Exhibit 10.26
EIGHTH AMENDMENT TO
CREDIT AGREEMENT
     THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (this “Eighth Amendment to Credit
Agreement”), made and entered into as of the 22nd day of August, 2005, by and
between VIRBAC CORPORATION, a Delaware corporation (“Virbac”), PM RESOURCES,
INC., a Missouri corporation (“PM Resources”), ST. JON LABORATORIES, INC., a
California corporation (“St. JON”), FRANCODEX LABORATORIES, INC., a Kansas
corporation (“Francodex”), and VIRBAC AH, INC., a Delaware corporation (“Virbac
AH,”), and DELMARVA LABORATORIES, INC., a Virginia corporation (“Delmarva,” and
collectively with Virbac, PM Resources, St. JON, Francodex and Virbac AH
referred to herein as the “Borrowers”), and FIRST BANK, a Missouri state banking
corporation (“Bank”).
WITNESSETH:
     WHEREAS, Borrowers heretofore jointly and severally executed and delivered
to Bank a Revolving Credit Note dated September 7, 1999, in the principal amount
of up to Ten Million Dollars ($10,000,000.00), payable to the order of Bank as
therein set forth, which Revolving Credit Note has been most recently amended
and restated by that certain Revolving Credit Note dated May 6, 2005 in the
original principal amount of up to Fifteen Million Dollars ($15,000,000.00) (as
amended and restated, the “Note”); and
     WHEREAS, the Note is described in a certain Credit Agreement dated as of
September 7, 1999 made by and among Borrowers and Bank, as previously amended by
an Amendment to Credit Agreement dated as of December 30, 1999 made by and among
Borrowers and Bank, by a Second Amendment to Credit Agreement dated as of May 1,
2000 made by and among Borrowers and Bank, by a Third Amendment to Credit
Agreement dated as of April 4, 2001 made by and among Borrowers and Bank, by a
Fourth Amendment to Credit Agreement dated as of August 7, 2002 made by and
among Borrowers and Bank, by a Fifth Amendment to Credit Agreement dated as of
August 11, 2003 made by and among Borrowers and Bank, by a Sixth Amendment to
Credit Agreement dated as of September 3, 2003 made by and among Borrowers and
Bank, by a Seventh Amendment to Credit Agreement dated as of March 1, 2004 made
by and among Borrowers and Bank, by a certain Forbearance Agreement dated as of
dated as of April 9, 2004 made by and among Borrowers and Bank, as previously
amended by a certain Amendment to Forbearance Agreement dated as of May 10, 2004
made by and among Borrowers and Bank, by a certain Second Amendment to
Forbearance Agreement dated as of August 9, 2004 made by and among Borrowers and
Bank, by a certain Third Amendment to Forbearance Agreement dated as of
February 7, 2005 made by and among Borrowers and Bank, by a certain Letter
Amendment dated as of April 1, 2005 made by and among Borrowers and Bank, and by
a certain Fifth Amendment to Forbearance Agreement dated as of May 6, 2005 made
by and among Borrowers and Bank (as amended, the “Loan Agreement,” all
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Loan Agreement); and
     WHEREAS, Borrowers and Bank desire to amend and modify the Note and the
Loan Agreement as hereinafter set forth;
     NOW, THEREFORE, in consideration of the premises and the mutual provisions
and agreements hereinafter set forth, the parties hereto do hereby mutually
promise and agree as follows:
     1. The third paragraph beginning with the word “WHEREAS” on the first page
of the Loan Agreement shall be deleted in its entirety and in its place shall be
substituted the following:

 

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     WHEREAS, Borrowers, including Virbac AH, Francodex and Delmarva which have
been added as parties to the credit facilities, have requested that the
aggregate amount thereof be amended to an aggregate principal amount of up to
Fifteen Million Dollars ($15,000,000.00) and otherwise amended on the terms and
conditions set forth herein, with such loans to mature on September 30, 2006;
and
     2. Section 1 of the Loan Agreement shall be deleted in its entirety and in
its place shall be substituted the following:
     The “Term” of this Agreement shall commence on the date hereof and shall
end on September 30, 2006, unless earlier terminated upon the occurrence of an
Event of Default under this Agreement.
     3. The definition of “Consolidated Debt Service” in Section 2 of the Loan
Agreement shall be deleted in its entirety and in its place shall be substituted
the following:
     Consolidated Debt Service shall mean the sum of all of Virbac’s and its
Consolidated Subsidiaries’ payments of principal scheduled on all long term
borrowed money Indebtedness (including, without limitation, any scheduled or
unscheduled Subordinated Indebtedness payments) within the twelve month period
following the date of any such calculation, plus Consolidated Interest Expense
during the twelve month period preceding the date of any such calculation, all
determined on a consolidated basis and in accordance with Generally Accepted
Accounting Principles consistently applied.
     4. The definition of “Consolidated EBITDA” in Section 2 of the Loan
Agreement shall be deleted in its entirety and in its place shall be substituted
the following:
     Consolidated EBITDA shall mean, for the period in question, the sum of
(a) Consolidated Net Income of Virbac and its Consolidated Subsidiaries during
such period plus (b) to the extent deducted in determining such Consolidated Net
Income, the sum of (i) Consolidated Interest Expense of Virbac and its
Consolidated Subsidiaries during such period, plus (ii) Consolidated Tax Expense
made by Virbac and its Consolidated Subsidiaries during such period (whether
paid or deferred), plus (iii) all depreciation and amortization expenses of
Virbac and its Consolidated Subsidiaries during such period, plus (iv) any
extraordinary losses of Virbac and its Consolidated Subsidiaries during such
period, plus (v) any losses incurred by Virbac and its Consolidated Subsidiaries
from the sale or other disposition of Property other than in the ordinary course
of business during such period plus (vi) any non-cash charge required to be made
by Virbac and its Consolidated Subsidiaries during such period for impairment of
goodwill and other intangible assets under U.S. Financial Accounting Standard
Number 142 entitled “Goodwill and Other Intangible Assets” minus (c) to the
extent added in determining such Consolidated Net Income, the sum of (i) any
extraordinary gains of Virbac and its Consolidated Subsidiaries during such
period plus (ii) any gains realized by Virbac and its Consolidated Subsidiaries
from the sale or other disposition of Property other than in the ordinary course
of business during such period, all determined in accordance with Generally
Accepted Accounting Principles consistently applied for the period in question
ending as of the date of any such calculation.
     5. A new definition of “Eighth Amendment” shall be added to Section 2 of
the Loan Agreement in proper alphabetical order as follows:

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     Eighth Amendment shall mean that certain Eighth Amendment to Credit
Agreement dated as of August 22, 2005 made by and among Borrowers and Bank.
     6. The definition of “Floating Rate Margin” in Section 2 of the Loan
Agreement shall be deleted in its entirety and in its place shall be substituted
the following:
     Floating Rate Margin shall mean One-Half of One Percent (0.50%) per annum.
Interest accrued under the Note prior to the date of this Eighth Amendment to
Credit Agreement shall continue to be due and payable, until paid, at the rates
applicable prior to the amendment made under this paragraph 6.
     7. Section 3.1(c) of the Loan Agreement shall be deleted in its entirety
and in its place shall be substituted the following:
     (c) Borrowing Base. For purposes of computing the amount of the Loans
available under this Section 3.1, the “Borrowing Base” shall mean the sum of:
          (i) Eighty Percent (80%) of the face amount of Eligible Accounts of
each of the Borrowers, plus
          (ii) the lesser of (A) Fifty Percent (50%) of the Eligible Inventory
of each of the Borrowers, or (B) $3,500,000.00; plus
          (iii) an amount determined by Bank as the loan value of Borrowers’
fixed assets, which amount shall be deemed to be equal to: (A) $9,000,000.00
through the month of September, 2005, minus (B) an amount equal to $250,000.00
multiplied by the number of quarters occurring since September 30, 2005,
commencing with the first such subtraction of $250,000.00 for the quarter ending
December 31, 2005 in connection with the calculation of the Borrowing Base for
December, 2005.
     8. Section 3.1(d) of the Loan Agreement shall be deleted in its entirety
and in its place shall be substituted the following:
     (d) Borrowing Base Certificate. Borrowers shall deliver to Bank on the last
day of each month, commencing in the month of August, 2005, a borrowing base
certificate in the form of Exhibit A attached to the Eighth Amendment and
incorporated herein by reference (a “Borrowing Base Certificate”) setting forth:
          (i) the Borrowing Base and its components as of the end of the
immediately preceding month;
          (ii) the aggregate principal amount of all outstanding Loans and the
aggregate face amount of all issued and outstanding Letters of Credit; and
          (iii) the difference, if any, between the Borrowing Base and the
aggregate principal amount of all outstanding Loans plus the aggregate face
amount of all issued and outstanding Letters of Credit.

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The Borrowing Base shown in such Borrowing Base Certificate shall be and remain
the Borrowing Base hereunder until the next Borrowing Base Certificate is
delivered to Bank, at which time the Borrowing Base shall be the amount shown in
such subsequent Borrowing Base Certificate. Each Borrowing Base Certificate
shall be certified (subject to normal year-end adjustments) as to truth and
accuracy by the President, principal financial officer or controller of each of
the Borrowers.
All references in the Loan Agreement and the other Transaction Documents to the
“Borrowing Base Certificate” and other references of similar import shall
hereafter be amended and deemed to refer to a Borrowing Base Certificate in the
form of the Borrowing Base Certificate, as amended and restated in the form
attached hereto as Exhibit A.
     9. The last sentence of Section 3.2 of the Loan Agreement shall be deleted
in its entirety and in its place shall be substituted the following:
Contemporaneously with the execution of the Eighth Amendment (amending this
Agreement), Borrowers shall execute and deliver to Bank a Note of Borrowers
dated as of August 22, 2005 and payable jointly and severally to the order of
Bank in the original principal amount of Fifteen Million Dollars
($15,000,000.00) in the form attached as Exhibit B to such Eighth Amendment and
incorporated herein by reference (as the same may from time to time be amended,
modified, extended or renewed, the “Note”).
     10. Section 3.4 of the Loan Agreement shall be deleted in its entirety and
in its place shall be substituted the following:
          3.4 Interest Rates.
     (a) Each Loan shall bear interest prior to maturity at a rate per annum
equal to the Prime Rate plus Floating Rate Margin, each in effect from time to
time during the period when such Loan is outstanding, with changes in the
interest rate taking effect on the date a change in the Prime Rate is made
effective generally by Bank.
     (b) Blank Intentionally.
     (c) From and after the maturity of the Note, whether by reason of
acceleration or otherwise, the entire unpaid principal balance of each Loan
shall bear interest, payable upon demand, until paid at a rate per annum equal
to Three and Three-Fourths Percent (3.75%) over and above the Prime Rate,
fluctuating as aforesaid.
     (d) Interest shall be computed with respect to all Loans on an actual day,
360-day year.
     11. Section 3.15 of the Loan Agreement shall be deleted in its entirety and
in its place shall be substituted the following:
          3.15 Commitment Fee. Borrowers shall jointly and severally pay to Bank
on the fifteenth (15th) day following the end of each December, March, June and
September during the Term of this Agreement and on the last day of the Term
hereof, a commitment fee (the “Commitment Fee”) in an amount equal to One-Fourth
of One Percent (0.25%) per annum calculated on the basis of the unused Bank’s
Commitment during the preceding fiscal quarter of Borrowers ending as of the
last day of each

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December, March, June and December, which unused Bank’s Commitment shall be
arrived at by dividing the aggregate of the daily unused Bank’s Commitment for
each day of that quarter as of the close of each day by ninety (90) (or by the
actual number of days for any partial quarter). Payment of the Commitment Fee is
a condition precedent to Bank’s obligations to make any new Loans hereunder.
     12. Section 3.16 of the Loan Agreement shall be deleted in its entirety and
in its place shall be substituted the following:
     3.16 Maturity. All Loans not paid prior to September 30, 2006, together
with all accrued and unpaid interest thereon, shall be due and payable on
September 30, 2006 (the “Maturity Date”).
     13. Section 7.1(a) of the Loan Agreement shall be deleted in its entirety
and in its place shall be substituted the following:.
(a) Information. Borrowers will deliver to Bank:
          (i) As soon as available and in any event within one hundred five
(105) days after the end of each fiscal year of Borrowers, the consolidated
balance sheet of Virbac and its Consolidated Subsidiaries as of the end of such
fiscal year and the related consolidated statements of income, retained earnings
and cash flows for such fiscal year, all with consolidating disclosures and
setting forth in each case, in comparative form, the figures for the previous
fiscal year, all such financial statements to be prepared in accordance with
Generally Accepted Accounting Principles consistently applied and audited by and
accompanied by the unqualified opinion of independent certified public
accountants of nationally recognized standing selected by Virbac and reasonably
acceptable to Bank together with (i) a certificate from such accountants to the
effect that, in making the examination necessary for the signing of such annual
audit report, such accountants have not become aware of any Default or Event of
Default that has occurred and is continuing, or, if such accountants have become
aware of any such event, describing it and the steps, if any, being taken to
cure it and (ii) the computations of such accountants evidencing Borrowers’
compliance with the financial covenants contained in this Agreement;
          (ii) As soon as available and in any event on or before the last day
of each month, the balance sheets of each of the Borrowers and its respective
Consolidated Subsidiaries as of the end of the immediately preceding month and
the related consolidated statements of income, retained earnings and cash flows
for such immediately preceding month and for the portion of each such Borrower’s
fiscal year ended at the end of such immediately preceding month, all (except
for such balance sheets) with consolidating disclosures and setting forth in
each case in comparative form, the figures for the corresponding month and the
corresponding portion of each such Borrower’s previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, Generally Accepted Accounting Principles and consistency by the
principal financial officer or controller of each such Borrower;
          (iii) simultaneously with the delivery of each set of financial
statements referred to in Section 7.1(a)(i) above and simultaneously with the

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delivery of each set of financial statements referred to in Sections 7.1(a)(ii)
above for the last fiscal month of a fiscal quarter of Borrower, a certificate
of the principal financial officers or controllers of Borrowers in the form
attached hereto as Exhibit E and incorporated herein by reference, accompanied
by supporting financial work sheets where appropriate, (A) evidencing Borrowers’
compliance with the financial covenants contained in Section 7.1(i) of this
Agreement, (B) stating whether there exists on the date of such certificate any
Default or Event of Default and, if any Default or Event of Default then exists,
setting forth the details thereof and the action which Borrowers are taking or
proposes to take with respect thereto and (C) certifying that all of the
representations and warranties of Borrowers and/or any other Obligor contained
in this Agreement and/or in any of the other Transaction Documents are true and
correct in all material respects on and as of the date of such certificate as if
made on and as of the date of such certificate;
          (iv) On or before the last day of each month, the Borrowing Base
Certificate dated as of the last day of the immediately preceding month, as
required pursuant to Section 3.1(d) hereof, together with: (A) an Accounts trial
balance of Borrowers and their Consolidated Subsidiaries as of such immediately
preceding month-end indicating which Accounts are up to 30, 31 to 60, 61 to 90
and 91 days or more past the invoice date and including, if requested by the
Bank, a listing of the names and addresses of all applicable Account Debtors,
(B) a summary of accounts payable of Borrowers and their Consolidated
Subsidiaries showing which accounts payable are current, up to 30, 31 to 60, 61
to 90 and 91 days or more past due, with contra accounts identified therein, and
including, if requested by the Bank, a listing of the names and addresses of
applicable creditors, (C) an Inventory listing, with obsolete, packaging and
offsite inventory noted thereon, (D) a listing of all foreign account debtors,
(E) a listing of all Accounts for which the Account Debtor is a Related Party to
one or more of the Borrowers, (F) any other additional schedules necessary to
compute the Borrowing Base which may be required by the Bank, (G) if requested
by Bank, a schedule of the current outstanding orders of the ten largest
customers of the Borrowers as of the preceding month-end, and (H) a schedule of
the preceding month’s gross sales and net sales (after discounts and other
incentives) to each customer of the Borrowers, all in form and detail reasonably
satisfactory to Bank and certified as being true, correct and complete by the
President or the chief financial officer of the Borrowers;
          (v) on or before the last day of each month, commencing with the next
such delivery on August 31, 2005 for the month of September, 2005, a cash budget
for Borrowers for the following fiscal month, setting forth Borrowers’
projections based upon the best estimates available to Borrowers as to the
anticipated cash receipts and cash disbursements of Borrowers as well as the
anticipated repayments of the outstanding loans under this Agreement and the
Notes, certified to Lender by the President or Chief Financial Officer of the
Borrowers as to fairness of assumptions made and form of presentation;
          (vi) Promptly upon receipt thereof, any reports submitted to any of
the Borrowers or any Consolidated Subsidiary of any of the Borrowers (other than
reports previously delivered pursuant to Sections 7.1(a)(i) and (ii) above) by
independent accountants in connection with any annual, interim or

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special audit made by them of the books of any of the Borrowers or any
Consolidated Subsidiary of any of the Borrowers;
          (vii) Promptly upon any filing thereof, and in any event within ten
(10) days after the filing thereof, copies of all registration statements (other
than the exhibits thereto and any registration statements on Form S-8 or its
equivalent) and annual, quarterly or interim reports which Virbac or any of the
other Borrowers shall file with the Securities and Exchange Commission;
          (viii) Promptly upon the mailing thereof to the shareholders of any of
the Borrowers generally, and in any event within ten (10) days after such
mailing, copies of all financial statements, reports, proxy statements and other
material information so mailed;
          (ix) As soon as available and in any event within thirty (30) days
prior to the beginning of each fiscal year of Borrowers, the consolidated and
consolidating balance sheet, income statement and cash flow projections for
Borrowers and their Subsidiaries for such fiscal year on a month-by-month basis,
all in form and detail reasonably acceptable to Bank; and
          (x) With reasonable promptness, such further information regarding the
business, affairs and financial condition of any of the Borrowers or any
Subsidiary of any of the Borrowers as Bank may from time to time reasonably
request.
          Bank is hereby authorized to deliver a copy of any financial statement
or other information made available by any of the Borrowers to any regulatory
authority having jurisdiction over Bank, pursuant to any request therefor.
     14. Borrowers hereby covenant and agree that on or before August 31, 2005,
Borrowers shall deliver to Bank the consolidated balance sheet of Borrowers and
their Consolidated Subsidiaries as of December 31, 2004 and the related
consolidated statements of income, retained earnings and cash flows for the
fiscal year ended as of December 31, 2004, all with consolidating disclosures
and setting forth in each case, in comparative form, the figures for the
previous fiscal year, all such financial statements to be prepared in accordance
with Generally Accepted Accounting Principles consistently applied and audited
by and accompanied by the unqualified opinion of PriceWaterhouse Coopers. Any
breach of the covenant set forth in this paragraph 14, or, if when delivered,
the audited consolidated balance sheet of Borrowers and their Consolidated
Subsidiaries as of December 31, 2004 and the related consolidated statements of
income, retained earnings and cash flows for the fiscal year ended as of
December 31, 2004 are substantially altered from the drafts of such statements
delivered to Bank on August 5, 2005, shall constitute an Event of Default under
the Loan Agreement and the other Transaction Documents.
     15. Section 7.1(i)(i) of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:.
     (i) Maintain a minimum Consolidated Net Worth at all times during the Term
hereof of not less than $24,000,000.00;
     16. Section 7.1(i)(ii) of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:.

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     (ii) Maintain a ratio of Consolidated EBITDA for the four quarter period
ending at each quarter-end and fiscal year end during the Term hereof, to
Consolidated Debt Service determined as of such fiscal quarter-end and fiscal
year-end, of at least 1.15 to 1.0;
     17. Section 7.1(c) of the Loan Agreement shall be deleted in its entirety
and in its place shall be substituted the following:.
          (c) Consultations and Inspections. Each of the Borrowers will permit,
and will cause each Subsidiary of any such Borrower to permit, Bank (and any
Person appointed by Bank to whom Borrowers do not reasonably object) to discuss
the affairs, finances and accounts of Borrowers and each Subsidiary of any of
the Borrowers with the officers of each such Borrower and each Subsidiary of any
of the Borrowers and their independent public accountants, all at such
reasonable times and as often as Bank may reasonably request. Each of the
Borrowers will also permit, and will cause each Subsidiary of any such Borrower
to permit, inspection of its Properties, books and records by Bank during normal
business hours or at other reasonable times, including, without limitation, the
performance of a field audit of the Borrowers and their Subsidiaries and all
Collateral and Third Party Collateral not less often than twice each year, which
field audits shall be performed by an auditing firm selected by the Bank.
Borrowers jointly and severally agree to pay Bank, on demand, audit fees in
connection with any field audits or inspections conducted by or on behalf of the
Bank of any Collateral or the Borrowers’ operations or business at the rates
established from time to time by the Bank as its audit fees, together with all
actual out-of-pocket costs and expenses incurred in conducting any such audit or
inspection. Borrower will reimburse Bank upon demand for all other reasonable
costs and expenses incurred by Bank in connection with any inspection conducted
by Bank while any Default or Event of Default under this Agreement has occurred
and is continuing. The Borrower irrevocably authorizes Bank to communicate
directly with its independent public accountants and irrevocably authorizes and
directs such accountants to disclose to Bank any and all information with
respect to the business and financial condition of the Borrower and each
Subsidiary as Bank may from time to time reasonably request in writing.
     18. A new Section 8.18 shall be added to the Loan Agreement as an
additional Event of Default immediately following Section 8.17 therein, as
follows:
     8.18 that certain Subordination Agreement dated as of April 9, 2004 made by
Virbac S. A. in favor of the Bank and acknowledged by the Borrowers (as amended
or restated from time to time, the “Subordination Agreement”) shall at any time
for any reason cease to be in full force and effect or shall be declared to be
null and void by a court of competent jurisdiction, or if the validity or
enforceability of the Subordination Agreement shall be contested or denied by
Virbac S. A., or if Virbac S. A. shall deny that it has any further liability or
obligation under the Subordination Agreement or if any repayment of any of the
Subordinated Indebtedness (as defined in such Subordination Agreement) shall
occur except to the extent any such repayments constitute “Permitted Payments”
(as defined in such Subordination Agreement);
     19. Section 9.14 of the Loan Agreement shall be deleted in its entirety and
in its place shall be substituted the following:.

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          9.14 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. This notice is provided
pursuant to Section 432.047, R.S.Mo. As used herein, “creditor” means Bank, the
“credit agreement” means this Agreement, as previously amended and as amended by
the Eighth Amendment, and “this writing” means this Agreement, as previously
amended and as amended by the Eighth Amendment, all guaranties executed by any
other Obligor, and any other agreement executed in connection herewith or
therewith. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS
BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT. This Agreement, as amended in
writing from time to time, embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings (oral or written) relating to the subject matter hereof.
     20. Provided Borrowers shall have delivered the audited December 31, 2004
fiscal year-end financial statements to Bank on or before August 31, 2005 as
required under paragraph 14 above, Bank hereby waives the existing Events of
Default under the Loan Agreement as such existing Events of Default are more
fully set forth in that certain Forbearance Agreement dated as of April 9, 2004
made by and among Borrowers and Lender, as previously amended by a certain
Amendment to Forbearance Agreement dated as of May 10, 2004 made by and among
Borrowers and Lender, by a certain Second Amendment to Forbearance Agreement
dated as of August 9, 2004 made by and among Borrowers and Lender, by a certain
Third Amendment to Forbearance Agreement dated as of February 7, 2005 made by
and among Borrowers and Lender, by a certain Letter Amendment dated as of
April 1, 2005 made by and among Borrowers and Lender, and by a certain Fifth
Amendment to Forbearance Agreement dated as of May 6, 2005 made by and among
Borrowers and Lender. This paragraph is not and shall not be construed as a
commitment on the part of Bank to waive any future Default or Event of Default
under the Loan Agreement, and Borrowers shall not be entitled to expect any such
future waiver. Lender hereby acknowledges that the Standstill Period in the
Forbearance Agreement has terminated and is no longer in effect.
     21. Contemporaneously with the execution of this Eighth Amendment to Credit
Agreement, the Revolving Credit Note made by the Borrowers payable to the order
of Bank shall be amended and restated in the form of that certain Revolving
Credit Note made by the Borrowers payable to the order of Bank attached hereto
as Exhibit B, to extend the maturity thereof and to make certain amendments as
set forth therein (as the same may from time to time be amended, modified,
extended or renewed, the “Note”). All references in the Loan Agreement and the
other Transaction Documents to the “Note,” the “Revolving Credit Note” and other
references of similar import shall hereafter be amended and deemed to refer to
the Note in the form of the Revolving Credit Note, as amended and restated in
the form attached hereto as Exhibit B.
     22. Contemporaneously with the execution of this Eighth Amendment to Credit
Agreement, the compliance certificate in the form of Exhibit E to the Loan
Agreement shall be amended and restated in the form of the compliance
certificate attached hereto as Exhibit E. All references in the Loan Agreement
and the other Transaction Documents to “Exhibit E,” to the “compliance
certificate,” to a

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“certificate of the principal financial officers or controllers of Borrowers in
the form attached hereto as Exhibit E” and other references of similar import
shall hereafter be amended and deemed to refer to the form of compliance
certificate as amended and restated in the form attached hereto as Exhibit E.
     23. Borrowers hereby agrees to reimburse Bank, upon demand, for all
out-of-pocket costs and expenses, including reasonable legal fees and expenses
of the attorneys for the Bank incurred by Bank in the preparation, negotiation
and execution of this Eighth Amendment to Credit Agreement and all other
documents, instruments and agreements relating to this Eighth Amendment to
Credit Agreement with Bank.
     24. In consideration of the amendments made by Bank hereunder, Borrowers
shall jointly and severally pay to Bank on the date hereof an amendment fee in
the amount of $25,000.00, which fee shall be fully earned by Bank on the date
hereof.
     25. The agreements of Bank contained herein are subject to the following
preconditions:
          (a) Execution by each of the Borrowers of this Eighth Amendment to
Credit Agreement;
          (b) Execution by each of the Borrowers of the amended and restated
Note;
          (c) the execution by JPMorgan Chase Bank, N.A. of a Consent of
Participant, in form and substance satisfactory to Bank;
          (d) the execution by VIRBAC S. A. of an Amendment to Subordination
Agreement, in form and substance satisfactory to Bank;
          (e) a copy of resolutions of the Board of Directors of each of the
Borrowers, duly adopted, which authorize the execution, delivery and performance
of this Eighth Amendment to Credit Agreement and the other Transaction
Documents, certified by the Secretary of each such Borrower;
          (f) such other documents as Bank may reasonably request; and
          (g) payment by Borrowers of the amendment fee required under paragraph
24 above.
     26. Borrowers hereby represent and warrant to Bank that:
          (a) The execution, delivery and performance by Borrowers of this
Eighth Amendment to Credit Agreement and the amended and restated Note are
within the corporate powers of Borrowers, have been duly authorized by all
necessary corporate action and require no action by or in respect of, or filing
with, any governmental or regulatory body, agency or official. The execution,
delivery and performance by Borrowers of this Eighth Amendment to Credit
Agreement and the amended and restated Note do not conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under
or result in any violation of, and none of the Borrowers is now in default under
or in violation of, the terms of the Articles of Incorporation or Bylaws of such
Borrower, any applicable law, any rule, regulation, order, writ, judgment or
decree of any court or governmental or regulatory agency or instrumentality, or
any agreement or instrument to which any of the Borrowers is a party or by which
any of them is bound or to which any of them is subject;

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          (b) This Eighth Amendment to Credit Agreement and the amended and
restated Note have been duly executed and delivered and constitute the legal,
valid and binding obligations of Borrowers enforceable in accordance with their
respective terms; and
          (c) As of the date hereof, all of the covenants, representations and
warranties of Borrowers set forth in the Loan Agreement are true and correct and
no “Event of Default” (as defined therein) under or within the meaning of the
Loan Agreement has occurred and is continuing.
     27. All references in the Loan Agreement to “this Agreement” and any other
references of similar import shall henceforth mean the Loan Agreement as amended
by this Eighth Amendment to Credit Agreement.
     28. This Eighth Amendment to Credit Agreement and the amended and restated
Note shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns, except that Borrowers may not assign,
transfer or delegate any of their rights or obligations hereunder.
     29. This Eighth Amendment to Credit Agreement shall be governed by and
construed in accordance with the internal laws of the State of Missouri.
     30. In the event of any inconsistency or conflict between this Eighth
Amendment to Credit Agreement and the Loan Agreement, the terms, provisions and
conditions of this Eighth Amendment to Credit Agreement shall govern and
control.
     31. The Loan Agreement and the Note, as hereby amended and modified, are
and shall remain the binding obligations of Borrowers and all of the provisions,
terms, stipulations, conditions, covenants and powers contained therein shall
stand and remain in full force and effect, except only as the same are herein
and hereby specifically varied or amended, and the same are hereby ratified and
confirmed. If any installment of principal or interest on the Note shall not be
paid when due as provided in the Note, as hereby amended and modified, the
holder of the Note shall be entitled to and may exercise all rights and remedies
under the Note and the Loan Agreement, as amended.
     32. This notice is provided pursuant to Section 432.047, R.S.Mo. As used
herein, “creditor” means Bank, the “credit agreement” means the Loan Agreement,
as previously amended and as amended by this Eighth Amendment to Credit
Agreement, and “this writing” means the Loan Agreement, as previously amended
and as amended by this Eighth Amendment to Credit Agreement, all guaranties
executed by any other Obligor, and any other agreement executed in connection
herewith or therewith. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY
UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO
PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR
DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN
THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT
BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.
The Loan Agreement, as amended by this Eighth Amendment to Credit Agreement,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings (oral or written) relating to
the subject matter hereof.

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     IN WITNESS WHEREOF, the parties hereto have executed this Eighth Amendment
to Credit Agreement as of the date first written above.

              VIRBAC CORPORATION     PM RESOURCES, INC.     ST. JON
LABORATORIES, INC.     VIRBAC AH, INC.     FRANCODEX LABORATORIES, INC.    
DELMARVA LABORATORIES, INC.     the “Borrowers”
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Name:   Jean M. Nelson
 
  Title:   Executive Vice President and Chief Financial
 
      Officer

              FIRST BANK
 
       
 
  By:   /s/ Traci L. Dodson
 
       
 
      Traci L. Dodson, Vice President

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EXHIBIT A
Borrowing Base Certificate
as of                     
     Pursuant to the Credit Agreement dated September 1999 and thereafter
amended among Virbac Corporation and Subsidiaries (“Borrower) and First Bank
(“Bank”), Borrower hereby warrants to Bank that as of the date indicated above,
the information in this report is true and correct and that the total eligible
accounts and eligible inventory referred to herein qualify per terms of the
Credit Agreement. Borrower further represents and warrants to Bank that as of
this date Borrower is in full compliance with all of its obligations under the
Credit Agreement and all other Loan Documents and is not in default of any term
or provision hereof or thereof.
1. Eligible Accounts Receivable

             
 
  Total Accounts Receivable per attached aging of same date as this report
hereof        
 
           
 
           
 
  less: Accounts more than 90 days from date of invoice        
 
           
 
  less: Credits aged greater than 90 days from date of invoice and included
above        
 
           
 
           
 
  less: Accounts ineligible due to 10% taint        
 
           
 
  less: That portion of Accounts due from any Account Debtor that exceed 30% of
Total Accounts Receivable        
 
           
 
  less: Accounts due from any Account Debtor that is a shareholder, partner or
related party of Borrower        
 
           
 
           
 
  less: Rebate Accruals and Credit/Return Reserves        
 
           
 
  less: Accounts due from any Account Debtor located outside the continental
United States of America        
 
           
 
  less: Accounts for which Borrower is liable to Account Debtor for goods sold
or services provided by Account Debtor        
 
           
 
           
 
  less: Other ineligible accounts per Credit Agreement        
 
           
 
            TOTAL ELIGIBLE ACCOUNTS RECEIVABLE:       $                    

2. Eligible Inventory

             
 
  Total Inventory per attached inventory listing of same date as this report
hereof        
 
           
 
           
 
  less: Work in process        
 
           
 
           
 
  less: Obsolete inventory        
 
           
 
           
 
  less: Consignment inventory        
 
           
 
           

 

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  less: Inventory not maintained at one of the locations provided in the
Security Agreements        
 
           
 
  less: Inventory not usable or saleable, at prices not less than standard cost,
to include packaging supplies        
 
           
 
           
 
  less: Other ineligible inventory per Credit Agreement        
 
           
 
           
 
                 TOTAL ELIGIBLE INVENTORY:       $                    

3. Borrowing Base

             
 
  Total Eligible Accounts Receivable * 80%        
 
           
 
           
 
  Total Eligible Inventory * 50% (not to exceed $3,500,000.00)        
 
           
 
  Loan Value of Fixed Assets (not to exceed $9,000,000 less $250,000 times ___
(# of quarters since September, 2005))        
 
           
 
           
 
                 TOTAL BORROWING BASE:       $                    

4. Loan Amount

             
 
  Lesser of Borrowing Base or Bank’s Commitment ($15,000,000)        
 
           
 
           
 
  less: Outstanding Loan Balance        
 
           
 
           
 
  less: Issued and Outstanding Letters of Credit        
 
           
 
           
 
                 TOTAL ADVANCES AVAILABLE:       $                    

Virbac Corporation

         
By:
       
 
       
Title:
       
 
       
Date:
       
 
       

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EXHIBIT B
Revolving Credit Note

     
$15,000,000.00
  St. Louis, Missouri
 
  August 22, 2005

     FOR VALUE RECEIVED, on September 30, 2006 the undersigned, VIRBAC
CORPORATION, a Delaware corporation (formerly known as Agri-Nutrition Group
Limited), PM RESOURCES, INC., a Missouri corporation, ST. JON LABORATORIES,
INC., a California corporation, FRANCODEX LABORATORIES, INC., a Kansas
corporation, VIRBAC AH, INC., a Delaware corporation and DELMARVA LABORATORIES,
INC., a Virginia corporation (collectively, the “Borrowers”), hereby jointly and
severally promise to pay to the order of FIRST BANK, a Missouri state banking
corporation (“Bank”), the principal sum of Fifteen Million Dollars
($15,000,000.00), or such lesser sum as may then be outstanding hereunder. The
aggregate principal amount which Bank shall be committed to have outstanding
hereunder at any one time shall not exceed the lesser of (i) Fifteen Million
Dollars ($15,000,000.00), or (ii) the “Borrowing Base” (as defined in the Loan
Agreement (as hereinafter defined)), which amount may be borrowed, paid,
reborrowed and repaid, in whole or in part, subject to the terms and conditions
hereof and of the Loan Agreement hereinafter identified.
     Borrowers further jointly and severally promise to pay to the order of Bank
interest on the principal amount from time to time outstanding hereunder prior
to maturity from the date disbursed until paid at the rate or rates per annum
required by the Loan Agreement. All accrued and unpaid interest with respect to
each principal disbursement made hereunder shall be payable on the dates set
forth in Section 3.6 of the Loan Agreement and at the maturity of this Note,
whether by reason of acceleration or otherwise. After the maturity of this Note,
whether by reason of acceleration or otherwise, interest shall accrue and be
payable on demand on the entire outstanding principal balance hereunder until
paid at a rate per annum equal to Three and Three-Fourths Percent (3.75%) over
and above the Prime Rate, fluctuating as and when said Prime Rate shall change.
All payments hereunder (other than prepayments) shall be applied first to the
payment of all accrued and unpaid interest, with the balance, if any, to be
applied to the payment of principal. All prepayments hereunder shall be applied
solely to the payment of principal.
     All payments of principal and interest hereunder shall be made in lawful
currency of the United States in Federal or other immediately available funds at
the office of Bank situated at 135 North Meramec, Clayton, Missouri 63105, or at
such other place as the holder hereof shall designate in writing. Interest shall
be computed on an actual day, 360-day year basis.
     Bank may record the date and amount of all loans and all payments of
principal and interest hereunder in the records it maintains with respect
thereto. Bank’s books and records showing the account between Bank and Borrowers
shall be admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth.
     This Note is the Note referred to in that certain Credit Agreement dated as
of September 7, 1999 made by and between Borrowers and Bank (as the same may
from time to time be amended, the “Loan Agreement”), to which Loan Agreement
reference is hereby made for a statement of the terms and conditions upon which
the maturity of this Note may be accelerated, and for other terms and
conditions, including prepayment, which may affect this Note. All capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Loan Agreement.
     This Note is secured by that certain Security Agreement dated as of May 14,
1998 executed by Virbac Corporation in favor of Bank, by that certain Security
Agreement dated as of May 14, 1998 and

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executed by PM Resources, Inc. in favor of Bank, by that certain Security
Agreement dated as of May 14, 1998 executed by St. JON Laboratories, Inc. in
favor of Bank, by that certain Security Agreement dated as of September 7, 1999
and executed by Virbac AH, Inc. in favor of Bank, by that certain Security
Agreement dated as of September 7, 1999 executed by Francodex Laboratories, Inc.
in favor of Bank and by that certain Security Agreement dated as of September 3,
2003 executed by Delmarva Laboratories, Inc. in favor of Bank (as the same may
from time to time be amended, the “Security Agreements”), to which Security
Agreements reference is hereby made for a description of the security and a
statement of the terms and conditions upon which this Note is secured.
     This Note is also secured by that certain Deed of Trust and Security
Agreement dated September 9, 1993 and executed by PM Resources, Inc. in favor of
Katherine D. Knocke, as trustee for Bank and by that certain Deed of Trust and
Security Agreement dated September 3, 2003 executed by Virbac Corporation in
favor of David F. Weaver, as trustee for Bank (as the same may from time to time
be amended, the “Deeds of Trust”), to which Deeds of Trust reference is hereby
made for a description of the security and a statement of the terms and
conditions upon which this Note is secured.
     This Note is also secured by that certain Agreement of Pledge dated as of
September 7, 1999 and executed by Virbac Corporation in favor of Bank and by
that certain Agreement of Pledge dated as of September 7, 1999 and executed by
Virbac AH, Inc. in favor of Bank (collectively, as the same may from time to
time be amended, the “Pledge Agreements”), to which Pledge Agreements reference
is hereby made for a description of the additional security and a statement of
the terms and conditions upon which this Note is further secured.
     This Note is also secured by that certain Patent, Trademark and License
Security Agreement dated as of September 3, 2003 and executed by Virbac
Corporation in favor of Bank, by that certain Patent, Trademark and License
Security Agreement dated as of September 3, 2003 and executed by Virbac AH, Inc.
in favor of Bank and by that certain Patent, Trademark and License Security
Agreement dated as of September 3, 2003 and executed by Delmarva Laboratories,
Inc. in favor of Bank (collectively, as the same may from time to time be
amended, the “IP Security Agreements “), to which IP Security Agreements
reference is hereby made for a description of the additional security and a
statement of the terms and conditions upon which this Note is further secured.
     If any of the Borrowers shall fail to make any payment of any principal of
or interest on this Note as and when the same shall become due and payable, or
if an “Event of Default” (as defined therein) shall occur under or within the
meaning of the Loan Agreement, any of the Security Agreements, the Deeds of
Trust or any of the Pledge Agreements, Bank may, at its option, terminate its
obligation to make any additional loans under this Note and Bank may further
declare the entire outstanding principal balance of this Note and all accrued
and unpaid interest thereon to be immediately due and payable.
     In the event that any payment of any principal of or interest on this Note
shall not be paid when due, whether by reason of acceleration or otherwise, and
this Note shall be placed in the hands of an attorney or attorneys for
collection or for foreclosure of any of the Security Agreements, any of the
Deeds of Trust or any of the Pledge Agreements securing payment hereof or for
representation of Bank in connection with bankruptcy or insolvency proceedings
relating hereto, Borrowers jointly and severally promise to pay, in addition to
all other amounts otherwise due hereon, the reasonable costs and expenses of
such collection, foreclosure and representation, including, without limitation,
reasonable attorneys’ fees and expenses (whether or not litigation shall be
commenced in aid thereof). All parties hereto severally waive presentment for
payment, demand, protest, notice of protest and notice of dishonor.

- 16 -

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     This Note shall be governed by and construed in accordance with the
internal laws of the State of Missouri.
     This Revolving Credit Note is a renewal, restatement and continuation of
the obligations due Bank as evidenced by a Revolving Credit Note dated May 6,
2005 from Borrower payable to the order of Bank in the maximum principal amount
of $15,000,000.00 (the “Prior Note”), and is not a novation thereof. All
interest evidenced by the Prior Note being amended and restated by this
instrument shall continue to be due and payable until paid.

              VIRBAC CORPORATION
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer
 
            PM RESOURCES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer
 
            ST. JON LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer

- 17 -

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              VIRBAC AH, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer
 
            FRANCODEX LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer
 
            DELMARVA LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
      Jean M. Nelson, Executive Vice President and
 
      Chief Financial Officer

- 18 -

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EXHIBIT E
August 22, 2005
First Bank
135 North Meramec
St. Louis, Missouri 63105
Attention: Traci Dodson
Gentlemen:
          Reference is hereby made to that certain Credit Agreement dated
September 7, 1999, by and between you, Virbac Corporation, St. JON Laboratories,
Inc., PM Resources, Inc., Virbac AH, Inc., Francodex Laboratories, Inc. and
Delmarva Laboratories, Inc. (as amended through and including the date hereof,
the “Agreement”). All capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed to them in the Agreement.
          The undersigned hereby certify to you that as of the date hereof:
          (a) all of the representations and warranties set forth in Section 6
of the Agreement are true and correct as if made on the date hereof;
          (b) no violation or breach of any of the affirmative covenants set
forth in Section 7.1 of the Agreement has occurred and is continuing;
          (c) no violation or breach of any of the negative covenants set forth
in Section 7.2 of the Agreement has occurred and is continuing;
          (d) no Default or Event of Default under or within the meaning of the
Agreement has occurred and is continuing;
          (e) the financial statements of Borrowers and their respective
Consolidated Subsidiaries delivered to you with this letter are true, correct
and complete and have been prepared in accordance with Generally Accepted
Accounting Principles consistently applied; and

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          (f) the financial covenant information set forth in Schedule 1 to this
letter is true and correct.

              Very truly yours,
 
            VIRBAC CORPORATION
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer
 
            PM RESOURCES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer
 
            ST. JON LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer
 
            VIRBAC AH, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer

- 20 -

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              FRANCODEX LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer
 
            DELMARVA LABORATORIES, INC.
 
       
 
  By:   /s/ Jean M. Nelson
 
       
 
  Title:   Jean M. Nelson, Executive Vice President and

 
      Chief Financial Officer

- 21 -

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SCHEDULE 1
Financial Covenant Information
as of                     , ______
(All determined pursuant to Generally Accepted Accounting
Principles and the definitions set forth in the Credit Agreement)
A. CONSOLIDATED EBITDA
     (for Virbac and its Consolidated Subsidiaries for the four fiscal quarters
ending                     , ___)

             
1. Consolidated Net Income
    $      
 
           
2. Consolidated Interest Expense
    $      
 
           
3. Consolidated Tax Expense
    $      
 
           
4. Depreciation and amortization expenses
    $      
 
           
5. Extraordinary losses
    $      
 
           
6. Losses from the disposition of Property
    $      
 
           
7. Goodwill and Other Intangible Assets Impairment
    $      
 
           
8. Extraordinary gains
    $      
 
           
9. Gains from the disposition of Property
    $      
 
           
 
           
10. Consolidated EBITDA (Sum of A.1 through A.7 minus A.8 and A.9)
    $      
 
           

B. MINIMUM CONSOLIDATED NET WORTH
     (for Virbac and its Consolidated Subsidiaries as of the month ended ______,
___)

                 
1. Current Consolidated Net Worth
    $          
 
         
 
               
2. Minimum Consolidated Net Worth required by Section 7.1(i)(i)
    $       24,000,000.00

C. MINIMUM CONSOLIDATED DEBT SERVICE COVERAGE RATIO
     (for Virbac and its Consolidated Subsidiaries for the four fiscal quarters
ending ______, ___)

             
1. Consolidated EBITDA (from A.10 above)
    $      
 
           
2. Scheduled Principal Payments on Senior borrowed money Indebtedness
    $      
 
           
3. Principal Payments on Subordinated Indebtedness
    $      
 
           
4. Consolidated Interest Expense
    $      
 
           
 
           
5. Consolidated Debt Service (Sum of C.2+C.3+C.4)
    $      
 
           
 
           
6. Consolidated Debt Service Coverage Ratio (C.1 divided by C.5)
                               to 1.00
7. Minimum Required Consolidated Debt Service Coverage
           
    Ratio per Section 7.1(i)(ii)
          1.15 to 1.00

- 22 -