLERY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Including Data Pertaining to Interim Periods)

8. Accrued Expenses and Other Current Liabilities

          Accrued expenses and other current liabilities consisted of the following:

		December 31,						June 30,
		2003			2004			2005
Wages payable		$	577,758		$	662,141		$	427,364
Advanced payments received			275,000			275,000			275,000
Sales return reserves			663,000			616,000			580,000
Gift certificate and prepaid sales liabilities			234,057			341,636			127,355
Miscellaneous accruals and other liabilities			110,380			251,895			277,980
		$	1,860,195		$	2,146,672		$	1,687,699
A rollforward of the Company’s sales return reserve is as follows:
Beginning balance		$	561,000		$	663,000		$	616,000
	Provision		8,048,927			8,939,404			4,812,050
	Returns		(7,946,927	)		(8,986,404	)		(4,848,050	)
Ending balance		$	663,000		$	616,000		$	580,000

9. Related Party Transactions

          In October of 2004, the Company entered into a lease agreement with a minority stockholder. The agreement, which relates to the Plaistow, NH retail store, is a five year lease with options to extend for an additional fifteen years. For the six months ended June 30, 2005, the Company paid and expensed $80,000 in connection with the lease. In addition, a related deposit of $18,750 is recorded as prepaid expenses and other current assets.

          In September 2004, the Company provided $281,600 to various stockholders to help facilitate the exercise of 199,000 stock options. These notes provide the Company full recourse to the individuals and are payable on demand. Interest on the notes accrued at 3% annually. The notes remained outstanding as of December 31, 2004 and June 30, 2005 and were repaid in August 2005.

10. Subsequent Events

          On August 25, 2005, the Company’s Board of Directors approved the Company’s plan to file a registration statement for the sale of its common stock having an aggregate value of up to $50,000,000 with the Securities Exchange Commission. In connection with this, the Board of Directors approved certain other resolutions, including an amendment to the stockholder’s agreement which will eliminate the common stock put rights and the adoption of an Equity Incentive Plan, both of which are subject to the closing of such offering.

          On September 16, 2005, pursuant to a redemption agreement, dated as of August 25, 2005, Citizens Ventures, Inc. converted all of its 1,015,000 shares of preferred stock into 1,015,000 shares of common stock and the Company purchased 603,889 shares of such common stock from Citizens Ventures for a purchase price of $6.0 million. The purchase was facilitated through an increased draw against the Company’s revolving credit facility and a restructuring of the subordinated notes payable.

          Under the restructuring of the subordinated notes payable, the Company issued $8.05 million of senior subordinated debt whereby the additional funds were used to pay off the previous subordinated notes payable discussed in Note 3. Interest on the notes may be prepaid at the Company’s option at 103%, 104% or 105% of its principal amount until September 16, 2006, 2007 or 2008, respectively. The notes are payable at 106% of its principal amount by September 16, 2009. In connection with these notes, the Company issued warrants to purchase common shares at $0.01 per share. The warrants are exercisable commencing March 31, 2006.

F-22

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

          The following table sets forth the fees and expenses in connection with the issuance and distribution of the securities being registered (excluding the underwriting discount). Except for the Securities and Exchange Commission registration fee and the National Association of Securities Dealers, Inc. filing fee, all amounts are estimates.

	Amount to be
	Paid
SEC registration fee	$	4,708
NASD filing fee	$	4,500
Nasdaq National Market listing fee	$	100,000
Legal fees and expenses		*
Accounting fees and expenses		*
Printing expenses		*
Transfer and registrar fee		*
Miscellaneous		*
Total		*

*  To be provided by amendment.

Item 14. Indemnification of directors and officers

          Section 145 of the Delaware General Corporation law empowers a Delaware corporation to indemnify its officers and directors and certain other persons to the extent and under the circumstances set forth therein.

          The Amended and Restated Certificate of Incorporation and By-laws of the Registrant, copies of which are incorporated by reference herein, respectively, provide for indemnification of officers and Directors of the Registrant and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions.

          The above discussion of the Registrant’s Amended and Restated Certificate of Incorporation and By-laws and Section 145 of the Delaware General Corporation Law is not intended to be exhaustive and is qualified in its entirety by the terms of the Amended and Restated Certificate of Incorporation and By-laws and the Delaware statute.

          The Registrant will agree to indemnify the underwriter and their controlling persons, and the underwriter will agree to indemnify the Registrant and its controlling persons, including directors and executive officers of the Registrant, against certain liabilities, including liabilities under the Securities Act. Reference is made to the form of the Underwriting Agreement that will be filed as part of the Exhibits hereto.

          For information regarding the Registrant’s undertaking to submit to adjudication the issue of indemnification for violation of the securities laws. See Item 17 hereof.

II-1

Item 15. Recent Sales of Unregistered Securities

          Set forth below is information regarding notes issued, and options granted, by us within the past three years. Also included is the consideration, if any, received by us for such notes and options and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.

          On December 11, 2003, in exchange for $3,500,000, we issued a Senior Secured Subordinated Note due March 11, 2007 to Wilton Funding, LLC, an affiliate of Patriot Capital Funding, Inc. On September 16, 2005, such note was paid in full from proceeds obtained through the issuance of a new Senior Secured Subordinated Note. This new note was issued to Patriot Capital Funding, LLC I for a principal amount of $8,050,000 and is due September 16, 2009. No underwriter was involved in the sales of such notes and such notes were issued in reliance upon the exemption from the registration requirements of the Securities Act provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder, to the extent exemptions from such registration were required.

          From the period beginning October 5, 2002 through October 4, 2005, we have granted stock options under our 1999 Stock Option Plan for an aggregate of 114,218 shares of common stock (net of exercises, expirations and cancellations) at exercise prices ranging from $2.56 to $2.82 per share. During the same period, options to purchase 227,000 shares of common stock were exercised. On September 16, 2005, we issued a warrant to purchase common stock to Patriot Capital Funding, Inc. exercisable for up to 23,503 shares at a price of $0.01 per share. The issuances of such stock options and the shares of common stock issuable upon the exercise thereof were issued in reliance on the exemption from registration provided by Section 3(b) of the Securities Act and Rule 701 promulgated thereunder and the warrant was issued in reliance on the exemption from registration provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. All recipients either received adequate information about us or had access, through employment or other relationships, to such information.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

Number			Description
	*1	.1	Form of Underwriting Agreement
	**3	.1	Amended and Restated Certificate of Incorporation of the Registrant
	3	.2	Certificate of Amendment to Certificate of Incorporation of the Registrant
	*3	.3	Second Amended and Restated Certificate of Incorporation of the Registrant to be filed upon completion of this offering
	**3	.4	By-laws of the Registrant
	3	.5	Amended and Restated By-laws of the Registrant to be effective upon completion of this offering
	**4	.1	Shareholders Agreement, dated as of September 17, 1998, by and among the Registrant, Stephen L. Day, Jonathan A.R. Grylls, David Post, Donald Motsenbocker, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers
	**4	.2	First Amendment to Shareholders Agreement, dated as of August 29, 2003, by and among the Registrant, Stephen L. Day, Jonathan A.R. Grylls, David Post, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers
	4	.3	Second Amendment to Shareholders Agreement, dated as of August 25, 2005, by and among a majority in interest of the Purchasers (as defined therein) and a majority in interest of the Sellers (as defined therein)

II-2

Number			Description
	4	.4	Instrument of accession, dated as of September 16, 2005, signed by Citizens Ventures, Inc. and accepted by the Registrant, to that certain Shareholders Agreement, dated as of September 17, 1998, by and among the Registrant and the Shareholders referenced therein, as amended
	*4	.5	Form of Common Stock Certificate
	4	.6	Warrant to purchase common stock of the Registrant issued to Patriot Capital Funding, Inc.
	4	.7	Amended and Restated 11.50% Senior Secured Subordinated Note, dated September 16, 2005, issued jointly by the Registrant, Dover Massachusetts and Smith Brothers, Inc. to Patriot Capital Funding, LLC I
	*5	.1	Opinion of Bingham McCutchen LLP
	*5	.2	Opinion of Preti Flaherty Beliveau Pachios & Haley LLP
	**†10	.1	1999 Stock Option Plan (the “1999 Plan”)
	**†10	.2	Form of Stock Option Agreement under the 1999 Plan
	*10	.3	2005 Equity Incentive Plan (the “2005 Plan”)
	*10	.4	Form of Stock Option Agreement under the 2005 Plan
	*10	.5	Form of Restricted Stock Award Agreement under the 2005 Plan
	**10	.6	Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman, LLP
	**10	.7	Lease, dated as of October 12, 2001, by and between David F. Post and Dover Massachusetts
	**10	.8	Lease, dated as of March 1, 2003, by and between Smith Brothers, Inc. and JDS Properties, LLC
	10	.9	Letter dated February 9, 2005 from the Registrant to JDS Properties, LLC regarding lease extension
	**10	.10	Lease, dated as of June 22, 2002, by and between Hockessin Square, L.L.C. and Dover Massachusetts
	10	.11	Letter dated January 25, 2005 from the Registrant to Hockessin Square, L.L.C. regarding lease extension
	**10	.12	Lease, dated as of November 24, 2003, by and between North Conway Holdings, Inc. and Dover Massachusetts
	**10	.13	Stock Purchase Agreement, dated as of August 14, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.14	First Amendment to Stock Purchase Agreement, dated as of August 14, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.15	Amendment to Stock Purchase Agreement, dated as of September 17, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.16	Amended and Restated Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.17	Amendment to Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.18	Amended and Restated Security Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.19	Amended and Restated Pledge Agreement, dated as of December 11, 2003, by and between the Registrant and Fleet National Bank
	**10	.20	Shareholder Pledge Agreement, dated as of September 17, 1998, by and among Stephen L. Day, Jonathan A.R. Grylls, David J. Powers, James F. Powers, Michele R. Powers and BankBoston, N.A.

II-3

Number			Description
	**10	.21	Amended and Restated Revolving Credit Note, dated as of December 11, 2003, by Dover Massachusetts for the benefit of Fleet National Bank
	10	.22	Letter agreement, dated as of September 16, 2005, by and between Dover Massachusetts and Bank of America, N.A. (successor by merger to Fleet National Bank)
	10	.23	Security Agreement, dated as of December 11, 2003, by and between Smith Brothers, Inc. and Fleet National Bank
	**10	.24	Guaranty, dated as of December 11, 2003, by Smith Brothers, Inc. to Fleet National Bank
	10	.25	Redemption Agreement, dated as of August 25, 2005, by and between the Registrant and Citizens Ventures, Inc.
	10	.26	Letter agreement, dated as of September 14, 2005, by and between the Registrant and Citizens Ventures, Inc., amending that certain Redemption Agreement, dated as of August 26, 2005, by and between the Registrant and Citizens Ventures, Inc.
	**10	.27	License Agreement, dated as of February 10, 2003, by and between Weatherbeeta PTY LTD and the Registrant
	**10	.28	Settlement Agreement, dated as of December 22, 2003, by and between Libertyville Saddle Shop, Inc. and the Registrant
	**10	.29	Employment Agreement, dated as of September 1, 2005, by and between Stephen L. Day and the Registrant
	**10	.30	Employment Agreement, dated as of September 1, 2005, by and between Jonathan A.R. Grylls and the Registrant
	10	.31	Amended and Restated Subordination Agreement, dated as of September 16, 2005, by and among Bank of America, N.A. (successor by merger to Fleet National Bank), Patriot Capital Funding, Inc. (successor in interest to Wilton Funding, LLC) and Dover Massachusetts, acknowledged by the Registrant and Smith Brothers, Inc.
	10	.32	Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement, dated as of September 16, 2005, by and among the Registrant, Dover Massachusetts, Smith Brothers, Inc., Patriot Capital Funding, Inc. and the Purchasers referenced therein
	10	.33	Amended and Restated Security Agreement, dated as of September 16, 2005, by and among the Registrant, Dover Massachusetts, Smith Brothers, Inc. and Patriot Capital Funding, Inc.
	14	.1	Code of Business Conduct and Ethics
	**21	.1	Subsidiaries of the Registrant
	*23	.1	Consent of Bingham McCutchen LLP
	23	.2	Consent of Ernst & Young LLP
	**24	.1	Power of Attorney
	99	.1	Consent of William F. Meagher, Jr.

*	To be filed by amendment
**	Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-1 filed on August 26, 2005

†  Indicates a management contract or compensatory plan or arrangement

(b) Financial Statement Schedules

          All schedules have been omitted because they are not required or because the required information is given in the financial statements or notes to those statements.

II-4

Item 17. Undertakings

          The undersigned Registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

          Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

          The undersigned Registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)

For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-5

SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933 as amended, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Boston, Commonwealth of Massachusetts, on this 5th day of October, 2005.

Dover Saddlery, Inc.
By:	/s/ Stephen L. Day
	Stephen L. Day President and Chief Executive Officer

          Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature		Title	Date
/s/ Stephen L. Day Stephen L. Day		President, Chief Executive Officer and Director (principal executive officer)	October 5, 2005
/s/ Jonathan A.R. Grylls Jonathan A.R. Grylls		Chief Operating Officer and Director	October 5, 2005
/s/ Michael W. Bruns Michael W. Bruns		Chief Financial Officer (principal accounting and financial officer)	October 5, 2005
* David J. Powers		Director	October 5, 2005
* James F. Powers		Director	October 5, 2005
* Gregory F. Mulligan		Director	October 5, 2005
*By:	/s/ Stephen L. Day Stephen L. Day Attorney-in-Fact
*By:	/s/ Jonathan A.R. Grylls Jonathan A.R. Grylls Attorney-in-Fact

II-6

EXHIBIT INDEX

Number			Description
	*1	.1	Form of Underwriting Agreement
	**3	.1	Amended and Restated Certificate of Incorporation of the Registrant
	3	.2	Certificate of Amendment to Certificate of Incorporation of the Registrant
	*3	.3	Second Amended and Restated Certificate of Incorporation of the Registrant to be filed upon completion of this offering
	**3	.4	By-laws of the Registrant
	3	.5	Amended and Restated By-laws of the Registrant to be effective upon completion of this offering
	**4	.1	Shareholders Agreement, dated as of September 17, 1998, by and among the Registrant, Stephen L. Day, Jonathan A.R. Grylls, David Post, Donald Motsenbocker, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers
	**4	.2	First Amendment to Shareholders Agreement, dated as of August 29, 2003, by and among the Registrant, Stephen L. Day, Jonathan A.R. Grylls, David Post, Thomas Gaines, David J. Powers, James F. Powers, and Michele R. Powers
	4	.3	Second Amendment to Shareholders Agreement, dated as of August 25, 2005, by and among a majority in interest of the Purchasers (as defined therein) and a majority in interest of the Sellers (as defined therein)
	4	.4	Instrument of accession, dated as of September 16, 2005, signed by Citizens Ventures, Inc. and accepted by the Registrant, to that certain Shareholders Agreement, dated as of September 17, 1998, by and among the Registrant and the Shareholders referenced therein, as amended
	*4	.5	Form of Common Stock Certificate
	4	.6	Warrant to purchase common stock of the Registrant issued to Patriot Capital Funding, Inc.
	4	.7	Amended and Restated 11.50% Senior Secured Subordinated Note, dated September 16, 2005, issued jointly by the Registrant, Dover Massachusetts and Smith Brothers, Inc. to Patriot Capital Funding, LLC I
	*5	.1	Opinion of Bingham McCutchen LLP
	*5	.2	Opinion of Preti Flaherty Beliveau Pachios & Haley LLP
	**†10	.1	1999 Stock Option Plan (the “1999 Plan”)
	**†10	.2	Form of Stock Option Agreement under the 1999 Plan
	*10	.3	2005 Equity Incentive Plan (the “2005 Plan”)
	*10	.4	Form of Stock Option Agreement under the 2005 Plan
	*10	.5	Form of Restricted Stock Award Agreement under the 2005 Plan
	**10	.6	Lease, dated as of May 29, 1997, by and between Dover Massachusetts and CE Holman, LLP
	**10	.7	Lease, dated as of October 12, 2001, by and between David F. Post and Dover Massachusetts
	**10	.8	Lease, dated as of March 1, 2003, by and between Smith Brothers, Inc. and JDS Properties, LLC
	10	.9	Letter dated February 9, 2005 from the Registrant to JDS Properties, LLC regarding lease extension
	**10	.10	Lease, dated as of June 22, 2002, by and between Hockessin Square, L.L.C. and Dover Massachusetts
	10	.11	Letter dated January 25, 2005 from the Registrant to Hockessin Square, L.L.C. regarding lease extension
	**10	.12	Lease, dated as of November 24, 2003, by and between North Conway Holdings, Inc. and Dover Massachusetts

Number			Description
	**10	.13	Stock Purchase Agreement, dated as of August 14, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.14	First Amendment to Stock Purchase Agreement, dated as of August 14, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.15	Amendment to Stock Purchase Agreement, dated as of September 17, 1998, by and among the Registrant, James F. Powers, David J. Powers and Michele R. Powers
	**10	.16	Amended and Restated Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.17	Amendment to Loan Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.18	Amended and Restated Security Agreement, dated as of December 11, 2003, by and between Dover Massachusetts and Fleet National Bank
	**10	.19	Amended and Restated Pledge Agreement, dated as of December 11, 2003, by and between the Registrant and Fleet National Bank
	**10	.20	Shareholder Pledge Agreement, dated as of September 17, 1998, by and among Stephen L. Day, Jonathan A.R. Grylls, David J. Powers, James F. Powers, Michele R. Powers and BankBoston, N.A.
	**10	.21	Amended and Restated Revolving Credit Note, dated as of December 11, 2003, by Dover Massachusetts for the benefit of Fleet National Bank
	10	.22	Letter agreement, dated as of September 16, 2005, by and between Dover Massachusetts and Bank of America, N.A. (successor by merger to Fleet National Bank)
	10	.23	Security Agreement, dated as of December 11, 2003, by and between Smith Brothers, Inc. and Fleet National Bank
	**10	.24	Guaranty, dated as of December 11, 2003, by Smith Brothers, Inc. to Fleet National Bank
	10	.25	Redemption Agreement, dated as of August 25, 2005, by and between the Registrant and Citizens Ventures, Inc.
	10	.26	Letter agreement, dated as of September 14, 2005, by and between the Registrant and Citizens Ventures, Inc., amending that certain Redemption Agreement, dated as of August 26, 2005, by and between the Registrant and Citizens Ventures, Inc.
	**10	.27	License Agreement, dated as of February 10, 2003, by and between Weatherbeeta PTY LTD and the Registrant
	**10	.28	Settlement Agreement, dated as of December 22, 2003, by and between Libertyville Saddle Shop, Inc. and the Registrant
	**10	.29	Employment Agreement, dated as of September 1, 2005, by and between Stephen L. Day and the Registrant
	**10	.30	Employment Agreement, dated as of September 1, 2005, by and between Jonathan A.R. Grylls and the Registrant
	10	.31	Amended and Restated Subordination Agreement, dated as of September 16, 2005, by and among Bank of America, N.A. (successor by merger to Fleet National Bank), Patriot Capital Funding, Inc. (successor in interest to Wilton Funding, LLC) and Dover Massachusetts, acknowledged by the Registrant and Smith Brothers, Inc.
	10	.32	Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement, dated as of September 16, 2005, by and among the Registrant, Dover Massachusetts, Smith Brothers, Inc., Patriot Capital Funding, Inc. and the Purchasers referenced therein
	10	.33	Amended and Restated Security Agreement, dated as of September 16, 2005, by and among the Registrant, Dover Massachusetts, Smith Brothers, Inc. and Patriot Capital Funding, Inc.
	14	.1	Code of Business Conduct and Ethics
	**21	.1	Subsidiaries of the Registrant
	*23	.1	Consent of Bingham McCutchen LLP

Number			Description
	23	.2	Consent of Ernst & Young LLP
	**24	.1	Power of Attorney
	99	.1	Consent of William F. Meagher, Jr.

*	To be filed by amendment
**	Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-1 filed on August 26, 2005

 †  Indicates a management contract or compensatory plan or arrangement

EX-3.2

                                                                     EXHIBIT 3.2

                           CERTIFICATE OF AMENDMENT OF

                         CERTIFICATE OF INCORPORATION OF

                              DOVER SADDLERY, INC.

                         Pursuant to Section 242 of the
                         General Corporation Law of the
                                State of Delaware

     DOVER SADDLERY, INC. (the "Corporation"), a corporation organized and
existing under the laws of the State of Delaware,

     DOES HEREBY CERTIFY:

     That, by a unanimous vote of the Board of Directors of the Corporation, the
following resolutions were duly adopted, pursuant to Section 242 of the General
Corporation Law of the State of Delaware, setting forth an amendment to the
Certificate of Incorporation of the Corporation and declaring such amendment to
be advisable. The stockholders of the Corporation duly approved said proposed
amendment by written consent in accordance with Sections 228 and 242 of the
General Corporation Law of the State of Delaware and written notice of such
consent has been given to all stockholders who have not consented in writing to
such amendment. The resolutions setting forth the amendment are as follows:

     RESOLVED:   That it is deemed advisable and in the best interests of the
                 Corporation to amend Article Sixth of its Certificate of
                 Incorporation to delete each reference to "September 10, 2005"
                 therein and replace each such reference with the date
                 "September 20, 2005".

     RESOLVED:   That the Corporation be and it hereby is authorized and
                 directed to amend its Certificate of Incorporation as set forth
                 in the foregoing resolution, and that the appropriate officers
                 of the Corporation be and they hereby are authorized and
                 directed to execute and deliver any and all documents or
                 certificates deemed necessary to effectuate the proposed
                 amendment outlined above, including a Certificate of Amendment
                 to Certificate of Incorporation for filing with the Delaware
                 Secretary of State.

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by the undersigned, Stephen L. Day, its President and
Chief Executive Officer, this 25th day of August, 2005.

                                       DOVER SADDLERY, INC.


                                       By: /s/ Stephen L. Day
                                           -------------------------------------
                                           Stephen L. Day
                                           President and Chief Executive Officer

EX-3.5

                                                                     EXHIBIT 3.5

                              DOVER SADDLERY, INC.

                          AMENDED AND RESTATED BY-LAWS

                              ARTICLE I. - GENERAL.

     1.1. OFFICES. The registered office of Dover Saddlery, Inc. (the "Company")
shall be in the City of Wilmington, County of New Castle, State of Delaware. The
Company may also have offices at such other places both within and without the
State of Delaware as the Board of Directors may from time to time determine or
the business of the Company may require.

     1.2. SEAL. The seal, if any, of the Company shall be in the form of a
circle and shall have inscribed thereon the name of the Company, the year of its
organization and the words "Corporate Seal, Delaware."

     1.3. FISCAL YEAR. The fiscal year of the Company shall be the period from
January 1 through December 31.

                           ARTICLE II. - STOCKHOLDERS.

     2.1. PLACE OF MEETINGS. Each meeting of the stockholders shall be held upon
notice as hereinafter provided, at such place as the Board of Directors shall
have determined and as shall be stated in such notice.

     2.2. ANNUAL MEETING. The annual meeting of the stockholders shall be held
each year on such date and at such time as the Board of Directors may determine.
At each annual meeting the stockholders entitled to vote shall elect such
members of the Board of Directors as are standing for election, by plurality
vote by ballot, and they may transact such other corporate business as may
properly be brought before the meeting. At the annual meeting any business may
be transacted, irrespective of whether the notice calling such meeting shall
have contained a reference thereto, except where notice is required by law, the
Company's Certificate of Incorporation, or these by-laws.

     2.3. QUORUM. At all meetings of the stockholders the holders of a majority
of the stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum requisite for the
transaction of business except as otherwise provided by law, the Company's
Certificate of Incorporation, or these by-laws. Whether or not there is such a
quorum at any meeting, the chairman of the meeting or the stockholders entitled
to vote thereat, present in person or by proxy, by a majority vote, may adjourn
the meeting from time to time without notice other than announcement at the
meeting. If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. At such adjourned meeting, at which the requisite amount of
voting stock shall be represented, any business may be transacted that might
have been transacted if the meeting had been held as originally called. The
stockholders present in person or by proxy at a duly called meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.

     2.4. RIGHT TO VOTE; PROXIES. Subject to the provisions of the Company's
Certificate of Incorporation, each holder of a share or shares of capital stock
of the Company having the right to vote at any meeting shall be entitled to one
vote for each such share of stock held by him. Any stockholder entitled to vote
at any meeting of stockholders may vote either in person or by proxy, but no
proxy that is dated more than three years prior to the meeting at which it is
offered shall confer the right to vote thereat unless the proxy provides that it
shall be effective for a longer period. A proxy may be granted by a writing
executed by the stockholder or his authorized agent or by transmission or
authorization of transmission of a telegram, cablegram, or other means of
electronic transmission to the person who will be the holder of the proxy or to
a proxy solicitation firm, proxy support service organization, or like agent
duly authorized by the person who will be the holder of the proxy to receive
such transmission, subject to the conditions set forth in Section 212 of the
Delaware General Corporation Law, as it may be amended from time to time (the
"DGCL").

     2.5. VOTING. At all meetings of stockholders, except as otherwise expressly
provided for by statute, the Company's Certificate of Incorporation, or these
by-laws, (i) in all matters other than the election of directors, the
affirmative vote of a majority of shares present in person or represented by
proxy at the meeting and entitled to vote on such matter shall be the act of the
stockholders and (ii) directors shall be elected by a plurality of the votes of
the shares present in person or represented by proxy at the meeting and entitled
to vote on the election of directors.

     2.6. NOTICE OF ANNUAL MEETINGS. Written notice of the annual meeting of the
stockholders shall be mailed to each stockholder entitled to vote thereat at
such address as appears on the stock books of the Company at least ten (10) days
(and not more than sixty (60) days) prior to the meeting. The Board of Directors
may postpone any annual meeting of the stockholders at its discretion, even
after notice thereof has been mailed. It shall be the duty of every stockholder
to furnish to the Secretary of the Company or to the transfer agent, if any, of
the class of stock owned by him and his post-office address, and to notify the
Secretary of any change therein. Notice need not be given to any stockholder who
submits a


                                      -2-

written waiver of notice signed by him before or after the time stated therein.
Attendance of a stockholder at a meeting of stockholders shall constitute a
waiver of notice of such meeting, except when the stockholder attends the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice.

     2.7. STOCKHOLDERS' LIST. A complete list of the stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order and showing
the address of each stockholder, and the number of shares registered in the name
of each stockholder, shall be prepared by the Secretary and shall be open to
examination of any stockholder, for any purpose germane to the meeting for a
period of at least ten days before such meeting (i) on a reasonably accessible
electronic network, provided that the information required to gain access to
such list is provided with the notice of the meeting, or (ii) during ordinary
business hours at the principal office of the corporation, and said list shall
be open to examination during the whole time of said meeting, at the place of
said meeting, or, if the meeting held is by remote communication, on a
reasonably accessible electronic network and the information required to access
such list shall be provided with the notice of the meeting.

     2.8. SPECIAL MEETINGS. Special meetings of the stockholders for any purpose
or purposes, unless otherwise provided by statute, may be called only by the
Chairman of the Board of Directors, the President, or a majority of the Board of
Directors. Any such person or persons may postpone any special meeting of the
stockholders at its or their discretion, even after notice thereof has been
mailed.

     2.9. NOTICE OF SPECIAL MEETINGS. Written notice of a special meeting of
stockholders, stating the time and place and object thereof shall be mailed,
postage prepaid, not less than ten (10) nor more than sixty (60) days before
such meeting, to each stockholder entitled to vote thereat, at such address as
appears on the books of the Company. No business may be transacted at such
meeting except that referred to in said notice, or in a supplemental notice
given also in compliance with the provisions hereof, or such other business as
may be germane or supplementary to that stated in said notice or notices. Notice
need not be given to any stockholder who submits a written waiver of notice
signed by him before or after the time stated therein. Attendance of a
stockholder at a meeting of stockholders shall constitute a waiver of notice of
such meeting, except when the stockholder attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the stockholders need be specified in any written waiver of notice.

     2.10. INSPECTORS.

          1. One or more inspectors may be appointed by the Board of Directors
     before or at any meeting of stockholders, or, if no such appointment shall
     have been made, the presiding officer may make such appointment at the
     meeting. At the


                                      -3-

     meeting for which the inspector or inspectors are appointed, he or they
     shall open and close the polls, receive and take charge of the proxies and
     ballots, and decide all questions touching on the qualifications of voters,
     the validity of proxies, and the acceptance and rejection of votes. If any
     inspector previously appointed shall fail to attend or refuse or be unable
     to serve, the presiding officer shall appoint an inspector in his place.

          2. At any time at which the Company has a class of voting stock that
     is (i) listed on a national securities exchange, (ii) authorized for
     quotation on an inter-dealer quotation system of a registered national
     securities association, or (iii) held of record by more than 2,000
     stockholders, the provisions of Section 231 of the DGCL with respect to
     inspectors of election and voting procedures shall apply, in lieu of the
     provisions of paragraph 1 of this Section 2.10.

     2.11. STOCKHOLDERS' CONSENT IN LIEU OF MEETING. Unless otherwise provided
in the Company's Certificate of Incorporation, any action required to be taken
at any annual or special meeting of stockholders of the Company, or any action
that may be taken at any annual or special meeting of such stockholders, may be
taken only at such a meeting, and not by written consent of stockholders.

     2.12. PROCEDURES. For nominations for the Board of Directors or for other
business to be properly brought by a stockholder before a meeting of
stockholders, the stockholder must first have given timely written notice
thereof to the Secretary of the Company. To be timely, a notice of nominations
or other business to be brought before an annual meeting of stockholders must be
delivered to the Secretary not less than 120 nor more than 150 days prior to the
first anniversary of the date of the Company's proxy statement delivered to
stockholders in connection with the preceding year's annual meeting, or if the
date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary, or if no proxy statement was delivered to stockholders
by the Company in connection with the preceding year's annual meeting, such
notice must be delivered not earlier than 90 days prior to such annual meeting
and not later than the later of (i) 60 days prior to the annual meeting or (ii)
10 days following the date on which public announcement of the date of such
annual meeting is first made by the Company. With respect to special meetings of
stockholders, such notice must be delivered to the Secretary not more than 90
days prior to such meeting and not later than the later of (i) 60 days prior to
such meeting or (ii) 10 days following the date on which public announcement of
the date of such meeting is first made by the Company. Such notice must contain
the name and address of the stockholder delivering the notice and a statement
with respect to the amount of the Company's stock beneficially and/or legally
owned by such stockholder, the nature of any such beneficial ownership of such
stock, the beneficial ownership of any such stock legally held by such
stockholder but beneficially owned by one or more others, and the length of time
for which all such stock has been beneficially and/or legally owned by such
stockholder, and information about each nominee for election as a director
substantially equivalent to that which would be required in a proxy statement
pursuant to the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Securities and Exchange Commission thereunder,


                                      -4-

and/or a description of the proposed business to be brought before the meeting,
as the case may be.

                            ARTICLE III. - DIRECTORS.

     3.1. NUMBER OF DIRECTORS.

     (a) Except as otherwise provided by law, the Company's Certificate of
Incorporation, or these by-laws, the property and business of the Company shall
be managed by or under the direction of a board of directors. Directors need not
be stockholders, residents of Delaware, or citizens of the United States. The
use of the phrase "whole board" herein refers to the total number of directors
which the Company would have if there were no vacancies.

     (b) The number of directors constituting the full Board of Directors shall
be as determined by the Board of Directors from time to time. The Board of
Directors shall be divided into three classes of directors, as determined by the
Board of Directors, such classes to be as nearly equal in number of directors as
possible, having staggered three-year terms of office, the term of office of the
directors of the first such class to expire as of the first annual meeting of
the Company's stockholders following the closing of the IPO, those of the second
class to expire as of the second annual meeting of the Company's stockholders
following such closing, and those of the third class as of the third annual
meeting of the Company's stockholders following such closing, such that at each
annual meeting of stockholders after such closing, nominees will stand for
election to succeed those directors whose terms are to expire as of such
meeting. Members of the Board of Directors shall hold office until the annual
meeting of stockholders at which their respective successors are elected and
qualified or until their earlier death, incapacity, resignation, or removal.
Except as the DGCL or the Company's Certificate of Incorporation may otherwise
require, in the interim between annual meetings of stockholders or special
meetings of stockholders called for the election of directors and/or for the
removal of one or more directors and for the filling of any vacancy in that
connection, any vacancies in the Board of Directors, including unfilled
vacancies resulting from the removal of directors for cause, may be filled by
the vote of a majority of the remaining directors then in office, although less
than a quorum, or by the sole remaining director.

     (c) If the office of any director becomes vacant by reason of death,
resignation, disqualification, removal, failure to elect, or otherwise, the
remaining directors, although more or less than a quorum, by a majority vote of
such remaining directors may elect a successor or successors who shall hold
office for the unexpired term.

     3.2. RESIGNATION. Any director of the Company may resign at any time by
giving written notice to the Chairman of the Board, the President, or the
Secretary of the Company. Such resignation shall take effect at the time
specified therein, at the time of receipt if no time is specified therein and at
the time of acceptance if the effectiveness of such resignation is conditioned
upon its acceptance. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.


                                      -5-

     3.3. REMOVAL. Except as may otherwise be provided by the DGCL or the
Company's Certificate of Incorporation, any director or the entire Board of
Directors may be removed only for cause and only by the vote of the holders of a
majority of the shares of the Company's stock entitled to vote for the election
of directors.

     3.4. PLACE OF MEETINGS AND BOOKS. The Board of Directors may hold their
meetings and keep the books of the Company outside the State of Delaware, at
such places as they may from time to time determine.

     3.5. GENERAL POWERS. In addition to the powers and authority expressly
conferred upon them by these by-laws, the board may exercise all such powers of
the Company and do all such lawful acts and things as are not by statute or by
the Company's Certificate of Incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.

     3.6. OTHER COMMITTEES. The Board of Directors may designate one or more
committees, by resolution or resolutions passed by a majority of the whole
board; such committee or committees shall consist of one or more directors of
the Company, and to the extent provided in the resolution or resolutions
designating them, shall have and may exercise specific powers of the Board of
Directors in the management of the business and affairs of the Company to the
extent permitted by statute and shall have power to authorize the seal of the
Company to be affixed to all papers that may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.

     3.7. POWERS DENIED TO COMMITTEES. Committees of the Board of Directors
shall not, in any event, have any power or authority to amend the Company's
Certificate of Incorporation (except that a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
adopted by the Board of Directors as provided in Section 151(a) of the DGCL, fix
the designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the Company or
the conversion into, or the exchange of such shares for, shares of any other
class or classes or any other series of the same or any other class or classes
of stock of the Company or fix the number of shares of any series of stock or
authorize the increase or decrease of the shares of any series), adopt an
agreement of merger or consolidation, recommend to the stockholders the sale,
lease, or exchange of all or substantially all of the Company's property and
assets, recommend to the stockholders a dissolution of the Company or a
revocation of a dissolution, or to amend the by-laws of the Company. Further, no
committee of the Board of Directors shall have the power or authority to declare
a dividend, to authorize the issuance of stock, or to adopt a certificate of
ownership and merger pursuant to Section 253 of the DGCL, unless the resolution
or resolutions designating such committee expressly so provides.

     3.8. SUBSTITUTE COMMITTEE MEMBER. In the absence or on the disqualification
of a member of a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously


                                      -6-

appoint another member of the Board of Directors to act at the meeting in the
place of such absent or disqualified member. Any committee shall keep regular
minutes of its proceedings and report the same to the board as may be required
by the board.

     3.9. COMPENSATION OF DIRECTORS. The Board of Directors shall have the power
to fix the compensation of directors and members of committees of the Board. The
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Company in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.

     3.10. REGULAR MEETINGS. No notice shall be required for regular meetings of
the Board of Directors for which the time and place have been fixed. Written,
oral, or any other mode of notice of the time and place shall be given for
special meetings in sufficient time for the convenient assembly of the directors
thereat. Notice need not be given to any director who submits a written waiver
of notice signed by him before or after the time stated therein. Attendance of
any such person at a meeting shall constitute a waiver of notice of such
meeting, except when he attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
directors need be specified in any written waiver of notice.

     3.11. SPECIAL MEETINGS. Special meetings of the board may be called by the
Chairman of the Board, if any, or the President, on two (2) days notice to each
director, or such shorter period of time before the meeting as will nonetheless
be sufficient for the convenient assembly of the directors so notified; special
meetings shall be called by the Secretary in like manner and on like notice, on
the written request of two or more directors.

     3.12. QUORUM. At all meetings of the Board of Directors, a majority of the
whole board shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically permitted or provided by
statute, or by the Company's Certificate of Incorporation, or by these by-laws.
If at any meeting of the board there shall be less than a quorum present, a
majority of those present may adjourn the meeting from time to time until a
quorum is obtained, and no further notice thereof need be given other than by
announcement at said meeting that shall be so adjourned.

     3.13. TELEPHONIC PARTICIPATION IN MEETINGS. Members of the Board of
Directors or any committee designated by such board may participate in a meeting
of the board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.


                                      -7-

     3.14. ACTION BY CONSENT. Unless otherwise restricted by the Company's
Certificate of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if written consent thereto is signed by all
members of the board or of such committee as the case may be and such written
consent is filed with the minutes of proceedings of the board or committee.

                             ARTICLE IV. - OFFICERS.

     4.1. SELECTION; STATUTORY OFFICERS. The officers of the Company shall be
chosen by the Board of Directors. There shall be a President, a Secretary, and a
Treasurer, and there may be a Chairman of the Board of Directors, one or more
Vice Chairmen, one or more Vice Presidents, one or more Assistant Secretaries,
and one or more Assistant Treasurers, as the Board of Directors may elect. Any
number of offices may be held by the same person, except that the offices of
President and Secretary shall not be held by the same person simultaneously.

     4.2. TIME OF ELECTION. The officers above named shall be chosen by the
Board of Directors at its first meeting after each annual meeting of
stockholders. None of said officers need be a director.

     4.3. ADDITIONAL OFFICERS. The board may appoint such other officers and
agents as it shall deem necessary, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.

     4.4. TERMS OF OFFICE. Each officer of the Company shall hold office until
his successor is chosen and qualified, or until his earlier resignation or
removal. Any officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors.

     4.5. COMPENSATION OF OFFICERS. The Board of Directors shall have power to
fix the compensation of all officers of the Company. It may authorize any
officer, upon whom the power of appointing subordinate officers may have been
conferred, to fix the compensation of such subordinate officers.

     4.6. CHAIRMAN OF THE BOARD. The Chairman of the Board of Directors shall
preside at all meetings of the stockholders and directors, and shall have such
other duties as may be assigned to him from time to time by the Board of
Directors.

     4.7. VICE-CHAIRMEN. The Vice-Chairmen shall perform such of the duties of
the Chairman of the Board on behalf of the Company as may be respectively
assigned to them from time to time by the Board of Directors or by the Chairman
of the Board.

     4.8. PRESIDENT. Unless the Board of Directors otherwise determines, the
President shall be the chief executive officer and head of the Company. Unless
there is a Chairman of the Board, the President shall preside at all meetings of
directors and stockholders. Under


                                      -8-

the supervision of the Board of Directors, the President shall have the general
control and management of its business and affairs, subject, however, to the
right of the Board of Directors to confer any specific power, except such as may
be by statute exclusively conferred on the President, upon any other officer or
officers of the Company. The President shall perform and do all acts and things
incident to the position of President and such other duties as may be assigned
to him from time to time by the Board of Directors.

     4.9. VICE-PRESIDENTS. The Vice-Presidents shall perform such of the duties
of the President on behalf of the Company as may be respectively assigned to
them from time to time by the Board of Directors or by the President. The Board
of Directors may designate one of the Vice-Presidents as the Executive
Vice-President, and in the absence or inability of the President to act, such
Executive Vice-President shall have and possess all of the powers and discharge
all of the duties of the President, subject to the control of the Board of
Directors.

     4.10. TREASURER. The Treasurer shall have the care and custody of all the
funds and securities of the Company that may come into his hands as Treasurer,
and the power and authority to endorse checks, drafts and other instruments for
the payment of money for deposit or collection when necessary or proper and to
deposit the same to the credit of the Company in such bank or banks or
depository as the Board of Directors, or the officers or agents to whom the
Board of Directors may delegate such authority, may designate, and he may
endorse all commercial documents requiring endorsements for or on behalf of the
Company. He may sign all receipts and vouchers for the payments made to the
Company. He shall render an account of his transactions to the Board of
Directors as often as the board or the committee shall require the same. He
shall enter regularly in the books to be kept by him for that purpose full and
adequate account of all moneys received and paid by him on account of the
Company. He shall perform all acts incident to the position of Treasurer,
subject to the control of the Board of Directors. He shall when requested,
pursuant to vote of the Board of Directors, give a bond to the Company
conditioned for the faithful performance of his duties, the expense of which
bond shall be borne by the Company.

     4.11. SECRETARY. The Secretary shall keep the minutes of all meetings of
the Board of Directors and of the stockholders; he shall attend to the giving
and serving of all notices of the Company. Except as otherwise ordered by the
Board of Directors, he shall attest the seal of the Company upon all contracts
and instruments executed under such seal and shall affix the seal of the Company
thereto and to all certificates of shares of capital stock of the Company. He
shall have charge of the stock certificate book, transfer book and stock ledger,
and such other books and papers as the Board of Directors may direct. He shall,
in general, perform all the duties of Secretary, subject to the control of the
Board of Directors.

     4.12. ASSISTANT SECRETARY. The Board of Directors or any two of the
officers of the Company acting jointly may appoint or remove one or more
Assistant Secretaries of the Company. Any Assistant Secretary upon his
appointment shall perform such duties of the Secretary, and also any and all
such other duties as the Board of Directors or the President or the Executive
Vice-President or the Treasurer or the Secretary may designate.


                                      -9-

     4.13. ASSISTANT TREASURER. The Board of Directors or any two of the
officers of the Company acting jointly may appoint or remove one or more
Assistant Treasurers of the Company. Any Assistant Treasurer upon his
appointment shall perform such of the duties of the Treasurer, and also any and
all such other duties as the Board of Directors or the President or the
Executive Vice-President or the Treasurer or the Secretary may designate.

     4.14. SUBORDINATE OFFICERS. The Board of Directors may select such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority, and perform such duties as the
Board of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.

                               ARTICLE V. - STOCK.

     5.1. STOCK. Each stockholder shall be entitled to a certificate or
certificates of stock of the Company in such form as the Board of Directors may
from time to time prescribe. The certificates of stock of the Company shall be
numbered and shall be entered in the books of the Company as they are issued.
They shall certify the holder's name and number and class of shares and shall be
signed by both of (i) any one of the Chairman of the Board, a Vice-Chairman, the
President or a Vice-President, and (ii) any one of the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, and may be sealed with the
corporate seal of the Company. If such certificate is countersigned (l) by a
transfer agent other than the Company or its employee, or, (2) by a registrar
other than the Company or its employee, the signature of the officers of the
Company and the corporate seal may be facsimiles. In case any officer or
officers who shall have signed, or whose facsimile signature or signatures shall
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the Company, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Company, such certificate or certificates may nevertheless be adopted by the
Company and be issued and delivered as though the person or persons who signed
such certificate or certificates or whose facsimile signature shall have been
used thereon had not ceased to be such officer or officers of the Company.

     5.2. FRACTIONAL SHARE INTERESTS. The Company may, but shall not be required
to, issue fractions of a share. If the Company does not issue fractions of a
share, it shall (i) arrange for the disposition of fractional interests by those
entitled thereto, (ii) pay in cash the fair value of fractions of a share as of
the time when those entitled to receive such fractions are determined, or (iii)
issue scrip or warrants in registered or bearer form that shall entitle the
holder to receive a certificate for a full share upon the surrender of such
scrip or warrants aggregating a full share. A certificate for a fractional share
shall, but scrip or warrants shall not unless otherwise provided therein,
entitle the holder to exercise voting rights, to receive dividends thereon, and
to participate in any of the assets of the Company in the event of liquidation.
The Board of Directors may cause scrip or warrants to be issued subject to the
conditions that they shall become void if not exchanged for certificates
representing full shares before a specified date, or subject to the conditions
that the shares for which scrip or warrants are exchangeable may be sold by the
Company and the proceeds thereof distributed


                                      -10-

to the holders of scrip or warrants, or subject to any other conditions that the
Board of Directors may impose.

     5.3. TRANSFERS OF STOCK. Subject to any transfer restrictions then in
force, the shares of stock of the Company shall be transferable only upon its
books by the holders thereof in person or by their duly authorized attorneys or
legal representatives and upon such transfer the old certificates shall be
surrendered to the Company by the delivery thereof to the person in charge of
the stock and transfer books and ledgers or to such other person as the
directors may designate by whom they shall be canceled and new certificates
shall thereupon be issued. The Company shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not it shall
have express or other notice thereof save as expressly provided by the laws of
Delaware.

     5.4. RECORD DATE. For the purpose of determining the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a meeting,
or entitled to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion, or exchange of stock or for the purpose of any other lawful
action, the Board of Directors may fix, in advance, a record date, that shall
not be more than sixty (60) days nor less than ten (10) days before the date of
such meeting, nor more than sixty (60) days prior to any other action. If no
such record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting, when no prior action by the Board of Directors is
necessary, shall be the day on which the first written consent is expressed; and
the record date for determining stockholders for any other purpose shall be at
the close of business on the day on which the Board of Directors adopts the
resolution relating thereto. A determination of stockholders of record entitled
to notice of or to vote at any meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.

     5.5. TRANSFER AGENT AND REGISTRAR. The Board of Directors may appoint one
or more transfer agents or transfer clerks and one or more registrars and may
require all certificates of stock to bear the signature or signatures of any of
them.

     5.6. DIVIDENDS.

          1. Power to Declare. Dividends upon the capital stock of the Company,
     subject to the provisions of the Company's Certificate of Incorporation, if
     any, may be declared by the Board of Directors at any regular or special
     meeting, pursuant to law. Dividends may be paid in cash, in property, or in
     shares of the capital stock,


                                      -11-

     subject to the provisions of the Company's Certificate of Incorporation and
     the laws of Delaware.

          2. Reserves. Before payment of any dividend, there may be set aside
     out of any funds of the Company available for dividends such sum or sums as
     the directors from time to time, in their absolute discretion, think proper
     as a reserve or reserves to meet contingencies, or for equalizing
     dividends, or for repairing or maintaining any property of the Company, or
     for such other purpose as the directors shall think conducive to the
     interest of the Company, and the directors may modify or abolish any such
     reserve in the manner in which it was created.

     5.7. LOST, STOLEN, OR DESTROYED CERTIFICATES. No certificates for shares of
stock of the Company shall be issued in place of any certificate alleged to have
been lost, stolen, or destroyed, except upon production of such evidence of the
loss, theft, or destruction and upon indemnification of the Company and its
agents to such extent and in such manner as the Board of Directors may from time
to time prescribe.

     5.8. INSPECTION OF BOOKS. The stockholders of the Company, by a majority
vote at any meeting of stockholders duly called, or in case the stockholders
shall fail to act, the Board of Directors shall have power from time to time to
determine whether and to what extent and at what times and places and under what
conditions and regulations the accounts and books of the Company (other than the
stock ledger) or any of them, shall be open to inspection of stockholders; and
no stockholder shall have any right to inspect any account or book or document
of the Company except as conferred by statute or authorized by the Board of
Directors or by a resolution of the stockholders.

               ARTICLE VI. - MISCELLANEOUS MANAGEMENT PROVISIONS.

     6.1. CHECKS, DRAFTS, AND NOTES. All checks, drafts, or orders for the
payment of money, and all notes and acceptances of the Company shall be signed
by such officer or officers, or such agent or agents, as the Board of Directors
may designate.

     6.2. NOTICES.

          1. Notices to directors may, and notices to stockholders shall, be in
     writing and delivered personally or mailed to the directors or stockholders
     at their addresses appearing on the books of the Company. Notice by mail
     shall be deemed to be given at the time when the same shall be mailed.
     Notice to directors may also be given by telegram, telecopy or orally, by
     telephone or in person.

          2. Whenever any notice is required to be given under the provisions of
     any applicable statute or of the Company's Certificate of Incorporation or
     of these by-laws, a written waiver of notice, signed by the person or
     persons entitled to said notice, whether before or after the time stated
     therein or the meeting or action to which such notice relates, shall be
     deemed equivalent to notice. Attendance of a person at a meeting shall
     constitute a waiver of notice of such meeting except when


                                      -12-

     the person attends a meeting for the express purpose of objecting, at the
     beginning of the meeting, to the transaction of any business because the
     meeting is not lawfully called or convened.

     6.3. CONFLICT OF INTEREST. No contract or transaction between the Company
and one or more of its directors or officers, or between the Company and any
other corporation, partnership, association, or other organization in which one
or more of its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board of or committee thereof that authorized the contract or transaction,
or solely because his or their votes are counted for such purpose, if: (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
committee and the board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders of the
Company entitled to vote thereon, and the contract or transaction as
specifically approved in good faith by vote of such stockholders; or (iii) the
contract or transaction is fair as to the Company as of the time it is
authorized, approved, or ratified, by the Board of Directors, a committee or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
that authorizes the contract or transaction.


                                      -13-

     6.4. VOTING OF SECURITIES OWNED BY THE COMPANY. Subject always to the
specific directions of the Board of Directors, (i) any shares or other
securities issued by any other corporation and owned or controlled by the
Company may be voted in person at any meeting of security holders of such other
corporation by the President of the Company if he is present at such meeting, or
in his absence by the Treasurer of the Company if he is present at such meeting,
and (ii) whenever, in the judgment of the President, it is desirable for the
Company to execute a proxy or written consent in respect to any shares or other
securities issued by any other corporation and owned by the Company, such proxy
or consent shall be executed in the name of the Company by the President,
without the necessity of any authorization by the Board of Directors, affixation
of corporate seal or countersignature or attestation by another officer,
provided that if the President is unable to execute such proxy or consent by
reason of sickness, absence from the United States or other similar cause, the
Treasurer may execute such proxy or consent. Any person or persons designated in
the manner above stated as the proxy or proxies of the Company shall have full
right, power and authority to vote the shares or other securities issued by such
other corporation and owned by the Company the same as such shares or other
securities might be voted by the Company.

                         ARTICLE VII. - INDEMNIFICATION.

     7.1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"Proceeding"), by reason of being or having been a director or officer of the
Company or serving or having served at the request of the Company as a director,
trustee, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to an
employee benefit plan (an "Indemnitee"), whether the basis of such proceeding is
alleged action or failure to act in an official capacity as a director, trustee,
officer, employee or agent or in any other capacity while serving as a director,
trustee, officer, employee or agent, shall be indemnified and held harmless by
the Company to the fullest extent authorized by the DGCL, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than permitted prior thereto) (as used in this Article 7,
the "Delaware Law"), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such Indemnitee in
connection therewith and such indemnification shall continue as to an Indemnitee
who has ceased to be a director, trustee, officer, employee, or agent and shall
inure to the benefit of the Indemnitee's heirs, executors, and administrators;
provided, however, that, except as provided in Section 7.2 hereof with respect
to Proceedings to enforce rights to indemnification, the Company shall indemnify
any such Indemnitee in connection with a Proceeding (or part thereof) initiated
by such Indemnitee only if such Proceeding (or part thereof) was authorized by
the Board of Directors of the Company. The right to indemnification conferred in
this Article 7 shall be a contract right and shall include the right to be paid
by the Company the expenses (including attorneys' fees) incurred in defending
any such Proceeding in advance of its final disposition (an "Advancement of
Expenses"); provided, however, that, if the Delaware Law so requires, an
Advancement of Expenses incurred by an Indemnitee shall be made only upon
delivery to


                                      -14-

the Company of an undertaking (an "Undertaking"), by or on behalf of such
Indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal (a "Final Adjudication") that such Indemnitee is not entitled to be
indemnified for such expenses under this Article 7 or otherwise.

     7.2. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section 7.1 hereof
is not paid in full by the Company within sixty days after a written claim has
been received by the Company, except in the case of a claim for an Advancement
of Expenses, in which case the applicable period shall be twenty days, the
Indemnitee may at any time thereafter bring suit against the Company to recover
the unpaid amount of the claim. If successful in whole or in part in any such
suit, or in a suit brought by the Company to recover an Advancement of Expenses
pursuant to the terms of an Undertaking, the Indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any suit
brought by the Indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the Indemnitee to enforce a right to an Advancement of
Expenses) it shall be a defense that, and (ii) in any suit by the Company to
recover an Advancement of Expenses pursuant to the terms of an Undertaking the
Company shall be entitled to recover such expenses upon a Final Adjudication
that, the Indemnitee has not met the applicable standard of conduct set forth in
the Delaware Law. Neither the failure of the Company (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
Indemnitee is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the Delaware Law, nor an actual
determination by the Company (including its Board of Directors, independent
legal counsel, or its stockholders) that the Indemnitee has not met such
applicable standard of conduct, shall create a presumption that the Indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the Indemnitee, be a defense to such suit. In any suit brought by the
Indemnitee to enforce a right to indemnification or to an Advancement of
Expenses hereunder, or by the Company to recover an Advancement of Expenses
pursuant to the terms of an Undertaking, the burden of proving that the
Indemnitee is not entitled to be indemnified, or to such Advancement of
Expenses, under this Article 7 or otherwise shall be on the Company.

     7.3. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the
Advancement of Expenses conferred in this Article 7 shall not be exclusive of
any other right that any person may have or hereafter acquire under any statute,
the Company's Certificate or Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.

     7.4. INSURANCE. The Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Company would have
the power to indemnify such person against such expense, liability or loss under
this Article 7 or under the Delaware Law.

     7.5. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE COMPANY. The Company
may, to the extent authorized from time to time by the Board of Directors, grant
rights to


                                      -15-

indemnification, and to the Advancement of Expenses, to any employee or agent of
the Company to the fullest extent of the provisions of this Article 7 with
respect to the indemnification and Advancement of Expenses of directors and
officers of the Company.

                           ARTICLE VIII. - AMENDMENTS.

     8.1. Amendments. Subject always to any limitations imposed by the Company's
Certificate of Incorporation, these By-Laws may be altered, amended, or
repealed, or new By-Laws may be adopted, only by (i) the affirmative vote of the
holders of at least a majority of the outstanding voting stock of the Company,
provided, that the affirmative vote of the holders of at least 67% of the
outstanding voting stock of the Company shall be required for any such
alteration, amendment, repeal, or adoption that would affect or be inconsistent
with the provisions of Sections 2.11, 2.12, and this Section 8.1 (in each case,
in addition to any separate class vote that may be required pursuant to the
terms of any then outstanding preferred stock of the Company), or (ii) by
resolution of the Board of Directors duly adopted by not less than a majority of
the directors then constituting the full Board of Directors.


                                      -16-

EX-4.3

                                                                     EXHIBIT 4.3

                   SECOND AMENDMENT TO SHAREHOLDERS' AGREEMENT

     This Second Amendment (this "Amendment") is made as of August 25, 2005 to
the Shareholders' Agreement, dated as of September 17, 1998, as amended, by and
among Dover Saddlery, Inc., a Delaware corporation (the "Company"), a majority
in interest of the Purchasers (as defined therein) and a majority in interest of
the Sellers (as defined therein) (as amended, the "Shareholders' Agreement").
Capitalized terms used, but not otherwise defined, herein shall have the
respective meanings assigned to such terms in the Shareholders' Agreement.

     WHEREAS, the Company and the Shareholders entered into the Shareholders'
Agreement and now the parties wish to amend certain provisions of the
Shareholders' Agreement;

     WHEREAS, Section 16 of the Shareholders' Agreement allows for such
amendments by written consent of the Company, a majority in interest of the
Purchasers and a majority in interest of the Sellers;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Shareholders' Agreement is hereby amended as follows:

     1.   The first paragraph (the preamble) of the Shareholders' Agreement
          shall be amended by including Citizens in the definition of the term
          "Sellers" if and when Citizens shall become a party to the
          Shareholders' Agreement by executing an Instrument of Accession in the
          form attached hereto as Exhibit A, provided that such Instrument of
          Accession is accepted and executed by the Company.

     2.   The form of instrument of accession attached to this Amendment as
          Exhibit A shall become Exhibit A to the Shareholders' Agreement.

     3.   A new definition of the term "Change in Control" shall be added to
          Section 1(a) of the Shareholders' Agreement as follows:

               ""Change in Control" shall mean the first to occur of the
               following (i) the merger or consolidation of the Company with or
               into another corporation or entity where the Company is not the
               surviving entity, (ii) the sale of all or substantially all of
               the assets of the Company, (iii) the sale of voting securities of
               the Company to an acquiror which, immediately prior to the
               transaction, held less than 10% of the voting control of the
               Company, in a transaction or series of transactions after which
               such acquiror owns, directly or indirectly, in excess of 50% of
               the voting control of the Company, (iv) a transaction or related
               series of transactions or reorganization of the Company in which
               the holders of the Company's capital stock immediately prior to
               the transaction or related series of transactions hold less than
               a majority of the capital

               stock of the surviving company, and (v) a liquidation or winding
               up of the Company."

     4.   The definition of the term "Citizens" in Section 1(a) of the
          Shareholders' Agreement shall be deleted and replaced in its entirety
          with the following sentence:

               ""Citizens" shall mean Citizens Ventures, Inc."

     5.   The definitions of the terms "Citizens Agreement" and "Citizens
          Stockholders and Registration Rights Agreement" in Section 1(a) of the
          Shareholders' Agreement shall each be deleted.

     6.   The definition of "Common Stock" in Section 1(a) of the Shareholders'
          Agreement shall be deleted and replaced in its entirety with the
          following definition:

               "Common Stock" shall mean the class A common stock of the
               Company, par value $0.0001 per share, and shall include any stock
               into which such Common Stock shall have been changed and any
               stock resulting from any reclassification of such Common Stock."

     7.   The definition of "Fair Market Value" in Section 1(a) of the
          Shareholders' Agreement shall be deleted and replaced in its entirety
          with the following definition:

               "Fair Market Value" as of any date shall mean the per share fair
               market value of the capital stock of the Company or any
               applicable portion thereof, determined in good faith by valuing
               the Company assuming the Company is sold to an independent third
               party as a going concern with no discount for lack of liquidity
               of the Company's common stock or the minority ownership discount
               and assuming exercise of all "in the money" warrants and any
               other rights to purchase shares which may be outstanding (i.e.
               warrants and other rights where the strike price is less than the
               Fair Market Value of the shares that issue on exercise), as
               determined by an independent investment banking firm reasonably
               acceptable to the Company and the interested Shareholder(s);
               provided that, in the event the Company and the interested
               Shareholder(s) cannot agree to appoint a single such firm within
               10 days of the date first giving rise to the need to appoint such
               a firm, the Company on the one hand, and the interested
               Shareholder(s) on the other hand, shall each select one such firm
               within 5 days following the expiration of such 10 day period, and
               the two firms so selected shall promptly select a third such firm
               which firm shall be responsible for the determination of the fair
               market value of the Common Stock The

               Company shall pay all of the fees, costs and expenses of all such
               firms."

     8.   The definition of the term "Liquidity Event" in Section 1(a) of the
          Shareholders' Agreement shall be deleted and replaced in its entirety
          with the following definition:

               ""Liquidity Event" shall mean the closing of an initial public
               offering of the Common Stock of the Company which yields
               aggregate gross proceeds to the Company and selling shareholders
               of not less than $25,000,000."

     9.   The definition of the term "Put Period" in Section 1(a) of the
          Shareholders' Agreement shall be deleted and replaced in its entirety
          with the following definition:

               ""Put Period" shall mean the period (i) commencing at the earlier
               of (A) 9:00 a.m., Eastern Standard Time, on December 31, 2006 or
               (B) a Change in Control, and (ii) ending at the earlier of (A)
               5:00 p.m., Eastern Standard Time, on December 31, 2007 or (B) a
               Liquidity Event."

     10.  Section 2(a)(ii)(1) of the Shareholders' Agreement shall be deleted
          and replaced in its entirely with the following:

               "(1) at all times prior to a Liquidity Event, two individuals
               designated by holders of a majority in interest of all shares of
               Common Stock then held by JP, DP and MP."

     11.  Section 2(a)(ii)(3) of the Shareholders' Agreement shall be deleted
          and replaced in its entirely with the following:

               "(3) an individual (the "Fifth Director") mutually agreeable to
               (A) Day and (B) the holders of a majority in interest of all
               shares of Common Stock then held by JP, DP and MP."

     12.  Section 2(a)(iii) of the Shareholders' Agreement shall be deleted and
          replaced in its entirely with the following:

               "(iii) in the event the Shareholders vote to increase the size of
               the Board in order to add one or more independent directors, the
               size of the Board may be so increased and such independent
               members of the Board (each an "Independent Director") shall be
               elected by the Shareholders."

     13.  Section 2(a)(iv) of the Shareholders' Agreement shall be deleted and
          replaced in its entirely with the following:

               "(iv) the removal from the Board (with or without cause) of any
               representative designated hereunder by the Person(s) entitled to
               make such designation hereunder, upon such Person's written
               request for removal as to its designee, but only upon such
               written request; provided that (i) no director may be removed by
               any Person(s) not entitled to designate such director hereunder,
               except that (ii) any Independent Director may be removed with
               cause or without cause by a majority vote of the Shareholders."

     14.  Section 2(a)(vi) of the Shareholders' Agreement shall be deleted and
          replaced in its entirety with following:

               "(vi) upon the resignation, removal or death of the Fifth
               Director, his replacement will be filled by an individual
               approved by the vote of a majority of the members of the Board
               who have been designated pursuant to clauses 2(a)(ii)(1) and
               2(a)(ii)(2)."

     15.  Section 2(f) shall be added to the Shareholders' Agreement and shall
          read as follows:

               "(f) Until a Liquidity Event shall have occurred, the Company
               shall permit a Person designated by Citizens to attend, but not
               vote at, all meetings of the Board and shall provide notice to
               such Person of each meeting of the Board as provided to other
               directors."

     16.  Section 3 of the Shareholders' Agreement shall be deleted in its
          entirety and replaced with the following:

               "Section 3. Certain Consents and Rights of Sellers (other than
               Citizens). Notwithstanding anything in this Agreement to the
               contrary, for purposes of this Section 3, Citizens shall not be
               included in the definition of "Seller". At all times prior to the
               earlier to occur of (a) a Liquidity Event, or (b) (1) in the case
               of clauses (i) and (ii) of this Section 3, the earliest date on
               which none of the individual Sellers remains a member of the
               Board (other than by reason of the death, disability or
               incapacity of all of the Sellers) and (2) in the case of clauses
               (iii), (iv) and (v), the first date on which none of the
               individual Sellers remains a Shareholder, the consent of the
               Sellers (which consent will be deemed to have been obtained if,
               within ten days following a request therefore, a majority in
               interest of the Sellers shall have (x) consented in writing to,
               (y) voted in favor of, or (z) not

               objected in writing to or voted against, such request) must be
               obtained with respect to the taking of any of the following
               actions by the Company:

               (i) an acquisition which is not a Permitted Acquisition;

               (ii) the guarantee by the Company of the obligations of third
               parties, except as permitted by the Senior Loan Documents;

               (iii) the issuance of any new equity securities other than (A)
               issuances pursuant to the Company's incentive plans authorized by
               Section 13 hereof, (B) pursuant to offerings to which the
               Sellers' preemptive rights under this Agreement are applicable,
               and (C) pursuant to stock for stock mergers with an unrelated
               third party where such securities are issued at a value which
               reasonably approximates Fair Market Value, provided that if, for
               the purposes of this clause (iii)(C) of Section 3 only, the
               Company is in compliance with all of its financial covenants
               under the Senior Loan Documents, the Sellers shall be deemed to
               have given their consent (as a Seller but not as a director of
               the Company) to such issuance if such issuance was approved by
               the Board;

               (iv) a merger of the Company with or into an entity controlled by
               Day or the Company or under common control with the Company or
               which is not an Unrelated Person; and

               (v) an acquisition by the Company of the stock or assets of an
               entity controlled by Day or the Company or under common control
               with the Company or which is not an Unrelated Person.

               The consent rights set forth in this Section 3 are personal to
               Sellers and may not be transferred to any Person other than a
               Permitted Transferee.

     17.  The following Section 3.1 shall be inserted immediately following the
          new Section 3 of the Shareholders' Agreement:

               "Section 3.1. Certain Consents and Rights of Citizens. At all
               times prior to the earlier to occur of (a) a Liquidity Event, or
               (b) (1) in the case of clauses (i) and (ii) of this Section 3.1,
               the earliest date on which Citizens no longer has observation
               rights on the Board and (2) in the case of clauses (iii), (iv)
               and (v), the first date on which Citizens does not remain a
               Shareholder, the consent of Citizens must be obtained with
               respect to the taking of any of the following actions by the
               Company:

               (i) an acquisition which is not a Permitted Acquisition;

               (ii) the guarantee by the Company of the obligations of third
               parties, except as permitted by the Senior Loan Documents;

               (iii) the issuance of any new equity securities other than (A)
               issuances pursuant to the Company's incentive plans authorized by
               Section 13 hereof, (B) pursuant to offerings to which Citizens'
               preemptive rights under this Agreement are applicable, and (C)
               pursuant to stock for stock mergers with an unrelated third party
               where such securities are issued at a value which reasonably
               approximates Fair Market Value, provided that if, for the
               purposes of this clause (iii)(C) of Section 3.1 only, the Company
               is in compliance with all of its financial covenants under the
               Senior Loan Documents, Citizens shall be deemed to have given its
               consent to such issuance if such issuance was approved by the
               Board;

               (iv) a merger of the Company with or into an entity controlled by
               Day or the Company or under common control with the Company or
               which is not an Unrelated Person; and

               (v) an acquisition by the Company of the stock or assets of an
               entity controlled by Day or the Company or under common control
               with the Company or which is not an Unrelated Person.

               The consent rights set forth in this Section 3.1 are personal to
               Citizens and may not be transferred to any Person other than a
               Permitted Transferee.

     18.  The following phrase in Section 6(c) of the Shareholders' Agreement
          shall be deleted:

               ", Citizens (to the extent it is electing to sell shares pursuant
               to any tag along right it may have),"

     19.  Section 10(b)(i) of the Shareholders' Agreement shall be deleted and
          replaced in its entirety with the following:

               "(i) The Sellers hereby waive any requirement of the Company to
               give the Sellers notice of the currently proposed offering, as of
               the date of this Amendment, of the Company's common stock in an
               underwritten public offering; the Company shall not be required
               to give notice to the Sellers or include the Common Stock of the
               Sellers in any registration if the proposed registration is a
               registration made after the Company has registered Common Stock
               under the Securities Act and such subsequent registration is (A)
               of a stock option or other compensation plan or dividend
               reinvestment plan or a registration of Common Stock issued or
               issuable pursuant to any such plan, or (B) a registration of
               Common Stock proposed to be issued in exchange for securities or
               assets of, or in connection with a merger or consolidation with,
               another Person;"

     20.  Section 10(c) of the Shareholders' Agreement shall be deleted and
          replaced in its entirety with the following:

               "The Sellers shall be afforded, and are hereby granted the right
               to receive the benefit of the most favorable "piggyback"
               registration rights granted or afforded to any other
               Shareholder."

     21.  The following phrase in Section 11(a) and in Section 12(a) of the
          Shareholders' Agreement shall be deleted:

               "and the Citizens Agreement"

     22.  Section 16 of the Shareholders' Agreement shall be amended by adding
          the following phrase to the end of the first sentence thereof:

               ", provided, however, that the written agreement of Citizens
               shall also be required for any amendment resulting in, or that
               would result in, an adverse effect on the rights of Citizens (i)
               set forth in Section 2(f), Section 6, Section 9 or Section 11 or
               (ii) in a manner that is different from the other Shareholders
               who are also adversely affected by such amendment."

     23.  The contact information set forth in Section 23 of the Shareholders'
          Agreement with respect to the Sellers shall be amended by adding
          thereto the following:

               "Citizens Ventures, Inc.,
               28 State Street, 15th Floor
               Boston, Massachusetts 02109
               Attention: Bradley Stewart
               Telecopy No.: 617-725-5630"

     24.  A new section shall be added to the end of the Shareholders' Agreement
          that reads as follows:

               "Section 28. Termination Upon a Liquidity Event. Upon the
               consummation of a Liquidity Event, this Agreement and all rights
               and obligations of all parties hereto as set forth in this
               Agreement shall immediately terminate."

     25.  Other than the changes set forth above, the terms of the Shareholders'
          Agreement shall remain in full force and effect and the undersigned
          hereby acknowledge the continued legal and binding effect of the
          Shareholders' Agreement and all of its terms and provisions.

                  [remainder of page intentionally left blank]

     IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
to Shareholders' Agreement as of the date first written above.

                                        COMPANY:

                                        DOVER SADDLERY, INC.


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


                                        PURCHASERS:


                                        /s/ Stephen L. Day
                                        ----------------------------------------
                                        Stephen L. Day


                                        /s/ Jonathan A.R. Grylls
                                        ----------------------------------------
                                        Jonathan A.R. Grylls


                                        ----------------------------------------
                                        David Post


                                        /s/ Donald Motsenbocker
                                        ----------------------------------------
                                        Donald Motsenbocker


                                        ----------------------------------------
                                        Thomas Gaines

                                        SELLERS:


                                        /s/ James F. Powers
                                        ----------------------------------------
                                        James F. Powers


                                        /s/ David J. Powers
                                        ----------------------------------------
                                        David J. Powers


                                        /s/ Michele R. Powers
                                        ----------------------------------------
                                        Michele R. Powers

                                                                       Exhibit A

                             INSTRUMENT OF ACCESSION

     The undersigned, Citizens Ventures, Inc., as a holder of 411,111 shares of
the Class A Common Stock, $0.0001 par value per share, of Dover Saddlery, Inc.,
a Delaware corporation (the "Company"), hereby agrees that by execution hereof
the undersigned hereby agrees to become a party to, and become subject to the
benefits and burdens set forth in, the Shareholders' Agreement, dated September
17, 1998, by and among the Company, the Shareholders (as defined therein), as
amended by the First Amendment to Shareholders' Agreement, dated as of August
29, 2003 and by the Second Amendment to Shareholders' Agreement, dated as of
August 25, 2005 (as so amended, the "Shareholders' Agreement") as a "Seller" (as
defined therein). This Instrument of Accession shall take effect and shall
become a part of the Shareholders' Agreement immediately upon execution by the
undersigned and acceptance by execution thereof by the Company.

     Executed as of the date set forth below under the laws of the Commonwealth
of Massachusetts.

                                        CITIZENS VENTURES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Address:
                                                 -------------------------------

                                        ----------------------------------------

                                        ----------------------------------------

                                        ----------------------------------------

                                        Date: [____________], 2005

Agreed and Accepted:
DOVER SADDLERY, INC.


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------

Date: [____________], 2005

EX-4.4

                                                                     EXHIBIT 4.4

                             INSTRUMENT OF ACCESSION

     The undersigned, Citizens Ventures, Inc., as a holder of 411,111 shares of
the Class A Common Stock, $0.0001 par value per share, of Dover Saddlery, Inc.,
a Delaware corporation (the "Company"), hereby agrees that by execution hereof
the undersigned hereby agrees to become a party to, and become subject to the
benefits and burdens set forth in, the Shareholders' Agreement, dated September
17, 1998, by and among the Company, the Shareholders (as defined therein), as
amended by the First Amendment to Shareholders' Agreement, dated as of August
29, 2003 and by the Second Amendment to Shareholders' Agreement, dated as of
August 25, 2005 (as so amended, the "Shareholders' Agreement") as a "Seller" (as
defined therein). This Instrument of Accession shall take effect and shall
become a part of the Shareholders' Agreement immediately upon execution by the
undersigned and acceptance by execution thereof by the Company.

     Executed as of the date set forth below under the laws of the Commonwealth
of Massachusetts.

                                        CITIZENS VENTURES, INC.


                                        By: /s/ Bradley Stewart
                                            ------------------------------------
                                        Name: Bradley Stewart
                                        Title: Vice President and Director

                                        Address: 28 State Street
                                        Boston, MA 02109

                                        Date: September 16, 2005

Agreed and Accepted:
DOVER SADDLERY, INC.


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

Date: September 16, 2005

EX-4.6

                                                                     EXHIBIT 4.6

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.

THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO AND
RESTRICTED BY THE TERMS OF THE AMENDED AND RESTATED NOTE AND WARRANT PURCHASE
AGREEMENT, DATED AS OF SEPTEMBER 16, 2005, BY AND AMONG THE PARENT, ITS
SUBSIDIARIES, PATRIOT CAPITAL FUNDING, INC., AS SERVICER, AND THE PURCHASERS
SIGNATORY THERETO, AS THE SAME MAY BE AMENDED.

THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND THE RIGHTS OF
PURCHASER HEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED
AND RESTATED SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005 (THE
"AMENDED AND RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF
AMERICA, AS THE SENIOR LENDER, AND PATRIOT CAPITAL FUNDING, INC., TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE
LOAN PARTIES UNDER AND PURSUANT TO THE AMENDED AND RESTATED SENIOR CREDIT
AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN). PURCHASER, BY
ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE AMENDED AND RESTATED SUBORDINATION AGREEMENT.

                                     WARRANT

                           TO PURCHASE COMMON STOCK OF

                              DOVER SADDLERY, INC.

Issue Date: September 16, 2005                               Certificate No. W-1

     THIS WARRANT IS TO CERTIFY THAT PATRIOT CAPITAL FUNDING, INC., a Delaware
corporation ("PURCHASER"), is entitled to purchase from DOVER SADDLERY, INC., a
Delaware corporation (the "PARENT"), the number of shares of the Parent's Common
Stock, par value $0.0001 per share ("COMMON STOCK"), as shall be determined in
accordance with the provisions of Section 2 hereof at a price per share of
$0.01, as adjusted from time to time pursuant to Section 4 (the "EXERCISE
PRICE"). Terms used but not defined herein shall have the meanings set forth in
the Amended and Restated Senior Subordinated Note and Warrant Purchase Agreement
of even date herewith, among the Loan Parties, including Parent, Patriot Capital
Funding, Inc., as Servicer, the Purchaser and certain other parties named
therein (the "AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT").

     SECTION 1. CERTAIN DEFINITIONS. As used in this Warrant, unless the context
otherwise requires:

     "APPRAISED VALUE" means the fair market value of the Subject Securities on
a control premium basis without discount for limitations on voting rights,
minority interests, illiquidity or restrictions on transfer and without increase
in value attributable to provisions in this Warrant, as determined by an
appraisal performed at the expense of Parent by any of (i) Houlihan, Lokey,
Howard & Zukin, (ii) Duff & Phelps or (iii) Williamette Management Associates,
or any successor to such firms, as Parent shall elect, or any other nationally
recognized firm selected by Parent and acceptable to the Warranholders holding a
majority of the shares of Warrant Stock; provided, that such appraiser shall be
directed to determine the value of such Subject Securities as soon as
practicable, but in no event later than forty-five (45) days from the date of
its selection and for such purposes all Convertible Securities shall be deemed
outstanding.

     "CONVERTIBLE SECURITIES" means securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
other securities that are convertible or exchangeable for Common Stock.

     "FAIR MARKET VALUE" of any security shall mean (i) the Market Price
thereof, if available, or (ii) if the Market Price is not available, the
Appraised Value.

     "IPO" means a public offering of shares of Parent's Common Stock pursuant
to an effective registration statement on Form S-1, or successor form, of the
SEC, to be closed prior to March 30, 2006, and pursuant to which the aggregate
gross proceeds to Parent and selling shareholders in the offering are not less
than $20,000,000.

     "MARKET PRICE" of any security shall mean the average of the closing prices
of such security's sale on all securities exchanges on which such security may
at the time be listed or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
securities at the end of each day or, if on any day such security is not listed,
the average of the representative bid and asked prices quoted in the NASDAQ
System as of 4:00 p.m., New York time or, if on any day such security is not
quoted in the domestic over-the-counter market as reported by the National
Quotations Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 30 days consisting of the day as of which
"Market Price" is being determined and the 29 consecutive business days prior to
such day. If at any time such security is not listed on any securities exchange
or quoted in the NASDAQ System or over-the-counter market, the "Market Price"
for purposes of the exercise of the Put Option shall be the fair market value
jointly determined by Parent and the Warrantholders holding a majority of the
Warrant Stock; provided, however, that if such parties are unable to reach
agreement within ten (10) business days, then the Market Price shall be deemed
not to be available.

     "ORGANIC CHANGE" means reclassification or change of the outstanding
Warrant Stock of the Parent (other than as a result of a subdivision,
combination or stock dividend), any consolidation of the Parent with, or merger
of the Parent into, another corporation or other business organization (other
than a consolidation or merger in which the Parent is the continuing


                                       -2-

corporation and which does not result in any reclassification or change of the
outstanding Warrant Stock of the Parent) or any sale of all or substantially all
of the Parent's assets, which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock.

     "PREFERRED STOCK" means the preferred stock, par value $0.0001 per share,
of Parent.

     "REGISTRATION EXPENSES" means all expenses incident to Parent's performance
of or compliance with Section 10 of this Warrant in connection with each
Incidental Registration, including, without limitation, all registration,
filing, listing and National Association of Securities Dealers, Inc. fees, all
fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, all messenger and delivery
expenses, any transfer taxes, the fees and expenses of Parent's legal counsel
and independent public accountants, counsel for the Warrantholder participating
in each such registration, and any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities; provided, however, that
Registration Expenses shall not include underwriting discounts and commissions.

     "SEC" means the Securities and Exchange Commission.

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

     "SUBJECT SECURITIES" means the Warrant and the Warrant Stock.

     "WARRANT" means this Warrant and all additional or new warrants issued upon
division or combination of, or in substitution for, this Warrant. All such
additional or new warrants shall at all times be identical as to terms and
conditions and date, except as to the number of shares of Warrant Stock for
which they may be exercised.

     "WARRANTHOLDER" means the Purchaser, as the initial holder of this Warrant,
and its nominees, successors or assigns, including any subsequent holder of this
Warrant to whom it has been legally transferred.

     "WARRANT STOCK" means the shares of Common Stock purchasable by the holder
of this Warrant upon the exercise of such Warrant, as determined in accordance
with Section 2 hereof.

     SECTION 2. WARRANT STOCK. This Warrant shall be exercisable for 23,503
shares of Common Stock, which is equal to .805% of the Common Stock Deemed
Outstanding as of the date hereof, calculated on a fully-diluted as converted
basis.

     SECTION 3. EXERCISE OF WARRANT.

          (a) From and after March 31, 2006 but prior to September 16, 2010 (the
"EXPIRATION DATE"), the Purchaser may at any time and from time to time exercise
this Warrant, in whole or in part.

          (b) (i) The Warrantholder shall exercise this Warrant by means of
delivering to the Parent at its office identified in Section 10.6 of the Amended
and Restated Note


                                       -3-

and Warrant Purchase Agreement (1) a written notice of exercise, including the
number of shares of Warrant Stock to be delivered pursuant to such exercise, (2)
this Warrant and (3) payment equal to the Exercise Price in accordance with
Section 3(b)(ii). In the event that any exercise shall not be for all shares of
Warrant Stock purchasable hereunder, a new Warrant registered in the name of the
Warrantholder, of like tenor to this Warrant and for the remaining shares of
Warrant Stock purchasable hereunder, shall be delivered to the Warrantholder
within five (5) days of any such exercise. Such notice of exercise shall be in
the Subscription Form set out at the end of this Warrant.

               (ii) The Warrantholder may elect to pay the Exercise Price to the
Parent either (1) by cash, certified check or wire transfer, (2) by converting
the Warrant into Warrant Stock ("CASHLESS EXERCISE") or (3) any combination of
the foregoing, and specifying such election(s) in the Subscription Form attached
hereto as Exhibit A (the "Subscription Form"). If the Warrantholder elects to
pay the Exercise Price through Cashless Exercise, upon the exercise hereof the
Warrantholder shall specify in the Subscription Form that the Parent is
authorized to withhold from issuance a number of shares of Warrant Stock which,
when multiplied by the fair market value (as determined in good faith by the
Board of Directors of the Parent and agreed to by the Warrantholder) per share
of the Warrant Stock, is equal to the aggregate Exercise Price (and such
withheld shares shall no longer be issuable under this Warrant).

          (c) Upon exercise of this Warrant and delivery of the Subscription
Form with proper payment relating thereto, the Parent shall cause to be executed
and delivered to the Warrantholder a certificate or certificates representing
the aggregate number of fully paid and nonassessable shares of Warrant Stock
issuable upon such exercise.

          (d) The stock certificate or certificates for Warrant Stock to be
delivered in accordance with this Section 3 shall be in such denominations as
may be specified in said notice of exercise and shall be registered in the name
of the Warrantholder or such other name or names as shall be designated in said
notice. Such certificate or certificates shall be deemed to have been issued and
the Warrantholder or any other person so designated to be named therein shall be
deemed to have become the holder of record of such shares, including to the
extent permitted by law the right to vote such shares or to consent or to
receive notice as a stockholder of the Parent, as of the time said notice is
delivered to the Parent as aforesaid.

          (e) The Parent shall pay all expenses payable in connection with the
preparation, issue and delivery of stock certificates under this Section 3,
including any transfer taxes resulting from the exercise of the Warrant and the
issuance of Warrant Stock hereunder.

          (f) All shares of Warrant Stock issuable upon the exercise of this
Warrant in accordance with the terms hereof shall be validly issued, fully paid
and nonassessable, and free from all liens and other encumbrances thereon, other
than liens or other encumbrances created by the Warrantholder.

          (g) In no event shall any fractional share of Warrant Stock of the
Parent be issued upon any exercise of this Warrant. If, upon any exercise of
this Warrant, the Warrantholder would, except as provided in this paragraph, be
entitled to receive a fractional


                                       -4-

share of Warrant Stock, then the Parent shall deliver in cash to such holder an
amount equal to the fair market value of such fractional interest (as determined
in good faith by the Parent's Board of Directors).

     SECTION 4. ADJUSTMENT OF NUMBER OF SHARES AND EXERCISE PRICE. In order to
prevent dilution of the rights granted under this Warrant, the number of shares
of Warrant Stock obtainable upon exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 4.

          (a) Subdivision or Combination.

               (i) Effect on Exercise Price. If, at any time prior to the
Expiration Date, the number of outstanding shares of Warrant Stock is (i)
increased by a stock dividend payable in shares of Warrant Stock or by a
subdivision or split-up of shares of Warrant Stock or (ii) decreased by a
combination of shares of Warrant Stock, then, following the record date fixed
for the determination of holders of Warrant Stock entitled to receive the
benefits of such stock dividend, subdivision, split-up, or combination, the
Exercise Price shall be adjusted to a new amount equal to the product of (I) the
Exercise Price in effect on such record date and (II) the quotient obtained by
dividing (x) the number of shares of Warrant Stock outstanding on such record
date (without giving effect to the event referred to in the foregoing clause (i)
or (ii)), by (y) the number of shares of Warrant Stock which would be
outstanding immediately after the event referred to in the foregoing clause (i)
or (ii), if such event had occurred immediately following such record date.

               (ii) Effect on Number of Shares. Upon each adjustment of the
Exercise Price as provided in this Section 4(a), the Warrantholder shall
thereafter be entitled to subscribe for and purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Warrant Stock equal to
the product of (i) the number of shares of Warrant Stock existing prior to such
adjustment and (ii) the quotient obtained by dividing (I) the Exercise Price
existing prior to such adjustment by (II) the new Exercise Price resulting from
such adjustment.

          (b) Division or Combination upon Request. This Warrant may be divided
or combined with other Warrants upon presentation at the aforesaid office of the
Parent, together with a written notice specifying the names and denominations in
which new Warrants are to be issued, signed by the Warrantholder or its agent or
attorney. The Parent shall pay all expenses in connection with the preparation,
issue and delivery of Warrants under this Section 4(b), including any transfer
taxes resulting from the division or combination hereunder. The Parent agrees to
maintain at its aforesaid office books for the registration of the Warrants.

          (c) Reclassification, Etc. In case of any Organic Change at any time
prior to the Expiration Date, then, as a condition of such Organic Change,
lawful provision shall be made, and duly executed documents evidencing the same
from the Parent or its successor shall be delivered to the Warrantholder, so
that the Warrantholder shall have the right prior to the Expiration Date to
purchase, at a total price not to exceed that payable upon the exercise of this
Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such Organic Change by a holder of the number of shares
of Warrant Stock of the Parent which might have been purchased by the
Warrantholder immediately prior to such Organic


                                       -5-

Change, in any such case appropriate provisions shall be made with respect to
the rights and interest of the Warrantholder to the end that the provisions
hereof (including provisions for the adjustment of the Exercise Price and of the
number of shares purchasable upon exercise of this Warrant) shall thereafter be
applicable in relation to any shares of stock and other securities and property
thereafter deliverable upon exercise hereof.

          (d) Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 4 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Parent's board of directors shall make an appropriate adjustment in the number
of shares of Warrant Stock obtainable upon exercise of this Warrant and in the
Exercise Price so as to protect the rights of the holders of the Warrants;
provided that no such adjustment shall decrease the number of shares of Warrant
Stock obtainable as otherwise determined pursuant to this Section 4.

          (e) No Avoidance. In the event that the Parent shall enter into any
transaction for the purpose of avoiding the application of the provisions of
this Section 4, the benefits provided by such provisions shall nevertheless
apply and be preserved.

          (f) Rounding. All calculations under this Section 4 shall be made to
the nearest fourth decimal place.

     SECTION 5. [INTENTIONALLY OMITTED].

     SECTION 6. CERTIFICATES AND NOTICES.

          (a) Certificates. Upon the occurrence of any event requiring
adjustments of the number of shares subject to this Warrant pursuant to Section
4, the Parent shall mail to the Warrantholder (by registered or certified mail,
postage prepaid) a certificate signed by the President or a Vice President and
by the Treasurer or an Assistant Treasurer of the Parent, setting forth in
reasonable detail the events requiring the adjustment and the method by which
such proposed adjustment was calculated, specifying the adjusted number of
shares subject to this Warrant after giving effect to the proposed adjustment
and the number of shares of Warrant Stock to be issued pursuant to Section 4
hereof.

          (b) Notices.

               (i) Immediately upon any adjustment of the number of shares of
Warrant Stock acquirable upon exercise of this Warrant, the Parent shall give
written notice thereof to the Warrantholder, setting forth in reasonable detail
and certifying the calculation of such adjustment.

               (ii) If the Parent after the date hereof shall propose to: (i)
pay any dividend payable in cash or stock to the holders of Common Stock or to
make any other distribution to the holders of Common Stock or any extraordinary
dividend directly or indirectly attributable to proceeds from the sale or other
disposition of a significant business or asset of the Parent; (ii) offer to the
holders of Common Stock rights to subscribe for or purchase any additional
shares of any class of stock or any other rights or options; (iii) effect any


                                       -6-

reclassification except the subdivision or combination of shares of outstanding
Common Stock; (iv) effect any Organic Change or the liquidation, dissolution or
winding up of the Parent; or (v) engage in any diluting event not otherwise
mentioned in this Section 6(b), then, in each such case, the Parent shall mail
(by registered or certified mail, postage prepaid) to the Warrantholder notice
of such proposed action, which shall specify the date on which the books of the
Parent shall close, or a record date shall be established, for determining
holders of Common Stock entitled to receive such stock dividends or other
distribution of such rights or options, or the date on which such Organic
Change, liquidation, dissolution or winding up shall take place or commence, as
the case may be, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to receive securities or other property
deliverable upon such action, if any such date is to be fixed. Such notice shall
be mailed, in the case of any action covered by clauses (i), (ii) or (v) above,
at least 10 days prior to the record date for determining holders of Common
Stock for purposes of receiving such payment or offer, and, in the case of any
action covered by clause (iii) above, at least 10 days prior to the date upon
which such action takes place, and, in the case of any action covered by clause
(iv) above, at least 30 days prior to the date upon which such action takes
place and at least 20 days prior to the date on which the Parent closes its
books or takes a record for determining rights to vote with respect to any event
covered by clause (iv) and 30 days prior to any record date to determine holders
of Common Stock entitled to receive such securities or other property.

          (c) Failure and Defects. Failure to file any certificate or notice or
to mail any notice, or any defect in any certificate or notice, pursuant to this
Section 6, shall not affect the legality or validity of the adjustment of the
Exercise Price and/or number of shares of Warrant Stock subject to this Warrant
pursuant to Section 4.

     SECTION 7. RESERVATION AND AUTHORIZATION OF CAPITAL STOCK. The Parent shall
have reserved and made available for issuance such number of its authorized but
unissued shares of Warrant Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants at any time on or prior to the Expiration Date.

     SECTION 8. STOCK AND WARRANT BOOKS. The Parent will not at any time, except
upon dissolution, liquidation or winding up, close its stock books or Warrant
books so as to result in preventing or delaying the exercise of any Warrant.

     SECTION 9. LIMITATION OF LIABILITY. No provisions hereof, in the absence of
affirmative action by the Warrantholder to purchase Warrant Stock hereunder,
shall give rise to any liability of the Warrantholder to pay the Exercise Price
or as a stockholder of the Parent (whether such liability is asserted by the
Parent or creditors of the Parent).

     SECTION 10. REGISTRATION RIGHTS.

          (a) Incidental Registration. If Parent for itself or any of its
security holders shall at any time or times after the date hereof undertake to
register under the Securities Act any shares of its capital stock or other
securities (other than (i) the registration of an offer, sale or other
disposition of securities solely to employees of, or other Persons providing
services to, Parent, or any Subsidiary pursuant to an employee or similar
benefit plan registered on Form S-8 or similar or successor forms promulgated by
the SEC or (ii) relating to a merger, acquisition or


                                       -7-

other transaction of the type described in Rule 145 under the Securities Act or
a comparable or successor rule, registered on Form S-4 or similar or successor
forms promulgated by the SEC), on each such occasion Parent will notify
Warrantholder of such determination or request at least thirty (30) days prior
to the filing of such registration statement, and upon the request of
Warrantholder given in writing within twenty (20) days after the receipt of such
notice, Parent shall use its best efforts as soon as practicable thereafter to
cause any of the Warrant Stock issuable upon the exercise of this Warrant
specified by Warrantholder to be included in such registration statement,
subject to the conditions of the Securities Act (an "INCIDENTAL REGISTRATION").
Notwithstanding anything to the contrary, it is the intention of the parties
that the registration rights set forth in this Section 10 shall not be available
to the Warrantholders in connection with the registration of Parent filed on
Form S-1 with the SEC on August 26, 2005, as the same may be amended from time
to time (File Number 333-127888). Any exercise of this Warrant specified by a
Warrantholder to be included in any registration statement shall be contingent
upon the effectiveness of such registration statement with the SEC. If
Warrantholder decides not to include all of the Warrant Stock issuable upon the
exercise of this Warrant in any Incidental Registration filed by Parent,
Warrantholder shall nevertheless continue to have the right to include any
Warrant Stock issuable upon the exercise of this Warrant in any subsequent
Incidental Registration as may be filed by Parent with respect to offerings of
its securities, all upon the terms and conditions set forth herein.

          (b) Priority in Registration. If an Incidental Registration is an
underwritten offering, and the managing underwriters shall give written advice
to the Warrantholder and the Parent that, in their opinion, market conditions
dictate that no more than a specified maximum number of securities (the
"UNDERWRITER'S MAXIMUM NUMBER") could successfully be included in such
registration, then the Parent shall be required only to include in such
registration only such number of securities as is equal to the Underwriter's
Maximum Number ("Incidental Registration Cutback") and the Parent and the
Warrantholder will participate in such offering in the following order of
priority:

               (i) First, the Parent shall be entitled to include in such
registration that number of securities that the Parent proposes to offer and
sell for its own account in such registration and that does not exceed the
Underwriter's Maximum Number; and

               (ii) Second, the Parent will be obligated and required to include
in such registration that number of shares of Warrant Stock of Warrantholder
along with other securities of the Parent that shall have been requested by
other parties having registration rights pursuant to one or more other
registration rights agreements with the Parent that does not exceed the
remaining portion of the Underwriter's Maximum Number.

          In the event that an Incidental Registration Cutback results in less
than all of the securities of a particular category (e.g., securities of the
Parent) that are requested to be included in such registration to actually be
included in such registration, then the number of securities of such category
that will be included in such registration shall be shared pro rata among all of
the holders of securities of such category that were requested to be included in
such registration based on the number of shares of Common Stock held by each
such holder of securities of such category, calculated on an as converted to
Common Stock basis.


                                       -8-

          (c) Registration Expenses. Parent shall pay all Registration Expenses
incurred in connection with all Incidental Registrations effected in accordance
with this Section 10.

          (d) Lock-Up. Subject to the conditions set forth in the last sentence
of this Section 10(d), in connection with any underwritten public offering of
Warrant Stock under the Securities Act, Warrantholder agrees that it shall, if
so requested by the managing underwriter, enter into a lockup agreement (the
"LOCKUP AGREEMENT"), with respect to all Warrant Stock issuable hereunder, in
form and substance as executed by the Parent's senior management and significant
shareholders. Notwithstanding the foregoing, the Warrantholder shall not be
required to execute a Lockup Agreement with respect to a higher percentage of
its aggregate holdings of Warrant Stock issuable hereunder than the lowest
percentage of individual holdings of capital stock of the Parent held by any of
Parent's senior management or significant shareholders that is subject to a
Lockup Agreement. If such restrictions are waived or shortened by the managing
underwriter or the Parent or other party bound thereto, the above restrictions
shall also be waived or shortened for Warrantholder in the same manner on a pro
rata basis (calculated including the shares held by the party bound by such
similar agreement).

     SECTION 11 COVENANTS OF PARENT.

          (a) Prohibition of Issuances of Preferred Stock. Commencing on the
date hereof and until the earlier to occur of (i) March 31, 2007 and (ii) full
exercise of this Warrant for all Warrant Stock issuable hereunder, without the
prior written consent of Warrantholder, Parent covenants and agrees that it
shall not authorize or increase, or permit any Subsidiary to authorize or
increase, the authorized number of shares of, or issue additional shares of
Preferred Stock, or any class or series of Parent's or any Subsidiary's capital
stock or options, warrants or other rights to acquire any such capital stock
ranking with respect to liquidation preference, dividends or redemption rights,
senior in right to, or on a parity with, the Preferred Stock.

          (b) Put Obligation.

               (i) Put Option. Parent hereby grants to each Warrantholder an
option to sell to Parent, and Parent is and shall be obligated to purchase from
such Warrantholder under such option (the "PUT OPTION"), all (but not less than
all) of the Subject Securities of such Warrantholder. The Put Option shall be
effective at any time after March 31, 2007 and shall be exercisable by the
Warrantholders holding a majority of the shares of Warrant Stock.

               (ii) Put Price. Upon exercise of the Put Option, the price to be
paid to such exercising Warrantholder (the "PUT PRICE") shall be the product of
the amount determined by multiplying (x) the number of shares of Subject
Securities (or, in the case of any Warrant, the number of shares of Warrant
Stock into which such Warrant is convertible) (collectively, the "PUT SHARES")
held by such Warrantholder by (y) the Fair Market Price thereof (less, in the
case of a Warrant, the aggregate exercise price thereof).

               (iii) Exercise of Put Option. If Warrantholders holding a
majority of the shares of Warrant Stock elect to exercise the Put Option, they
shall give notice to Parent and Parent shall promptly give notice (the "PUT
NOTICE") to each other Warrantholder, specifying,


                                       -9-

among other things, the date on which the closing of the purchase and sale of
the Put Shares shall occur (the "PUT OPTION CLOSING").

               (iv) Put Option Closing. The Put Option Closing shall occur on
the later of the date specified in the Put Notice and the ninetieth (90th) day
after the date of final determination of the Fair Market Value in accordance
with the definition hereof (or, if not a business day, the next following
business day). At the Put Option Closing, the Warrantholders exercising the Put
Option shall deliver the Warrant and/or certificate or certificates evidencing
the Put Shares, duly endorsed in blank. In consideration thereof, Parent shall
deliver to each Warrantholder exercising the Put Option the Put Price for such
holder's Put Shares, payable by wire transfer of immediately available funds to
an account designated by such holder. In the event there is insufficient cash
available to pay each holder the Put Price payable to such holder pursuant to
the preceding sentence, any payment of cash shall be made on a pro rata basis
among such holders in proportion to their respective ownership of Put Shares.

          (c) Rule 144 Sales. At any such time as the Parent is required to file
reports under the Securities Exchange Act of 1934, as amended, the Parent shall
comply with all reporting requirements set forth or referred to in Rule 144
promulgated under the Securities Act (or any successor rule thereto) and shall
do all such other things as may be reasonably necessary to permit the sale at
any time of any Warrants or Warrant Stock by a Warrantholder in accordance with
and to the extent permitted by said Rule 144 or any other similar rule or rules
promulgated by the SEC from time to time.

          (d) Termination of Covenants under Sections 11(a) and 11(b). The
covenants of the Parent set forth in Sections 11(a) and 11(b) shall terminate
and be of no further force and effect upon the closing of the IPO.

     SECTION 12. TRANSFER. Subject to compliance with the Securities Act and the
applicable rules and regulations promulgated thereunder, this Warrant and all
rights hereunder shall be transferable in whole or in part. Any such transfer
shall be made at the office or agency of the Parent at which this Warrant is
exercisable, by the registered holder hereof in person or by its duly authorized
attorney, upon surrender of this Warrant together with the assignment hereof
properly endorsed, and promptly thereafter a new warrant shall be issued and
delivered by the Parent, registered in the name of the assignee. Until
registration of transfer hereof on the books of the Parent, the Parent may treat
the Purchaser as the owner hereof for all purposes.

     SECTION 13. INVESTMENT REPRESENTATIONS; RESTRICTIONS ON TRANSFER OF WARRANT
STOCK. Unless a current registration statement under the Securities Act shall be
in effect with respect to the Warrant Stock to be issued upon exercise of this
Warrant, the Warrantholder, by accepting this Warrant, covenants and agrees
that, at the time of exercise hereof, and at the time of any proposed transfer
of Warrant Stock acquired upon exercise hereof, such Warrantholder will deliver
to the Parent a written statement that the securities acquired by the
Warrantholder upon exercise hereof are for the account of the Warrantholder or
are being held by the Warrantholder as trustee, investment manager, investment
advisor or as any other fiduciary for the account of the beneficial owner or
owners for investment and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) and with no
present intention (at any such time) of offering and distributing such
securities (or any portion thereof).


                                      -10-

     SECTION 14. LOSS, DESTRUCTION OF WARRANT CERTIFICATES. Upon receipt of
evidence satisfactory to the Parent of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity and/or security satisfactory to the
Parent or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Parent will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same aggregate number of shares of Warrant Stock.

     SECTION 15. AMENDMENTS. The terms of this Warrant may be amended, and the
observance of any term herein may be waived, but only with the written consent
of the Parent and the Warrantholder.

     SECTION 16. NOTICES GENERALLY. Any notice, request, consent, other
communication or delivery shall be made in accordance with Section 10.6 of the
Amended and Restated Note and Warrant Purchase Agreement.

     SECTION 17. SUCCESSORS AND ASSIGNS. This Warrant shall bind and inure to
the benefit of and be enforceable by the parties hereto and their respective
permitted successors and assigns.

     SECTION 18. GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.

                            [SIGNATURE PAGE FOLLOWS]


                                      -11-

                             WARRANT SIGNATURE PAGE

     IN WITNESS WHEREOF, the Parent has caused this Warrant to be signed in its
name by its President.

Dated: September 16, 2005

                                        DOVER SADDLERY, INC.


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

                                    EXHIBIT A

                                SUBSCRIPTION FORM

                 (to be executed only upon exercise of Warrant)

To: ____________________________________

     [Choose one or both of the paragraphs, as applicable]

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to purchase ___________ shares of
the Warrant Stock covered by such Warrant and herewith makes payment of
$_________, representing the full purchase price for such shares at the price
per share provided for in such Warrant.

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ____), hereby irrevocably elects to exercise the right of cashless
exercise represented by the attached Warrant for _____ shares of Warrant Stock,
and as payment therefor hereby directs ________________________ to withhold
_____ shares of Warrant Stock that the undersigned would otherwise be entitled
thereunder.

Dated:                                  Name:
       ----------------------                 ----------------------------------


                                        Signature:
                                                   -----------------------------
                                        Address:
                                                 -------------------------------

                                                 -------------------------------

EX-4.7

                                                                     EXHIBIT 4.7

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
     TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION
     PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
     EXEMPTIONS THEREFROM.

     THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND BY THE
     OTHER PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASER AND SERVICER
     HEREUNDER AND THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE
     SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
     AMENDED AND RESTATED SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005
     (THE "AMENDED AND RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN
     PARTIES, BANK OF AMERICA, AS THE SENIOR LENDER, THE SERVICER AND THE
     PURCHASER, TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL OTHER
     OBLIGATIONS OF, THE LOAN PARTIES UNDER AND PURSUANT TO THE AMENDED AND
     RESTATED SENIOR CREDIT AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS
     DEFINED THEREIN). THE SERVICER AND EACH HOLDER HEREOF, BY ITS ACCEPTANCE
     HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE
     SUBORDINATION AGREEMENT.

                              AMENDED AND RESTATED
                     11.50% SENIOR SECURED SUBORDINATED NOTE

$8,050,000.00                                     Issue Date: September 16, 2005
                                                              New York, New York

     FOR VALUE RECEIVED, the undersigned, DOVER SADDLERY, INC., a Delaware
corporation ("PARENT") and DOVER SADDLERY, INC., a Massachusetts corporation
("OPERATING COMPANY #1"), SMITH BROTHERS, INC., a Texas corporation (OPERATING
COMPANY #2 and, together with the Parent, the "LOAN PARTIES"), HEREBY JOINTLY
AND SEVERALLY UNCONDITIONALLY PROMISE TO PAY to PATRIOT CAPITAL FUNDING, LLC I,
or its registered assigns (the "PURCHASER"), the principal sum of EIGHT MILLION
FIFTY THOUSAND DOLLARS ($8,050,000.00), together with interest on the unpaid
principal amount hereof from time to time outstanding at the rates and computed
and payable at the times (and in the manner) as set forth in the Amended and
Restated Note Purchase Agreement (as hereinafter defined). This Note amends,
restates and replaces that certain 17.25% Senior Secured Subordinated Note of
the Loan Parties issued to Wilton Funding, LLC on December 11, 2003.

     Both principal and interest are payable in the lawful money of the United
States of America to Patriot Capital Funding, Inc., as Servicer, at 274
Riverside Avenue, Westport,

Connecticut 06880. All references herein (or in any of the other Transaction
Documents) to the principal amount of this Note shall, unless the context
clearly requires otherwise, mean the principal amount as so adjusted from time
to time.

     This Note is one of the Notes referred to in the Amended and Restated
Senior Secured Subordinated Note and Warrant Purchase Agreement dated as of the
issue date hereof (as the same may be amended, restated, supplemented or
otherwise modified from time to time and including all exhibits, attachments and
appendices thereto, the "NOTE AND WARRANT PURCHASE AGREEMENT") by and among the
Loan Parties, the Servicer (as defined therein) and the Purchasers (as defined
therein) from time to time a party thereto. Capitalized terms used herein and
not otherwise defined shall have the meanings set forth in the Note and Warrant
Purchase Agreement.

     The Note and Warrant Purchase Agreement, among other things, (i) provides
for the purchase of the Notes by the Purchaser in an aggregate amount not to
exceed at any time outstanding the principal amount set forth above, the
indebtedness of the Loan Parties resulting from such purchase being evidenced by
this Note and (ii) contains provisions for acceleration of the maturity of the
unpaid principal amount of this Note upon the happening of certain stated events
and also for prepayments on account of the principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.

     The Loan Parties promise, jointly and severally, to timely pay to the
Purchaser all costs and expenses (including any attorneys fees) required to be
paid under the Note and Warrant Purchase Agreement, any premium required to be
paid under the Note and Warrant Purchase Agreement and any other obligations
owed to the Purchaser.

     The holder of this Note is entitled to all the benefits and rights of a
Purchaser (as defined in the Note and Warrant Purchase Agreement) under the Note
and Warrant Purchase Agreement to which reference is hereby made for a statement
of such benefits and rights, including without limitation, provisions with
respect to redemption, the right to receive any applicable premium, and the
terms and conditions under which the entire unpaid balance of this Note, all
interest hereon and any applicable premium, shall become immediately due and
payable. The terms and conditions of this Note are subject to the terms and
conditions of the Note and Warrant Purchase Agreement including any restrictions
on transfer thereunder.

     This Note is secured as provided in the Security Documents.

     The Loan Parties hereby waive presentment, demand, notice, notice of
dishonor, protest and other demands and notices in connection with the delivery,
acceptance or enforcement of this Note.

     No delay or omission on the part of the holder of this Note in exercising
any right hereunder shall operate as a waiver of such right or of any other
right under this Note, and a waiver, delay or omission on any occasion shall not
be construed as a bar to or waiver of any such right on any future occasion.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]


                                       -2-

     This Note shall be governed by, and construed in accordance with, the laws
of the State of New York (without giving effect to any conflicts of law
provisions contained therein).

                                        THE LOAN PARTIES

                                        DOVER SADDLERY, INC.,
                                           a Delaware corporation ("Parent")


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


                                        DOVER SADDLERY, INC.,
                                           a Massachusetts corporation
                                           ("Operating Company #1")


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


                                        SMITH BROTHERS, INC.,
                                           a Texas corporation
                                           ("Operating Company #2")


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

THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND BY THE OTHER
PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASER AND SERVICER HEREUNDER AND
THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED AND RESTATED
SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005 (THE "AMENDED AND
RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF AMERICA, AS
THE SENIOR LENDER, THE SERVICER AND THE PURCHASER, TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE LOAN PARTIES UNDER AND
PURSUANT TO THE AMENDED AND RESTATED SENIOR CREDIT AGREEMENT AND EACH RELATED
"LOAN DOCUMENT" (AS DEFINED THEREIN). THE SERVICER AND EACH HOLDER HEREOF, BY
ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.

                               FORM OF ASSIGNMENT

                    [To be signed only upon transfer of Note]

     For value received, the undersigned hereby sells, assigns and transfers
unto the within Note, and appoints Attorney to transfer such Note on the books
of DOVER SADDLERY, INC., a Delaware corporation, DOVER SADDLERY, INC., a
Massachusetts corporation, and SMITH BROTHERS, Inc., a Texas corporation, with
full power of substitution in the premises.

Date: ___________________


                                        ----------------------------------------
                                        (Signature must conform in all respects
                                        to name of holder as specified on the
                                        face of the Note)


Signed in the presence of


- -------------------------------------

                                                                       EXHIBIT E

                         DOVER SADDLERY, INC. ("PARENT")
                  DOVER SADDLERY, INC. ("OPERATING COMPANY #1")
                  SMITH BROTHERS, INC. ("OPERATING COMPANY #2")

                                 [FILL-IN DATE]

[Name and Address of each Purchaser]

     Re: Compliance Certificate under the Amended and Restated Senior Secured
         Subordinated Note and Warrant Purchase Agreement dated September 16,
         2005

Ladies and Gentlemen:

     Please refer to that certain Amended and Restated Senior Subordinated Note
and Warrant Purchase Agreement, dated as of September 16, 2005 (as same may be
amended, restated, supplemented or otherwise modified from time to time and
including all exhibits, attachments and appendices thereto, the "Amended and
Restated Note and Warrant Purchase Agreement"), by and among Dover Saddlery,
Inc. ("Parent"), Dover Saddlery, Inc. ("Operating Company #1"), Smith Brothers,
Inc. ("Operating Company #2" and, together with Parent and Operating Company #1,
the "Loan Parties"), the Servicer (as defined therein), and the Purchasers (as
defined therein) from time to time a party thereto. Capitalized terms used in
this certificate without definition shall have the meanings assigned to them in
the Amended and Restated Note and Warrant Purchase Agreement.

     This is a certificate delivered pursuant to Section 7.1(e)(iii) of the
Amended and Restated Note and Warrant Purchase Agreement with respect to
compliance with certain covenants and other matters under the Amended and
Restated Note and Warrant Purchase Agreement. The Chief Financial Officer of
each of the Loan Parties has duly executed this certificate.

     1. I am the duly elected Chief Financial Officer of each of the Loan
Parties and am familiar with the financial condition, operations, cash flows and
other business of the Loan Parties and their respective Subsidiaries.

     2. I have reviewed the terms of the Amended and Restated Note and Warrant
Purchase Agreement, and have made, or have caused to be made under my
supervision, a review in reasonable detail of the transactions, financial
condition, operations, cash flows and other business of the Loan Parties and
their respective Subsidiaries during and as of the end of the period(s) covered
by this Certificate.

     3. The review described in paragraph 2 above did not disclose, and I am not
otherwise aware of, any Default or Event of Default that existed as of or during
the [Fiscal Year ending ____, 20__ [fill-in Fiscal Year for which the
Certificate is being delivered in the case of a certificate being delivered in
connection with Section 7.1(e)(i)]] [Fiscal Quarter ending ____, 20__ [fill-in
Fiscal Quarter for which the Certificate is being delivered in the case of a
certificate being delivered in connection with Section 7.1(e)(ii)]] [except for
____________ [fill-in reasonable detail as to any Default or Event of Default
and the actions the Loan Parties or any Subsidiary has taken or proposes to take
with respect to same]]

     4. Schedule A attached hereto provides a written narrative report by the
management of the Loan Parties explaining material developments and trends in
the Business and the provided financial statements.

     5. Schedule B attached hereto sets forth the computations, in reasonable
detail, for all applicable covenants set forth in Section 7.3 of the Amended and
Restated Note and Warrant Purchase Agreement.

     6. Except as set forth on Schedule C attached hereto, there are no actions,
suits, proceedings, claims or investigations of any kind pending against the
Loan Parties or any of their respective Subsidiaries or to the knowledge of the
Loan Parties threatened before any court, arbitrator, tribunal or administrative
agency, or board that, if adversely determined, could, either in any case or in
the aggregate, be reasonably expected to have a Material Adverse Effect or which
question the validity of the Amended and Restated Note and Warrant Purchase
Agreement, any of the other Transaction Documents, or any action taken or to be
taken pursuant thereto.

         [THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]


                                       -2-

     IN WITNESS WHEREOF, the undersigned has signed this certificate on behalf
of the Loan Parties on this ___ day of _____________, ______.

                                        DOVER SADDLERY, INC. ("PARENT")


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Chief Financial Officer


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


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Chief Financial Officer


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


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title: Chief Financial Officer

EX-10.9

                                                                    Exhibit 10.9


                             [SMITH BROTHERS LOGO]


February 9, 2005


Mr. Jim Smith
JDS Properties, LLC
7833 I-35
Denton, Texas 76207
 (via FedEx)


Dear Jim:

We are looking forward to another successful year, after the grand re-opening of
the Smith Brothers flagship store in 2004, as well as the continued growth of
the Smith Brothers catalog.

As we continue our success together, please consider this official notice that
we intend to exercise our first of two options to extend the term of our lease,
for five additional years, effective March 1, 2005.

Under the terms of the lease, we need to receive from you a calculation of the
rent adjustment under Article 3, subparagraph B, which is based upon specific
Consumer Price Index data.

Please forward that calculation for our review and approval at your earliest
opportunity.

Sincerely,

/s/ Stephen L. Day

Stephen L. Day
President
Smith Brothers, Inc.


Cc:      Michael Bruns - Controller
         Cole Smith - General Manager

         Shipping: P.O. Box 1100 - 525 Great Road - Littleton, MA 01460
                          7833 I-35 - Denton, TX 76207

EX-10.11

                                                                   Exhibit 10.11

                              [DOVER SADDLERY LOGO]
                              WWW.DOVERSADDLERY.COM

January 25, 2005

Hockessin Square, L.L.C.
C/o Ms. Sonya R. Gross
3100 Centerville Road
Wilmington, DE 19807


RE:      Lease - First Option to Renew
         683-693 Yorklyn Road
         Hockessin, DE 19707
          (sent via Fed Ex)


Dear Ms. Gross:

In accordance with our lease provisions, please consider this official written
notice of our intent to exercise the first of our three options, for an
additional period of five years, commencing on August 1, 2005.

We look forward to continuing our mutually beneficial relationship. Please
acknowledge your receipt of this notice in the space below, and return one copy
to my attention. Please do not hesitate to contact me directly at 978.952.8062,
ext. 231 with any and all property questions or concerns.



Sincerely,

/s/ Stephen Day

Stephen Day
CEO and President

Cc:      Michael Bruns, CPA Controller
         John Sullivan, Corporate Counsel

I acknowledge receipt, and the exercise of the first Option of this lease from
August 1, 2005 to July 31, 2009.

/s/ Sonya R. Gross               1/26/05
- ---------------------            -------
Ms. Sonya R. Gross               Date
Hockessin Square, LLC


           Office: 525 Great Road/Littleton, MA 01460/(978) 952-8062
            Catalog: P.O. Box 1100/Littleton, MA 01460/(978) 952-6300
         MA Store: 595 Washington St./Wellesley, MA 02482/(781) 235-1411
          DE Store: 683 Yorklyn Rd./Hockessin, DE 19707/(302) 234-8047

EX-10.22

                                                                   EXHIBIT 10.22

                              DOVER SADDLERY, INC.
                                 525 Great Road
                               Littleton, MA 01460

                                                 Dated as of: September 16, 2005

Bank of America, N.A.
(successor by merger to Fleet National Bank)
100 Federal Street
Boston, Massachusetts 02110

     Re:  First Amendment to Amended and Restated Loan Agreement

Ladies and Gentlemen:

     We refer to the Amended and Restated Loan Agreement, dated as of December
11, 2003 (as amended from time to time, the "Agreement"), between Dover
Saddlery, Inc. (the "Borrower") and Bank of America, N.A. (successor by merger
to Fleet National Bank) (the "Bank"). Upon the terms and subject to the
conditions contained in the Agreement, you agreed to make Revolving Loans to the
Borrower.

     Terms used in this letter of agreement (the "First Amendment") which are
not defined herein, but which are defined in the Agreement, shall have the same
respective meanings herein as therein.

     We have requested that you make certain amendments to the Agreement. You
have advised us that you are prepared and would be pleased to make the
amendments so requested by us on the condition that we join with you in this
First Amendment.

     Accordingly, in consideration of these premises, the promises, mutual
covenants and agreements contained in this First Amendment, and fully intending
to be legally bound by this First Amendment, we hereby agree with you as
follows:

                                    ARTICLE I

                             AMENDMENTS TO AGREEMENT

     Effective as of September 16, 2005, the Agreement is amended in each of the
following respects:

     (a) The terms "Loan Documents" and "Security Documents" shall, wherever
used in any of the Loan Documents or Security Documents, be deemed to also mean
and include this First Amendment.

     (b) The term "Lender" shall, wherever used in any of the Loan Documents or
Security Documents, be deemed to refer to "Bank of America, N.A. (successor by
merger to Fleet National Bank)".

     (c) The table set forth in the definition of "Applicable Margin" is amended
to read in its entirety as follows:



                                         Base Rate   Libor Rate   Commitment Fee
Funded Debt Ratio:                         Margin      Margin         Margin
- ------------------                       ---------   ----------   --------------
                                                         
Category 1                                 1.00%        3.25%          0.25%
> or = 3.50x
Category 2                                 0.75%        3.00%          0.25%
Less than 3.50x and Greater than or
equal to 3.00x
Category 3                                 0.50%        2.75%          0.25%
Less than 3.00x and Greater than or
equal to 2.50x
Category 4                                 0.00%        2.25%          0.25%
Less than 2.50x and Greater than or
equal to 2.00x
Category 5                                 0.00%        1.75%          0.25%
< 2.00x


     (d) The following new definition is inserted in Section 1.1 of the
Agreement immediately after the definition of "Capital Expenditures":

          "Change of Control" means an event or series of events by which:

          (a)  any "person" or "group" (as such terms are used in Sections 13(d)
               and 14(d) of the Securities Exchange Act of 1934, but excluding
               any employee benefit plan of such person or its subsidiaries, and
               any person or entity acting in its capacity as trustee, agent or
               other fiduciary or administrator of any such plan) becomes the
               "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
               Securities Exchange Act of 1934, except that a person or group
               shall be deemed to have "beneficial ownership" of all securities
               that such person or group has the right to acquire (such right,
               an "option right"), whether such right is exercisable immediately
               or only after the passage of time), directly or indirectly, of
               25% or more of the equity securities of the Parent entitled to
               vote for members of the board of directors or equivalent
               governing body of the Parent on a fully-diluted basis (and taking
               into account all such securities that such person or group has
               the right to acquire pursuant to any option right);

          (b)  during any period of 12 consecutive months, a majority of the
               members of the board of directors or other equivalent governing
               body of the Parent cease to be composed of individuals (i) who


                                      -2-

               were members of that board or equivalent governing body on the
               first day of such period, (ii) whose election or nomination to
               that board or equivalent governing body was approved by
               individuals referred to in clause (i) above constituting at the
               time of such election or nomination at least a majority of that
               board or equivalent governing body or (iii) whose election or
               nomination to that board or other equivalent governing body was
               approved by individuals referred to in clauses (i) and (ii) above
               constituting at the time of such election or nomination at least
               a majority of that board or equivalent governing body (excluding,
               in the case of both clause (ii) and clause (iii), any individual
               whose initial nomination for, or assumption of office as, a
               member of that board or equivalent governing body occurs as a
               result of an actual or threatened solicitation of proxies or
               consents for the election or removal of one or more directors by
               any person or group other than a solicitation for the election of
               one or more directors by or on behalf of the board of directors);
               or

          (c)  any Person or two or more Persons acting in concert shall have
               acquired by contract or otherwise, or shall have entered into a
               contract or arrangement that, upon consummation thereof, will
               result in its or their acquisition of the power to exercise,
               directly or indirectly, a controlling influence over the
               management or policies of the Parent, or control over the equity
               securities of the Parent entitled to vote for members of the
               board of directors or equivalent governing body of the Parent on
               a fully-diluted basis (and taking into account all such
               securities that such Person or group has the right to acquire
               pursuant to any option right) representing 25% or more of the
               combined voting power of such securities.

     (e) The following new sentence is added at the end of the definition of
"EBITDA":

               It is agreed that there shall be excluded from the computation of
          EBITDA one-time, non-recurring transaction expenses, not to exceed
          $450,000 in the aggregate, which are directly related to the IPO and
          the transactions contemplated by the First Amendment, the Subordinated
          Debt Documents delivered in connection therewith, and the
          Recapitalization Agreement, and which are actually deducted in
          calculating EBITDA, provided, however, that such expenses (a) are paid
          within 6 months after the date of the First Amendment, (b) are
          expensed and not capitalized, and (c) are excluded only for any period
          of computation of EBITDA which includes the fiscal quarter in which
          such expenses have been deducted.

     (f) The following new definition is inserted in Section 1.1 of the
Agreement immediately after the definition of "Inventory":


                                      -3-

               "IPO" means a public offering of shares of the Parent's capital
          stock pursuant to an effective registration statement on Form S-1, or
          successor form, of the Securities and Exchange Commission, to be
          closed prior to March 30, 2006, and pursuant to which the aggregate
          gross proceeds to the Parent and selling shareholders in the offering
          are not less than $20,000,000.

     (g) The term "Maturity Date" is amended to read in its entirety as follows:

               "Maturity Date" means September 16, 2008.

     (h) The term "Maximum Amount" is amended to read in its entirety as
follows:

               "Maximum Amount" shall be $16,000,000.

     (i) The term "Subordinated Debt Documents" shall, wherever used in any of
the Loan Documents or Security Documents, be deemed to also mean and include
each such instrument and document as amended and restated on September 16, 2005,
together with the Warrant to purchase shares of common stock of the Parent
issued on such date.

     (j) The term "Subordination Agreement" shall, wherever used in any of the
Loan Documents or Security Documents, be deemed to refer to the Amended and
Restated Subordination Agreement, dated as of September 16, 2005, among the
Subordinated Lender, the Loan Parties and the Lender, as the same may be
amended, modified or supplemented from time to time.

     (k) Section 5.9 of the Agreement is amended by inserting the following new
third sentence at the end thereof:

          In addition, the Borrower may pay to Citizens Ventures, Inc.
("Citizens") on September 16, 2005, in exchange for 603,889 shares of
convertible preferred stock of the Parent held by Citizens, upon the conversion
of such shares into the Parent's common stock, an amount equal to $6,000,000, of
which up to $2,000,000 may be financed with proceeds of the Revolving Loans.
Such repurchase shall be consummated pursuant to the Redemption Agreement, dated
as of August 26, 2005, between the Parent and Citizens (the "Redemption
Agreement").

     (l) The first sentence of Section 5.12 of the Agreement is amended by
inserting, immediately after the parenthetical, the following:

          and for the consummuration of the repurchase of shares contemplated by
the Redemption Agreement, provided that not more than $2,000,000 of such
repurchase shall be financed with proceeds of the Revolving Loans.


                                      -4-

     (m) It is acknowledged by the Lender that neither the Parent Guaranty nor
Section 5.14 of the Agreement shall prohibit the modification of the Parent's
Charter, upon consummation of the IPO, pursuant to the "Second Amended and
Restated Certificate of Incorporation of Dover Saddlery, Inc.", in the form
previously delivered to the Lender for its approval.

     (n) The table set forth in Section 5.17 of the Agreement is amended to read
in its entirety as follows:



PERIOD                                                        MAXIMUM RATIO
- ------                                                        -------------
                                                           
For the fiscal quarter ending on September 30, 2005            4.70 to 1.0
For the fiscal quarter ending on December 31, 2005             4.00 to 1.0
For the fiscal quarter ending on March 31, 2006                4.00 to 1.0
For the fiscal quarter ending on June 30, 2006                 4.00 to 1.0
For the fiscal quarter ending on September 30, 2006            4.00 to 1.0
For the fiscal quarter ending on December 31, 2006             3.50 to 1.0
For the fiscal quarter ending on March 31, 2007                3.50 to 1.0
For the fiscal quarter ending on June 30, 2007                 3.50 to 1.0
For the fiscal quarter ending on September 30, 2007            3.50 to 1.0
For any fiscal quarter ending on or after December 31, 2007    3.00 to 1.0


     Notwithstanding the foregoing, from and after consummation of the IPO the
foregoing Maximum Ratio shall be adjusted to 3.00 to 1.0 for each fiscal quarter
thereafter.

     (o) The table set forth in Section 5.18 of the Agreement is amended to read
in its entirety as follows:



PERIOD                                                        MAXIMUM RATIO
- ------                                                        -------------
                                                           
For the fiscal quarter ending on September 30, 2005            3.00 to 1.0
For the fiscal quarter ending on December 31, 2005             2.75 to 1.0
For the fiscal quarter ending on                               2.75 to 1.0



                                      -5-

                                                            
March 31, 2006
For the fiscal quarter ending on June 30, 2006                 2.75 to 1.0
For the fiscal quarter ending on September 30, 2006            2.75 to 1.0
For the fiscal quarter ending on December 31, 2006             2.50 to 1.0
For the fiscal quarter ending on March 31, 2007                2.50 to 1.0
For the fiscal quarter ending on June 30, 2007                 2.50 to 1.0
For the fiscal quarter ending on September 30, 2007            2.50 to 1.0
For any fiscal quarter ending on or after December 31, 2007    2.25 to 1.0



     Notwithstanding the foregoing, from and after consummation of the IPO the
foregoing Maximum Ratio shall be adjusted to 2.00 to 1.0 for each fiscal quarter
thereafter.

     (p) The table set forth in Section 5.19 of the Agreement is amended to read
in its entirety as follows:



PERIOD                                                          MINIMUM
- ------                                                        ----------
                                                           
For the fiscal quarter ending on September 30, 2005           $4,750,000
For the fiscal quarter ending on December 31, 2005            $5,000,000
For the fiscal quarter ending on March 31, 2006               $5,000,000
For the fiscal quarter ending on June 30, 2006                $5,000,000
For the fiscal quarter ending on September 30, 2006           $5,000,000
For any fiscal quarter ending on or after December 31, 2006   $5,500,000


     (q) Section 5.12 of the Agreement is amended to read in its entirety as
follows:

               Capital Expenditures. The Borrower will not make Capital
          Expenditures in excess of $1,250,000 in the aggregate during any
          fiscal year without the prior written consent of the Lender.

     (r) The table set forth in Section 5.27 of the Agreement is amended to read
in its entirety as follows:


                                      -6-



FISCAL YEAR                MAXIMUM AMOUNT
- -----------                --------------
                        
Ending December 31, 2005     $1,400,000
Ending December 31, 2006     $1,600,000
Ending December 31, 2007     $2,100,000
Ending December 31, 2008     $2,600,000


     (s) Section 6.1 (xi) of the Agreement is amended to read in its entirety as
follows:

(xi) any change in equity ownership of the Parent which would result in Stephen
L. Day owning less than 80% of the issued and outstanding shares of capital
stock of the Parent owned by him on and as of the Closing Date (or, subsequent
to consummation of the IPO, owning less than 10% of the issued and outstanding
shares of capital stock of the Parent) or which would, for any reason other than
consummation of the IPO, result in the Lender having a first-priority secured
pledge of less than 51% of the issued and outstanding capital stock of the
Parent, or any Change of Control shall occur subsequent to consummation of the
IPO, or any change in equity ownership of the Borrower or Smith Brothers which
would result in the Parent owning, both legally and beneficially, on a
fully-diluted basis, less than 100% of each class of the capital stock of the
Borrower or Smith Brothers, respectively (such shares, and the Parent Shares,
being subject to a first-priority pledge in favor of the Lender pursuant to the
Parent Pledge Agreement and the Pledge Agreement, respectively); or.

                                   ARTICLE II

            AMENDMENTS TO AMENDED AND RESTATED REVOLVING CREDIT NOTE

     Effective as of September 16, 2005, the Amended and Restated Revolving
Credit Note (the "Note") is amended in each of the following respects:

     (a) Each reference in the Note to "$14,000,000" or "Fourteen Million
Dollars ($14,000,000)", as the case may be, shall be deemed to be references to
"$16,000,000" or "Sixteen Million Dollars ("$16,000,000)", as applicable.

     (b) The reference to the maturity date of "December 11, 2006" in the third
paragraph thereof shall be deemed to be a reference to "September 16, 2008".

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

     The Borrower hereby represents and warrants to you as follows:

     (a) Representations in Agreement. Each of the representations and
warranties made by the Borrower to you in the Agreement was true, correct and
complete when


                                      -7-

made and is true, correct and complete in all material respects on and as of the
date hereof with the same full force and effect as if each of such
representations and warranties had been made by the Borrower on the date hereof
and in this First Amendment (except to the extent such representations and
warranties expressly relate to an earlier date).

     (b) No Defaults or Events of Default. No Default or Event of Default exists
on the date of this First Amendment (after giving effect to all of the
arrangements and transactions contemplated by this First Amendment).

     (c) Binding Effect of Documents. This First Amendment has been duly
executed and delivered to you by the Borrower and is in full force and effect as
of the date hereof, and the agreements and obligations of the Borrower contained
herein constitute the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms.

                                   ARTICLE IV

                        PROVISIONS OF GENERAL APPLICATION

     (a) No Other Changes. Except to the extent specifically amended and
supplemented hereby, all of the terms, conditions and the provisions of the
Agreement and each of the Loan Documents and Security Documents shall remain
unmodified, and the Agreement and each of the other Loan Documents and Security
Documents, as amended and supplemented by this First Amendment, are confirmed as
being in full force and effect.

     (b) Governing Law. This First Amendment is intended to take effect as a
sealed instrument and shall be deemed to be a contract under the laws of the
Commonwealth of Massachusetts. This First Amendment and the rights and
obligations of each of the parties hereto and thereto shall be governed by and
interpreted and determined in accordance with the laws of the Commonwealth of
Massachusetts.

     (c) Binding Effect; Assignment. This First Amendment shall be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors in title and assigns.

     (d) Counterparts. This First Amendment may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original, but all of which together shall constitute one instrument. In making
proof of this First Amendment, it shall not be necessary to produce or account
for more than one counterpart thereof signed by each of the parties hereto.

     (e) Conflict with Other Agreements. If any of the terms of this First
Amendment shall conflict in any respect with any of the terms of any of the
Agreement or any other Loan Document, the terms of this First Amendment shall be
controlling.


                                      -8-

     (f) Conditions Precedent. This First Amendment shall be effective as of
September 16, 2005, but only if:

          (i) the form of acceptance at the end of this First Amendment shall be
signed by the Borrower and the Lender, and the Consent at the end of this First
Amendment shall be signed by the Guarantors;

          (ii) the Lender shall have received the amendment fee from the
Borrower in the amount of $100,000 (along with reimbursement of the Lender's
out-of-pocket expenses (including legal fees) in connection with the
transactions contemplated hereby);

          (iii) the Borrower shall have entered into, and thereafter maintain in
effect, interest rate protection arrangements in form and substance, and in a
minimum amount, satisfactory to the Lender (it being agreed by the Lender that
such arrangements may be made by the 90th day following the date of this First
Amendment);

          (iv) the Lender shall have received originals or copies of each of (x)
the Citizens Ventures, Inc. Redemption Agreement, the Second Amendment to
Shareholders' Agreement, and all related documents (collectively, the "Citizens
Documents"), (y) the Subordinated Debt Documents (or modifications to the
existing versions thereof) and (z) the Amended and Restated Subordination
Agreement, each duly executed and delivered by the parties thereto, and each in
form and substance satisfactory to the Lender;

          (v) the transactions contemplated by the Citizens Documents and the
Subordinated Debt Documents shall have been consummated on the terms previously
described in writing to the Lender, and each of the conditions precedent
specified in any thereof shall have been duly satisfied and completed to the
satisfaction of the Lender on or prior to the date hereof, notwithstanding any
waiver or modification thereof;

          (vi) the Lender shall have received satisfactory evidence of
appropriate corporate and, if necessary, shareholder approval of the proposed
transactions;

          (vii) the Lender shall have received a legal opinion from Preti
Flaherty Beliveau Pachios and Haley in form and substance satisfactory to the
Lender; and

          (viii) the Lender shall have received from the Borrower a pro forma
covenant compliance certificate, dated as of the date hereof, in substantially
the form of Exhibit C to the Agreement, and the Applicable Margin shall be
automatically adjusted as and to the extent required by such certificate.

     (g) Release of Pledge Agreement Upon IPO. The Lender agrees that if (but
only if) the IPO is consummated, then, at the sole cost and expense of the
Borrower, the Lender shall release from the Pledge Agreement all shares of
capital stock held by the Lender in pledge thereunder.


                                       -9-

     If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this First Amendment and return such
counterpart to the undersigned, whereupon this First Amendment, as so accepted
by you, shall become a binding agreement between you and the undersigned.

                                        Very truly yours,

                                        The Borrower:

                                        DOVER SADDLERY, INC.


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

     The foregoing amendment is hereby accepted by the undersigned as of
September 16, 2005.

The Bank:

BANK OF AMERICA, N.A.
(successor by merger to Fleet National Bank)


By: /s/ John F. Lynch
    ------------------------------------
Title: Senior Vice President


                                      -10-

                              CONSENT OF GUARANTORS

     Each of DOVER SADDLERY, INC., a Delaware corporation and SMITH BROTHERS,
INC. (collectively, the "Guarantors") has guaranteed the Obligations of the
Borrower under (and as defined in) the Agreement. By executing this consent,
each Guarantor hereby absolutely and unconditionally reaffirms to the Bank that
such Guarantor's Guaranty remains in full force and effect. In addition, each
Guarantor hereby acknowledges and agrees to the terms and conditions of this
First Amendment, and of the Agreement and the other Loan Documents as amended
hereby (including, without limitation, the making of the representations and
warranties and the performance of the covenants applicable to it herein or
therein).

                                        DOVER SADDLERY, INC.


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


                                        SMITH BROTHERS, INC.


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


                                      -11-

EX-10.23

                                                                   Exhibit 10.23

                              SMITH BROTHERS, INC.
                               a Texas Corporation

                               SECURITY AGREEMENT

     This SECURITY AGREEMENT is made as of December 11, 2003 by and between
Smith Brothers, Inc. ("Smith Brothers"), a Texas corporation having its
principal place of business and chief executive office at 7833 I-35, Denten,
Texas 76207, and FLEET NATIONAL BANK (as successor-in-interest to BankBoston,
N.A.), a national banking association with its head office at 100 Federal
Street, Boston, Massachusetts 02110 (the "Bank").

     WHEREAS, Dover Saddlery, Inc., a Massachusetts corporation (the
"Borrower"), an affiliate of Smith Brothers, is amending and restating that
certain Loan Agreement dated September 17, 1998 by and between the Borrower and
the Bank (as amended, the "Original Loan Agreement," and as amended and
restated, the "Loan Agreement"); and

     WHEREAS, as an inducement to the Bank to so amend and restate the Original
Loan Agreement, Smith Brothers has agreed to execute and deliver this Security
Agreement and grant the security interests herein provided;

     NOW, THEREFORE, in consideration of the foregoing recitals, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

     1. Definitions. The following terms shall have the meanings set forth
below. All capitalized terms used herein, but not defined herein, shall have the
same meanings as set forth in the Loan Agreement. Terms not otherwise defined
herein or therein shall have the meanings ascribed to them, if any, under the
Massachusetts Uniform Commercial Code.

          "Account and Accounts Receivable" means individually and collectively,
all rights to payment for goods sold, leased or licensed or for services
rendered, all sums of money or other proceeds due or becoming due thereon
(including, without limitation, all accounts, accounts receivable, notes, bills,
drafts, acceptances, instruments, documents, chattel paper and all other debts,
obligations and liabilities in whatever form owing to any Person for goods sold,
leased or licensed by it or for services rendered by it), all guaranties and
security therefor, and all right, title and interest of such Person in the goods
or services giving rise thereto and the rights pertaining to such goods,
including rights of reclamation and stoppage in transit, and all related
insurance, whether any of the foregoing be now existing or hereafter arising,
now or hereafter received by or owing or belonging to such Person, and all
"accounts" as such term is defined in Revised Article 9 of the Massachusetts
Uniform Commercial Code, to the extent not otherwise described herein.


                                      -1-

          "Collateral" means all personal property and fixtures of Smith
Brothers of every kind and description, tangible or intangible, whether now or
hereafter existing, whether now owned or hereafter acquired, and wherever
located, including, but not limited to, the following: all Inventory of Smith
Brothers; all furniture, fixtures and similar property of Smith Brothers; all
machinery and equipment of Smith Brothers; all Accounts of Smith Brothers; all
contract rights of Smith Brothers, including without limitation, all rights of
Smith Brothers as a bailee; all other rights of Smith Brothers to the payment of
money, including without limitation amounts due from Affiliates, bailors, tax
refunds, and insurance proceeds; any and all rights Smith Brothers may have
pursuant to a bailee's lien; all interests of Smith Brothers in goods as to
which an Account shall have arisen; all files, records (including without
limitation computer programs, tapes and related electronic data processing
software) and writings of Smith Brothers or in which Smith Brothers has an
interest in any way relating to the foregoing property; all goods, instruments,
documents of title, policies and certificates of insurance, securities,
investment property, chattel paper (electronic or otherwise), deposits, deposit
accounts, documents, commerical tort claims, supporting obligations,
letter-of-credit rights, money, cash, cash equivalents or other property owned
by Smith Brothers or in which Smith Brothers has an interest which are now or
may hereafter be in the possession of the Bank or as to which the Bank may now
or hereafter control possession by documents of title or otherwise (including,
without limitation, the issued and outstanding capital stock of any subsidiaries
of Smith Brothers and all balances or other sums credited by or due from the
Bank or any of its branch or affiliate offices); all general intangibles of
Smith Brothers (including without limitation all patents, trademarks, trade
names, service marks, copyrights and applications for any of the foregoing; all
goodwill connected with the use of and symbolized by trademarks, trade names and
service marks of Smith Brothers; all rights to use patents, trademarks, trade
names, service marks and copyrights of any person; and any rights of Smith
Brothers to retrieval from third parties of electronically processed and
recorded information pertaining to any of the types of collateral referred to in
this definition); any other property of Smith Brothers, real or personal,
tangible or intangible, in which the Bank now has or hereafter acquires a
security interest or which is now or may hereafter be in the possession of the
Bank; any sums at any time credited by or due from the Bank to Smith Brothers,
including deposits; and proceeds and products of and accessions to all of the
foregoing. To the extent not otherwise defined herein, the categories of assets
used in the foregoing definition of Collateral shall have the meanings ascribed
to them in Revised Article 9 of the Massachusetts Uniform Commercial Code.

          "Inventory" means all of Smith Brothers's inventory of whatever name,
nature, kind or description, all goods held for sale or lease or to be furnished
under contracts of service, finished goods, work in process, raw materials,
materials used or consumed by Smith Brothers, parts, supplies, all wrapping,
packaging, advertising, labeling, and shipping materials, devices, names and
marks, all contracts, rights and documents relating to any of the foregoing,
whether any of the foregoing be now existing or hereafter arising, wherever
located, now owned or hereafter acquired by Smith Brothers, and all "inventory"
as such term is defined in Revised Article 9 of the Massachusetts Uniform
Commercial Code, to the extent not otherwise described herein.


                                      -2-

          "Massachusetts Uniform Commercial Code" means the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts from time to time.

          "Obligations" shall have the meaning ascribed to such term in the Loan
Agreement.

          "Revised Article 9" means revised Article 9 as in effect in any
jurisdiction from time to time.

          "Uniform Commercial Code" means, when used with reference to any other
jurisdiction, the Uniform Commercial Code as in effect in such jurisdiction from
time to time.

          Notwithstanding anything herein to the contrary, if a term used herein
is defined in Revised Article 9 of the Massachusetts Uniform Commercial Code
differently than in another article of the Massachusetts Uniform Commercial
Code, then the term shall have the meaning specified in Revised Article 9 of the
Massachusetts Uniform Commercial Code.

     2. Satisfaction of Obligations. Smith Brothers hereby promises to pay or
otherwise satisfy all Obligations when the same shall become due, whether at
maturity, by acceleration or otherwise.

     3. Grant of Security Interest.

          3.1 Collateral. As security for the prompt and unconditional payment
and performance of the Obligations, Smith Brothers hereby grants to the Bank a
continuing security interest in all Collateral, whether now owned or existing or
hereafter arising or acquired and wherever located; and in each case in all
proceeds, products, and accessions thereof, all causes of action and remedies
relating thereto and all guaranties and security therefor. Smith Brothers agrees
that the security interest herein granted has attached and shall continue until
the Obligations have been paid, performed and indefeasibly discharged in full
and the Bank is not committed to extend any credit to Smith Brothers under the
Loan Agreement or under any other Loan Document.

          3.2 Deposits. Any and all deposits or other sums at any time credited
by or due from the Bank or any of its affiliates to Smith Brothers shall at all
times constitute security for Obligations and may be set-off against any
Obligations at any time after the occurrence and during the continuance of an
Event of Default whether or not they are then adequate. Any and all instruments,
documents, policies and action, general intangibles, chattel paper, cash,
property and the proceeds thereof (whether or not the same are Collateral or
proceeds thereof) owned by Smith Brothers or in which Smith Brothers has an
interest, which now or hereafter are at any time in the possession or control of
the Bank or any of its affiliates or in transit by mail or carrier to or from
the


                                      -3-

Bank or such affiliate or in the possession of any third party acting in its
behalf, without regard to whether the Bank or such affiliate received the same
in pledge, for safekeeping, as agent for collection or transmission or otherwise
or had conditionally released the same, shall constitute security for
Obligations and may be applied at any time after the occurrence and during the
continuance of an Event of Default to Obligations which are then owing, whether
due or not due.

          3.3 Insurance. Smith Brothers hereby assigns to the Bank all sums,
including, without limitation, return of premiums, which may become payable
under any of Smith Brothers's policies of liability and casualty insurance and
directs each insurance company issuing any such policy to make payment thereof
directly to the Bank.

     4. Collateral.

          4.1 Location of Collateral. Smith Brothers's principal place of
business is located at the address shown on Exhibit A attached hereto and the
records relating to Smith Brothers's Accounts Receivable are kept at that
address. Smith Brothers will not change such principal place of business without
giving 30 days' prior written notice to the Bank. The Collateral will be kept at
the location(s) listed on Exhibit A and such new locations as Smith Brothers
shall establish not sooner than 7 days after having given written notice thereof
to the Bank and will not be removed from such locations without the prior
consent of the Bank.

          4.2 Instruments. If any Accounts Receivable are at any time evidenced
by promissory notes, trade acceptances or other instruments for the payment of
money, Smith Brothers will immediately deliver the same to the Bank,
appropriately endorsed to the Bank's order (and accompanied by such instrument
of transfer or assignment duly executed in blank as the Lender may reasonably
request) and, regardless of the form of such endorsement, Smith Brothers hereby
waives presentment, demand, notice of dishonor, protest, notice of protest and
all other notices with respect thereto.

          4.3 No Transfers. Except as expressly permitted by the Loan Agreement,
Smith Brothers shall not sell, lease or transfer or further encumber any of the
Collateral (except that Inventory may be sold in the ordinary course of
business) without the prior written consent of the Bank until the Bank has
determined that the Obligations have been indefeasibly paid in full.

          4.4 Representations. Smith Brothers represents, warrants and agrees as
follows:

               (a) Smith Brothers has no knowledge of any fact that would impair
the validity or make uncollectible any material amount of the Collateral that is
Accounts Receivable, chattel paper, general intangibles, contract rights,
documents or instruments, and, to the best of Smith Brothers's knowledge, each
obligor liable upon such Collateral has and will have capacity to contract.


                                      -4-

               (b) The items making up the Inventory at any time (other than
Inventory which is not material in amount at such time) are and will be genuine
and salable in the ordinary course of Smith Brothers's business.

               (c) Each Account Receivable is and will be a true and correct
statement of the actual indebtedness incurred by each account debtor with
respect thereto, and arises and will arise out of or in connection with the sale
or lease of goods or for the rendering of services by Smith Brothers to each
such account debtor.

               (d) No presently effective financing statement under the Uniform
Commercial Code naming Smith Brothers as debtor is on file in any jurisdiction
(other than such financing statements as may be on file naming the Lender as
secured party) and Smith Brothers has not signed any presently effective
security agreement (other than the Original Security Agreement) authorizing any
secured party thereunder to file a financing statement except for the Bank and
as otherwise permitted in the Loan Agreement.

               (e) Smith Brothers's exact legal name is set forth at the
beginning of this Agreement and Smith Brothers does not conduct business under
any other name except as set forth on Exhibit A attached hereto. Exhibit A
attached hereto accurately sets forth the Borrower's (i) type of organization;
(ii) jurisdiction of organization; and (iii) organizational identification
number, or accurately states that it has none.

               (f) At the time that Smith Brothers pledges, sells, assigns or
transfers to the Bank any instrument, document of title, security, chattel paper
or other property or any proceeds or products thereof, or any interest therein,
such entity shall be the lawful owner thereof, or the lawful holder of the
leasehold interest therein, and shall have the right to pledge, sell, assign or
transfer the same, subject only to the Permitted Encumbrances; and Smith
Brothers shall defend the same against the claims and demands of all persons.

          4.5 Commercial Tort Claims. If Smith Brothers shall, now or at any
time hereafter, hold or acquire a commercial tort claim, Smith Brothers shall
immediately notify the Bank in a writing signed by Smith Brothers of the
particulars thereof and grant to the Bank in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Security
Agreement, with such writing to be in form and substance satisfactory to the
Bank.

          4.6 Other Perfection, Etc. Smith Brothers shall at any time and from
time to time, whether or not Revised Article 9 is in effect in any particular
jurisdiction, take such steps as the Bank may reasonably request for the Bank
(a) to obtain an acknowledgment, in form and substance satisfactory to the Bank,
of any bailee having possession of any of the Collateral that the bailee holds
such Collateral for the Bank, (b)


                                      -5-

to obtain "control" of any investment property, deposit accounts,
letter-of-credit rights or electronic chattel paper (as such terms are defined
in Revised Article 9 with corresponding provisions in Rev. Sections 9-104,
9-105, 9-106 and 9-107 relating to what constitutes "control" for such items of
Collateral), with any agreements establishing control to be in the form and
substance satisfactory to the Bank, and (c) otherwise to insure the continued
perfection and priority of the Bank's security interest in any of the Collateral
and of the preservation of its rights therein.

     5. Proceeds of Collateral.

          5.1 Collection By Smith Brothers. So long as no Event of Default shall
have occurred and be continuing, Smith Brothers will collect with diligence all
the proceeds of Smith Brothers's Accounts Receivable, Inventory, instruments,
chattel paper, general intangibles, and contract rights pursuant to this
Agreement. The Bank will at any time after the occurrence and during the
continuance of an Event of Default have the right to require Smith Brothers (i)
to enter into a lockbox arrangement with the Bank or its representative or
designee for the collection of such remittances and payments or (ii) to maintain
its deposit account(s) at the Bank or, in the alternative, at another financial
institution which has agreed to accept drafts drawn on it by the Bank under a
written depository transfer agreement with the Bank, and to block Smith
Brothers's account and waive its own rights as against such account.

          5.2 Collection By the Bank. At the Bank's request, upon the occurrence
and during the continuance of an Event of Default, Smith Brothers will notify
account debtors that Collateral has been assigned to the Bank, and that payments
by such debtors shall be made directly to the Bank, and give instruction and/or
dictate on billings to such debtors that their Accounts Receivable shall be paid
to the Bank. The Bank may at any time, without prior notice to Smith Brothers
(provided that the Bank will endeavor to give Smith Brothers notice thereof in
accordance with its customary practices, but the failure to give such notice
shall not affect or in any way limit or impair the Bank's rights hereunder), if
an Event of Default has occurred and is continuing, collect the proceeds of
Smith Brothers's Accounts Receivable, Inventory, instruments, chattel paper,
general intangibles and contract rights and give notice of assignment thereof to
any and all debtors thereof, and Smith Brothers does hereby make, constitute and
appoint the Bank its irrevocable, true and lawful attorney in fact with power
during the continuance of an Event of Default: to receive, open and dispose of
all mail addressed to Smith Brothers; to take possession of, sign, endorse the
name of Smith Brothers upon and collect any notes, drafts, money orders,
demands, checks, instruments, payments (including payments payable under or with
respect to any policy of insurance), evidences of payment, agreements,
documents, and other writings that may come into the possession of the Bank in
connection with the Collateral or as proceeds of Collateral; in Smith Brothers's
name or otherwise, to demand, sue for, collect and give acquittances for, any
and all moneys due or to become due upon the Collateral; to compromise,
prosecute or defend any action, claim or proceeding with respect thereto; and to
do any and all things necessary or desirable to carry out the purposes herein
contemplated.


                                      -6-

     6. Protection of Security Interest.

          6.1 By Smith Brothers Smith Brothers shall continuously take all steps
that are necessary or reasonably prudent to protect and maintain the security
interest of the Bank in the Collateral. Without limiting the generality of the
foregoing, Smith Brothers will:

               6.1.1 No Liens. Not create, grant or permit to exist any security
interest or lien in or on any of the Collateral, except as permitted by the Loan
Agreement;

               6.1.2 Books. Keep and maintain separate books relating to the
Collateral at its principal place of business listed on Exhibit A attached
hereto, not remove the same without the prior written consent of the Bank, which
consent shall not be unreasonably withheld, and allow the Bank access to the
books and to the Collateral at any reasonable time during normal business hours
(and at all times after the occurrence of an Event of Default) for the purpose
of examination, verification, copying, extracting or other purposes as the Bank
may reasonably require;

               6.1.3 Maintenance. Maintain, preserve and protect all Collateral,
keep all Collateral in good condition and repair (ordinary wear and tear
excepted) and will not change its type of organization, jurisdiction of
organization or other legal structure;

               6.1.4 Copies. Deliver to the Bank promptly at its reasonable
request all schedules, lists, invoices, original bills of lading, documents of
title, original purchase orders, receipts, agreements, writings and other items
relating to the Collateral;

               6.1.5 Notice. Upon reasonable request of the Bank, make, stamp or
record on any of Smith Brothers's books relating to the Collateral entries or
legends with respect to the Bank's security interest, including, without
limitation, notation of the security interest of the Bank on any certificates of
title or other evidence of ownership outstanding with respect thereto;

               6.1.6 Filings. Join with the Bank at its request from time to
time in executing financing statements, amendments thereto and continuation
statements, and pay the cost of filing the same wherever the Bank reasonably
deems necessary, and do, make, execute and deliver all additional and further
acts, things, deeds, powers of attorney, assurances, writings, and instruments
that Bank may reasonably require to vest completely in it and assure to it its
rights hereunder and in and to the Collateral;

               6.1.7 Assignments Under the Federal Assignment of Claims Act. If
any Accounts Receivable arise from contracts with the United States or any
department, agency or instrumentality thereof, Smith Brothers will immediately
notify the Bank thereof and execute any instruments and take any steps
reasonably requested by the


                                      -7-

Bank in order that all monies due and to become due thereunder shall be assigned
to the Bank and notice thereof given to the Federal authorities under the
Federal Assignment of Claims Act;

               6.1.8 Adverse Interests. Promptly notify the Bank of the
existence of any claims, liens, security interests, rights, attachments or other
encumbrances that may be or become adverse to the interest of the Bank in any of
the Collateral; and defend the Collateral against all claims, liens, security
interests, demands and other encumbrances of third parties at any time claiming
an interest in the Collateral that is adverse to the security interest granted
to the Bank (other than those expressly permitted by the Loan Agreement), and
reimburse the Bank for any reasonable expenses it may incur in satisfying any of
the foregoing;

               6.1.9 Insurance. Maintain insurance on the Collateral as required
by the Loan Agreement or other Loan Documents;

               6.1.10 Loss. Notify the Bank in the event of a material loss of
or damage to the Collateral; of any loss, theft, damage or destruction to or of
any material assets(s) of Smith Brothers not covered by insurance; of any
reclamation or repossession of or any action by a creditor to reclaim or
repossess any material asset(s) of Smith Brothers; of any material adverse
change in the Collateral; and of any other occurrence that may materially or
adversely affect the security interest of the Bank in the Collateral;

               6.1.11 Inventory. At least annually and whenever else reasonably
requested by the Bank (but not more than twice a year if no Event of Default has
occurred and is continuing), take a physical listing of all Inventory and
provide a copy (certified by an authorized officer of Smith Brothers to be true,
correct and complete) of any listing of Inventory, and perform any and all
further steps reasonably requested by the Bank to perfect the Bank's security
interest in Inventory;

               6.1.12 Valuation. Notify the Bank in the event of any change in
the basis for valuing Inventory;

               6.1.13 Name. Notify the Bank at least 30 days before changing its
legal name or doing business under any name other than its legal name or the
names set forth on Exhibit A;

               6.1.14 Expenses. Pay all expenses incurred with respect to the
purchase, manufacture, delivery, use, repair, storage or other handling of the
Collateral, and reimburse the Bank for all reasonable expenses and all taxes
that the Bank may incur in connection with the protection of its security
interest in the Collateral.

          6.2 Bank Action. The Bank is hereby authorized and permitted to take
any action at any time and from time to time (except as expressly limited below)
it reasonably deems necessary or prudent to protect the Collateral or its
security interest in


                                      -8-

the Collateral, and Smith Brothers agrees to reimburse the Bank for all
reasonable costs and expenses incurred by the Bank in connection therewith.
Without limiting the generality of the foregoing (but subject to the Bank's
reasonably determining it necessary or prudent), Smith Brothers hereby grants to
the Bank the right, at the Bank's sole discretion:

               6.2.1 U.C.C. Statements. To file in any filing office in any
Uniform Commercial Code jurisdiction any initial financing statements and
amendments thereto that (a) indicate the Collateral (i) as all assets of the
Smith Brothers or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Revised Article 9 of
the Massachusetts Uniform Commercial Code or such other jurisdiction, or (ii) as
being of an equal or lesser scope or with greater detail, and (b) provide any
other information required by part 5 of Revised Article 9 of the Massachusetts
Uniform Commercial Code or such other jurisdiction for the sufficiency or filing
office acceptance of any financing statement or amendment, including (i) whether
Smith Brothers is an organization, the type of organization and any
organizational identification number issued to Smith Brothers and, (ii) in the
case of a financing statement filed as a fixture filing or indicating Collateral
as as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Smith Brothers agrees to furnish any
such information to the Bank promptly upon the Bank's request;

               6.2.2 Communication with Debtors. In its own name or in the name
of others, to communicate with account debtors in order to verify with them to
the Bank's reasonable satisfaction the existence, amount and terms of any
Accounts Receivable and the absence of any reductions, discounts, defenses or
offsets with respect thereto; provided, however, that prior to the occurrence of
an Event of Default, the Bank shall communicate with such account debtors only
in the name of others and not in its own name;

               6.2.3 Taxes. (i) Discharge taxes and liens levied or placed on
Collateral except those contested in accordance with the terms of the Loan
Agreement; (ii) pay for insurance thereon or the maintenance and preservation
thereof; or (iii) if Smith Brothers shall fail to make deposits in respect of
F.I.C.A. and withholding taxes, make such deposits or pay such taxes, in whole
or in part, or set up such reserves as the Bank shall deem reasonably necessary
in respect of Smith Brothers's liability therefor. Any amount so paid, deposited
or reserved for shall constitute a Revolving Loan under the Loan Agreement.
Nothing herein shall be deemed to obligate the Bank to do any of the foregoing
and the making of any one or more such payments, deposits or reserves shall not
constitute an agreement by the Bank to take any further or similar action or a
waiver of any right of the Bank hereunder.


                                      -9-

     7. Default and Remedies.

          7.1 Action after Default. Whenever any Event of Default shall have
occurred and be continuing, the Bank may, at its option and without demand first
made and without notice to Smith Brothers:

               7.1.1 Immediately, or from time to time, take possession of the
Collateral, or any of it, wherever it may be found, using all necessary force so
to do but without breach of the peace, or, from time to time, require Smith
Brothers to assemble the Collateral, or any of it, and make it available to the
Bank at a place designated by the Bank that is reasonably convenient to Smith
Brothers and the Bank, and Smith Brothers waives all claims for damages due to,
arising from or connected with any such taking;

               7.1.2 From time to time, proceed in the foreclosure of the Bank's
security interest and sale of the Collateral, or any of it, in any manner
permitted by law or provided for herein;

               7.1.3 Sell, lease or otherwise dispose of the Collateral, or any
of it, at public or private sale, with or without having the Collateral, or any
of it, at the place of sale, and upon terms and in such manner as the Bank may
determine. Except for Collateral which is perishable or threatens to decline
speedily in value or which is of a type customarily sold on a recognized market,
the Bank shall give Smith Brothers at least 10 days' prior written notice of the
time and place of any public sale of Collateral or of the time after which any
private sale or other intended disposition is to be made, which notice Smith
Brothers agrees is reasonable. The Bank may bid for any of the Collateral at any
public sale and acquire the same free from any redemption right, and in lieu of
paying cash therefor may make settlement for the selling price by crediting upon
the Obligations the net selling price after deducting all reasonable costs and
expenses in any way relating thereto;

               7.1.4 From time to time in the Bank's sole discretion, postpone
the time and change the place of any proposed public sale of any of the
Collateral that has been noticed as provided above, upon at least 1 day prior
written notice to Smith Brothers (which notice Smith Brothers agrees is
reasonable), which notice shall identify the new time and place of such sale
(which time shall be at least 5 days after such notice of postponement is given
to Smith Brothers) whenever, in the Bank's reasonable judgment, such
postponement or change is necessary or appropriate in order that the provisions
of this Security Agreement applicable to such sale may be fulfilled or in order
to obtain more favorable conditions under which such sale may take place;

               7.1.5 In case of any sale by the Bank of any of the Collateral on
credit or for future delivery (which may be elected in the Bank's sole
discretion), retain the Collateral so sold until the full selling price is paid
by the purchaser, and the Bank shall incur no liability in case of failure of
the purchaser to take up and pay for the


                                      -10-

Collateral so sold. In case of any such failure, the Collateral so sold may
again be similarly sold;

               7.1.6 Retain the Collateral, or any of it, in satisfaction of the
Obligations secured hereby;

               7.1.7 Act as attorney for Smith Brothers in obtaining, adjusting,
settling and canceling insurance, endorsing any checks or drafts, and applying
any amounts collected or received by the Bank to obligations or at the option of
the Bank, releasing the same to Smith Brothers, but such application or release
shall not cure or waive any Default or Event of Default hereunder and no amount
so released shall be deemed a payment on any Obligations secured hereby;

               7.1.8 Settle, compromise or adjust any suit, action or proceeding
against Smith Brothers with respect to any Collateral and in connection
therewith, give such discharges or releases as the Bank may deem appropriate
and, generally, sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Bank were absolute owner thereof for all purposes;

               7.1.9 As to the Collateral that is Accounts Receivable, chattel
paper, deposit accounts, instruments, general intangibles or contract rights,
the Bank may, in its own name or in the name of Smith Brothers:

                    (i) Take any action permitted under Section 5.2 relating to
               such Collateral or in connection therewith, sign and endorse any
               invoices, drafts against debtors, assignments, verifications and
               notices in connection therewith or in connection with other
               documents relating to the Collateral;

                    (ii) Receive payment of, receipt for, settle, compromise or
               adjust and give discharges and releases for or in respect of any
               and all moneys, claims and other amounts due and to become due at
               any time under or arising out of the Collateral;

                    (iii) File any claim and take other action in any court of
               law or equity or otherwise deemed appropriate by the Bank for the
               purpose of collecting any and all such Collateral whenever
               payable relating thereto, although the Bank shall not be required
               or obligated in any manner to make any demand or make any inquiry
               as to the nature or sufficiency of any payment received by it, or
               present or file any claim or take any action to collect or
               enforce the payment of any amounts that may have been assigned to
               it or to which it may be entitled hereunder at any time or times;


                                      -11-

                    (iv) Give written notice to officials of the United States
               Post Office to effect change or changes of address so that all
               mail addressed to Smith Brothers may be delivered directly to a
               Post Office box or to any other depository that may be selected
               by the Bank (which is hereby consented to by Smith Brothers), and
               receive, open and dispose of all mail addressed to Smith
               Brothers; and

                    (v) Direct obligors or any other party liable for the
               payment thereunder to make payment of any and all moneys at any
               time payable in connection therewith directly to the Bank or to
               an agent specified by it; and notwithstanding the foregoing,
               neither this Security Agreement nor the receipt by the Bank of
               any payment pursuant hereto shall cause the Bank to be under any
               obligation or liability in any respect to an obligor or any other
               party for the performance or observance of any of the
               representations, warranties, conditions or terms of any invoice,
               agreement or other document issued or executed in connection with
               any Account Receivable;

               7.1.10 Exercise any and all remedies of a secured party under the
Massachusetts or other applicable Uniform Commercial Code or as otherwise
provided by law.

          7.2 Additional Provisions.

               7.2.1 Smith Brothers authorizes the Bank to carry out the
remedial steps set forth in Section 7.1 above and irrevocably makes,
constitutes, and appoints the Bank and any officer or agent thereof with full
power of substitution as Smith Brothers's true and lawful attorney in fact in
connection therewith.

               7.2.2 Smith Brothers hereby waives, to the full extent permitted
by law, the benefit of all appraisement, valuation, stay, extension and
redemption laws now or hereafter in force and all rights of marshaling in the
event of any sale or other disposition of any of the Collateral.

               7.2.3 Prior to any such disposition of Collateral, the Bank may,
at its option, cause any of the Collateral to be repaired or reconditioned in
such manner and to such extent as the Bank reasonably deems advisable, and any
reasonable sums expended therefor by the Bank shall constitute loans to be
repaid by Smith Brothers and shall be secured hereby. The Bank shall have the
right to pursue any remedy that it may have hereunder or by law. If a sufficient
sum is not realized from any such disposition of Collateral to pay all of the
Obligations, Smith Brothers hereby promises and agrees to pay the Bank any
deficiency and the security interest herein granted shall continue in accordance
with Section 3.1 hereof in Collateral not so disposed of.


                                      -12-

               7.2.4 The receipt of the Bank for the purchase money paid at any
sale of Collateral made by the Bank shall be a sufficient discharge therefor to
any purchaser of any of the Collateral sold as provided above. No such purchaser
(or his or its representatives or assigns) other than the Bank, after paying
such purchase money and receiving such receipt, shall be bound to see to the
application of such purchase money or any part thereof or be answerable in any
manner for any loss, misapplication or nonapplication of any such purchase
money, or be bound to inquiry as to the authorization, necessity, expediency or
regularity of any such sale.

               7.2.5 Under no circumstances shall the Bank be deemed to assume
any responsibility for or obligation or duty with respect to any part or all of
the Collateral of any nature or kind, or any matter or proceedings arising out
of or relating thereto, but the same shall be at Smith Brothers's sole risk at
all times, it being acknowledged that the Bank will act in a commercially
reasonable manner. The Bank shall not be required to take any action of any kind
to collect, preserve or protect its or Smith Brothers's rights in the Collateral
or against other parties. The Bank's prior recourse to any part or all of the
Collateral shall not constitute a condition of any demand, suit or proceeding
for payment or collection of the Obligations.

               7.3 Priority of Payment. Any amounts collected pursuant to action
taken under this Section 7 shall be paid to the Bank, and applied first, to the
payment of any reasonable costs incurred by the Bank in taking such action; and
second, to payment of all sums due to the Bank in respect of Obligations; and
the excess, if any, shall be paid to Smith Brothers.

               7.4 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Bank is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No course of dealing on the part of
the Bank and no delay or omission to exercise any right or power accruing upon
the occurrence of any Default or Event of Default shall impair such right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle the Bank to exercise any remedy reserved to it in this Section
7, it shall not be necessary to give any notice, other than any notice or
notices expressly required in this Section 7.

     8. General.

          8.1 Successors and Assigns. This Security Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their respective
successors and assigns whether or not an express assignment of rights hereunder
is made. No other person shall acquire or have any right under or by virtue of
this Security Agreement.


                                      -13-

          8.2 Provisions to Survive. All representations, warranties, covenants
and agreements contained in this Security Agreement shall survive the execution
and delivery, and termination or cancellation, of the Loan Documents.

          8.3 Severability. If any provision of this Security Agreement shall be
held invalid or unenforceable by any court of competent jurisdiction, that
holding shall not invalidate or render unenforceable any other provision hereof.

          8.4 Amendments. This Security Agreement may be amended, modified and
supplemented only by written agreement of the parties hereto.

          8.5 Waivers. No waiver of any rights or remedies hereunder shall be
deemed made by the Bank or any subsequent holder of the Note under any
circumstances unless in writing and duly signed on behalf of the Bank or such
holder, as the case may be. Any such written waiver shall apply only to the
particular instance specified therein and shall not impair the further exercise
of the right or remedy involved.

          8.6 Execution and Counterparts. This Security Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute one and the same instrument.

          8.7 Captions. Captions and headings in this Security Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
the provisions hereof.

          8.8 Written Notices. Any notices, expressly required by this Agreement
to be in writing, to any party hereto shall be deemed to have been given when
delivered by hand, when sent by telecopy, when delivered to any overnight
delivery service freight pre-paid or 3 days after deposit in the mails, postage
prepaid, and addressed to such party at its address given at the beginning of
this Agreement or at any other address specified in writing. Written notices to
Smith Brothers shall be sent to the attention of Stephen L. Day, President, or
to such other officer as may be designated by Smith Brothers, with a copy to
Preti, Flaherty, Beliveau, Pachios & Haley, LLC, P.O. Box 1318, Concord, NH
03302-1318, Attention: John M. Sullivan, Esq., and written notices to the Bank
shall be sent to the attention of John F. Lynch, Senior Vice President, or to
such other officer as may be designated by the Bank, with a copy to Goulston &
Storrs, P.C., 400 Atlantic Avenue, Boston, MA 02110-3333, Attention: Philip A.
Herman, Esq. Any notice, unless otherwise specified, may be given orally or in
writing.

          8.9 Governing Law. This Security Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts
(without giving effect to provisions relating to conflicts of law). Any legal
action or proceeding arising out of or relating to this Agreement or any
Obligation may be instituted in the courts of the Commonwealth of Massachusetts
or of the United States of America for the District of Massachusetts, and Smith
Brothers hereby irrevocably submits


                                      -14-

to the jurisdiction of each such court in any such action or proceeding,
provided, however, that the foregoing shall not limit the Bank's rights to bring
any legal action or proceeding in any other appropriate jurisdiction in which
event, at the Bank's option, the laws of such jurisdiction or of the
Commonwealth of Massachusetts shall apply. Personal jurisdiction over Smith
Brothers may be obtained by the mailing (postage prepaid) of a summons or
similar legal document to Smith Brothers's address for notices under this
Agreement.

          8.10 Exhibits. The Exhibits attached hereto are incorporated herein
for all purposes, and shall be considered a part of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and sealed by their duly authorized officers or representatives,
all as of the date first above written.

                                        SMITH BROTHERS, INC.


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


                                        FLEET NATIONAL BANK


                                        By: /s/ John Lynch
                                            ------------------------------------
                                        Title: Senior Vice President


                                      -15-

EX-10.25

                                                                   EXHIBIT 10.25

                              DOVER SADDLERY, INC.

                              REDEMPTION AGREEMENT

     This Redemption Agreement (this "Agreement"), dated as of August 25, 2005,
is by and between Dover Saddlery, Inc., a Delaware corporation (the "Company"),
and Citizens Ventures, Inc. (the "Shareholder").

     WHEREAS, the Shareholder owns of record certain shares of the Company's
Convertible Preferred Stock, $0.0001 par value per share (the "Preferred
Stock"), and the parties hereto mutually desire that Shareholder convert the
Preferred Stock into shares of the Company's Class A Common Stock, $0.0001 par
value per share (the "Common Stock"); and

     WHEREAS, the parties hereto mutually desire the Company to then repurchase
certain of the shares of Common Stock owned by the Shareholder, on the terms set
forth in this Agreement;

     NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, and intending hereby to be legally bound, subject to the provisions
of this Agreement, each of the Company and the Shareholder hereby agrees as
follows:

     1. Exchange of Preferred Stock. The Shareholder hereby agrees, elects and
covenants to exchange the Preferred Stock for Common Stock at the Closing (as
defined below) by surrendering to the Company stock certificate(s) representing
1,015,000 shares of Preferred Stock, free and clear of any lien, claim or other
encumbrance and duly endorsed in blank for transfer, or accompanied by an
appropriate stock power duly executed in blank for transfer, to the Company and
accepting in exchange therefor from the Company, as the sole consideration
received in connection with such conversion, 1,015,000 shares of Common Stock of
the Company.

     2. Purchase and Sale of Common Stock. At the Closing and immediately
following the exchange of Preferred Stock for Common Stock as set forth in
Section 1 above, the Shareholder shall sell, assign, transfer, and deliver
603,889 shares of the Common Stock (the "Redeemed Shares") to the Company by
delivery of the stock certificate representing such Redeemed Shares, free and
clear of any lien, claim or other encumbrance and duly endorsed in blank for
transfer, or accompanied by an appropriate stock power duly executed in blank
for transfer, to the Company and the Company shall purchase and accept the
Redeemed Shares from the Shareholder in exchange for the Purchase Price (as
defined below).

     3. Purchase Price. At the Closing, in consideration of the transfer of the
Redeemed Shares from the Shareholder to the Company, the Company shall pay
$6,000,000

                                        2


to the Shareholder by wire transfer to the account of the Shareholder set forth
on Exhibit A attached hereto.

     4. Closing. The closing of the exchange of the Preferred Stock and the
purchase and sale of the Redeemed Shares (the "Closing") shall take place on
September 15, 2005 at the offices of Bingham McCutchen LLP, 150 Federal Street,
Boston, Massachusetts 02110, or at such place and/or earlier time as the Company
and the Shareholder may mutually agree (such date being hereinafter referred to
as the "Closing Date").

     5. Termination of Rights. All rights of the Shareholder with respect to,
and as a holder of, Preferred Stock and, except as specifically set forth in
this Agreement or the Shareholders' Agreement or with respect to holders of
Common Stock generally, all agreements, rights, duties and obligations by and
between the Company and the Shareholder, shall automatically terminate as of the
Closing Date.

     6. Shareholders' Agreement. At the Closing, the Shareholder shall execute
and deliver to the Company and the Company shall execute and deliver to the
Shareholder an instrument of accession in the form attached hereto as Exhibit B
(the "Instrument of Accession") by which the Shareholder shall become a party to
the Shareholders' Agreement, dated September 17, 1998, by and among the Company,
the Purchasers (as defined therein) and the Sellers (as defined therein), as
amended by the First Amendment to Shareholders' Agreement, dated as of August
29, 2003 and by the Second Amendment to Shareholders' Agreement, dated as of
August 25, 2005, attached hereto as Exhibit C (as so amended, the "Shareholders'
Agreement").

     7. Limitations on Transfer. At the Closing, the Shareholder shall, as
requested by the Company and its underwriters, enter into a lockup agreement
(the "Lockup Agreement"), with respect to all shares of capital stock of the
Company held by the Shareholder, in form and substance as executed by the
Company's senior management and significant shareholders. Notwithstanding the
foregoing, the Shareholder shall not be required to execute a Lockup Agreement
with respect to a higher percentage of its aggregate holdings of capital stock
of the Company than the lowest percentage of individual holdings, with respect
to any founder, officer or director of the Company, that is subject to a Lockup
Agreement. The Shareholder shall not offer for sale, sell, pledge, or otherwise
dispose of (or enter into any transaction or device that is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any shares of capital stock of the Company prior to the Closing
except in accordance with this Agreement. Except as provided in this Agreement,
the Shareholder shall not offer for sale, sell, pledge, or otherwise dispose of
(or enter into any transaction or device that is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock except in accordance with the Shareholders'
Agreement and the Lockup Agreement.

                                        3


     8. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to the Company, both as of the date hereof and as of
immediately prior to the Closing, as follows:

     (a) The Shareholder has all requisite power and full legal right to enter
into this Agreement, to perform all of its agreements and obligations under this
Agreement in accordance with the terms hereof, including to exchange the shares
of Preferred Stock and sell to the Company the Redeemed Shares as provided
herein.

     (b) Upon consummation of the transactions contemplated by this Agreement,
the Shareholder will no longer have any right, title or interest in, to or
related to the Preferred Stock or the Redeemed Shares.

     (c) This Agreement has been duly executed and delivered by the Shareholder
and constitutes the legal, valid, and binding obligation of the Shareholder
enforceable against the Shareholder in accordance with its terms.

     (d) Except as provided in (i) the Securities Purchase Agreement, dated
September 17, 1998, by and among the Company, and the Operating Company (as
defined therein) and each of the Purchasers (as defined therein), as amended by
the First Amendment to Securities Purchase Agreement, dated as of December 11,
2003 and (ii) the Stockholders and Registration Rights Agreement, dated
September 17, 1998, by and among the Company, Stephen L. Day and Citizens, the
Shareholder has, and upon consummation of the transactions contemplated by this
Agreement the Company will have, sole record and beneficial ownership of the
Redeemed Shares, free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity, or other
adverse claim thereto.

     (e) The execution, delivery and performance of this Agreement by the
Shareholder will not violate any contractual obligation of the Shareholder. The
Shareholder has not previously entered into any agreement that is currently in
effect, or to which the Shareholder is currently bound, granting any rights to
any person that are inconsistent with the rights granted by the Shareholder in
this Agreement.

     (f) The Shareholder is an accredited investor within the meaning of
Regulation D under the Securities Act of 1933.

     9. Representations and Warranties of the Company. The Company represents
and warrants to the Shareholder, both as of the date hereof and as of
immediately prior to the Closing, as follows:

     (a) The Company has all requisite power and full legal right to enter into
this Agreement and to perform all of its agreements and obligations under this
Agreement in accordance with its terms.

                                        4


     (b) This Agreement has been duly executed and delivered by the Company and
constitutes the legal, valid, and binding obligation of the Company, enforceable
against it in accordance with its terms.

     (c) Before giving effect to the transactions contemplated hereby, the
authorized capital stock of the Company consists of 4,300,000 shares of Common
Stock, of which 2,095,000 shares are issued and outstanding and 390,000 shares
are reserved for issuance pursuant to stock incentive plans; 1,100,000 shares of
Class B Common Stock of which no shares were issued and outstanding; 1,100,000
shares of Preferred Stock, of which 1,015,000 shares are issued and outstanding;
and the Company has no shares of capital stock held in treasury.

     (d) The execution, delivery and performance of this Agreement by the
Company will not violate any contractual obligation of the Company. The Company
has not previously entered into any agreement that is currently in effect, or to
which the Company is currently bound, granting any rights to any person that are
inconsistent with the rights granted by the Company in this Agreement.

     (e) All of the shares of Common Stock issued to the Shareholder at the
Closing pursuant to the terms of this Agreement will have been duly authorized
and validly issued and will be fully paid and non-assessable.

     10. Limitation on Issuance of Additional Shares. The Company hereby
covenants and agrees that, between the date of this Agreement and the closing of
a Qualified Public Offering, it shall not, without the consent of the
Shareholder, issue any shares of its capital stock except for (i) shares of
Common Stock as provided in this Agreement, (ii) stock dividends or stock
splits, (iii) shares of the Company's capital stock pursuant to stock incentive
plan(s) approved by the shareholders of the Company as of the date of this
Agreement, and (iv) shares of capital stock issued (A) at a value which
reasonably approximates such shares' fair market value or above, (B) in a
transaction to which the Shareholder's preemptive rights, as provided in the
Shareholders' Agreement, apply, and (C) for cash or in a bona fide acquisition.
For purposes of this Agreement, the term "Qualified Public Offering" shall mean
a public offering of shares of the Company's capital stock pursuant to an
effective registration statement on Form S-1, or successor form, of the
Securities and Exchange Commission, pursuant to which the aggregate gross
proceeds to the Company and selling shareholders in the offering are not less
than $25,000,000. Notwithstanding the foregoing, in the event a Qualified Public
Offering has not closed prior to March 30, 2006, the above restriction on the
issuance of the Company's capital stock shall automatically terminate.

     11. Reimbursement of Expenses. At the Closing, the Company shall pay the
reasonable out-of-pocket fees, charges and disbursements of counsel incurred by
the Shareholder in connection with the transactions contemplated by this
Agreement, which

                                        5


payments shall be made by wire transfer of immediately available funds to an
account or accounts designated by the Shareholder, provided that such
reimbursement shall not exceed $15,000.

     11. Miscellaneous. This Agreement shall be governed by and interpreted and
construed in accordance with the laws of the Commonwealth of Massachusetts
(without reference to principles of conflicts of law). This Agreement may be
executed by the parties in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement. No provision of this Agreement may be
amended, waived or terminated without the prior written consent of each of the
Company and the Shareholder. The section and paragraph headings herein are for
convenience only and shall not affect the construction hereof.

                  [Remainder of page intentionally left blank.]

     IN WITNESS WHEREOF, each of the Company and the Shareholder has executed
and delivered this Redemption Agreement as an instrument under seal as of the
date first above written.

                                        COMPANY:

                                        DOVER SADDLERY, INC.


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


                                        SHAREHOLDER:

                                        CITIZENS VENTURES, INC.


                                        By: /s/ Bradley Stewart
                                            ------------------------------------
                                        Name: Bradley Stewart
                                        Title: Vice President

EX-10.26

                                                                   EXHIBIT 10.26

                                                              September 14, 2005

Brad Stewart
Citizens Ventures, Inc.
28 State Street, 15th Floor
Boston, MA 02109

Dear Mr. Stewart:

     Re: Amendment to Redemption Agreement

     Reference is hereby made to the Redemption Agreement (the "Redemption
Agreement"), dated as of August 26, 2005, by and between Dover Saddlery, Inc.
(the "Company") and Citizens Ventures, Inc. (the "Shareholder"). Capitalized
terms used but not defined herein shall have the respective meanings given them
in the Redemption Agreement.

     1.   The Redemption Agreement is hereby amended by changing the date of the
          Closing Date set forth therein to be September 16, 2005.

                  [remainder of page intentionally left blank]

Page 2


     The undersigned hereby consent to the amendment to the Redemption Agreement
set forth herein.

                                        COMPANY:

                                        DOVER SADDLERY, INC.


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


                                        SHAREHOLDER:

                                        CITIZENS VENTURES, INC.


                                        By: /s/ Bradley Stewart
                                            ------------------------------------
                                        Name: Bradley Stewart
                                        Title: Vice President

EX-10.31

                                                                   EXHIBIT 10.31

                  AMENDED AND RESTATED SUBORDINATION AGREEMENT

     THIS AMENDED AND RESTATED SUBORDINATION AGREEMENT (this "Agreement"), dated
as of September 16, 2005, is by and among Bank of America, N.A. (successor in
interest to Fleet National Bank) (the "Senior Bank"), Patriot Capital Funding,
Inc. (successor in interest to Wilton Funding, LLC) as the purchaser and
servicer (the "Subordinated Creditor"), and Dover Saddlery, Inc., a
Massachusetts corporation (the "Borrower"), and acknowledged by Dover Saddlery,
Inc., a Delaware corporation (the "Parent"), and Smith Brothers, Inc., a Texas
corporation ("Smith", and together with the Senior Bank, the Subordinated
Creditor, the Borrower and the Parent, the "Parties").

     WHEREAS, the Parties had previously entered into that certain Subordination
Agreement, dated as of December 11, 2003 (the "Existing Subordination
Agreement");

     WHEREAS, the Borrower and the Senior Bank are parties to that certain
Amended and Restated Loan Agreement, dated as of December 11, 2003, ( the
"Existing Loan Agreement") pursuant to which the Borrower, the Parent and Smith
granted to the Senior Bank security interests in and other liens on all their
respective property pursuant to the Bank Agreements (as defined herein);

     WHEREAS, the Borrower and the Senior Bank wish to amend the Existing Loan
Agreement pursuant to that certain First Amendment, dated as of September 16,
2005 (the "First Amendment", and together with the Existing Loan Agreement (as
may be further amended and as in effect from time to time), the "Loan
Agreement"), the Loan Agreement together with all related instruments, notes,
agreements and documents evidencing the Borrower's, the Parent's or Smith's
respective obligations thereunder or granting security interests and liens to
the Senior Bank being collectively referred to herein as the "Bank Agreements");

     WHEREAS, the Borrower, the Parent, Smith and the Subordinated Creditor are
parties to that certain Senior Subordinated Note Purchase Agreement, dated as of
December 11, 2003 (the "Existing Subordinated Agreement")

     WHEREAS, the Borrower, the Parent, Smith and the Subordinated Creditor wish
to amend and restate the Existing Subordinated Agreement, pursuant to that
certain Amended and Restated Senior Subordinated Note and Warrant Purchase
Agreement, dated as of September 16, 2005, (as amended in accordance with this
Agreement and as in effect from time to time, together with all related
instruments, notes, agreements and documents evidencing the Borrower's, the
Parent's or Smith's obligations thereunder, being collectively referred to
herein as the "Subordinated Agreement");


                                       -1-

     WHEREAS, it is a condition precedent to the Senior Bank's willingness to
enter into the First Amendment and to make loans pursuant to the Bank Agreements
and to permit the Borrower, the Parent and Smith to enter into the Subordinated
Agreement, that the Borrower and the Subordinated Creditor enter into this
Agreement with the Senior Bank, and that the Parent and Smith acknowledge that
they will abide hereby; and

     WHEREAS, in order to induce the Senior Bank to enter into the First
Amendment and to make loans pursuant to the Bank Agreements and to consent to
the entering into by the Borrower, the Parent and Smith of the Subordinated
Agreement, the Borrower and the Subordinated Creditor has agreed to enter into
this Agreement with the Senior Bank, and the Parent and Smith have agreed to
acknowledge same;

     NOW, THEREFORE, in consideration of the foregoing, the mutual agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, hereby agree as follows:

     Section 1. Definitions. Terms not otherwise defined herein have the same
respective meanings given to them in the Loan Agreement. In addition, the
following terms shall have the following meanings:

          "Loan Parties" shall mean, collectively, the Borrower, the Parent and
Smith.

          "Senior Debt" shall mean all indebtedness and other obligations of the
Loan Parties to the Senior Bank of every kind and description, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, regardless of how they arise or by what agreement or
instrument they may be evidenced, including, without limitation, all
"Obligations" under and as defined in the Bank Agreements and all principal,
interest, fees, costs, enforcement expenses (including reasonable legal fees and
disbursements), collateral protection expenses and other reimbursement or
indemnity obligations created or evidenced by any of the Bank Agreements or any
prior, concurrent, or subsequent notes, instruments or agreements of
indebtedness, liabilities or obligations of any type or form whatsoever in favor
of the Senior Bank; provided, however, that the principal referred to above
shall not (unless the Subordinated Creditor otherwise consents thereto in
writing) at any time exceed the sum of: (a) Eighteen Million ($18,000,000)
Dollars , plus (b) all indebtedness now existing or hereafter arising of the
Borrower in respect of any interest rate protection agreement covering a
notional principal amount which shall not exceed Eight Million ($8,000,000)
Dollars, and provided, further, that the indebtedness under this clause (b)
shall not at any time exceed an aggregate amount equal to Eight Hundred Thousand
($800,000) Dollars. Such maximum principal amount, as increased in accordance
with such consent from time to time, is referred to hereafter as the "Maximum
Senior Debt". Senior Debt shall expressly include any and all interest accruing
or out of pocket costs or expenses incurred after the date of any filing by or


                                       -2-

against any Loan Party of any petition under the federal Bankruptcy Code or any
other Bankruptcy, insolvency or reorganization act regardless of whether the
Senior Bank's claim therefor is allowed or allowable in the case or proceeding
relating thereto.

          "Subordinated Debt" shall mean all indebtedness and other obligations
of the Loan Parties to the Subordinated Creditor of every kind and description,
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, under the Subordinated Agreement, including, without
limitation, all principal, interest, fees, costs, enforcement expenses
(including legal fees and disbursements), collateral protection expenses, other
reimbursement and indemnity obligations, so-called put and call rights,
tag-along rights and the like, and any fees or charges created or evidenced by
the Subordinated Agreement or any subsequent notes, instruments or agreements or
indebtedness, liabilities or obligations of any type or form issued in payment
or in connection with the Subordinated Agreement. "Subordinated Debt" shall
include, without limitation, (i) the warrants exercisable for shares of common
stock representing .78% of the Convertible Securities (as defined in the
Subordinated Agreement) of the Parent on a fully diluted basis (the "Warrants")
and the put-right exercisable with respect thereto (the "Put Right"), with such
Warrants issued and Put Right granted pursuant to that certain Warrant
Agreement, dated as of September 16, 2005 (the "Warrant Agreement") and (ii) any
and all guaranties provided to the Subordinated Creditor by any Subsidiary of
any Loan Party.

          "Subordinated Documents" shall mean collectively, the Subordinated
Agreement, the Warrant Agreement, any promissory notes executed in connection
therewith and any and all guaranties, pledges and security interests, mortgages
and other liens directly or indirectly guarantying or securing any of the
Subordinated Debt, any and all other documents or instruments evidencing or
further guarantying or securing directly or indirectly any of the Subordinated
Debt, whether now existing or hereafter created.

     Section 2. Subordination.

          (a) Anything in any agreement between the Loan Parties and the
Subordinated Creditor to the contrary notwithstanding, the Subordinated Debt
shall be subordinate and junior in right of payment and priority, to the extent
and in the manner set forth in this Agreement, to the Senior Debt. If at any
time the Revolving Loans outstanding under the Loan Agreement shall be paid in
full in cash without terminating the Loan Agreement, subsequent borrowings by
the Borrower under the Loan Agreement shall constitute Senior Debt for purposes
of this Agreement. Upon the occurrence of an Event of Default, the Senior Bank
will provide the Subordinated Creditor, with reasonable promptness, a copy of
any notice of such Event of Default then being provided to the Borrower.

          (b) In no event shall the Subordinated Creditor exercise the Put Right
prior to the maturity of the Senior Credit Agreement and the repayment in full
in cash of the Senior Debt.


                                       -3-

          (c) Except as provided in clause (d) below, unless and until all
Senior Debt shall have been paid in full in cash and the Loan Agreement shall
have been terminated, no Loan Party will, nor will permit any subsidiary or
affiliate to, directly or indirectly, make or agree to make, and neither the
holder nor any assignee or successor holder of any Subordinated Debt will
demand, accept or receive from any Loan Party or any other person or entity, (i)
any payment (in cash, property or securities, by set-off or otherwise), direct
or indirect, of or in respect of any Subordinated Debt (including, without
limitation, any payment with respect to the exercise of the Put Right), and no
such payment shall be accepted by any holder of any Subordinated Debt, or (ii)
any payment for the purpose of any redemption, purchase or other acquisition,
direct or indirect, of any Subordinated Debt, and no such payment shall be due.

          (d) The Senior Bank acknowledges that the Borrower may make and the
Subordinated Creditor may receive (i) regularly scheduled monthly payments of
cash interest with respect to the Subordinated Debt, at the maximum rate of
11.50% per annum as set forth in Section 3.1(a) of the Subordinated Agreement as
in effect on the date hereof and delivered to the Senior Bank, (ii) any interest
accrued at a default or overdue rate set forth in the Subordinated Agreement,
and (iii) any costs and expenses required to be reimbursed or paid by the
Borrower to the Subordinated Creditor not to exceed $50,000 in the aggregate in
any fiscal year of the Borrower, provided that on the date upon which any such
interest payment is proposed to be made, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing; provided,
however, that if (i) during any fiscal quarter the Subordinated Creditor
receives or accepts one or more payments under the Subordinated Debt (the
"Quarterly Sub Debt Payments") and (ii) the Senior Bank determines upon receipt
of the Borrower's quarterly financial statements with respect to the fiscal
quarter immediately preceding the fiscal quarter in which such Quarterly Sub
Debt Payments were made that a Default or Event of Default was then continuing,
the Senior Bank shall have a period of 15 Business Days after receipt of such
financial statements to request that such Quarterly Sub Debt Payments received
by the Subordinated Creditor be paid over to the Senior Bank for application to
the Senior Debt. It is hereby acknowledged and agreed that no principal shall be
payable in respect of the Subordinated Agreement until the Senior Debt has been
paid in full in cash and the Loan Agreement has been terminated, provided,
however, that if the maturity of the Senior Debt has been extended beyond
September 16, 2009 (the first date on which the Subordinated Debt begins to
amortize), the regularly scheduled repayments of principal of the Subordinated
Debt (but not prepayments) may be made by the Borrower in accordance with the
terms of the Subordinated Agreement as in effect on the date hereof and
delivered to the Senior Bank, provided that on the due date of any such
principal payment, and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.

     (i) In the event that a Default or Event of Default has occurred and is
continuing under Section 6.1(i) of the Loan Agreement (a "Payment Default") and
the Subordinated Creditor shall have received notice of such Default or Event of
Default (or otherwise have


                                       -4-

actual knowledge thereof), no payments shall be made by any Loan Party or
accepted by either Subordinated Creditor until the earlier to occur of (x) the
date on which the Senior Debt is paid in full in cash and the Loan Agreement is
terminated and (y) the date, if any, on which the Senior Bank has given written
notice to the Subordinated Creditor that such Default or Event of Default is
cured or waived (a "Cure Notice"), so long as at such date (A) the Subordinated
Creditor has not been notified (or do not have actual knowledge) of any
additional Default or Event of Default under the Loan Agreement is continuing,
(B) there is not an Other Default Standstill Period (defined below) in effect,
(C) the Senior Bank has not accelerated the Revolving Loans or commenced an
action, suit, or other legal proceeding against any Loan Party or its property,
or (D) the Senior Bank shall not be prosecuting the Senior Bank's rights under
the Uniform Commercial Code or other applicable law to foreclose and realize
upon the Collateral securing the Obligations (all such conditions being referred
to herein as the "Payment Cure Conditions"; and each period of time during which
such Payments shall not be permitted to be made or accepted as a result of a
Payment Default referred to as a "Payment Standstill Period").

     (ii) In the event that a Default or Event of Default other than a Payment
Default (an "Other Default") has occurred and is continuing, the Senior Bank may
(but shall not be obligated to) give a standstill notice to the Subordinated
Creditor (a "Standstill Notice"), and upon the giving of such Standstill Notice,
no payments on the Subordinated Debt shall be made or accepted until the earlier
to occur of (x) the date which is 180 days after the date upon which such
Standstill Notice has been given, or (y) the date, if any, on which the Senior
Bank has given a Cure Notice to the Subordinated Creditor that such Other
Default has been cured or waived, so long as at such date, (A) no Payment
Default has occurred and is continuing, (B) the Senior Bank has not accelerated
any of the Revolving Loans or commenced an action, suit, or other legal
proceeding against any Loan Party or its property, or (C) the Senior Bank shall
not be prosecuting the Senior Bank's rights under the Uniform Commercial Code or
other applicable law to foreclose and realize upon the Collateral securing the
Senior Debt (each period of time during which such payments shall not be
permitted to be made or accepted as a result of a Default or Event of Default
other than a Payment Default referred to as an "Other Default Standstill
Period"). At no time during the term of this Agreement shall such Other Default
Standstill Periods pursuant to this clause (ii) be in effect for more than an
aggregate of 180 days in any consecutive 360-day period. However, if (and on
each occasion that) a Subordinated Creditor Default (as hereinafter defined)
shall occur solely as a result of the breach of a financial covenant thereunder
(a "Financial Covenant Default"), and if at the time of such occurrence one or
more Other Default Standstill Periods have already been in effect for an
aggregate of 180 days, then, notwithstanding the immediately preceding sentence,
the Senior Bank shall be permitted to invoke an additional Other Default
Standstill Period of 30 days with respect to such Financial Covenant Default, by
giving a Standstill Notice to the Subordinated Creditor.

     Interest, if any, in excess of 11.50% per annum accrued on the Subordinated
Debt, or premium, if any, accrued on the Subordinated Debt, shall not be paid
until all Senior Debt has been paid in full in cash and the Loan Agreement has
been terminated (it being


                                       -5-

understood that invoking a default or overdue rate set forth in the Subordinated
Agreement shall not be restricted hereunder, provided that its payment is
subject to the terms of this Agreement).

          (d) The Subordinated Creditor shall, simultaneously with the execution
and delivery of this Agreement, (i) cause a conspicuous legend to be placed on
the Subordinated Agreement, satisfactory in all respect to the Senior Bank,
regarding the subordination reflected herein, and (ii) deliver executed copies
of the Subordinated Agreement to the Senior Bank.

     Section 3. Enforcement.

          (a) The Subordinated Creditor will not take or omit to take any action
or assert any claim with respect to the Subordinated Debt or otherwise which is
inconsistent with the provisions of this Agreement. Without limiting the
foregoing, until the Senior Debt has been paid in full in cash and the Loan
Agreement has been terminated, the Subordinated Creditor will not assert,
collect or enforce the Subordinated Debt or any part thereof or take any action
to foreclose or realize upon the Subordinated Debt or any part thereof or
enforce any of the Subordinated Documents except to the extent (but only to such
extent) that the commencement of a legal action may be required to toll the
running of any applicable statute of limitation. Notwithstanding the foregoing,
upon the occurrence of an event of default under the Subordinated Documents (a
"Subordinated Creditor Default"), the Subordinated Creditor may take enforcement
action against the Borrowers upon the earlier to occur of (x) 15 Business Days
after the acceleration of the Senior Debt, and (y) the date which is 180 days
after the date upon which such Subordinated Creditor Default has occurred so
long as the Subordinated Creditor have provided written notice to the Senior
Bank of their intention to commence enforcement action at least 15 Business Days
(but no more than 60) days prior to such commencement; provided, however, in the
case of clauses (x) and (y) above, if any acceleration of the Senior Debt is
rescinded by the Senior Bank, then any acceleration by the Subordinated Creditor
shall be rescinded immediately and all other enforcement action, if any, being
taken by the Subordinated Creditor in connection with such acceleration shall
terminate immediately, if based solely on the acceleration of the Senior Debt,
and provided, further, that the Subordinated Creditor shall at no time and under
no circumstances whatsoever be permitted to take enforcement action with respect
to the Junior Liens (defined below). Until the Senior Debt has been paid in full
in cash and the Loan Agreement has been terminated, the Subordinated Creditor
shall not have any right of subrogation, reimbursement, restitution,
contribution or indemnity arising from any payments made by the Subordinated
Creditor or on account of the Subordinated Debt to the Senior Bank or by virtue
of this Agreement whatsoever from any assets of any Loan Party or any guarantor
of or provider of collateral security for the Senior Debt (which right the
Subordinated Creditor may assert following such payment in full). The
Subordinated Creditor further waives any and all rights with respect to
marshaling. In case any Subordinated Debt is declared due and payable because of
the occurrence of a default under circumstances when the terms of Section 3(b)
are not applicable, the holders of


                                       -6-

such Subordinated Debt shall not be entitled to receive any payment or
distribution in respect thereof until all Senior Debt at the time outstanding
shall have been paid in full in cash and the Loan Agreement shall been
terminated. Upon the occurrence of a Subordinated Creditor Default, the Borrower
and the Subordinated Creditor will give prompt notice in writing of such
happening to the Senior Bank.

          (b) The Subordinated Creditor will not commence or join with any other
creditor or creditors of any Loan Party in commencing any bankruptcy,
reorganization, insolvency or similar proceedings against any Loan Party. In the
event of any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to any Loan Party
or its property, any proceeding for the liquidation, dissolution or other
winding-up of any Loan Party, voluntary or involuntary, and whether or not
involving insolvency or bankruptcy proceedings, any general assignment by any
Loan Party for the benefit of creditors, or any distribution, division,
marshaling or application of any of the properties or assets of any Loan Party
or the proceeds thereof to creditors, voluntary or involuntary, and whether or
not involving legal proceedings, then and in any such event:

          (i) all Senior Debt shall first be paid in full in cash (including all
     principal, premium, if any, and interest) before any payment or
     distribution of any character, whether in cash, securities or other
     property (other than securities of the Borrower or any other corporation
     provided for by a plan of reorganization or readjustment or similar plan,
     the payment of which is subordinated, at least to the extent provided in
     this Agreement with respect to Subordinated Debt, to the payment of all
     Senior Debt at the time outstanding and to any securities issued in respect
     thereof under any such plan), shall be made in respect of any Subordinated
     Debt;

          (ii) any payment or distribution of any character, whether in cash,
     securities or other property, which would otherwise (but for the terms
     hereof) be payable or deliverable in respect of any Subordinated Debt,
     shall be paid or delivered directly to the Senior Bank, for application to
     the payment of the Senior Debt, until all Senior Debt shall have been paid
     in full in cash and the Loan Agreement shall have been terminated, and the
     holders of the Subordinated Debt at the time outstanding irrevocably
     authorize, empower and direct all receivers, trustees, liquidators,
     conservators, fiscal agents and others having authority in the premises to
     effect all such payments and deliveries;

          (iii) each holder of the Subordinated Debt at the time outstanding
     hereby irrevocably authorizes and empowers the Senior Bank to demand, sue
     for, collect and receive of all such payments and distributions and to
     receipt therefor; and

          (iv) the holders of the Subordinated Debt shall execute and deliver to
     the Senior Bank, when and as deemed appropriate by the Senior Bank
     hereunder,


                                       -7-

     all such further instruments confirming the above authorization, and all
     such powers of attorney, proofs of claim, assignments of claim and other
     instruments, and shall take all such other action, as may be requested by
     the Senior Bank to enforce all claims upon or in respect of the
     Subordinated Debt as provided herein.

          (c) For all purposes of this Agreement, Senior Debt shall not be
deemed to have been paid in full unless (i) the holders thereof shall have
received cash equal to the amount of Senior Debt at the time outstanding and the
Loan Agreement shall have been terminated, or (ii) the holders of the Senior
Debt otherwise consent to the termination of the Loan Agreement.

          (d) No present or future holder of Senior Debt shall be prejudiced in
the right to enforce subordination of the Subordinated Obligations by any act or
failure to act on the part of any Loan Party or the Subordinated Creditor.

          (e) It is understood and agreed that the Subordinated Creditor shall
retain the right to vote all or any part of the Subordinated Debt for purposes
of (among other things) accepting or rejecting any plan of partial or complete
liquidation, reorganization, arrangement, composition or extension, provided
that the Subordinated Creditor shall not vote with respect to any such plan or
take any other action in any way so as to (i) contest the validity of any Senior
Debt or any collateral therefor or guaranties thereof, (ii) contest the relative
rights and duties of any holders of any Senior Debt established in any
instruments or agreements creating or evidencing any of the Senior Debt with
respect to any of such collateral or guaranties, (iii) contest such Subordinated
Creditor's obligations and agreements set forth in this Agreement, or (iv)
accept or confirm any plan of partial or complete liquidation, reorganization,
arrangement, composition or extension that the Senior Bank opposes or votes
against. Upon the failure of the Subordinated Creditor to file appropriate
proofs of claim, serve such proofs of claim upon the Senior Bank or take any
other appropriate action within 20 days prior to the date (after giving effect
to any extension) such proof of claim is due or other action needs to be taken,
the Subordinated Creditor each irrevocably authorize and empower the Senior Bank
to file such claims or take such actions.

          (f) It is understood and agreed that, upon commencement of enforcement
action by the Senior Bank against the Borrower under the Bank Agreements, the
Subordinated Creditor shall have the right, but not the obligation, to purchase
all, but not less than all, of the Senior Debt from the Senior Bank in cash and
assume all rights and obligations of the Senior Bank under the Bank Agreements,
provided that any such purchase must be on terms and conditions (including
amount) satisfactory in all respects to the Senior Bank.

     Section 4. Payments Held in Trust.

          (a) The Subordinated Creditor will hold in trust and immediately pay
over to the Senior Bank, in the same form of payment received, with appropriate


                                       -8-

endorsements, for application to the Senior Debt, any cash amount that any Loan
Party pays to the Subordinated Creditor with respect to the Subordinated Debt
(except for those payments expressly permitted to be made pursuant to Section
2(c) above), and will hold in trust as collateral for the Senior Debt any other
assets of any Loan Party that the Subordinated Creditor may receive with respect
to Subordinated Debt. Any such payments or distributions so paid over to the
Senior Bank by the Subordinated Creditor in accordance with this clause (a)
shall not constitute payments with respect to the Subordinated Debt and as such
will not reduce the outstanding amount of the Subordinated Debt.

          (b) If any payment or distribution of any character (whether in cash,
securities or other property) or any security shall be received by any holder of
any of the Subordinated Debt in contravention of any of the terms of this
Agreement, such payment or distribution or security shall be held in trust for
the benefit of, and shall be paid over or delivered and transferred to the
Senior Bank, for application to the payment of all Senior Debt remaining unpaid,
to the extent necessary to pay all such Senior Debt in full. In the event of the
failure of any holder of any of the Subordinated Debt to endorse or assign any
such payment, distribution or security, the Senior Bank is hereby irrevocably
authorized to endorse or assign the same. Any such payments or distributions so
paid over to the Senior Bank by the Subordinated Creditor in accordance with
this clause (b) shall not constitute payments with respect to the Subordinated
Debt and as such will not reduce the outstanding amount of the Subordinated
Debt.

     Section 5. Defense to Enforcement. If the Subordinated Creditor, in
contravention of the terms of this Agreement, shall commence, prosecute or
participate in any suit, action or proceeding against any Loan Party, then the
Senior Bank may intervene and interpose such defense or plea in its name or in
the name of such Loan Party. If either Subordinated Creditor, in contravention
of the terms of this Agreement, shall attempt to collect any of the Subordinated
Debt or enforce any of the Subordinated Documents, then the Senior Bank may, by
virtue of this Agreement, restrain the enforcement thereof in the name of the
Senior Bank or in the name of the Loan Parties. If either Subordinated Creditor,
in contravention of the terms of this Agreement, obtains any cash or other
assets of any Loan Party as a result of any administrative, legal or equitable
actions, or otherwise, the Subordinated Creditor agrees forthwith to pay,
deliver and assign to the Senior Bank, with appropriate endorsements, any such
cash for application to the Senior Debt and any such other assets as collateral
for the Senior Debt. Any such payments or distributions so paid over to the
Senior Bank by the Subordinated Creditor in accordance with this Section 5 shall
not constitute payments with respect to the Subordinated Debt and as such will
not reduce the outstanding amount of the Subordinated Debt.

     Section 6. Liens. (a) Neither Subordinated Creditor shall have or claim any
security interest, lien, claim, right or other Encumbrance in or on any property
of any Loan Party, other than the Subordinated Creditor may be named as loss
payees on up to $2,000,000 of key man life insurance held by the Loan Parties
(whereupon Citizens Capital, Inc. shall cease to be a loss payee thereunder) and
as expressly permitted by Section 5.6 of the Loan Agreement (the "Junior
Liens"). The Senior Debt, and all obligations of the Loan Parties


                                       -9-

under the Loan Agreement and the other Bank Agreements and any and all other
documents and instruments evidencing or creating the Senior Debt, and all
guaranties, mortgages, security agreements, pledges and other collateral
guarantying or securing the Senior Debt or any part thereof shall be senior to
the Subordinated Debt, the Junior Liens and all obligations of the Loan Parties
under all of the Subordinated Documents irrespective of the time of the
execution, delivery or issuance of any thereof or the filing or recording for
perfection of any thereof or the filing of any financing statements of
continuation statement relating to any thereof or the time, order or method of
attachment, perfection, filing or recording of any Encumbrance. In addition,
each Subordinated Creditor hereby agrees that, unless and until all Senior Debt
shall have been paid in full in cash and the Loan Agreement shall have been
terminated, it shall not at any time enforce or realize upon the Junior Liens.
Each Subordinated Creditor hereby agrees, upon request of the Senior Bank at any
time and from time to time, to execute such other documents or instruments as
may be reasonably requested by the Senior Bank further to evidence of public
record or otherwise the senior priority of the Senior Debt as contemplated by
this Agreement, and further agrees that the Senior Bank shall have the right to
control the filing of all financing statements naming the Subordinated Creditor
as a secured party. Each Subordinated Creditor further agrees to maintain on its
books and records such notations as the Senior Bank may reasonably request to
reflect the subordination contemplated by this Agreement and to perfect or
preserve the rights of the Senior Bank hereunder. A copy of this Agreement may
be filed as a financing statement in any Uniform Commercial Code recording
office.

     (b) Without limiting any of the rights of the Senior Bank under the Loan
Agreement, the other Bank Agreements or applicable law, in the event that the
Senior Bank releases any collateral for the Senior Debt in connection with a
sale, transfer or other disposition of same, which collateral also is subject to
the Junior Lien, such collateral shall thereupon be deemed to have been
automatically released from the Subordinated Agreement and Junior Lien in favor
of the Subordinated Creditor, provided that any net proceeds of any sale or
disposition of collateral in connection with such release shall be applied to
the Obligations.

     Section 7. Senior Bank's Freedom of Dealing. Each Subordinated Creditor
agrees, with respect to the Senior Debt and any and all collateral therefor and
guaranties thereof, that the Borrower and the Senior Bank may agree to increase
the amount of the Obligations under (and as defined in) the Bank Agreements
(subject to the Maximum Senior Debt limitations set forth in the definition of
Senior Debt contained in Section 1 hereof), and that the Borrower and the Senior
Bank may otherwise modify the terms of any of the Senior Debt, and the Senior
Bank may grant extensions of the time of payment or performance to and make
compromises, including releases of collateral or guaranties, and settlements
with the Borrower and all other persons, in each case without the consent of the
Subordinated Creditor or the Borrower and without affecting the agreements of
the Subordinated Creditor or the Loan Parties contained in this Agreement. The
terms of this Agreement, the subordination effected hereby and the rights of the
holders of the Senior Debt shall not be affected by any amendment of or addition
or supplement to any Senior


                                      -10-

Debt or any instrument or agreement relating thereto, any exercise or
non-exercise of any right, power or remedy under or in respect of any Senior
Debt or any instrument or agreement relating thereto, or any waiver, consent,
release indulgence, extension, renewal, modification, delay or other action,
inaction or omission, in respect of any Senior Debt or any instrument or
agreement relating thereto or any security therefor or guaranty thereof, whether
or not any holder of any Subordinated Debt shall have had notice or knowledge of
any of the foregoing. Notwithstanding the foregoing, the Senior Bank shall not
(i) increase the interest margin with respect to the Senior Debt by more than
200 basis points above the highest margin specified in the pricing grid, except
in connection with the imposition of a default rate of interest in accordance
with the terms of the Loan Agreement, or (ii) extend the final maturity of the
Senior Debt by more than 60 days without the consent of the Subordinated
Creditor, such consent not to be unreasonably withheld or delayed.

     Section 8. Modification or Sale of the Subordinated Debt. The Subordinated
Agreement may be amended or modified without the consent of the Senior Bank,
except for any of the following amendments or modifications, which will require
the Senior Bank's prior written consent:

     (i)  any increase in the principal amount of the Subordinated Debt;

     (ii) any shortening of the maturity of the Subordinated Debt (including by
          way of acceleration, except as otherwise provided herein) or any
          change in any of the prepayment or repurchase provisions, if any, or
          any other alteration of the repayment provisions of the Subordinated
          Debt in any respect;

     (iii) any increase in the interest rate, default rate, fees or premium
          applicable to the Subordinated Debt;

     (iv) any amendment to any covenants or events of default contained in the
          Subordinated Documents so as to make them more restrictive;

     (v)  the addition of any covenants or events of default to the Subordinated
          Debt Documents (including the addition of a cross-default of the
          Subordinated Debt to a Default or Event of Default under the Senior
          Debt, which such cross-default shall not be permitted);

     (vi) the requirement of any lien or other security for the Subordinated
          Debt (other than the Junior Liens expressly permitted hereunder and
          subject to the limitations contained herein);

     (vii) any change in any Subordinated Agreement that could reasonably be
          expected to materially increase either Subordinated Creditor's rights
          in relation to those of the Senior Bank or could reasonably be
          expected to


                                      -11-

          adversely affect the Senior Bank or its rights and remedies against
          any Loan Party or the Senior Bank; and

     (viii) any change or amendment to the Warrant Agreement which would permit
          the exercise of the Put Right prior to the maturity of the Senior
          Credit Agreement and the final repayment in full in cash of the Senior
          Debt

     Further, neither Subordinated Creditor will sell, transfer, pledge, assign,
hypothecate or otherwise dispose of any or all of the Subordinated Debt to any
person other than to the other Subordinated Creditor or to a person (i) that is
a legal entity that controls, or is controlled by, or is under common control
with, such Subordinated Creditor, (ii) iStar Financial, Inc., as lender to the
Subordinated Purchaser, or (iii) who is reasonably satisfactory to the Senior
Bank, such approval not to be unreasonably withheld or delayed, provided that,
in each case, such assignee shall agree in a writing, satisfactory in form and
substance to the Senior Bank, to become a party hereto and to succeed to the
rights and to bound by all of the obligations of the Subordinated Creditor
hereunder. Except with respect to dispositions to iStar Financial, Inc. by the
Subordinated Creditor (which notice shall be provided by the Subordinated
Creditors with reasonable promptness not later than the closing of such
disposition), in the case of any such disposition by the Subordinated Creditor,
the Subordinated Creditor will notify the Senior Bank at least 20 days prior to
the date of any of such intended disposition.

     Section 9. Borrower's Obligations Absolute. Nothing contained in this
Agreement shall impair, as between the Borrower and the Subordinated Creditor,
the obligation of the Borrower to pay to the Subordinated Creditor all amounts
payable in respect of the Subordinated Debt as and when the same shall become
due and payable in accordance with the terms thereof, all, however, subject to
the rights of the Senior Bank and the restrictions on the Subordinated Creditor
as set forth in this Agreement.

     Section 10. Termination of Subordination. This agreement shall continue in
full force and effect, and the obligations and agreements of the Subordinated
Creditor and the Loan Parties hereunder shall continue to be fully operative,
until all of the Senior Debt shall have been paid and satisfied in full in cash
and such full payment and satisfaction shall be final and not voidable. To the
extent that any Loan Party or any guarantor of or provider of collateral for the
Senior Debt makes any payment on the Senior Debt that is subsequently
invalidated, declared to be fraudulent or preferential or set aside or is
required to be repaid to a trustee, receiver or any other party under any
Bankruptcy, insolvency or reorganization act, state or federal law, common law
or equitable cause, except to the extent that any such payment is found by a
final, non-appealable judgment of a court to arise from the willful misconduct
of the Senior Bank (such payment being hereinafter referred to as a "Voided
Payment"), then to the extent of such Voided Payment, that portion of the Senior
Debt that had been previously satisfied by such Voided Payment shall be revived
and continue in full force and effect as if such Voided Payment had never been
made. In the event that a Voided Payment is recovered from the Senior Bank, an
Event of Default shall be deemed to have existed


                                      -12-

and to be continuing under the Loan Agreement from the date of the Senior Bank's
initial receipt of such Voided Payment until the full amount of such Voided
Payment is restored to the Senior Bank. During any continuance of any such Event
of Default, this Agreement shall be in full force and effect with respect to the
Subordinated Debt. To the extent that either Subordinated Creditor has received
any payments with respect to the Subordinated Debt subsequent to the date of the
Senior Bank's initial receipt of such Voided Payment and such payments have not
been invalidated, declared to be fraudulent or preferential or set aside or are
required to be repaid to a trustee, receiver, or any other party under any
Bankruptcy act, state or federal law, common law or equitable cause, the
Subordinated Creditor shall be obligated and hereby agree that any such payment
so made or received shall be deemed to have been received in trust for the
benefit of the Senior Bank, and the Subordinated Creditor hereby agrees to pay
to the Senior Bank, upon demand, the full amount so received by the Subordinated
Creditor during such period of time to the extent necessary fully to restore to
the Senior Bank the amount of such Voided Payment. Upon the payment and
satisfaction in full in cash of all of the Senior Debt, which payment shall be
final and not voidable, this Agreement will automatically terminate without any
additional action by any party hereto.

     Section 11. Waivers, etc. Except as expressly provided herein, the
provisions contained herein and the undertakings and agreements hereunder shall
not be affected by: (a) any rescission, waiver, amendment or modification of any
agreement referred to herein; (b) any exercise or nonexercise of any right,
remedy, power or privilege (including, without limitation, any sale, release or
exchange of any security) under in respect of any such agreement or applicable
law, including, without limitation, any waiver, consent, extension, indulgence
or other action or inaction in respect of any thereof; or (c) any bankruptcy,
insolvency, reorganization, arrangement, readjustment, composition, liquidation
or similar proceeding of or affecting any Loan Party. Except as required hereby,
proceeds from any collateral held by or for the benefit of the Senior Bank may
be applied to payment of any liabilities under the Bank Agreements, as the
Senior Bank shall determine in its sole discretion.

     Section 12. Notices. All notices and other communications which are
required and may be given pursuant to the terms of this Agreement shall be in
writing and shall be sufficient and effective in all respects if telecopied or
delivered (including by any commercial delivery service) or mailed by registered
or certified mail, postage prepaid, as follows:

     (a)  If to the Senior Bank, to it at: Bank of America, N.A., One Hundred
          Federal Street, Boston, Massachusetts 02110, Attention: John F. Lynch,
          with a copy to Philip A. Herman, Esq., Goulston & Storrs, 400 Atlantic
          Avenue, Boston, Massachusetts 02110-3333;

     (b)  If to the Borrower, to it at: Dover Saddlery, Inc., 525 Great Road,
          Littleton, Massachusetts 01460, Attention: Stephen L. Day, with a copy
          to


                                      -13-

          Preti, Flaherty, Beliveau, Pachios & Haley, LLC, 57 North Main Street,
          Concord, New Hampshire 03302; and

     (c)  If to the Subordinated Creditor, to it at: Patriot Capital Funding,
          Inc., 274 Riverside Avenue, Westport, Connecticut 06880, Attention:
          Timothy W. Hassler, with a copy to Edwards & Angell, LLP, Three
          Stamford Plaza, 301 Tresser Boulevard, Stamford, Connecticut 06901,
          Attention: Evan S. Seideman, Esq.;

or such other address or addresses as any party hereto shall have designated
have designated by written notice to the other parties hereto. Notices shall be
deemed given and effective upon the earlier to occur of (i) the fifth day
following deposit thereof in the U.S. mail or (ii) receipt by the party to whom
such notice is directed.

     Section 13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts
(without giving effect to provisions relating to conflicts of law). Any legal
action or proceeding arising out of or relating to this Agreement or any
Obligation may be instituted in the courts of the Commonwealth of Massachusetts
or of the United States of America for the District of Massachusetts, and each
of the Senior Bank, the Borrower and the Subordinated Creditor hereby
irrevocably submits to the jurisdiction of each such court in any such action or
proceeding, provided, however, that the foregoing shall not limit the Senior
Bank's rights to bring any legal action or proceeding in any other appropriate
jurisdiction in which event, at the Senior Bank's option, the laws of such
jurisdiction or of the Commonwealth of Massachusetts shall apply. Personal
jurisdiction over each of the Senior Bank, the Borrower and the Subordinated
Creditor may be obtained by the mailing (postage prepaid) of a summons or
similar legal document to each of the Senior Bank, the Borrower and the
Subordinated Creditor at their respective addresses for notices under this
Agreement.

     Section 14. Waiver of Jury Trial. EACH OF THE SENIOR BANK, THE SUBORDINATED
CREDITOR AND THE LOAN PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER WRITTEN OR VERBAL) OR ACTIONS OF ANY
PARTY. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER
INTO THIS AGREEMENT AND FOR THE SENIOR BANK TO MAKE LOANS AND EXTEND CREDIT TO
THE BORROWER. EXCEPT AS PROHIBITED BY LAW, THE SENIOR BANK, THE SUBORDINATED
CREDITOR AND THE LOAN PARTIES EACH HEREBY WAIVES ANY RIGHT WHICH IT MAY HAVE TO
CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL


                                      -14-

DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE SENIOR
BANK, THE SUBORDINATED CREDITOR AND THE BORROWER EACH (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT EACH OTHER PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.

     Section 15. Further Assurances. The parties agree to do, make, execute and
deliver all such additional and further acts, things, assurances and instruments
as any party may reasonably require to carry into effect the provisions and
intent of this Agreement, including such documents as may be reasonably
requested by any bank or banks which re-fund or refinance any of the Senior
Debt.

     Section 16. Miscellaneous. This Agreement may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement, it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against which enforcement is sought. The Senior Bank may, in its sole and
absolute discretion, waive any provisions of this Agreement benefiting the
Senior Bank; provided, however, that such waiver shall be effective only if in
writing and signed by the Senior Bank and shall be limited to the specific
provision or provisions expressly so waived. This Agreement shall be binding
upon the respective successors and assigns of the Subordinated Creditor and the
Borrower and shall inure to the benefit of the Senior Bank, the Senior Bank's
respective successors and assigns, any bank refunding or refinancing any of the
Senior Debt and their respective successors and assigns, but shall not otherwise
create any rights or benefits for any third party. In the event that any lender
or lenders refund or refinance any of the Senior Debt, the terms "Loan
Agreement", "Bank Agreements", "Event of Default" and the like shall refer
mutatis mutandis to the agreements and instruments in favor of such lender or
lenders and to the related definitions contained therein.

                      [Signatures appear on following page]


                                      -15-

                                    The Senior Bank:

                                    BANK OF AMERICA, N.A.
                                    (successor by merger to Fleet National Bank)


                                    By: /s/ John F. Lynch
                                        ----------------------------------------
                                    Name: John F. Lynch
                                    Title: Senior Vice President


                                    The Subordinated Creditor:

                                    PATRIOT CAPITAL FUNDING, INC.


                                    By: /s/ Richard P. Buckanavage
                                        ----------------------------------------
                                    Name: Richard P. Buckanavage
                                    Title: President


                                    By: /s/ Timothy W. Hassler
                                        ----------------------------------------
                                    Name: Timothy W. Hassler
                                    Title: Chief Operating Officer


                                    The Borrower:

                                    DOVER SADDLERY, INC.
                                    (a Massachusetts corporation)


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

                       [Signatures continue on next page]


                                      -16-

Acknowledged and Agreed:

DOVER SADDLERY, INC. (a Delaware
corporation)


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


SMITH BROTHERS, INC.


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


                                      -17-

EX-10.32

                                                                   EXHIBIT 10.32

THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND BY THE OTHER
PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASERS AND SERVICER HEREUNDER AND
THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED AND RESTATED
SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005, 2003 (THE "AMENDED AND
RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF AMERICA, AS
THE SENIOR LENDER, THE SERVICER AND THE PURCHASER, TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE LOAN PARTIES UNDER AND
PURSUANT TO THE AMENDED AND RESTATED SENIOR CREDIT AGREEMENT AND EACH RELATED
"LOAN DOCUMENT" (AS DEFINED THEREIN). THE SERVICER AND EACH HOLDER HEREOF, BY
ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE AMENDED AND RESTATED SUBORDINATION AGREEMENT.

            AMENDED AND RESTATED SENIOR SUBORDINATED NOTE AND WARRANT
                               PURCHASE AGREEMENT

                                  BY AND AMONG

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

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

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

                                       AND

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

                                       AND

                          THE PURCHASERS IDENTIFIED ON
                                 ANNEX A HERETO

                               SEPTEMBER 16, 2005

                                TABLE OF CONTENTS



                                                                            Page
                                                                            ----
                                                                         
ARTICLE 1    DEFINITIONS.................................................     2
   1.1     CERTAIN DEFINITIONS...........................................     2
   1.2     ACCOUNTING PRINCIPLES.........................................    12
   1.3     OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION...................    12

ARTICLE 2    ISSUE AND SALE OF SECURITIES................................    12
   2.1     AUTHORIZATION AND ISSUANCE OF THE NOTES AND WARRANTS..........    12
   2.2     SALE AND PURCHASE.............................................    13
   2.3     THE CLOSING...................................................    13

ARTICLE 3    REPAYMENT OF THE NOTES......................................    13
   3.1     INTEREST RATES AND INTEREST PAYMENTS..........................    13
   3.2     REPAYMENT OF THE NOTES........................................    13
   3.3     OPTIONAL PREPAYMENT OF NOTES..................................    13
   3.4     NOTICE OF OPTIONAL PREPAYMENT.................................    14
   3.5     MANDATORY PREPAYMENT..........................................    14
   3.6     ANNIVERSARY FEE...............................................    14
   3.7     HOME OFFICE PAYMENT...........................................    14
   3.8     TAXES.........................................................    14
   3.9     MAXIMUM LAWFUL RATE...........................................    15
   3.10    CAPITAL ADEQUACY..............................................    15
   3.11    CERTAIN WAIVERS...............................................    16

ARTICLE 4    CONDITIONS..................................................    16
   4.1     CONDITIONS TO PURCHASE OF SECURITIES..........................    16

ARTICLE 5    REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES..............    19
   5.1     REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES............    19
   5.2     ABSOLUTE RELIANCE ON THE REPRESENTATIONS AND WARRANTIES.......    26

ARTICLE 6    TRANSFER OF SECURITIES......................................    26
   6.1     RESTRICTED SECURITIES.........................................    26
   6.2     LEGENDS; PURCHASER'S REPRESENTATIONS..........................    26
   6.3     ASSIGNMENTS AND PARTICIPATIONS................................    26
   6.4     REPLACEMENT OF LOST SECURITIES................................    27
   6.5     NO OTHER REPRESENTATIONS AFFECTED.............................    27
   6.6     REGISTER......................................................    27

ARTICLE 7    COVENANTS...................................................    27
   7.1     AFFIRMATIVE COVENANTS.........................................    27
   7.2     NEGATIVE COVENANTS............................................    33



                                      -i-

                                                                          
   7.3     FINANCIAL COVENANTS...........................................    38

ARTICLE 8    EVENTS OF DEFAULT...........................................    39
   8.1     EVENTS OF DEFAULT.............................................    39
   8.2     CONSEQUENCES OF EVENT OF DEFAULT..............................    41
   8.3     SECURITY......................................................    42

ARTICLE 9    THE SERVICER................................................    42
   9.1     AUTHORIZATION AND ACTION......................................    42
   9.2     DELEGATION OF DUTIES..........................................    42
   9.3     EXCULPATORY PROVISIONS........................................    42
   9.4     RELIANCE......................................................    43
   9.5     NON-RELIANCE ON SERVICER AND OTHER PURCHASERS.................    43
   9.6     SERVICER IN ITS INDIVIDUAL CAPACITY...........................    43
   9.7     SUCCESSOR SERVICER............................................    43
   9.8     COLLECTIONS AND DISBURSEMENTS.................................    44
   9.9     REPORTING.....................................................    44
   9.10    CONSENT OF PURCHASERS.........................................    45
   9.11    THIS ARTICLE NOT APPLICABLE TO LOAN PARTIES...................    45
   9.12    NO LIABILITY OF PURCHASERS....................................    45

ARTICLE 10   MISCELLANEOUS...............................................    46
   10.1    SUCCESSORS AND ASSIGNS........................................    46
   10.2    MODIFICATIONS AND AMENDMENTS..................................    46
   10.3    NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.....    46
   10.4    REIMBURSEMENT OF EXPENSES.....................................    46
   10.5    HOLIDAYS......................................................    46
   10.6    NOTICES.......................................................    46
   10.7    SURVIVAL......................................................    48
   10.8    GOVERNING LAW.................................................    48
   10.9    JURISDICTION, CONSENT TO SERVICE OF PROCESS...................    48
   10.10      JURY TRIAL WAIVER..........................................    49
   10.11      SEVERABILITY...............................................    49
   10.12      HEADINGS...................................................    49
   10.13      INDEMNITY..................................................    49
   10.14      ENVIRONMENTAL INDEMNITY....................................    49
   10.15      COUNTERPARTS...............................................    50
   10.16      INTEGRATION................................................    50
   10.17      SUBORDINATION..............................................    50
   10.18      ORIGINAL ISSUE DISCOUNT....................................    51



ANNEX

SCHEDULES


                                      -ii-

            AMENDED AND RESTATED SENIOR SUBORDINATED NOTE AND WARRANT
                               PURCHASE AGREEMENT

                    $8,050,000 AGGREGATE PRINCIPAL AMOUNT OF
              SENIOR SECURED SUBORDINATED NOTES OF THE LOAN PARTIES
                             DUE SEPTEMBER 16, 2009

                                  together with

           WARRANTS TO PURCHASE COMMON STOCK REPRESENTING .805% OF THE
            CONVERTIBLE SECURITIES OF PARENT ON A FULLY DILUTED BASIS

     THIS AMENDED AND RESTATED SENIOR SUBORDINATED NOTE AND WARRANT PURCHASE
AGREEMENT (this "Agreement"), dated as of September 16, 2005, is by and among
DOVER SADDLERY, INC., a Delaware corporation ("Parent"), DOVER SADDLERY, INC., a
Massachusetts corporation and wholly-owned subsidiary of Parent ("Operating
Company #1"), SMITH BROTHERS, INC., a Texas corporation and wholly-owned
subsidiary of Parent ("Operating Company #2 and, together with Parent and
Operating Company #1, the "Loan Parties"), the securities purchasers that are
now and hereafter at any time parties hereto and are listed in Annex B (or any
amendment or supplement thereto) attached hereto (individually, a "Purchaser"
and collectively, "Purchasers"), and PATRIOT CAPITAL FUNDING, INC., a Delaware
corporation ("Patriot"), as administrative agent for Purchasers (in such
capacity, "Servicer"). Capitalized terms used and not defined elsewhere in this
Agreement are defined in Article 1 hereof.

                                    RECITALS

     WHEREAS, the Loan Parties, Servicer and Purchasers are parties to that
certain Senior Subordinated Note Purchase Agreement, dated as of December 11,
2003, pursuant to which the Purchasers purchased $3,500,000.00 of notes (the
"Prior Notes") to provide debt financing to the Loan Parties (the "Prior Note
Purchase Agreement"); and

     WHEREAS, the Loan Parties, the Purchasers and Servicer desire to amend and
restate the Prior Notes and Prior Note Purchase Agreement for the purpose of:
(i) redeeming 603,889 shares of the Citizens Stock; (ii) paying fees and
expenses in connection with the transactions contemplated under the Transaction
Documents; and (iii) financing ongoing working capital and capital expenditure
requirements and other general corporate purposes in the ordinary course of
business; and

     WHEREAS, in order to induce the Purchasers to purchase the Notes to be
issued pursuant to this Agreement, Parent has agreed to issue and sell to
Purchaser, warrants exercisable for shares of Common Stock representing .805% of
the Convertible Securities of Parent on a Fully Diluted Basis, subject to the
terms and conditions set forth in this Agreement.

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

                                    ARTICLE 1

                                   DEFINITIONS

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

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

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

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

     "Amended and Restated Subordination Agreement" means that certain Amended
and Restated Subordination Agreement by and among the Senior Lender, the Loan
Parties, the Servicer and the Purchaser, dated as of September 16, 2005, as such
may be amended or modified from time to time as permitted thereby.

     "Anniversary Fee" has the meaning assigned to such term in Section 3.6
hereof.

     "Arrangement Fee" means a fee in an amount equal to 1.00% of the initial
aggregate principal amount of the Notes payable by the Loan Parties to Servicer
at Closing in consideration of the structuring of the financing contemplated
hereby.

     "Bank of America" means Bank of America, N.A., as successor by merger to
Fleet National Bank, having its head office at 100 Federal Street, Boston, MA
02110.

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


                                       -2-

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

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

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

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

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

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

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

          (a) any transaction or series of related transactions resulting in the
     sale or issuance of securities or any rights to securities of Parent by
     Parent, or any transaction or series of related transactions resulting in
     the sale, transfer, assignment or other conveyance or disposition of any
     securities or any rights to securities of Parent by any holder or holders
     thereof and, as a result thereof in either case, Stephen L. Day holds less
     than 80% of the voting securities of Parent owned by him as of the Closing
     Date or less than 80% of the total equity securities of Parent owned by him
     as of the Closing Date (or, subsequent to the consummation of the IPO,
     holding less than 10% of the voting securities of Parent or less than 10%
     of the total equity securities of Parent), in all cases computed on a fully
     diluted basis;

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


                                       -3-

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

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

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

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

     "Citizens" means Citizens Ventures, Inc. and any Affiliate holding the
Citizens Stock.

     "Citizens Redemption Agreement" means the Redemption Agreement dated as of
the date hereof, by and between Parent and Citizens.

     "Citizens Stock" means the 1,015,000 shares of Common Stock held by
Citizens as of the Closing (following conversion of 1,015,000 shares of
Preferred Stock previously held by Citizens), of which 603,889 shares of Common
Stock will be redeemed pursuant to the Citizens Redemption Agreement.

     "Citizens Transaction" means the transactions contemplated by the Citizens
Redemption Agreement, including the redemption of 603,889 shares of the Citizens
Stock.

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

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

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

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

     "Competitor" means a Person actively engaged the Business.

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

     "Convertible Securities" means securities or obligations that are directly
or indirectly exercisable for, convertible into or exchangeable for shares of
common stock or other shares of capital stock of the issuer. As to Parent, the
term includes, without limitation, Preferred Stock and options, warrants or
other rights to subscribe


                                       -4-

for or purchase Common Stock or to subscribe for or purchase other shares of
capital stock and notes or other obligations that are directly or indirectly,
exercisable for, convertible into or exchangeable for Common Stock.

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

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

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

     "EBITDA" means, during any period of determination, without duplication,
the Net Income of the Loan Parties for such period plus the following, to the
extent deducted in computing such Net Income: (i) depreciation, (ii)
amortization, (iii) other non-cash charges, (iv) Interest Charges, (v) Taxes on
income imposed by any Governmental Authority, and (vi) all extraordinary items.
It is agreed that there shall be excluded from the computation of EBITDA
one-time, non-recurring transaction expenses, not to exceed $450,000 in the
aggregate, which are directly related to the IPO and the transactions
contemplated by the Senior Credit Agreement, this Agreement and the
Recapitalization Agreement, and which are actually deducted in calculating
EBITDA; provided, however, that such on-time, non-recurring transaction expenses
(a) are paid within 6 months after the date of this Agreement, (b) are expensed
and not capitalized and (c) are excluded only for any period of computation of
EBITDA which includes the fiscal quarter in which such expenses have been
deducted.

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

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

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

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

     The term "Environmental Liabilities" includes: (i) fines, penalties,
judgments, awards, settlements, losses, damages (including foreseeable and
unforeseeable consequential damages), costs, fees (including attorneys' and
consultants' fees), expenses and disbursements; (ii) defense


                                       -5-

and other responses to any administrative or judicial action (including claims,
notice letters, complaints, and other assertions of liability); and (iii)
financial responsibility for (1) cleanup costs and injunctive relief, including
any Removal, Remedial or other Response actions, and natural resource damages,
and (2) any other compliance or remedial measures.

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

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

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

     "Executive Officers" means the chief executive officer, chief operating
officer and chief financial officer of the applicable Loan Party.

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

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

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

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

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

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

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


                                       -6-

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

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

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

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

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

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

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


                                       -7-

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

     "IPO" means a public offering of shares of Parent's Common Stock pursuant
to an effective registration statement on Form S-1, or successor form, of the
SEC, to be closed prior to March 30, 2006, and pursuant to which the aggregate
gross proceeds to Parent and selling shareholders in the offering are not less
than $20,000,000.

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

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

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

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

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

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

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

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

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


                                       -8-

entity (other than a Subsidiary) in which a Loan Party has an ownership
interest, except to the extent such net earnings shall have actually been
received by the Loan Party in the form of cash distributions; (iv) any gains or
losses on the sale or other disposition of investments or fixed or capital
assets; (v) the proceeds of any life insurance policy; (vi) any deferred or
other credit representing any excess of the equity of any Subsidiary at the date
of acquisition thereof over the amount invested in such Subsidiary; and (vii)
any reversal of any contingency reserve, except to the extent that provision for
such contingency reserve shall be made from income arising during such period.

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

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

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

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

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

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

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

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

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

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

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


                                       -9-

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

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

     "Prior Notes" has the meaning assigned to such term in the recitals hereto.

     "Prior Note Purchase Agreement" has the meaning assigned to such term in
the recitals hereto.

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

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

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

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

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

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

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

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

     "Revolving Financing" means a secured revolving line of credit facility
under the Senior Credit Agreement providing for advances in an aggregate amount
outstanding initially not to exceed $16,000,000.

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


                                      -10-

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

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

     "Security Documents" means the Amended and Restated Security Agreement, the
Financing Statements, and all other documents, instruments and other materials
necessary to create, maintain or perfect the security interests created pursuant
to the Amended and Restated Security Agreement.

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

     "Senior Financing" means the Revolving Financing.

     "Senior Lender" means Bank of America and each other lender party to the
Senior Credit Agreement.

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

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

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

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

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


                                      -11-

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

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

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

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

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

                                    ARTICLE 2

                          ISSUE AND SALE OF SECURITIES

     2.1 AUTHORIZATION AND ISSUANCE OF THE NOTES AND WARRANTS.

          (a) NOTES. The Loan Parties have duly authorized the issuance and sale
to Purchasers of $8,050,000 in aggregate principal amount of the Loan Parties'
Senior Secured Subordinated Notes (including any Notes issued in substitution
therefor pursuant to Sections 6.3 and 6.4 hereof, the "Notes"), to be
substantially in the forms attached hereto as Exhibit A.

          (b) WARRANTS. Parent has duly authorized the issuance and sale to
Purchasers of warrants to purchase Common Stock representing .805% of the
Convertible Securities of Parent on a Fully Diluted Basis (the "Warrants"), to
be substantially in the form attached hereto as Exhibit B.


                                      -12-

     2.2 SALE AND PURCHASE. Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Loan
Parties shall sell to Purchasers, and Purchasers shall purchase from the Loan
Parties, in an amount equal to the pro rata portion of the Notes and Warrants as
set forth on Annex B, the Notes in the aggregate principal amount and Warrants
set forth in Section 2.1 hereof. The Notes and Warrants are sometimes referred
to herein as the "Securities." The aggregate purchase price for the Securities
shall be $8,050,000.

     2.3 THE CLOSING. Delivery of and payment for the Securities (the "Closing")
shall be made at the offices of Edwards & Angell, LLP, Three Stamford Plaza, 301
Tresser Boulevard, Stamford, Connecticut, commencing at 10:00 a.m., local time,
on September 16, 2005 or at such place or on such other date on or before
September 30, 2005 as may be mutually agreeable to the Loan Parties and
Purchasers. The date and time of the Closing as finally determined pursuant to
this Section 2.3 are referred to herein as the "Closing Date." Delivery of the
Securities shall be made to Purchasers against payment of the purchase price
therefore, less the Arrangement Fee and any other amounts payable pursuant to
Section 4.1(j) hereof, by wire transfer of immediately available funds in the
manner agreed to by the Loan Parties and Purchasers. The Notes shall be issued
in such name or names and in such permitted denomination or denominations as set
forth in Annex B or as Purchasers may request in writing not less than two (2)
Business Days before the Closing Date. The Closing shall occur simultaneously
with the closing of the transactions contemplated by the Senior Credit Agreement
and the Citizens Redemption Agreement.

                                    ARTICLE 3

                             REPAYMENT OF THE NOTES

     3.1 INTEREST RATES AND INTEREST PAYMENTS. The Notes will bear interest on
the outstanding principal amount thereof at a rate equal to 11.50% per annum.
Interest on the Notes will be computed on the basis of a year of 360 days,
composed of twelve 30-day months, and the actual number of days elapsed. The
Loan Parties, jointly and severally, covenant and agree to make payments to
Servicer for the ratable benefit of Purchasers, of accrued interest on the Notes
on the fifth (5th) Business Day of each month (each an "Interest Payment Date")
commencing on October 1, 2005. All accrued but unpaid interest on the Notes
shall be due and payable in cash on each Interest Payment Date.

     3.2 REPAYMENT OF THE NOTES. The Loan Parties, jointly and severally,
covenant and agree to repay to Servicer, for the ratable benefit of Purchasers,
the unpaid principal balance of the Notes in full, together with all accrued and
unpaid interest, fees and other amounts due hereunder, on September 16, 2009.

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


                                      -13-



         If Prepaid During
   the 12-Month Period Ending on
September 16 of the Following Years:   Percentage
- ------------------------------------   ----------
                                    
2006                                       3%
2007                                       4%
2008                                       5%
2009 through and including maturity        6%


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

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

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

     3.6 ANNIVERSARY FEE. On the first anniversary of the Closing Date and
solely in the event that the Notes remain outstanding, the Loan Parties shall
pay Servicer, for the benefit of the Purchasers, a fee (the "Anniversary Fee")
equal to .50% multiplied by the principal amount of the Notes then outstanding.

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

     3.8 TAXES. Any and all payments by the Loan Parties hereunder or under the
Notes or other Purchase Documents that are made to or for the benefit of
Purchasers shall be made free


                                      -14-

and clear of and without deduction for any and all present or future Taxes,
excluding taxes imposed on Servicer's or Purchasers' net income or capital and
franchise taxes imposed on any of them by the jurisdiction under the laws of
which any of them is organized or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes"). If any of
the Loan Parties shall be required by law to deduct any Covered Taxes from or in
respect of any sum payable hereunder or under any Notes or other Purchase
Documents to Servicer for the benefit of Purchasers, or to Purchasers, the sum
payable shall be increased as may be necessary so that after making all required
deductions of Covered Taxes (including deductions of Covered Taxes applicable to
additional sums payable under this paragraph), each Purchaser receives an amount
equal to the sum it would have received had no such deductions been made. The
Loan Parties shall make such deductions and the Loan Parties shall pay the full
amount so deducted to the relevant taxation authority or other authority in
accordance with applicable law. In addition, the Loan Parties agree to pay any
present or future stamp, documentary, excise, privilege, intangible or similar
levies that arise at any time or from time to time from any payment made under
any and all Purchase Documents or from the execution or delivery by the Loan
Parties or from the filing or recording or maintenance of, or otherwise with
respect to the exercise by Servicer or Purchasers of their respective rights
under any and all Purchase Documents (collectively, "Other Taxes"). The Loan
Parties will indemnify Servicer and Purchasers for the full amount of Covered
Taxes imposed on or with respect to amounts payable hereunder and Other Taxes,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. Payment of this indemnification shall be made within
thirty (30) days from the date Servicer or Purchasers provide the Loan Parties
with a certificate certifying and setting forth in reasonable detail the
calculation thereof as to the amount and type of such Taxes. Any such
certificates submitted by Servicer or Purchasers in good faith to the Loan
Parties shall, absent manifest error, be final, conclusive and binding on all
parties. The obligation of the Loan Parties under this Section 3.8 shall survive
the payment of the Notes and the termination of this Agreement. Within thirty
(30) days after the Loan Parties having received a receipt for payment of
Covered Taxes and/or Other Taxes, the Loan Parties shall furnish to Servicer,
the original or certified copy of a receipt evidencing payment thereof.

     3.9 MAXIMUM LAWFUL RATE. This Agreement, the Notes and the other Purchase
Documents are hereby limited by this Section 3.9. In no event, whether by reason
of acceleration of the maturity of the amounts due hereunder or otherwise, shall
interest and fees contracted for, charged, received, paid or agreed to be paid
to Purchasers exceed the maximum amount permissible under such applicable law.
If, from any circumstance whatsoever, interest and fees would otherwise be
payable to Servicer or Purchasers in excess of the maximum amount permissible
under applicable law, the interest and fees shall be reduced to the maximum
amount permitted under applicable law. If from any circumstance, Servicer or
Purchasers shall have received anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excess of
interest shall be applied to the reduction of the principal amount of the Notes,
in such manner as may be determined by Purchasers, and not to the payment of
fees or interest, or if such excessive interest exceeds the unpaid balance of
the principal amount of the Notes, such excess shall be refunded to the Loan
Parties.

     3.10 CAPITAL ADEQUACY. If, after the date hereof, either the introduction
of or any change of the interpretation of any law or the compliance by
Purchasers with any guideline or request from any Governmental Authority
(whether or not having the force of law) has or would


                                      -15-

have the effect of reducing the rate of return on the capital or assets of
Purchasers as a consequence of, as determined by Servicer or Purchasers in their
sole discretion, the existence of any Purchaser's obligations under this
Agreement or any other Purchase Documents, then, upon demand by Purchasers, the
Loan Parties immediately shall pay to Purchasers, from the time as specified by
Purchasers, additional amounts sufficient to compensate Purchaser in light of
such circumstances. The obligations of the Loan Parties under this Section 3.9
shall survive the payments of the Notes and the termination of this Agreement.

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

                                    ARTICLE 4

                                   CONDITIONS

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

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

          (B) MATERIAL ADVERSE EFFECT. There shall have occurred no event or
occurrence constituting, or with the passage of time may reasonably be expected
to have a Material Adverse Effect.

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


                                      -16-

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

          (E) AMENDED AND RESTATED SUBORDINATION AGREEMENT. The Loan Parties,
Purchaser, Servicer and the Senior Lender shall have executed and delivered the
Amended and Restated Subordination Agreement.

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

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

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

               (ii) one or more Warrants in the form of Exhibit B hereto (as
designated by Servicer and Purchasers pursuant to Section 2.1 and Annex B
hereof), evidencing the right to acquire shares of Common Stock, subject to
adjustment from time to time in accordance with the terms thereof, duly
completed and executed by Parent;

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

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

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

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

               (vii) copies of the resolutions duly adopted by each of the Loan
Party's board of directors, general partners, board of managers or other
governing body, authorizing the execution, delivery and performance by the
respective Loan Party of this Agreement and each of


                                      -17-

the other agreements, instruments and documents contemplated hereby to which the
respective Loan Party is a party, and the consummation of all of the other
Transactions, certified as of the Closing Date by the secretary, assistant
secretary, manager or general partner, as applicable, of the respective Loan
Party;

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

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

               (x) an opinion of PretiFlaherty PLLP, counsel to the Loan Parties
in form the form of Exhibit D;

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

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

               (xiii) copies of all documents related to the Citizens
Transaction, including, without limitation, fully executed copies of the
Citizens Redemption Agreement and certificates representing the Citizens Stock,
together with instruments of transfer executed in blank.

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

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

          (J) PURCHASERS' FEES AND EXPENSES.

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

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


                                      -18-

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

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

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

          (N) CONSUMMATION OF CITIZENS TRANSACTION. The Citizens Transaction
shall have closed concurrently with the Closing.

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

          (P) MINIMUM EBITDA; MAXIMUM FUNDED DEBT RATIO; MAXIMUM FUNDED SENIOR
DEBT RATIO. On the Closing Date, the Loan Parties shall have provided evidence
to the reasonable satisfaction of the Servicer of (i) pro forma EBITDA for the
twelve month period preceding the Closing of not less than $4,750,000; (ii) a
Funded Debt Ratio at Closing of not more than 4.50 to 1.0; and (iii) a Funded
Senior Debt Ratio at Closing of not more than 3.00 to 1.0.

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

                                    ARTICLE 5

                 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES

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

          (A) ORGANIZATION AND POWER. Each of the Loan Parties is a corporation
or limited liability company duly organized, validly existing and in good
standing under the Laws of its state of formation. Each of the Loan Parties has
all requisite corporate or other organizational power and authority and all
material licenses, permits, approvals and authorizations necessary to own and
operate its properties, to carry on its businesses as now


                                      -19-

conducted and presently proposed to be conducted and to carry out the
Transactions, and is qualified to do business in the jurisdictions listed on the
"Organization Schedule" attached hereto as Schedule 5.1(a), which includes every
jurisdiction where the failure to so qualify might reasonably be expected to
have a Material Adverse Effect. Each of the Loan Parties has its principal place
of business as set forth on the "Organization Schedule". The copies of the
Charter Documents and By-Laws of the Loan Parties that have been furnished to
Servicer reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.

          (B) PRINCIPAL BUSINESS. Each of Operating Company #1 and Operating
Company #2 is engaged in the business of the offer and sale of tack and equine
products for mail order, retail and online purchase, and Parent's only activity
is ownership of Operating Company #1 and Operating Company #2 (collectively, the
"Business"). Purchasers' investment in the Securities will not be characterized
as a "United States real property interest" within the meaning of Section 897(c)
of the Code.

          (C) FINANCIAL STATEMENTS AND FINANCIAL PROJECTIONS.

               (I) FINANCIAL STATEMENTS; HISTORICAL STATEMENTS. The Loan Parties
have delivered to Servicer copies of their audited consolidated year-end
financial statements (including a balance sheet and statement of operations,
stockholders' equity and cash flows of each of the Loan Parties) for and as of
the end of the three fiscal years ended December 31, 2002, 2003 and 2004 (the
"Annual Statements") and the seven (7) months ended July 31, 2005, for each of
the Parent, Operating Company #1 and Operating Company #2 (the "Most Recent
Statements"). The Annual Statements and the Most Recent Statements were compiled
from the books and records maintained by the management of the companies
referred to above, are correct and complete and fairly represent the
consolidated financial condition of such companies as of their dates and the
results of operations for the fiscal periods then ended and have been prepared
in accordance with GAAP consistently applied (except, with respect to the Most
Recent Statements, for the absence of notes thereto and the making of certain
normal year-end accruals and adjustments, none of which will be individually or
in the aggregate material).

               (II) FINANCIAL PROJECTIONS. The Loan Parties have delivered to
Servicer financial projections of the Loan Parties for the period from July 31,
2005 through December 31, 2010 derived from various assumptions of the Loan
Parties' management (the "Financial Projections"). The Financial Projections
represent a reasonable range of possible results in light of the history of the
Business and the Loan Parties and the present and foreseeable conditions and the
intentions of the Loan Parties' management. The Financial Projections accurately
reflect the liabilities of the Loan Parties upon consummation of the
transactions contemplated hereby as of the Closing Date.

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


                                      -20-

          (D) CAPITALIZATION AND RELATED MATTERS. (i) As of the Closing Date and
immediately after giving effect to the Citizens Transaction, the authorized
capital stock of Parent will consist of: (A) 5,400,000 shares of Common Stock,
of which (x) 4,300,000 shares are designated as "Class A Common", of which
2,896,000 shares are issued and outstanding and (y) 1,100,000 are designated
"Class B Common", of which no shares are issued and outstanding; and (B)
1,100,000 shares of Preferred Stock, of which none are issued and outstanding.
As of the Closing Date and immediately thereafter, 390,000 shares of common
stock of the Parent have been reserved for issuance upon exercise of the options
issuable under the 1999 Option Plan of the Parent. As of the Closing, each
outstanding share of Common Stock and capital stock of each Loan Party will be
duly authorized, validly issued, fully paid and non-assessable and not issued in
violation of any preemptive or similar rights created by applicable Law, any
Loan Party's Charter Documents, By-laws or by any agreement to which any Loan
Party is a party or by which it is bound, and will have been issued in
compliance with applicable federal and state securities or "blue sky" Laws. As
of the Closing Date, no Loan Party will have outstanding any stock or securities
convertible or exchangeable for any shares of its capital stock other than the
Preferred Stock and options issuable under the 1999 Option Plan of the Parent or
any rights or options to subscribe for or to purchase its capital stock or any
stock or securities convertible into or exchangeable for its capital stock,
other than the Preferred Stock and options issuable under the 1999 Option Plan
of the Parent. As of the Closing Date, no Loan Party will be subject to any
obligation (contingent or otherwise) to repurchase or acquire or retire any
shares of its capital stock. None of the Loan Parties have violated any
applicable federal or state securities laws in connection with the offer, sale
or issuance of any of its capital stock, and the offer, sale and issuance of the
Securities hereunder do not require registration under the Securities Act or any
applicable state securities laws. There are no agreements among Parent's
stockholders with respect to the voting or transfer of Parent's capital stock
other than (i) as set forth in that certain Stockholders Agreement, dated
September 17, 1998 by and among Parent, Stephen L. Day, Jonathan A.R. Grylls,
David Post, Donald Motsenbocker, Thomas Gaines, James F. Powers, David J. Powers
and Michele R. Powers, (ii) as set forth in that certain Stockholders and
Registration Rights Agreement, dated September 17, 1998, by and among Parent,
Stephen L. Day and Citizens Ventures, Inc., or (iii) as contemplated herein.

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

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

          (F) AUTHORIZATION; NO BREACH. The execution, delivery and performance
of this Agreement, the other Purchase Documents and all other agreements
contemplated hereby and thereby to which each of the Loan Parties is a party
(collectively, the "Transaction Documents"), and the consummation of the
Transactions have been duly authorized by each of the Loan Parties. The
execution and delivery by each of the Loan Parties of the Transaction Documents
and the consummation of the Transactions do not and will not (i) conflict with
or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under,


                                      -21-

(iii) except as created pursuant to the Security Documents, result in the
creation of any Lien upon any of the Loan Parties' capital stock or assets
pursuant to, (iv) give any third party the right to accelerate any obligation
under, (v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any Governmental Authority
pursuant to, the Charter Documents of any of the Loan Parties, or any Law to
which any of the Loan Parties is subject, or any agreement, instrument, order,
judgment or decree to which any of the Loan Parties is a party or to which they
or their assets are subject.

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

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

          (I) NO MATERIAL ADVERSE CHANGE. Since December 31, 2004, there has
been no event or occurrence that is likely to have a Material Adverse Effect.

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

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


                                      -22-

          (L) ENVIRONMENTAL PROTECTION. Except as specified in "Environmental
Schedule" attached hereto as Schedule 5.1(l) and after giving effect to the
Transactions: (a) the business of the Loan Parties, the methods and means
employed by the Loan Parties in the operation thereof (including all operations
and conditions at or in the properties of the Loan Parties), and the assets
owned, leased, managed, used, controlled, held or operated by the Loan Parties,
comply in all material respects with all applicable Environmental Laws; (b) with
respect to the Properties and Facilities, and except as disclosed in the
Environmental Schedule, the Loan Parties have obtained, possess and are in
material compliance with all permits, licenses, reviews, certifications,
approvals, registrations, consents and any other authorizations required under
any Environmental Laws; (c) the Loan Parties have not received (i) any claim or
notice of violation, lien, complaint, suit, order or other claim or notice to
the effect that the Loan Parties are or may be liable to any Person as a result
of (A) the environmental condition of any of their Properties or any other
property, or (B) the release or threatened release of any Pollutant, or (ii) any
letter or request for information under Section 104 of the CERCLA, or comparable
state laws, and to the best of any of the Loan Parties' knowledge, none of the
operations of the Loan Parties is the subject of any investigation by a
Governmental Authority evaluating whether any remedial action is needed to
respond to a release or threatened release of any Pollutant at the Properties
and Facilities or at any other location, including any location to which the
Loan Parties have transported, or arranged for the transportation of, any
Pollutants with respect to the Properties and Facilities; (d) except as
disclosed in the Environmental Schedule, neither the Loan Parties nor, to the
Loan Parties' knowledge, any prior owner or operator has incurred in the past,
or is now subject to, any Environmental Liabilities; (e) except as disclosed in
the Environmental Schedule, there are no Liens, covenants, deed restrictions,
notice or registration requirements, or other limitations applicable to the
Properties and Facilities, based upon any Environmental Laws or other legal
obligations; (f) there are no USTs located in, at, on or under the Properties
and Facilities, other than the USTs identified in the Environmental Schedule as
USTs, that singly or in the aggregate could have a Material Adverse Effect; and,
except as disclosed in the Environmental Schedule, each of those USTs is in
material compliance with all Environmental Laws and other legal obligations; and
(g) except as disclosed in the Environmental Schedule, there are no PCBs, lead
paint, asbestos (of any type or form), or materials, articles or products
containing PCBs, lead paint or asbestos, located in, at, on, under, a part of,
or otherwise related to the Properties and Facilities (including, without
limitation, any building, structure, or other improvement that is a part of the
Properties and Facilities) that singly or in the aggregate could have a Material
Adverse Effect, and, except as disclosed in the Environmental Schedule, all of
the PCBs, lead paint, asbestos, and materials, articles and products containing
PCBs, lead paint or asbestos identified in the Environmental Schedule are in
compliance with all Environmental Laws and other legal obligations.

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


                                      -23-

used to purchase or carry any margin stock or margin security or to extend
credit to others for the purpose of purchasing or carrying any margin stock or
margin security.

          (N) TAXES. Each of the Loan Parties has filed or caused to be filed
all Federal, state and local tax returns that are required to be filed by it,
and has paid or caused to be paid all Taxes shown to be due and payable on such
returns or on any assessments received by it, including payroll taxes.

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

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

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

          (R) INTELLECTUAL PROPERTY; LICENSES. Each of the Loan Parties
possesses all Proprietary Rights necessary to conduct the Business as heretofore
conducted or as proposed to be conducted by it. All Proprietary Rights
registered in the name of any of the Loan Parties and applications therefor
filed by any of the Loan Parties are listed on the "Intellectual Property
Schedule," attached hereto as Schedule 5.1(r). No event has occurred that
permits, or after


                                      -24-

notice or lapse of time or both would permit, the revocation or termination of
any of the foregoing, which taken in isolation or when considered with all other
such revocations or terminations could have a Material Adverse Effect. None of
the Loan Parties has notice or knowledge of any facts or any past, present or
threatened occurrence that could preclude or impair the Loan Parties' ability to
retain or obtain any authorization necessary for the operation of the Business.

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

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

          (U) BROKER'S OR FINDER'S COMMISSIONS. No broker's or finder's or
placement fee or commission will be payable to any broker or agent engaged by
the Loan Parties or any of its officers, directors or agents with respect to the
issuance and sale of the Securities or the transactions contemplated by this
Agreement, including without limitation the Transactions, except for fees
payable to Purchasers and Servicer. The Loan Parties agree to indemnify Servicer
and Purchasers and hold them harmless from against any claim, demand or
liability for broker's or finder's or placement fees or similar commissions,
whether or not payable by the Loan Parties, alleged to have been incurred in
connection with such transactions, other than any broker's or finder's fees
payable to Persons engaged by Servicer or Purchasers.

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

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

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


                                      -25-

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

          (W) ACCURACY OF INFORMATION. None of the Purchase Documents nor any
other information furnished to any of Purchasers by any of the Loan Parties and
any of their Affiliates in connection with the Transactions contains any untrue
statement of material fact or omits to state any material fact necessary to make
the statements contained therein not misleading.

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

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

                                    ARTICLE 6

                             TRANSFER OF SECURITIES

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

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

     6.3 ASSIGNMENTS AND PARTICIPATIONS. Subject to Section 6.2 hereof and the
Amended and Restated Subordination Agreement, a holder of a Note may (i)
transfer such Note to Servicer, an Affiliate of Servicer or a new holder, other
than a Person who is, at the time of proposed transfer, a Competitor, or (ii)
exchange such Note for Notes of different denominations (but in no event of
denominations of less than $500,000 in original principal amount), by
surrendering such Note to the Loan Parties duly endorsed for transfer or
accompanied by a duly executed instrument of transfer naming the new holder (or
the current holder if submitted for exchange only), together with written
instructions for the issuance of one or more new Notes


                                      -26-

specifying the respective principal amounts of each new Note and the name of
each new holder and each address therefor. Notwithstanding the foregoing, the
limitations on transfer under Section 6.3(i) above shall not apply in the event
a Default or Event of Default under this Agreement. The Loan Parties shall
simultaneously deliver to such holder or its designee such new Notes, shall mark
the surrendered Notes as canceled and shall provide notice of such transfer to
Servicer. In lieu of the foregoing procedures, a holder may assign a Note (in
whole but not in part) to a new holder by sending written notice to the Loan
Parties and Servicer of such assignment specifying the new holder's name and
address; in such case, the Loan Parties shall promptly acknowledge such
assignment in writing to both the old and new holder. The Loan Parties shall not
be required to recognize any subsequent holder of a Note unless and until the
Loan Parties have received reasonable assurance that all applicable transfer
taxes have been paid and, if the subsequent holder is organized outside the
United States, it has provided the forms required under Section 3.8 certifying
that it is exempt from United States withholding tax.

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

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

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

                                    ARTICLE 7

                                    COVENANTS

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

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

          (B) BUSINESSES AND PROPERTIES; COMPLIANCE WITH LAWS. At all times (i)
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect the rights, licenses, registrations, permits, certifications,
approvals, consents, franchises, patents,


                                      -27-

copyrights, trademarks and trade names, and any other trade names that may be
material to the conduct of their businesses; (ii) comply in all material
respects with all laws and regulations applicable to the operation of such
business, including but not limited to, all Environmental Laws, whether now in
effect or hereafter enacted and with all other applicable Laws, (iii) take all
action that may be required to obtain, preserve, renew and extend all rights,
patents, copyrights, trademarks, trade names, franchises, registrations,
certifications, approvals, consents, licenses, permits and any other
authorizations that may be material to the operation of such business, (iv)
maintain, preserve and protect all property material to the conduct of such
business, and (v) except for obsolete or worn out equipment, keep their property
in good repair, working order and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals, additions, improvements
and replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times. Without limiting
the generality of the foregoing, the Loan Parties shall comply with the specific
environmental covenants set forth in Schedule 5.1(l).

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

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

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

               (I) ANNUAL STATEMENTS. Within one hundred twenty (120) days after
the end of each fiscal year, a balance sheet and statements of operations,
stockholders' equity


                                      -28-

and cash flows of the Loan Parties showing the financial condition of the Loan
Parties as of the close of such year and the results of operations during such
year, all of the foregoing financial statements to be audited by a firm of
independent certified public accountants of recognized national standing
acceptable to Servicer and accompanied by an opinion of such accountants without
material exceptions or qualifications. Additionally, such financial statements
shall be accompanied by a certificate of such accountants (which shall not
contain any qualification exception or scope limitation not acceptable to
Servicer) stating that in the course of its regular audit of the Business of the
Loan Parties, which audit was conducted in accordance with GAAP, no Default or
Event of Default relating to financial and accounting matters has come to their
attention, or if any Default or Event of Default exists, a statement as to the
nature thereof.

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

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

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

               (V) PROJECTIONS. As soon as available, but in no event later than
thirty days after the end of each Fiscal Year, a preliminary projection and, as
soon as available, but in


                                      -29-

no event later than sixty days after the end of each Fiscal Year, a final
projection, of the Loan Parties' balance sheet, and income, retained earnings
and cash flow statements, respectively, for the following five fiscal years and
comparable actual and budgeted figures for the current year; and within ten (10)
days after any material update or amendment of any such plan or forecast, a copy
of such update or amendment, including a description of and reasons for such
update or amendment. Each such projection, update or amendment shall be
accompanied by a written certificate signed by the Loan Parties' chief financial
officer to the effect that it has been prepared on the basis of the Loan
Parties' historical financial statements and records, together with the
assumptions set forth in such projection and that it reflects expectations,
after reasonable analysis, of the Loan Parties' management as to the matters set
forth therein.

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

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

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

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

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

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

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


                                      -30-

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

               (VI) BOARD MEETINGS. Written notice of each regular meeting of
each of the Loan Parties' board of directors at least 30 days in advance of such
meeting and prior written notice of each special meeting of each of the Loan
Parties' board of directors at least seven (7) days in advance of such meeting,
but in any case such notice shall be delivered no later than the date on which
the members of the board of directors are notified of such meeting. In addition,
the Loan Parties will send Servicer copies of all reports and materials provided
to members of the board of directors at meetings or otherwise.

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

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

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


                                      -31-

          (I) BOARD OF DIRECTORS.

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

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

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

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

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

               (vi) Notwithstanding anything herein to the contrary, each party
to the transactions contemplated by this Agreement (and each Affiliate and
officer, director, manager, stockholder, members, employee and agent, in their
capacities as such) agree that each party (and each Affiliate and officer,
director, manager, stockholder, members, employee and agent, in their capacities
as such) may disclose to any and all persons or entities, without limitation of
any kind, the tax treatment and tax structure of the transactions and all
materials of any kind (including opinions or other tax analyses) that are
provided to such party or such person or entity relating to such tax treatment
and tax structure, except to the extent necessary to comply with any applicable
federal or state securities laws. This authorization is not intended to permit
disclosure


                                      -32-

of any other information including (without limitation) (A) any portion of any
materials to the extent not related to the tax treatment or tax structure of the
transactions contemplated by this Agreement, (B) the identities of the parties
participating or potentially participating in the transactions contemplated by
this Agreement, (C) the existence or status of any negotiations, (D) any pricing
or financial information (except to the extent such pricing or financial
information is related to the tax treatment or tax structure of the transactions
contemplated by this Agreement), or (E) any other term or detail not relevant to
the tax treatment or the tax structure of the transactions contemplated by this
Agreement.

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

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

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

               (i) Indebtedness incurred under this Agreement;

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

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

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

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

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

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

               (ii) Liens for or priority claims imposed by Law that are
incidental to the conduct of business or the ownership of properties and assets
(including mechanic's,


                                      -33-

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

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

               (iv) Liens listed on the Permitted Encumbrances Schedule attached
hereto as Schedule 7.2(b);

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

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

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

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

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

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


                                      -34-



       Fiscal Year         Maximum Amount
       -----------         --------------
                        
Ending December 31, 2005     $1,400,000
Ending December 31, 2006     $1,600,000
Ending December 31, 2007     $2,100,000
Ending December 31, 2008     $2,600,000
Ending December 31, 2009     $3,100,000


          (E) CAPITAL EXPENDITURES. The Loan Parties shall not make or commit to
make any payments in any Fiscal Years on account of the purchase or lease of any
fixed assets (whether through purchase, Capitalized Lease or operating lease),
that in the aggregate would cost more than $1,400,000 during any Fiscal Year,
without the prior written consent of Servicer.

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

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

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


                                      -35-

regular compensation to employees of the Loan Parties in the ordinary course of
business and consistent with past practices and (iii) payments, not to exceed
$6,000,000, pursuant to the Citizens Redemption Agreement.

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

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

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

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

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

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

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

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

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

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


                                      -36-

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

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

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

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

          (K) AMENDMENT OF CHARTER DOCUMENTS OR CHANGE IN LEGAL STRUCTURE. The
Loan Parties shall not (i) amend, terminate, modify or waive or agree to the
amendment, modification or waiver of any material term or provision of their
respective Charter Documents or Bylaws in any material respect or (ii) without
providing Servicer with at least thirty (30) days' prior written notice, change
their jurisdiction of formation or cease to be corporations or limited liability
companies, as applicable. It is acknowledged by Servicer that this Section
7.2(k) shall not prohibit the modification of Parent's Charter Documents or
Bylaws in connection with the closing of the IPO pursuant to the "Second Amended
and Restated Certificate of Incorporation of Dover Saddlery, Inc.", in the form
previously delivered to Servicer for its approval.

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

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

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

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

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


                                      -37-

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

          (A) FUNDED DEBT RATIO. A maximum Funded Debt Ratio as at any fiscal
quarter-end during any period specified below of not more than the ratio
identified below as applicable to such period:



                           Period                             Maximum Ratio
                           ------                             -------------
                                                           
For the fiscal quarter ending on September 30, 2005            5.10 to 1.0
For the fiscal quarter ending on December 31, 2005             4.40 to 1.0
For the fiscal quarter ending on March 31, 2006                4.40 to 1.0
For the fiscal quarter ending on June 30, 2006                 4.40 to 1.0
For the fiscal quarter ending on September 30, 2006            4.40 to 1.0
For the fiscal quarter ending on December 31, 2006             3.90 to 1.0
For the fiscal quarter ending on March 31, 2007                3.90 to 1.0
For the fiscal quarter ending on June 30, 2007                 3.90 to 1.0
For the fiscal quarter ending on September 30, 2007            3.90 to 1.0
For any fiscal quarter ending on or after December 31, 2007    3.50 to 1.0


          Notwithstanding the foregoing, from and after consummation of the IPO,
the foregoing maximum Funded Debt Ratio shall be adjusted to 3.30 to 1.0 for
each fiscal quarter-end thereafter.

          (B) FUNDED SENIOR DEBT RATIO. A maximum Funded Senior Debt Ratio as at
any fiscal quarter-end during any period specified below of not more than the
ratio identified below as applicable to such period:



                           Period                             Maximum Ratio
                           ------                             -------------
                                                           
For the fiscal quarter ending on September 30, 2005            3.25 to 1.0
For the fiscal quarter ending on December 31, 2005             3.00 to 1.0
For the fiscal quarter ending on March 31, 2006                3.00 to 1.0
For the fiscal quarter ending on June 30, 2006                 3.00 to 1.0



                                      -38-



                           Period                             Minimum Ratio
                           ------                             -------------
                                                           
For the fiscal quarter ending on September 30, 2006            3.00 to 1.0
For the fiscal quarter ending on December 31, 2006             2.75 to 1.0
For the fiscal quarter ending on March 31, 2007                2.75 to 1.0
For the fiscal quarter ending on June 30, 2007                 2.75 to 1.0
For the fiscal quarter ending on September 30, 2007            2.75 to 1.0
For any fiscal quarter ending on or after December 31, 2007    2.50 to 1.0


          Notwithstanding the foregoing, from and after consummation of the IPO,
the foregoing maximum Funded Senior Debt Ratio shall be adjusted to 2.20 to 1.0
for each fiscal quarter-end thereafter.

          (C) OPERATING CASH FLOW TO TOTAL DEBT SERVICE. A minimum ratio of (i)
Operating Cash Flow to (ii) Total Debt Service of not less than 1.30 to 1.0, in
each case as determined at the end of each fiscal quarter for the four
consecutive fiscal quarters then ending.

          (D) MINIMUM EBITDA AMOUNT. Minimum EBITDA for the then preceding four
quarters of not less than:



                           Period                             Minimum Amount
                           ------                             --------------
                                                           
For the fiscal quarter ending on September 30, 2005             $4,450,000
For each of the four fiscal quarters ending on
   December 31, 2005, March 31, 2006, June 30, 2006 and
   September 30, 2006, respectively                             $4,700,000
For any fiscal quarter ending on or after December 31, 2006     $5,000,000


                                    ARTICLE 8

                                EVENTS OF DEFAULT

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

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


                                      -39-

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

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

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

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

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

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

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

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

          (j) a final judgment that, together with any other undischarged final
judgments against any Loan Party, exceeds in an aggregate of $115,000 (except to
the extent fully covered by insurance and the insurance carrier has not reserved
the right to disallow such


                                      -40-

claim), shall have been entered against any Loan Party if, within thirty (30)
days after the entry thereof, such judgment shall not have been discharged or
execution thereof stayed pending appeal (provided, that the total cost of any
bond applied in order to procure a stay of execution in any such litigation
shall not exceed $11,500), or if, within thirty (30) days after the expiration
of any such stay, such judgment shall not have been discharged;

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

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

          (m) a Change of Control shall have occurred.

     8.2 CONSEQUENCES OF EVENT OF DEFAULT.

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

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

          (C) POST-DEFAULT INTEREST. Following the occurrence and during the
continuance of any Event of Default, the holders of the Notes shall be entitled
to receive, to the extent permitted by applicable Law, interest on the
outstanding principal of, and premium and overdue interest, if any, on, the
Notes at a rate per annum equal to the interest rate thereon (determined as
provided in Section 3.1) plus two hundred fifty (250) basis points.

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


                                      -41-

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

                                    ARTICLE 9

                                  THE SERVICER

     9.1 AUTHORIZATION AND ACTION. Each Purchaser and each subsequent holder of
any Note by its acceptance thereof, hereby designates and appoints Patriot as
Servicer hereunder and authorizes Patriot to take such actions as agent on its
behalf and to exercise such powers as are delegated to Servicer by the terms of
this Agreement and the other Purchase Documents, together with such powers as
are reasonably incidental thereto. Servicer shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of Servicer
shall be read into this Agreement or otherwise exist for Servicer. In performing
its functions and duties hereunder, Servicer shall act solely as agent for
Purchasers and does not assume, nor shall be deemed to have assumed, any
obligation or relationship of trust or agency with or for the Loan Parties or
any of their respective successors or assigns. Servicer shall not be required to
take any action that exposes Servicer to personal liability or that is contrary
to this Agreement or applicable Laws. The appointment and authority of Servicer
hereunder shall terminate at the indefeasible payment in full of the Notes and
related obligations.

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

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


                                      -42-

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

     9.5 NON-RELIANCE ON SERVICER AND OTHER PURCHASERS. Each Purchaser expressly
acknowledges that neither Servicer, nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by Servicer or hereafter taken, including,
without limitation, any review of the affairs of the Loan Parties, shall be
deemed to constitute any representation or warranty by Servicer. Each Purchaser
represents and warrants to Servicer that it has and will, independently and
without reliance upon Servicer or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Loan Parties and made
its own decision to enter into this Agreement.

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

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


                                      -43-

     9.8 COLLECTIONS AND DISBURSEMENTS.

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

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

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

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


                                      -44-

     9.10 CONSENT OF PURCHASERS.

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

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

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

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

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

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


                                      -45-

                                   ARTICLE 10

                                  MISCELLANEOUS

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

     10.2 MODIFICATIONS AND AMENDMENTS. Except as set forth in Section 10.7, the
Prior Note Purchase Agreement is hereby amended and restated in its entirety as
set forth herein. The provisions of this Agreement may be modified, waived or
amended, but only by a written instrument signed by each of the Loan Parties to
be bound thereby, and to the extent such modification, amendment or waiver
relates to the Notes, such instrument must be executed by Servicer on behalf of
Purchasers upon satisfaction of the conditions set forth in Section 9.10.

     10.3 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No delay or
failure in exercising any right, power or remedy hereunder shall affect or
operate as a waiver thereof; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies that Servicer or Purchasers or any holder of Notes would
otherwise have. Any waiver, permit, consent or approval of any kind or character
of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing, satisfy the
conditions set forth in Section 9.10 and shall be effective only to the extent
in such writing specifically set forth.

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

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

     10.6 NOTICES. All notices and other communications given to or made upon
any party hereto in connection with this Agreement shall, except as otherwise
expressly herein provided,


                                      -46-

be in writing (including telecopy, but in such case, a confirming copy will be
sent by another permitted means) and mailed via certified mail, telecopied or
delivered by guaranteed overnight parcel express service or courier to the
respective parties, as follows:

     to the Loan Parties:

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

     with a copy to:

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

     to Servicer:

          Patriot Capital Funding, Inc.
          274 Riverside Avenue
          Westport, Connecticut 06880
          Attn: Timothy W. Hassler
          Telecopier: (203) 221-8253

     with a copy to:

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

     to Purchasers:

          As set forth on Annex A

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


                                      -47-

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

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

     10.9 JURISDICTION, CONSENT TO SERVICE OF PROCESS.

          (a) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT,
FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE
STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER
PURCHASE DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR, TO THE EXTENT PERMITTED
BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT SERVICER
AND PURCHASERS MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, THE NOTES OR ANY OTHER PURCHASE DOCUMENT AGAINST THE LOAN
PARTIES OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

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


                                      -48-

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

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

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

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

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

     10.14 ENVIRONMENTAL INDEMNITY. The Loan Parties, and their successors and
assigns, hereby release and discharge, and agree to defend, indemnify and hold
harmless, Servicer, Purchasers and their Affiliates (including their partners,
subsidiaries, customers, guests, and invitees, and the successors and assigns of
all of the foregoing, and their respective directors, officers, employees and
agents) (collectively, the "Indemnified Parties") from and against any


                                      -49-

and all Environmental Liabilities, whenever and by whomever asserted, to the
extent that such Environmental Liabilities are based upon, or otherwise relate
to: (i) any Condition at any time in, at, on, under, a part of, involving or
otherwise related to the Properties and Facilities (including any of the
properties, materials, articles, products, or other things included in or
otherwise a part of the Properties and Facilities); (ii) any action or failure
to act of any Person, including any prior owner or operator of the Properties
and Facilities (including any of the properties, materials, articles, products,
or other things included in or otherwise a part of the Properties and
Facilities), involving or otherwise related to the Properties and Facilities or
operations of the Loan Parties; (iii) the Management of any Pollutant, material,
article or product (including Management of any material, article or product
containing a Pollutant) in any physical state and at any time, involving or
otherwise related to the Properties and Facilities; (iv) any violation of or
noncompliance with or the assertion of any Lien under the Environmental Laws,
unless such violation, noncompliance or assertion is caused by the gross
negligence or willful misconduct of an Indemnified Party; (v) the presence of
any toxic or hazardous substances, wastes or contaminants on, at or from the
Properties and Facilities, including, without limitation, human exposure
thereto; (vi) any spill, release, discharge or emission affecting the Properties
and Facilities, whether or not the same originates or emanates from such
Properties and Facilities or any contiguous real estate, including, without
limitation, any loss of value of such Properties and Facilities as a result
thereof; or (vii) a misrepresentation in any representation or warranty or
breach of or failure to perform any covenant made by the Loan Parties in this
Agreement. This indemnity and agreement to defend and hold harmless shall
survive any termination or satisfaction of the Notes or the sale, assignment or
foreclosure thereof or the sale, transfer or conveyance of all or part of the
past and present properties and facilities or any other circumstances that might
otherwise constitute a legal or equitable release or discharge, in whole or in
part, of the Loan Parties under the Notes.

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

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

     10.17 SUBORDINATION. THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED
HEREBY AND BY THE OTHER PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASERS AND
SERVICER HEREUNDER AND THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT)
ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
AMENDED AND RESTATED SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005 (THE
"AMENDED AND RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF
AMERICA, AS THE SENIOR LENDER, THE SERVICER AND THE PURCHASER, TO THE
INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF, THE
LOAN PARTIES UNDER AND PURSUANT TO


                                      -50-

THE SENIOR CREDIT AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED
THEREIN). THE SERVICER AND EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF,
ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE AMENDED AND
RESTATED SUBORDINATION AGREEMENT.

     10.18 ORIGINAL ISSUE DISCOUNT. Together, the Notes and the Warrants issued
in accordance with this Agreement constitute an "investment unit" for the
purposes of Section 1273(c)(2)(A) of the Code. In accordance with Sections
1273(c)(2)(A) and 1273(b)(2) of the Code, the issue price of the investment unit
is the purchase price of the Notes. Allocating that issue price among the Notes
and Warrants in proportion to their fair market value, as required by Section
1273(c)(2)(B) of the Code and Treasury Regulation 1.1273-2(h)(1), results in the
Warrants having an issue price of $235.03 and the Notes having an aggregate
issue price of $7,816,718.63. Accordingly, the original issue discount that will
accrue on the Notes is $233,281.37. None of the parties will take any position
in its tax returns or otherwise that is inconsistent with the foregoing.

                                      * * *


                                      -51-

                               SIGNATURE PAGES TO
                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

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

                                        LOAN PARTIES:

                                        DOVER SADDLERY, INC. ("PARENT")


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


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


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


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


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

                               SIGNATURE PAGES TO
                   SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT

                                        SERVICER:

                                        PATRIOT CAPITAL FUNDING, INC.,
                                           a Delaware corporation


                                        By: /s/ Richard P. Buckanavage
                                            ------------------------------------
                                            Richard P. Buckanavage
                                            President and Chief Executive
                                            Officer


                                        By: /s/ Timothy W. Hassler
                                            ------------------------------------
                                            Timothy W. Hassler
                                            Chief Operating Officer


                                        PURCHASERS:

                                        PATRIOT CAPITAL FUNDING, INC.,
                                           a Delaware corporation


                                        By: /s/ Richard P. Buckanavage
                                            ------------------------------------
                                            Richard P. Buckanavage
                                            President and Chief Executive
                                            Officer


                                        By: /s/ Timothy W. Hassler
                                            ------------------------------------
                                            Timothy W. Hassler
                                            Chief Operating Officer

EX-10.33

                                                                   EXHIBIT 10.33

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

                     AMENDED AND RESTATED SECURITY AGREEMENT

          AMENDED AND RESTATED SECURITY AGREEMENT, dated as of September 16,
2005 (as amended, restated, supplemented or otherwise modified from time to time
and including all exhibits, attachments and appendices hereto, the "AGREEMENT")
among DOVER SADDLERY, INC., a Delaware corporation ("PARENT"), each of the
Domestic Subsidiaries of the Parent which is a signatory hereto or which shall
become a party hereto from time to time in accordance with the terms hereof
(together with their respective successors and assigns, and together with the
Parent, the "LOAN PARTIES") and PATRIOT CAPITAL FUNDING, INC., a Delaware
corporation ("PATRIOT"), as servicer for the Purchasers (in such capacity,
"SERVICER").

          WHEREAS, the Loan Parties, Servicer and each of the purchasers
signatory thereto (each, a "PURCHASER" and collectively, the "PURCHASERS") are
parties to that certain Senior Subordinated Note Purchase Agreement, dated as of
December 11, 2003, pursuant to which the Purchasers provided $3,500,000.00 in
debt financing to the Loan Parties (the "PRIOR NOTE PURCHASE AGREEMENT"); and

          WHEREAS, pursuant to that certain Amended and Restated Senior
Subordinated Note and Warrant Purchase Agreement, dated as of the date hereof,
by and among the Loan Parties, the Purchasers and Servicer (as amended,
restated, supplemented or otherwise modified from time to time and including all
exhibits, attachments and appendices hereto, the "AMENDED AND RESTATED NOTE AND
WARRANT PURCHASE AGREEMENT"), the Purchasers have agreed to amend and restate
the Prior Note Purchase Agreement to provide additional debt financing to the
Loan Parties to fund the recapitalization of the Parent and provide additional
working capital to the Loan Parties and provide Purchasers with warrants
("WARRANTS") exercisable for shares of common stock, par value $0.0001 per
share, of Parent ("COMMON STOCK"), all upon the terms and subject to the
conditions set forth therein (the "FINANCING"); and

          WHEREAS, as evidence of the Financing, the Loan Parties have
contemporaneously herewith executed and delivered (i) Amended and Restated Notes
in favor of the Purchasers, in the principal amount of $8,050,000 (the "NOTES")
and (ii) Warrants exercisable for Common Stock representing .805% of the shares
of capital stock of Parent on a fully-diluted as converted basis; and

          WHEREAS, in connection with the transactions contemplated by the Prior
Note Purchase Agreement, the Loan Parties granted Purchasers a security interest
in the assets of the Loan Parties pursuant to that certain Security Agreement,
dated as of December 11, 2003, by and among the Loan Parties and Services (the
"PRIOR SECURITY AGREEMENT");

          WHEREAS, as a condition precedent to the Financing, the Purchasers
have required that the Loan Parties amend and restate the Prior Security
Agreement in favor of the Servicer for the benefit of the Purchasers, on the
terms and conditions set forth herein;

          NOW, THEREFORE, in consideration of the mutual covenants of the Loan
Parties and the Servicer set forth herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

                                   ARTICLE 1.
                                  DEFINITIONS

     1.1. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned by the Amended and Restated Note and Warrant Purchase
Agreement.

     1.2. All terms used in this Agreement which are not specifically defined
herein or in the Amended and Restated Note and Warrant Purchase Agreement shall
have the meanings assigned to such terms in the Uniform Commercial Code (the
"UCC") in effect in the state of New York to the extent such other terms are
defined therein.

     1.3. Definitions.

          (a) "COLLATERAL" means each of the Loan Parties' now existing and
hereafter arising interests in and to all of the following, in each case whether
now owned or existing or hereafter acquired or arising or in which such Loan
Party now has or at any time in the future may acquire any right, title or
interest and whether any item or property is mentioned once or more than once
below:

               (i) all Accounts, contract rights, Chattel Paper, Documents,
Instruments, Investment Property, notes, acceptances, drafts and General
Intangibles (including, but not limited to, all now existing and hereafter
arising choses in action and tax and duty refunds, all now owned and hereafter
acquired franchises, licenses, permits, patents, patent applications,
trademarks, tradenames and copyrights, and all rights thereunder and
registrations thereof); all interests in the goods represented thereby and all
returned, reclaimed and repossessed goods with respect thereto; all rights as an
unpaid


                                       -2-

vendor (including stoppage in transit, replevin, reclamation and resale), all
additional amounts due to each Loan Party from any Account Debtor irrespective
of whether such additional amounts have been specifically assigned to the
Servicer, for the ratable benefit of the Purchasers; all guaranties, letters of
credit and other agreements or property securing or relating to any of the items
referred to above; all monies, deposits (general or special), securities,
instruments, credits and other property now or hereafter actually or
constructively held or received by, or in transit in any manner to or from, the
Servicer or any other Person, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, or placed in any safe deposit box leased
by the Servicer or any such other Person to any Loan Party; and all rights and
remedies under or in connection with all of the foregoing;

               (ii) all Inventory, including raw materials and all other goods,
and all right, title and interest therein and thereto;

               (iii) all machinery, Equipment, furniture, furnishings, Fixtures,
tools, and all attachments, components, accessories and parts therefor or
installed thereon or affixed thereto (excluding vehicles);

               (iv) all leasehold interests in Equipment leased from third
parties;

               (v) all books, records, customer lists, ledger sheets, ledgers,
files, orders, invoices and shipping receipts (including, without limitation,
computer programs, tapes and related electronic data processing software)
relating to all of the foregoing; and

               (vi) to the extent not listed above as original collateral, any
and all products and Proceeds of the foregoing in any form, whether from the
voluntary or involuntary disposition thereof, including, without limitation,
Accounts, contract rights, General Intangibles, Chattel Paper, Documents,
Instruments, Inventory, Investment Property, Equipment, Fixtures, insurance
proceeds and claims against third parties for damage to or loss or destruction
of any or all of the foregoing.

          Notwithstanding the foregoing, "Collateral" shall not include: (i) the
issued and outstanding capital stock of any of the Loan Parties; (ii) any real
property, whether owned or leased, of the Loan Parties; or (iii) any general
intangibles or other rights or other interests in Property arising under any
contracts, Instruments, licenses, leases or other Documents as to which the
grant of a security interest would constitute a violation of a valid and
enforceable restriction in favor of a third party on such grant, unless and
until any required consents shall have been obtained.

          (b) "SECURED OBLIGATIONS" means all of the obligations of each Loan
Party now or hereafter existing under this Agreement, any and all other
indebtedness hereafter arising of a Loan Party to Servicer, for the ratable
benefit of the Purchasers, and all renewals, extensions, restructurings and
refinancings of any of the above.


                                       -3-

                                   ARTICLE 2.
                           GRANT OF SECURITY INTEREST

     2.1. Security for Secured Obligations. This Agreement and the Collateral of
each Loan Party secure the full and prompt payment, at any time and from time to
time as and when due (whether at the stated maturity, by acceleration or
otherwise), of all present and future liabilities and obligations of such Loan
Party, of every kind, nature or description, and whether or not now contemplated
or related to the Amended and Restated Note and Warrant Purchase Agreement,
whether now existing or hereafter incurred, created or arising and whether
direct or indirect, absolute or contingent, due or to become due to any and all
Purchasers, and whether under, arising out of or in connection with the Amended
and Restated Note and Warrant Purchase Agreement, the Notes, this Agreement, any
other related security agreement, pledge, mortgage or guaranty or any other
document to which it is or hereafter becomes a party or otherwise, including,
without limitation (i) all present and future principal of and interest under
any and all Notes and all present and future premiums, attorneys' fees and
disbursements, court costs and other fees, expenses, indemnities and other
amounts payable by the Loan Parties under the Amended and Restated Note and
Warrant Purchase Agreement or any other Transaction Document (including without
limitation, for the avoidance of doubt, all interest accruing after the filing
of a petition or commencement of a case by or with respect to a Loan Party
seeking relief under any applicable federal and state laws pertaining to
bankruptcy, reorganization, arrangement, moratorium, readjustment of debts,
dissolution, liquidation or other debtor relief, specifically including, without
limitation, 11 U.S.C. Sections 101 et seq., as amended from time to time, and
any successor statute (the "BANKRUPTCY CODE") and any fraudulent transfer and
fraudulent conveyance laws, whether or not the claim for such interest is
allowed in such case or proceeding), and (ii) all present and future liabilities
and obligations of Parent pursuant to the Pledge Agreement; and in each case
including, without limitation, (A) all such liabilities and obligations that,
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due, and (B) all fees, costs and expenses payable
by such Loan Party under Article 8. It is the intent of the parties hereto that
(i) this Agreement shall constitute a continuing agreement as to any and all
future, as well as existing transactions, between the Loan Parties, Patriot and
Servicer under or in connection with the Notes, and (ii) the security interest
provided for herein shall attach to after-acquired as well as existing
Collateral.

     2.2. Subordination; Other Security Interests.

          (a) THE OBLIGATIONS OF PAYMENT AND PERFORMANCE EVIDENCED HEREBY AND BY
THE OTHER PURCHASE DOCUMENTS AND THE RIGHTS OF THE PURCHASER AND SERVICER
HEREUNDER AND THEREUNDER (INCLUDING RIGHTS OF PAYMENT AND ENFORCEMENT) ARE
SUBORDINATE IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED
AND RESTATED SUBORDINATION AGREEMENT DATED AS OF SEPTEMBER 16, 2005 (THE
"AMENDED AND RESTATED SUBORDINATION AGREEMENT"), AMONG THE LOAN PARTIES, BANK OF
AMERICA, AS THE SENIOR LENDER, THE SERVICER AND THE PURCHASER,


                                       -4-

TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY, AND ALL OTHER OBLIGATIONS OF,
THE LOAN PARTIES UNDER AND PURSUANT TO THE AMENDED AND RESTATED SENIOR CREDIT
AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN). THE SERVICER
AND EACH HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE
BOUND BY THE PROVISIONS OF THE AMENDED AND RESTATED SUBORDINATION AGREEMENT.

          (b) The Loan Parties shall cause the holders of any security interests
by or on behalf of the Senior Lender in satisfaction of the obligations arising
under the Senior Financing to enter into arrangements pursuant to which such
Persons shall release its or their security interests following a Senior
Termination (as hereinafter defined).

                                   ARTICLE 3.
                        PERFECTION OF SECURITY INTERESTS

     3.1. Filing of Financing Statements.

          (a) Each Loan Party authorizes the Servicer to file financing
statements (the "FINANCING STATEMENTS") describing the Collateral in accordance
with Article 9 of the UCC.

          (b) Each Loan Party authorizes the Servicer to file a Financing
Statement describing any agricultural liens or other statutory liens (if any)
held by the Servicer.

          (c) The Servicer shall receive, as soon as practicable after the date
hereof, an official report from the Secretary of State of each Collateral State,
each Chief Executive Office State and each Loan Party State (each as defined
below) (the "SOS REPORTS") indicating that the Servicer's security interest will
be prior to all other security interests or other interests reflected in the SOS
Report, other than the security interest in favor of the Senior Lender under the
Amended and Restated Senior Credit Agreement.

     3.2. Possession.

          (a) After (i) the Senior Financing is paid in full in cash and the
Amended and Restated Senior Credit Agreement is terminated, or (ii) the parties
thereto otherwise consent to the termination of the Amended and Restated Senior
Credit Agreement (each, a "SENIOR TERMINATION"), Each Loan Party shall have
possession of the Collateral owned by it, except where expressly otherwise
provided in this Agreement or where the Servicer chooses to perfect its security
interest granted hereby by possession in addition to the filing of a financing
statement, subject to the rights of the Senior Lender pursuant to the Amended
and Restated Subordination Agreement.

          (b) Where Collateral is in the possession of a third party, each
applicable Loan Party will join with the Servicer in notifying the third party
of the Servicer's security interest and obtaining an acknowledgment from the
third party that it is holding such Collateral for the benefit of the Servicer.


                                       -5-

     3.3. Control. Following a Senior Termination, each Loan Party will
cooperate with the Servicer in obtaining control with respect to Collateral
consisting of:

          (a) Investment Property;

          (b) deposit Accounts;

          (c) Letter-of-credit rights; and

          (d) Electronic Chattel Paper.

     3.4. Marking of Chattel Paper. No Loan Party shall create any Chattel Paper
without placing a legend on the Chattel Paper acceptable to the Senior Bank and
the Servicer (other than Chattel Paper that is delivered to the Servicer, if
any) indicating that the Servicer has a security interest in the Chattel Paper,
subject to the Amended and Restated Subordination Agreement, for the ratable
benefit of the Purchasers. The parties hereto agree that prior to a Senior
Termination, no Chattel Paper shall be delivered to the Servicer by any Loan
Party.

                                   ARTICLE 4.
           POST-CLOSING COVENANTS AND RIGHTS CONCERNING THE COLLATERAL

     4.1. Inspection. The Servicer may inspect any Collateral in any Loan
Party's possession.

     4.2. Personal Property. The Collateral shall remain personal property at
all times. No Loan Party shall affix any of the Collateral to any real property
in any manner which would change its nature from that of personal property to
real property or to a Fixture.

     4.3. Servicer's Collection Rights. Subject to the Amended and Restated
Subordination Agreement, after the occurrence of an Event of Default and during
the continuance thereof, the Servicer shall have the right at any time to
enforce Loan Parties' rights against the Account Debtors and obligors under any
Accounts owned by the applicable Loan Party.

     4.4. Limitations on Obligations Concerning Maintenance of Collateral.

          (a) Risk of Loss. Loan Parties have the risk of loss of the
Collateral.

          (b) No Collection Obligation. The Servicer does not have any duty to
collect any income accruing on the Collateral or to preserve any rights relating
to the Collateral.

     4.5. No Disposition of Collateral. Except as permitted by the Senior Loan
Agreement, the Servicer does not authorize any Loan Party to, and each Loan
Party agrees not to:


                                       -6-

          (a) make any sales, leases, assignments, transfers or other
disposition of any of the Collateral;

          (b) license any of the Collateral; or

          (c) grant any other security interest in any of the Collateral.

     4.6. Further Assurances; Financing Statements. At any time and from time to
time, at the reasonable request of the Servicer, each Loan Party shall, at its
own cost and expense, execute and deliver to the Servicer such agreements,
instruments, certificates and other instruments, and take such other actions, as
may be necessary or desirable, in the opinion of the Servicer, to further
evidence, effect or perfect, or preserve the grant, perfection or priority of,
the Liens created by this Agreement, or to otherwise effectuate the purposes of
this Agreement. To the extent permitted by applicable Law, each Loan Party
hereby authorizes the Servicer to execute and file at any time or times one or
more financing statements pursuant to the UCC with respect to any or all of the
Collateral with or without the signature of any Loan Party. Each Loan Party
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.

     4.7. Reports. Each Loan Party shall report, in form and substance
satisfactory to the Servicer, such information as the Servicer shall have
reasonably requested in its discretion from time to time regarding the
Collateral.

     4.8. Former Names. All corporate or fictitious names and tradenames used by
each Loan Party or by which each Loan Party has been known during the preceding
five years is set forth on Schedule 4.8.

     4.9. Delivery and Marking of Certain Collateral. Following a Senior
Termination, each Loan Party shall, upon the request of the Servicer, (a)
deliver and pledge to the Servicer, duly endorsed and/or accompanied by such
instruments of assignment and transfer in such form and substance as the
Servicer may request, any and all Instruments, Investment Property, Documents,
securities and Chattel Paper which are included in the Collateral, (b) cause the
issuance of a document in the name of the Servicer in respect of any goods in
the possession of a bailee (other than a bailee who has issued a negotiable
document therefor), and (c) keep and stamp or otherwise mark any and all
Documents and Chattel Paper, and its individual books and records relating to
the Collateral to evidence this Agreement and the Liens granted hereby.

     4.10. Maintenance of Records. Each Loan Party shall keep and maintain
satisfactory and complete records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to its Accounts.

     4.11. Notices. Each Loan Party shall advise the Servicer promptly, in
reasonable detail, at its address set forth in the Amended and Restated Note and
Warrant Purchase Agreement, of any Lien on, or claim asserted against, any of
the Collateral.

     4.12. Limitations on Discounts, Compromises, Extensions of Accounts. Except


                                       -7-

as permitted by the Senior Loan Agreement, no Loan Party shall grant any
extension of the time of payment of any of the Accounts, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partially, any Person liable for the payment thereof, or allow any credit or
discount whatsoever thereon except in the ordinary course of business as
generally conducted by such Loan Party over a period of time.

     4.13. Limitations on Modifications, Waivers, Extensions of Contracts and
Agreements Giving Rise to Accounts. Other than in the ordinary course of
business as generally conducted by such Loan Party over a period of time or as
permitted by the Senior Loan Agreement, no Loan Party shall (a) amend, modify,
terminate or waive any provision of any contract or any agreement giving rise to
an Account in any manner which could reasonably be expected to result in a
Material Adverse Effect without the Servicer's prior written consent or (b) fail
to perform and observe in all material respects, all the terms and provisions of
each contract to he performed or observed by it, unless ally failure to perform
or observe any term or provision could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

                                   ARTICLE 5.
                 REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES

          Each Loan Party hereby represents and warrants to, and covenants and
agrees with the Servicer, for itself and the benefit of the Purchasers, that:

     5.1. Title; No Other Liens. Except for Permitted Liens and the Lien granted
to the Servicer pursuant to this Agreement, each Loan Party owns each item of
the Collateral free and clear of any and all Liens or claims of others. No
security agreement, financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except such as may have been filed in favor of the Servicer pursuant to this
Agreement or as may be expressly permitted pursuant to the Transaction
Documents.

     5.2. Perfected Second Priority Liens. Upon the filing of all financing
statements and other actions necessary to perfect a security interest in the
Collateral, the Liens granted pursuant to this Agreement constitute perfected
Liens on the Collateral in favor of the Servicer which are prior to all other
Liens on the Collateral created by the Loan Parties and in existence on the date
hereof, except for the Liens on the Collateral created by the Loan Parties in
favor of the Senior Lender pursuant to the Senior Financing.

     5.3. Farm Products. None of the Collateral constitutes, or is the proceeds
of, Farm Products.

     5.4. Locations of Offices and Collateral Change of Locations and Names. The
(a) state, including the addresses of each location where any of the Collateral
(including without limitation Equipment and Inventory) is or may hereafter be
located (each a "COLLATERAL STATE"), (b) exact legal name of each Loan Party,
(c) state of incorporation of


                                       -8-

each Loan Party (each a "LOAN PARTY STATE"), and (d) state in which the chief
executive office of each Loan Party is located (each a "CHIEF EXECUTIVE OFFICE
STATE", are set forth on Schedule 5.4. No Loan Party shall change (w) the
location where Inventory or Equipment that constitute Collateral are kept from
the locations listed on Schedule 5.4, (x) its name, identity or corporate
structure, (y) the state of incorporation, or (z) its Chief Executive Office
State unless (i) such Loan Party shall have given the Servicer at least thirty
(30) days' prior written notice, (ii) such Loan Party shall have executed and
delivered such financing statements and other agreements, instruments,
certificate and other documents, and taken such other actions, as may be
necessary or desirable, in the opinion of the Servicer, to perfect or preserve
the Liens created by this Agreement, (iii) such financing statements refereed to
in clause (ii) shall have been duly filed under the UCC of each jurisdiction
necessary or desirable to perfect or preserve the Liens created by this
Agreement in favor of the Servicer and (iv) such change will not, assuming the
actions listed in clauses (ii) and (iii) are taken, impair in any respect the
grant, perfection or priority of the Liens created by this Agreement.

     5.5. Authorization; Consent. No authorization, consent or approval of, or
declaration or filing with, any Governmental Authority (including, without
limitation, any notice filing with state tax or revenue authorities required to
be made by account creditors in order to enforce any Accounts in such state) is
required for the valid execution, delivery and performance by any Loan Party of
this Agreement, the grant by it of the Lien and security interest in favor of
the Servicer provided for herein, or the exercise by the Servicer of its rights
and remedies hereunder, except for (i) the filings and actions described in
Section 3.1, (ii) in the case of Accounts owing from any federal governmental
agency or authority, the filing by the Servicer of a notice of assignment in
accordance with the federal Assignment of Claims Act of 1940, as amended, and
(iii) in the case of securities, shares of capital stock or equity interests,
such filings and approvals as may be required in connection with a disposition
of any such Collateral by laws affecting the offering and sale of securities
generally.

     5.6. No Restrictions. To the knowledge of the Loan Parties, there are no
statutory or regulatory restrictions, prohibitions or limitations on any Loan
Party's ability to grant to the Servicer a Lien upon and security interest in
the Collateral pursuant to this Agreement or (except for the provisions of the
federal Anti-Assignment Act and Anti-Claims Act, as amended) on the exercise by
the Servicer of its rights and remedies hereunder (including any foreclosure
upon or collection of the Collateral), and there are no contractual restrictions
on any Loan Party's ability so to grant such Lien and security interest.

                                   ARTICLE 6.
                                EVENTS OF DEFAULT

          The occurrence of an Event of Default as defined in the Amended and
Restated Note and Warrant Purchase Agreement shall constitute an Event of
Default hereunder.


                                       -9-

                                   ARTICLE 7.
                        RIGHTS AND REMEDIES UPON DEFAULT

          Subject to the Amended and Restated Subordination Agreement, if an
Event of Default shall occur and be continuing, the Servicer shall have all of
the following rights and remedies, in addition to all other rights and remedies
set forth in other sections of this Agreement, in the other Transaction
Documents, or as provided by applicable law or in equity or otherwise:

     7.1. Rights Under UCC. Notwithstanding anything to the contrary contained
herein, in addition to all of the rights and remedies contained in this
Agreement, in the other Transaction Documents, or as provided by applicable law
or in equity or otherwise, the Servicer shall have all rights and remedies of a
secured party under the UCC.

     7.2. Possession of Collateral. The Servicer shall have the right: (a) to
enter upon the premises of any or all of the Loan Parties or any other place or
places where any Collateral is located and kept through self-help and without
judicial process without first obtaining a final judgment or giving any Loan
Party notice and opportunity for a hearing on the validity of the Servicer's
claim and without any obligation to pay rent; (b) to prepare, assemble or
process the Collateral for sale, lease, or other disposition; (c) to remove the
Collateral to the premises of the Servicer or any agent of the Servicer, for
such time as the Servicer may desire, in order to collect or dispose of the
Collateral; and (d) to require any and all Loan Parties to assemble the
Collateral and make it available to the Servicer at a place to be designated by
the Servicer.

     7.3. Action Pending Disposition. Until the Servicer is able to effect a
sale or other disposition of the Collateral, the Servicer shall have the right
to use or take such action with respect to the Collateral, or any part thereof,
as it deems appropriate for the purpose of preserving the Collateral or its
value or for any other purpose deemed appropriate by the Servicer. The Servicer
shall have no obligation to any Loan Party to maintain or preserve the rights of
any Loan Party as against third parties with respect to the Collateral while the
Collateral is in the possession of the Servicer. The Servicer may, if it so
elects, seek the appointment of a receiver or keeper to take possession of the
Collateral and to enforce any of the Servicer's remedies hereunder with respect
to such appointment without prior notice or hearing.

     7.4. Disposition of Collateral; Power of Attorney. The Servicer shall have
the right to sell or otherwise dispose of all or any of the Collateral, at
public or private sale, sales or other dispositions, in lots or in bulk, for
cash or on credit, all as the Servicer, in its sole discretion, may deem
necessary or desirable. The Servicer will give the appropriate Loan Party notice
of the time and place of any public sale or other disposition of the Collateral,
or of the time after which any private sale or other disposition thereof is to
be made, by sending notice, as provided herein, at least five (5) days before
the time of the sale or other disposition, which provisions for notice each Loan
Party and the Servicer agree are reasonable; provided, however, that no such
notice need be given by the Servicer with respect to Collateral which is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market. Such sales or other


                                      -10-

dispositions may be adjourned and continued from time to time with or without
notice. The Servicer shall have the right to conduct such sales or other
dispositions on any Loan Party's premises or elsewhere and shall have the right
to use any Loan Party's premises without charge for such sales or other
dispositions for such time or times as the Servicer deems necessary or
desirable. To enable the Servicer to effect any such sale or other disposition,
each Loan Party hereby makes, constitutes and appoints the Servicer as its true
and lawful attorney, in its name, place and stead, and for its account and risk,
so long as an Event of Default has occurred and is continuing, to make, execute
and deliver any and all assignments or other agreements, instruments,
certificates and other documents which the Servicer may deem necessary or
desirable to effectuate the authority hereby conferred by signing any Loan
Party's name only or by signing the same as its attorney-in-fact, as may be
deemed by the Servicer to be necessary or desirable in connection with any sale
or other disposition of all or any part of the Collateral. The foregoing power
of attorney is coupled with an interest and shall be a continuing one and
irrevocable until the Termination Date.

          The Servicer may purchase all or any part of the Collateral at public
sale or, if permitted by Law, private sale, and in lieu of actual payment of
such purchase price, may set off the amount of such price against the Secured
Obligations.

     7.5. Waiver of Bond. In connection with the foregoing remedies, the Loan
Parties and the Servicer hereby waive the posting of any bond that might
otherwise be required.

     7.6. Waiver of Claims. To the extent permitted by applicable Law, each Loan
Party waives all claims, damages and demands that it may acquire against the
Servicer arising out of the exercise by it of any rights hereunder, except to
the any extent such claims, damages and demands arise solely from the gross
negligence or willful misconduct of the Servicer. The Servicer may exercise all
rights and remedies contained in this Agreement, in the other Transaction
Documents, or provided by applicable law or in equity or otherwise, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by Law and/or expressly provided
herein or under the other Transaction Documents) to or upon any Loan Party or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived).

     7.7. Rights of Servicer; Limitations on Servicer's Obligations.

          (a) Loan Parties Remain Liable under Accounts and Contracts. Anything
herein to the contrary notwithstanding each Loan Party shall remain liable under
each of its contracts and agreements giving rise to any Accounts, to observe and
perform all the conditions, contracts and agreements giving rise to any
Accounts, to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
such contracts or agreements giving rise to any Account. The Servicer shall not
have any obligation or liability under any contract or any agreement giving rise
to any Account by reason of or arising out of this Agreement or the receipt by
the Servicer of any payment relating to such contract,


                                      -11-

agreement, or Account pursuant hereto, nor shall the Servicer be obligated in
any manner to perform any of the obligations of any Loan Party under or pursuant
to any contract or any agreement giving rise to any Account, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any contract or any agreement giving rise to any Account, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

          (b) Notice to Contracting Parties. Upon the request of the Servicer at
any time after the occurrence and during the continuance of an Event of Default,
each Loan Party shall notify parties to the contracts and agreements giving rise
to Accounts that the contracts and agreements have been assigned to the Servicer
and that payments in respect thereof shall be made directly to the Servicers.
The Servicer may in its own name or in the name of others communicate with
Account Debtors of any Loan Party or parties to the contracts to verify with
them to its satisfaction the existence, amount and terms of any Accounts or
contracts.

          The Servicer may at any time if an Event of Default shall occur,
notify Account Debtors of any Loan Party that the Accounts have been assigned to
the Servicer and that payments shall be made directly to the Servicer, and shall
concurrently inform such Loan Party that such notice has been given; provided,
however, the failure of the Servicer to so inform such Loan Party shall have no
effect on the rights of the Servicer hereunder. If an Event of Default shall
occur, upon the request of the Servicer at any time, each Loan Party shall so
notify such Account Debtors.

                                   ARTICLE 8.
                    THE SERVICER'S EXPENSES; INDEMNIFICATION

          Each Loan Party shall be jointly and severally liable to the Servicer
for any costs and expenses (including, without limitation, all reasonable fees
and disbursements of counsel to the Servicer) which may arise under, out of, or
in connection with, this Agreement, the Note, or any other Transaction Document;
any and all sums, costs and expenses which the Servicer may pay or incur
pursuant to the provisions of this Agreement or in defending, protecting or
enforcing the Liens granted herein or otherwise in connection with the
provisions hereof; in each case including without limitation all (x) search,
filing and recording fees and expenses, (y) fees and expenses for the service
and filing of papers, fees of marshals, sheriffs, custodians, auctioneers and
others, travel expenses, court costs and collection charges, and (z) fees and
expenses, appraisal fees, taxes, levies and reasonable attorneys' and
accountants' fees and expenses (i) in any suit, proceeding or action brought by
the Servicer under any Account or contract for any sum owing thereunder, or to
enforce any provisions of any Account or contract, by reason of any defense,
setoff, counterclaim, recoupment or reduction or liability whatsoever of the
Account Debtor or obligor thereunder, or otherwise, (ii) in connection with the
repossession, holding, preparation for sale and sale of the Collateral, (iii)
with respect to, or resulting from any delay in paying, any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, or (iv) with


                                      -12-

respect to, or resulting from, any delay in complying with any requirement of
Law applicable to any of the Collateral; and all such liabilities shall be part
of the obligations and shall be payable upon demand.

                                   ARTICLE 9.
                                  MISCELLANEOUS

     9.1. Authority of Servicer. Each Loan Party acknowledges that the rights
and responsibilities of the Servicer under this Agreement with respect to any
action taken by the Servicer or the exercise or non-exercise by the Servicer of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall be governed by the
Amended and Restated Note and Warrant Purchase Agreement and by the other
Transaction Documents and the Servicer shall be conclusively presumed to be
acting as Servicer with full and valid authority so to act or retrain from
acting, and such Loan Party shall not be under any obligation, or entitlement,
to make any inquiry respecting such authority.

     9.2. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.

     9.3. Limitation on Duties Regarding Preservation of Collateral. The
Servicer's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under the UCC or otherwise,
shall be to deal with it in the same manner as the Servicer deals with similar
Property for its own account. Neither the Servicer, nor any of its respective
directors, officers or employees shall be liable for failure to demand, collect
or realize upon all or any part of the Collateral or for any delay in doing so
or shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Loan Party or otherwise.

     9.4. Payment of Dollars. The Loan Parties shall make any payment required
to be made hereunder in lawful money of the United States of America and in
immediately available funds to the Servicer.

     9.5. Amendments and Waivers; Remedies Cumulative. The Prior Security
Agreement is hereby amended and restated in its entirety as set forth herein.
Except as otherwise expressly provided in this Agreement and subject to the
terms of the Amended and Restated Note and Warrant Purchase Agreement, any
provision of this Agreement may be amended or modified only by an instrument in
writing signed by the Loan Parties and the Servicer, and any provision of this
Agreement enforceable against the Loan Parties may be waived by the Servicer. No
failure on the part of the Servicer to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. All remedies set
forth in this Agreement and the other Transaction Documents, or provided at law
or in equity, are cumulative.

     9.6. Joint and Several. The obligations of the Loan Parties hereunder shall
be


                                      -13-

joint and several.

     9.7. Survival. The obligations of the Loan Parties under Article 5 and
Article 8 shall survive the termination of this Agreement.

     9.8. Assignment; Participations. This Agreement shall be binding upon, and
shall inure to the benefit of, the Loan Parties and the Servicer and their
respective successors and assigns, and except as otherwise provided in the
Transaction Documents, no Loan Party may assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Servicer (and any
such assignment or transfer without such consent shall be null and void.)
Without limiting the generality of the foregoing, subject to the Subordinated
Agreement, the Servicer may assign or transfer all or any portion of its rights
and obligations under any Transaction Document, under the terms of this
Agreement to the extent provided in and subject to the terms of the Amended and
Restated Note and Warrant Purchase Agreement, to any other Person, and such
other Person shall thereupon become vested with all of the rights and
obligations in respect thereof, including, without limitation, with respect to
the Collateral, granted to the Servicer herein.

          Without limiting the generality of the foregoing, the Loan Parties
hereby acknowledge that the Servicer may sell, grant or assign, participation
interest(s) in the Notes and in the Servicer's rights and obligations in respect
of the Transaction Documents, including, without limitation, this Agreement, on
the terms and conditions set forth in the Amended and Restated Note and Warrant
Purchase Agreement. In the event that the Servicer shall sell, grant or assign
such participation interest(s), subject to the provisions of the Amended and
Restated Note and Warrant Purchase Agreement (a) the Servicer may, in its sole
discretion, disclose financial and other information to prospective
participant(s) with respect to the Loan Parties, (b) the Loan Parties shall
cooperate with the Servicer in connection with any such participation and shall
execute any and all documents which may be necessary or desirable, in the
Servicer's or such participant's judgment, to effectuate any such
participation(s), and (c) each representation and agreement made by the Loan
Parties in this Agreement and the other Transaction Documents to which it is a
party shall run to the benefit of such participant(s).

     9.9. Notices. All notices, requests and demands to or upon the Loan Parties
or the Servicer shall be given in accordance with Section 10.6 of the Amended
and Restated Note and Warrant Purchase Agreement to the address set forth
therein, or, if not set forth therein, to the address set forth next to the
signature block of such party.

     9.10. Setoff. Upon the occurrence of and during the continuance of an Event
of Default, each Loan Party agrees that, in addition to (and without limitation
of) any right of setoff, banker's lien or counterclaim the Servicer may
otherwise have, Servicer shall be entitled, at its option, to offset balances
(general or special, time or demand, provisional or final) held by it for the
account of any Loan Party at the Servicer's Lending Office, in Dollars or in any
other currency, against any amount payable by such Loan Party to the Servicer
under this Agreement which is not paid when due (regardless of whether such
balances are then due such Loan Party), in which case it shall promptly notify
each Loan


                                      -14-

Party thereof, provided that the Servicer's failure to give such notice shall
not affect the validity thereof. Payments by any Loan Party under any
Transaction Document shall be made without setoff or counterclaim.

     9.11. Headings. The headings and captions hereunder are for convenience
only and shall not affect the interpretation or construction of this Agreement.

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

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

     9.14. JURISDICTION, CONSENT TO SERVICE OF PROCESS.

          (a) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMIT,
FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN THE
STATE OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER
PURCHASE DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR, TO THE EXTENT PERMITTED
BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT SERVICER
AND PURCHASERS MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, THE NOTES OR ANY OTHER PURCHASE DOCUMENT AGAINST THE LOAN
PARTIES OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.

          (b) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE FULLEST EXTENT THEY MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER
PURCHASE DOCUMENT IN ANY


                                      -15-

STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

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

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

     9.16. WAIVER OF CERTAIN DAMAGES. EXCEPT AS PROHIBITED BY LAW EACH LOAN
PARTY AND THE SERVICER HEREBY WAIVE 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. EACH LOAN PARTY AND THE
SERVICER CERTIFY THAT NO REPRESENTATIVE SERVICER OR ATTORNEY OF THE SERVICER OR
ANY LOAN PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE SERVICER OR ANY
LOAN PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE SERVICER AND EACH
LOAN PARTY TO ACCEPT THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED UNDER THE
AMENDED AND RESTATED NOTE AND WARRANT PURCHASE AGREEMENT.

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      -16-

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Security Agreement as of the date first written above.

                                       LOAN PARTIES

                                       DOVER SADDLERY, INC. ("Parent")


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


                                       DOVER SADDLERY, INC.


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


                                       SMITH BROTHERS, INC.


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


                                       SERVICER

                                       PATRIOT CAPITAL FUNDING, INC.


                                       By: /s/ Richard P. Buckanavage
                                           -------------------------------------
                                           Richard P. Buckanavage
                                           President and Chief Executive Officer


                                       By: /s/ Timothy W. Hassler
                                           -------------------------------------
                                           Timothy W. Hassler
                                           Chief Operating Officer

EX-14.1

                                                                    Exhibit 14.1

                              DOVER SADDLERY, INC.

               CODE OF BUSINESS CONDUCT AND ETHICS FOR EMPLOYEES,
                        EXECUTIVE OFFICERS AND DIRECTORS

INTRODUCTION

     Dover Saddlery, Inc. (the "Company") strives to apply high ethical, moral
and legal principles in every aspect of its business conduct. This Code of
Business Conduct and Ethics (the "Code") is a guide for each of the Company's
employees, executive officers and directors (each, a "Company Party" and
collectively, the "Company Parties") to follow in meeting these principles. The
Company shall make this Code available on its website at www.doversaddlery.com
and shall disclose such availability in its Annual Report on Form 10-K.

     This Code describes certain ethical principles that the Company has
established for the conduct of its business, and outlines certain key legal
requirements of which all Company Parties must be generally aware and with which
all Company Parties must comply. While this Code does not cover every issue that
may arise, it sets out basic principles to guide Company Parties in the course
of performing their duties and responsibilities to the Company.

     This Code is designed to deter wrongdoing and promote the following:

     -    honest and ethical conduct, including the ethical handling of actual
          or apparent conflicts of interest between personal and professional
          relationships;

     -    full, fair, accurate, timely and understandable disclosure in reports
          and documents that the Company files with, or submits to, the
          Securities and Exchange Commission and in other public communications
          made by the Company;

     -    compliance with applicable governmental laws, rules and regulations;

     -    prompt internal reporting to an appropriate person or persons
          identified herein of violations of this Code; and

     -    accountability for adherence to this Code.

     If a Company Party is concerned about a possible ethical or illegal
situation or any violation of this Code or is not sure whether specific conduct
meets applicable Company standards, he or she should discuss the situation with
an immediate supervisor or contact the Company's chief financial officer.
Company Parties who are executive officers or members of the Company's board of
directors (the "Board") should discuss the situation with the Board or a
committee of the Board. Any Company Party who violates the standards contained
in this Code will be subject to disciplinary action, which may include
termination. The Company will treat as confidential, to the extent possible, all
information received from a Company Party with respect to a possible ethical or
illegal situation and will not take any retributive or retaliatory action by
reason of such disclosure against any Company Party who discloses such
information in good faith.

1.   CONFLICTS OF INTEREST

     A "conflict of interest" exists when a Company Party's private interest
interferes in any way or appears to interfere with the interests of the Company.
A conflict of interest can arise when a Company Party acts in a matter, or has
interests, that may make it difficult for him or her to objectively and
effectively perform his or her work for the Company. Conflicts of interest also
can arise when a Company Party, or members of his or her family, receives
improper personal benefits because of his or her position in the Company.

     Unless approved by the Board or an appropriate Committee of the Board, no
Company Party or any member of his or her immediate family can acquire a
financial interest in, or accept employment with, any entity doing business with
the Company if the interest or employment could conflict with his or her duties
to the Company and the performance of such duties. It is usually a conflict of
interest for a Company Party to work simultaneously, even on a part-time or
temporary basis, for a competitor, customer or supplier of the Company. A
Company Party cannot work for a competitor as an employee, consultant,
contractor or board member.

     In addition, a Company Party and his or her immediate family members cannot
accept material gifts or favors that could create the appearance that such
Company Party's business judgment could be affected by the receipt of such gifts
or favors. A Company Party and members of his or her immediate family can accept
gifts of nominal value from existing sources, prospective sources and persons,
firms or companies with whom the Company does or might do business.

     The purpose of business entertainment and gifts in a commercial setting is
to create good will and sound working relationships, not to gain unfair
advantage with customers. Company Parties cannot offer gifts or favors to any
employee of a competitor, supplier or customer of the Company, or a member of
such employee's immediate family, if the gifts or favors might place the
recipient under any obligation to a Company Party or to the Company.

     Conflicts of interest are prohibited as a matter of Company policy.
Conflicts of interest may not always be apparent so, if a Company Party has a
question regarding whether a particular situation is a conflict of interest, he
or she should consult with his or her immediate supervisor or contact the
Company's chief financial officer. Company Parties who are executive officers or
members of the Board should consult with the Board or a committee of the Board.
A Company Party must bring any conflict of interest or potential conflict of
interest to the attention of his or her immediate supervisor or the Company's
chief financial officer or follow the procedures described in Section 14 herein.

2.   CORPORATE OPPORTUNITIES

     A Company Party cannot personally take for himself or herself business
opportunities discovered using Company property, information or position. A
Company Party cannot use Company property, information or position for personal
gain, and cannot compete with the


                                        2

Company directly or indirectly. It is the duty and responsibility of each
Company Party to advance the Company's legitimate interests when the opportunity
to do so arises.

3.   CONFIDENTIALITY

     A Company Party must maintain the confidentiality of all confidential and
non-public information entrusted to him or her by the Company and its customers
and suppliers, except when disclosure is authorized by an executive officer of
the Company or required by applicable laws or regulations. Confidential
information includes all information that, if disclosed, might be of use to
competitors of the Company or harmful to the Company or its customers or
suppliers. It also includes information that Company customers and suppliers
have entrusted to the Company. For example, confidential information includes
customer lists, financial documents, pricing, manufacturer and vendor
information, corporate development materials, the cost of goods, personnel
files, manuals and procedures, proprietary information (as discussed below),
computer software, design documents, videos and internal reports and memoranda.
Information that the Company has made public, such as information presented in
press releases, advertisements or documents filed with governmental regulatory
authorities, is not confidential information. The obligation to preserve
confidential information extends beyond the term of employment with, or service
to, the Company.

4.   FAIR DEALING

     The Company seeks to outperform its competition fairly and honestly through
superior performance and not through unethical or illegal business practices.
Company Parties must endeavor to deal fairly with their colleagues and
customers, suppliers and competitors of the Company. Company Parties cannot
steal proprietary information, possess trade secret information obtained without
the owner's consent or induce such disclosures by past or present employees of
other companies. No Company Party may take unfair advantage of anyone through
manipulation, concealment, abuse of confidential information, misrepresentation
of material facts or any other unfair-dealing practice. The knowing or
deliberate falsification of any documents or data by a Company Party may be the
basis for immediate discharge and may subject such Company Party to civil and/or
criminal penalties.

5.   PROTECTION AND PROPER USE OF COMPANY ASSETS

     Company Parties must endeavor to protect the Company's assets and property
and ensure their efficient use. Theft, carelessness and waste have a direct
impact on the Company's profitability. Company Parties must report any suspected
incident of fraud or theft immediately for investigation to their immediate
supervisor or the Company's chief financial officer. Company Parties who are
executive officers or members of the Board must report such fraud or theft to
the Board or a committee of the Board. Company Parties must use all assets and
property of the Company for legitimate business purposes only.

     The obligation of a Company Party to protect the Company's assets includes
its proprietary information. Proprietary information includes intellectual
property such as trade


                                       3

secrets, patents, patent applications, trademarks and copyrights, as well as
business, marketing and service plans, engineering and manufacturing ideas,
designs, databases, consumer and customer information, records, salary
information and any unpublished financial data and reports. Unauthorized use or
distribution of this information violates Company policy and may subject Company
Parties to civil and/or criminal penalties.

6.   COMPLIANCE WITH LAWS, RULES AND REGULATIONS

     All Company Parties must respect and obey the laws, rules and regulations
of the cities, states and countries in which the Company operates. Company
Parties must contact the Company's chief financial officer with any questions as
to the applicability of any law, rule or regulation or the appropriate manner of
compliance therewith.

7.   INSIDER TRADING

     Company Parties who have access to confidential information cannot use or
share such information for stock trading purposes or for any other purpose
except the proper conduct of the Company's business. All Company Parties are
subject to the Company's Policy on Insider Trading and Confidentiality then in
effect. The Company will deal firmly with all instances of insider trading. If a
Company Party has any questions regarding non-public information and the use of
such information or the Company's Policy on Insider Trading and Confidentiality
then in effect, he or she should contact the Company's chief financial officer.

8.   DISCRIMINATION AND HARASSMENT

     The Company requires strict adherence to its policies and applicable laws
regarding equal employment opportunities and discrimination in the workplace.
The Company will not tolerate any illegal discrimination or harassment of any
kind. Relationships with colleagues and business relationships with competitors,
suppliers and customers always must be conducted free of any discrimination,
including based on race, color, creed, religion, age, sex, sexual preference,
national origin, marital status, veteran status, handicap or disability.
Examples of illegal discrimination or harassment include derogatory comments
based on any of the preceding characteristics and unwelcome sexual advances.

9.   HEALTH AND SAFETY

     The Company strives to provide each employee with a safe and healthful work
environment. Each Company Party is responsible for maintaining a safe and
healthy workplace for their colleagues by following safety and health rules and
practices and reporting accidents, injuries and unsafe equipment, practices or
conditions.

     The Company will not tolerate violence or threatening behavior in the
workplace. Company Parties are required to report to work in condition to
perform their duties, free from the influence of illegal drugs or alcohol. The
Company will not tolerate the use of illegal drugs in the workplace or on any
Company property.


                                       4

10.  RECORD-KEEPING

     The Company requires honest and accurate recording and reporting of
information in order to make responsible business decisions. Company Parties
must document and record accurately all business expense accounts they use. If a
Company Party is unsure whether a certain expense is legitimate, such Company
Party should ask his or her immediate supervisor or the Company's chief
financial officer. Company Parties who are executive officers or members of the
Board should confer with the Board or a committee of the Board. Rules and
guidelines regarding business expenses are available from the Company's
accounting department.

     All of the Company's books, records, accounts and financial statements must
be maintained in reasonable detail, must appropriately reflect the Company's
transactions and must conform both to applicable legal requirements and to the
Company's system of internal controls. Unrecorded or "off the books" funds or
assets cannot be maintained unless permitted by applicable laws or regulations.
All Company Parties are subject to the Company's Document Retention Policy. Any
questions concerning the Company's Document Retention Policy should be directed
to the Company's chief financial officer.

     Company Parties must avoid exaggeration, derogatory remarks, guesswork or
inappropriate characterizations of people and companies in business records and
communications. This prohibition applies equally to e-mail, internal memos and
formal reports.

11.  PAYMENTS TO GOVERNMENT PERSONNEL OR CANDIDATES FOR OFFICE

     All Company Parties must comply with the Foreign Corrupt Practices Act,
which prohibits giving anything of value, directly or indirectly, to officials
of foreign governments or foreign political parties or candidates to obtain or
retain business and prohibits making payments to government officials of any
country. No Company Party may give to, or receive from, any government official
kickbacks, bribes, rebates or other illegal consideration. All Company Parties
dealing with government agencies must be aware of, and comply with, any agency
rules limiting or prohibiting gifts or other favors.

     The Company cannot contribute, directly or indirectly, to any political
campaign or party. Company Parties cannot use expense accounts to pay for any
personal political contributions or seek any other form of reimbursement from
the Company for such contributions. Of course, Company Parties are free to
engage in political activity with their own resources on their own time.

12.  WAIVERS OF THE CODE OF BUSINESS CONDUCT AND ETHICS

     Any waiver of this Code for executive officers or directors requires the
approval of the Board and must be disclosed promptly as required by applicable
law, rules or regulations.


                                       5

13.  REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR

     Company Parties are encouraged to talk to immediate supervisors or the
Company's chief financial officer about observed illegal or unethical behavior
when unsure about the best course of action to take in a particular situation.
Company Parties who are executive officers or members of the Board should
discuss such behavior with the Board or a committee of the Board. In addition,
Company Parties must report violations of laws, rules, regulations or this Code
to immediate supervisors or the Company's chief financial officer. Company
Parties who are executive officers or members of the Board must report such
matters to the Board or a committee of the Board. The Company prohibits
retaliation for reports of ethical misconduct made by Company Parties in good
faith. If a situation requires that the identity of a Company Party reporting
any such misconduct not be disclosed, the Company will protect the anonymity of
such Company Party to the extent legally possible. The Company will not permit
retaliation of any kind against any reporting Company Party for good faith
reports of ethical violations.

14.  COMPLIANCE PROCEDURES

     This Code broadly describes the ethical standards by which the Company
conducts its business. If a Company Party is uncertain as to the applicability
of any of these standards to a particular situation or the propriety of any
contemplated course of action, the Company encourages such Company Party to
discuss the potential situation with his or her immediate supervisor or the
Company's chief financial officer. Company Parties who are executive officers or
members of the Board should discuss the potential situation with the Board or a
committee of the Board. In any case where a Company Party feels that it is not
appropriate to discuss an issue with an immediate supervisor, or where he or she
does not feel comfortable approaching an immediate supervisor with a question,
such Company Party is encouraged to discuss the question with Company's chief
financial officer or report the matter directly to the Board or a committee of
the Board.

15.  AMENDMENTS

     This Code may be amended by the Board. The Company must report promptly any
amendments pertaining to executive officers or senior financial officers as
required by applicable laws, rules or regulations.


                                       6

EX-23.2

                                                                    Exhibit 23.2




            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


 We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated April 15, 2005 included in Amendment No. 1 to the
Registration Statement (Form S-1 No. 333-127888) and related Prospectus of Dover
Saddlery, Inc.




Boston, Massachusetts                   /s/ Ernst & Young LLP
October 5, 2005                         ---------------------
                                        Ernst & Young LLP

EX-99.1

                                                                    Exhibit 99.1

                              CONSENT TO BE NAMED

Pursuant to Rule 438 of Regulation C promulgated under the Securities Act
of 1933, as amended, I, William F. Meagher, Jr. do hereby consent to be named
in the Registration Statement on Form S-1/A of Dover Saddlery, Inc. as a
proposed Director of Dover Saddlery, Inc.


DATED: October 3, 2005



/s/ William F. Meagher
______________________

William F. Meagher

CORRESP

corresp