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EXHIBIT 10.27
April 15, 2005
Virbac Corporation and Subsidiaries
3200 Meacham Boulevard
Fort Worth, Texas 76137
Attention: Jean M. Nelson,
Executive Vice
President and Chief Financial Officer
Re: Waiver of 2001 and
2002 Financial Covenant Defaults and
Amendments to Forbearance Agreement
Dear Ms. Nelson:
Reference is made to that certain Credit Agreement dated as of
September 7, 1999 made by and among Virbac
Corporation, PM Resources, Inc., St.
Jon Laboratories, Inc., Francodex
Laboratories, Inc., Virbac AH, Inc. and
Delmarva Laboratories, Inc. (collectively,
the "Borrowers"), and First Bank
("Bank"), as the same has been from time to
time amended (as amended, the
"Credit Agreement;" capitalized terms used
herein and not otherwise defined
shall have the meanings given to such terms
in the Credit Agreement). You have
informed the undersigned Bank of the
Borrowers' noncompliance with the financial
covenants set forth in Section 7.1(i)(i)
(ratio of Consolidated EBITDA to
Consolidated Debt Service) of the Credit
Agreement for the fiscal quarters
ending March 31, 2001 through and including
December 31, 2001, and in Section
7.1(i)(ii) (Consolidated Net Worth) of the
Credit Agreement for the fiscal
quarters ending March 31, 2001 through and
including December 31, 2002, which
covenant defaults constitute Events of
Default under Section 8.3 of the Credit
Agreement, and you have requested waivers
of the same.
By this letter, the undersigned Bank hereby waives the
Borrowers'
noncompliance under Section 7.1(i)(i) of
the Credit Agreement for the fiscal
quarters ending March 31, 2001 through and
including December 31, 2001 and
Borrowers' noncompliance under Section
7.1(i)(ii) of the Credit Agreement for
the fiscal quarters ending March 31, 2001
through and including December 31,
2002, and the undersigned Bank further
waives any Default or Event of Default
under the Credit Agreement caused by such
noncompliance for such fiscal
quarters. These waivers shall constitute
waivers only of the above-referenced
covenants and only with respect to the
specified fiscal quarters. Such waivers
shall not be deemed to be a waiver for any
other occurrence under the
above-referenced Sections 7.1(i)(i) and
7.1(i)(ii) of the Credit Agreement or
for any other provisions contained in the
Credit Agreement or any of the other
Transaction Documents. Such waivers shall
also not be deemed to create any
custom, practice or course of dealing
between Borrowers and the Bank, and
Borrowers should not rely on such present
waivers to anticipate or expect any
other or similar waivers in the future.
You have also requested certain amendments to the Forbearance
Agreement
dated as of April 9, 2004 made by and among
Borrowers and Bank, as the same has
been from time to time amended (the
"Forbearance Agreement") to: (i) permit the
delivery of the audited financial
statements for Borrowers' fiscal years ending
December 31, 2003, December 31, 2002,
December 31, 2001 and December 31, 20
