Exhibit 10.30

 

[***] — Certain information in this exhibit have been omitted and filed
separately with the Securities and Exchange Commission.  Confidential treatment
has been requested with respect to the omitted portions.

 

SECOND AMENDMENT TO THIRD AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT

 

This Amendment, dated as of July 20, 2007, is made by and between Heska
Corporation, a Delaware corporation (“Heska”), Diamond Animal Health, Inc., an
Iowa corporation (“Diamond”) (each of Heska and Diamond may be referred to
herein individually as a “Borrower” and collectively as the “Borrowers”), and
Wells Fargo Bank, National Association, operating through its Wells Fargo
Business Credit operating division (the “Lender”).

 

Recitals

 

The Borrowers and the Lender are parties to a Third Amended and Restated Credit
and Security Agreement dated as of December 30, 2005 as amended by the terms of
that certain First Amendment to Third Amended and Restated Credit and Security
Agreement dated as of December 5, 2006 (collectively, and as amended from time
to time in the future, the “Credit Agreement”). Capitalized terms used in these
recitals have the meanings given to them in the Credit Agreement unless
otherwise specified.

 

The Borrowers have requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

 

1.     SPREAD. SECTION 2.7 OF THE CREDIT AGREEMENT IS HEREBY AMENDED TO READ IT
ITS ENTIRETY AS FOLLOWS:

 

                “SECTION 2.7           SPREAD.  THE SPREAD (THE “SPREAD”) MEANS
THE PERCENTAGE SET FORTH IN THE TABLE BELOW OPPOSITE THE APPLICABLE
PRIOR-FISCAL-YEAR NET INCOME OF THE BORROWERS, WHICH PERCENTAGE SHALL CHANGE
ANNUALLY EFFECTIVE AS OF THE FIRST DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH
THE BORROWERS DELIVERS TO THE LENDER THEIR AUDITED FINANCIAL STATEMENTS FOR THE
PRIOR FISCAL YEAR; PROVIDED, HOWEVER, THAT IN NO CASE SHALL ANY DECREASE IN THE
SPREAD OCCUR DURING A DEFAULT PERIOD:

 

--------------------------------------------------------------------------------

 

Prior Fiscal Year Net Income

 

Spread

 

 

 

 

Less than $0

2.00

%

 

 

 

Greater than or equal to $0 but less than $2,500,000

1.00

%

 

 

 

Greater than or equal to $2,500,000

0.00

%”

 

2.     AUDIT FEES. SECTION 2.9(B) OF THE CREDIT AGREEMENT IS HEREBY AMENDED TO
READ IT ITS ENTIRETY AS FOLLOWS:

 

                “(B)         AUDIT FEES. THE BORROWER SHALL PAY THE LENDER FEES
IN CONNECTION WITH ANY COLLATERAL EXAMS, AUDITS OR INSPECTIONS CONDUCTED BY OR
ON BEHALF OF THE LENDER OF ANY COLLATERAL OR THE BORROWER’S OPERATIONS OR
BUSINESS AT THE RATES ESTABLISHED FROM TIME TO TIME BY THE LENDER AS ITS
COLLATERAL EXAM FEES (WHICH FEES ARE CURRENTLY $100 PER HOUR PER COLLATERAL
EXAMINER), TOGETHER WITH ALL ACTUAL OUT-OF-POCKET COSTS AND EXPENSES INCURRED IN
CONDUCTING ANY SUCH COLLATERAL EXAMINATION OR INSPECTION; PROVIDED, HOWEVER,
THAT SO LONG AS NO DEFAULT PERIOD EXISTS AND AVERAGE AVAILABILITY (COMPUTED ON A
90-DAY ROLLING AVERAGE BASIS, AS REASONABLY DETERMINED BY THE LENDER) EXCEEDS
$1,500,000 THE LENDER WILL NOT CONDUCT MORE THAN THREE SUCH COLLATERAL EXAMS IN
ANY CALENDAR YEAR.”

 

3.     PROJECTIONS. SUB-SECTION (F) OF SECTION 6.1 OF THE CREDIT AGREEMENT IS
HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

                “(f)  on or before May 31 of each year, the projected balance
sheets and income statements for each of the subsequent twelve months, each in
reasonable detail, representing each Borrower’s good faith projections and
certified by such Borrower’s chief financial officer as being the most accurate
projections available and identical to the projections used by such Borrower for
internal planning purposes, together with such supporting schedules and
information as the Lender may in its discretion require;”

 

4.     FINANCIAL COVENANTS.  SECTIONS 6.12, 6.13 AND 6.16 OF THE CREDIT
AGREEMENT ARE HEREBY AMENDED TO READ IN THEIR ENTIRETIES AS FOLLOWS:

 

                “Section 6.12 Minimum Capital. Heska will maintain, on a
consolidated basis, as of each date listed below, its Capital at an amount not
less than the amount set forth opposite such date (amounts in parentheses denote
negative numbers):

 

2

--------------------------------------------------------------------------------

 

[***] — Certain information on this page have been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

Date

 

Minimum Capital

 

July 31, 2007

[***]

 

August 31, 2007

[***]

 

September 30, 2007

[***]

 

October 31, 2007

[***]

 

November 30, 2007

[***]

 

December 31, 2007

[***]

 

January 31, 2008

[***]

 

February 29, 2008

[***]

 

March 31, 2008

[***]

 

April 30, 2008

[***]

 

May 31, 2008

[***]

 

June 30, 2008 and the last day of each month thereafter

[***]

 

 

In addition to the foregoing, if Heska makes a purchase of intellectual property
rights by June 30, 2008, as contemplated by Section 7.4(a)(ix), to the extent
the purchase is expensed in accordance with GAAP, the Minimum Capital amounts
listed above occurring after the date of such purchase shall be adjusted
downward on a dollar-for-dollar basis by the amount of such expense, not to
exceed the Investment Cap.”

 

                “Section 6.13 Minimum Net Income. Heska will achieve, on a
consolidated basis, during each period described below, Net Income in an amount
not less than the amount set forth opposite such period (amounts in parentheses
denote negative numbers):

 

Period

 

Minimum Net Income

 

Nine months ending September 30, 2007

[***]

 

Twelve months ending December 31, 2007

[***]

 

Three months ending March 31, 2008

[***]

 

Six months ending June 30, 2008

[***]

 

 

In addition to the foregoing, if Heska makes a purchase of intellectual property
rights by June 30, 2008, as contemplated by Section 7.4(a)(ix), to the extent
the purchase is expensed in accordance with GAAP, the Minimum Net Income amounts
listed above occurring after the date of such purchase shall be adjusted
downward on a dollar-for-dollar basis by the amount of such expense, not to
exceed the Investment Cap.”

 

3

--------------------------------------------------------------------------------

 

                “Section 6.16 New Covenants. Annually, on or before June 30, the
Borrowers and the Lender shall agree on new covenant levels for Sections 6.12,
6.13, 6.14, 7.4(a)(v) and 7.10 for periods after such date. The new covenant
levels will be based on (i) the Borrowers’ projections for such periods and
(ii) the year to date financial results of Heska, on a consolidated basis, and
such new covenant levels shall be no less stringent than the present levels.  An
Event of Default shall occur if the new covenants are not agreed to by the above
date.”

 

5.     INVESTMENTS. CLAUSE (V) OF SECTION 7.4(A) OF THE CREDIT AGREEMENT IS
HEREBY AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

                “(V)         UNLESS A DEFAULT PERIOD EXISTS OR WOULD EXIST
IMMEDIATELY AFTER OR AS A RESULT OF ANY SUCH ADVANCE OR CONTRIBUTION, ADVANCES
OR CONTRIBUTIONS DURING THE FISCAL YEAR ENDING DECEMBER 31, 2007, AND THE SIX
MONTH PERIOD ENDING JUNE 30, 2008, BY HESKA TO ANY SUBSIDIARY THAT IS NOT A
BORROWER; PROVIDED, HOWEVER, THAT (A) BOTH BEFORE AND AFTER SUCH ADVANCE OR
CONTRIBUTION HESKA’S TANGIBLE NET WORTH MUST EQUAL OR EXCEED $100,000 AND
(B) ALL CONTRIBUTIONS AND ADVANCES MADE IN RELIANCE ON THIS SUBSECTION (V) SHALL
NOT EXCEED $700,000 IN THE AGGREGATE DURING THE TWELVE MONTH PERIOD BEGINNING
JULY 1, 2007 AND ENDING JUNE 30, 2008;”

 

6.     CAPITAL EXPENDITURES. SECTION 7.10 OF THE CREDIT AGREEMENT IS HEREBY
AMENDED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

                “Section 7.10 Capital Expenditures. The Borrowers, together with
any Affiliates, will not incur or contract to incur, in the aggregate, Capital
Expenditures in the aggregate during the fiscal year-to-date period ending on
any date described below in excess of the amount set forth opposite such period:

 

4

--------------------------------------------------------------------------------

 

[***] — CERTAIN INFORMATION ON THIS PAGE HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

Period

 

Maximum Capital
Expenditures

 

July 31, 2007

[***]

 

August 31, 2007

[***]

 

September 30, 2007

[***]

 

October 31, 2007

[***]

 

November 30, 2007

[***]

 

December 31, 2007

[***]

 

January 31, 2008

[***]

 

February 29, 2008

[***]

 

March 31, 2008

[***]

 

April 30, 2008

[***]

 

May 31, 2008

[***]

 

June 30, 2008

[***]

 

 

In addition to the foregoing, the amounts set forth above shall be adjusted
upward on a dollar-for-dollar basis by the amount allocated for such purpose in
accordance with Section 2.22.”

 

7.     COMPLIANCE CERTIFICATE. EXHIBIT B TO THE CREDIT AGREEMENT IS REPLACED IN
ITS ENTIRETY BY EXHIBIT A TO THIS AMENDMENT.

 

8.     NO OTHER CHANGES. EXCEPT AS EXPLICITLY AMENDED BY THIS AMENDMENT, ALL OF
THE TERMS AND CONDITIONS OF THE CREDIT AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT AND SHALL APPLY TO ANY ADVANCE OR LETTER OF CREDIT THEREUNDER.

 

9.     CONDITIONS PRECEDENT. THIS AMENDMENT SHALL BE EFFECTIVE WHEN THE LENDER
SHALL HAVE RECEIVED AN EXECUTED ORIGINAL HEREOF, TOGETHER WITH THE FOLLOWING,
EACH IN FORM AND SUBSTANCE ACCEPTABLE TO THE LENDER IN ITS SOLE DISCRETION:

 

(A)   A CERTIFICATE OF AUTHORITY OF THE BORROWERS CERTIFYING AS TO THE
RESOLUTIONS OF THE BOARDS OF DIRECTORS OF THE BORROWERS APPROVING THE EXECUTION
AND DELIVERY OF THIS AMENDMENT.

 

(B)   SUCH OTHER MATTERS AS THE LENDER MAY REQUIRE.

 

10.   REPRESENTATIONS AND WARRANTIES. THE BORROWERS HEREBY REPRESENT AND WARRANT
TO THE LENDER AS FOLLOWS:

 

(A)   THE BORROWERS HAVE ALL REQUISITE POWER AND AUTHORITY TO EXECUTE THIS
AMENDMENT AND TO PERFORM ALL OF ITS OBLIGATIONS HEREUNDER, AND THIS AMENDMENT
HAS

 

5

--------------------------------------------------------------------------------

 

BEEN DULY EXECUTED AND DELIVERED BY THE BORROWERS AND CONSTITUTE THE LEGAL,
VALID AND BINDING OBLIGATION OF THE BORROWERS, ENFORCEABLE IN ACCORDANCE WITH
THEIR TERMS.

 

(B)   THE EXECUTION, DELIVERY AND PERFORMANCE BY THE BORROWERS OF THIS AMENDMENT
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION AND DO NOT
(I) REQUIRE ANY AUTHORIZATION, CONSENT OR APPROVAL BY ANY GOVERNMENTAL
DEPARTMENT, COMMISSION, BOARD, BUREAU, AGENCY OR INSTRUMENTALITY, DOMESTIC OR
FOREIGN, (II) VIOLATE ANY PROVISION OF ANY LAW, RULE OR REGULATION OR OF ANY
ORDER, WRIT, INJUNCTION OR DECREE PRESENTLY IN EFFECT, HAVING APPLICABILITY TO
THE BORROWERS, OR THE ARTICLES OF INCORPORATION OR BY-LAWS OF THE BORROWERS, OR
(III) RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT UNDER ANY INDENTURE OR LOAN
OR CREDIT AGREEMENT OR ANY OTHER AGREEMENT, LEASE OR INSTRUMENT TO WHICH ANY
BORROWER IS A PARTY OR BY WHICH IT OR ITS PROPERTIES MAY BE BOUND OR AFFECTED.

 

(C)   ALL OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE V OF THE
CREDIT AGREEMENT ARE CORRECT ON AND AS OF THE DATE HEREOF AS THOUGH MADE ON AND
AS OF SUCH DATE, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS AND WARRANTIES
RELATE SOLELY TO AN EARLIER DATE.

 

11.   NO WAIVER. THE EXECUTION OF THIS AMENDMENT AND ACCEPTANCE OF ANY DOCUMENTS
RELATED HERETO SHALL NOT BE DEEMED TO BE A WAIVER OF ANY DEFAULT OR EVENT OF
DEFAULT UNDER THE CREDIT AGREEMENT OR BREACH, DEFAULT OR EVENT OF DEFAULT UNDER
ANY SECURITY DOCUMENT OR OTHER DOCUMENT HELD BY THE LENDER, WHETHER OR NOT KNOWN
TO THE LENDER AND WHETHER OR NOT EXISTING ON THE DATE OF THIS AMENDMENT.

 

12.   RELEASE. THE BORROWERS HEREBY ABSOLUTELY AND UNCONDITIONALLY RELEASE AND
FOREVER DISCHARGE THE LENDER, AND ANY AND ALL PARTICIPANTS, PARENT CORPORATIONS,
SUBSIDIARY CORPORATIONS, AFFILIATED CORPORATIONS, INSURERS, INDEMNITORS,
SUCCESSORS AND ASSIGNS THEREOF, TOGETHER WITH ALL OF THE PRESENT AND FORMER
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES OF ANY OF THE FOREGOING, FROM ANY AND
ALL CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY KIND, NATURE OR DESCRIPTION,
WHETHER ARISING IN LAW OR EQUITY OR UPON CONTRACT OR TORT OR UNDER ANY STATE OR
FEDERAL LAW OR OTHERWISE, WHICH ANY BORROWER HAS HAD, NOW HAS OR HAS MADE CLAIM
TO HAVE AGAINST ANY SUCH PERSON FOR OR BY REASON OF ANY ACT, OMISSION, MATTER,
CAUSE OR THING WHATSOEVER ARISING FROM THE BEGINNING OF TIME TO AND INCLUDING
THE DATE OF THIS AMENDMENT, WHETHER SUCH CLAIMS, DEMANDS AND CAUSES OF ACTION
ARE MATURED OR UNMATURED OR KNOWN OR UNKNOWN.

 

13.   COSTS AND EXPENSES. THE BORROWERS HEREBY REAFFIRM THEIR AGREEMENT UNDER
THE CREDIT AGREEMENT TO PAY OR REIMBURSE THE LENDER ON DEMAND FOR ALL COSTS AND
EXPENSES INCURRED BY THE LENDER IN CONNECTION WITH THE LOAN DOCUMENTS, INCLUDING
WITHOUT LIMITATION ALL REASONABLE FEES AND DISBURSEMENTS OF LEGAL COUNSEL.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE BORROWERS SPECIFICALLY
AGREE TO PAY ALL FEES AND DISBURSEMENTS OF COUNSEL TO THE LENDER FOR THE
SERVICES PERFORMED BY SUCH COUNSEL IN CONNECTION WITH THE PREPARATION OF THIS
AMENDMENT AND THE DOCUMENTS AND INSTRUMENTS INCIDENTAL HERETO. THE BORROWERS
HEREBY AGREE THAT THE LENDER MAY, AT ANY TIME OR FROM TIME TO TIME IN ITS SOLE
DISCRETION AND WITHOUT FURTHER AUTHORIZATION BY THE BORROWERS, MAKE A LOAN TO
THE BORROWERS UNDER THE CREDIT AGREEMENT, OR APPLY THE PROCEEDS OF ANY LOAN, FOR
THE PURPOSE OF PAYING ANY SUCH FEES, DISBURSEMENTS, COSTS AND EXPENSES.

 

6

--------------------------------------------------------------------------------

 

14.   MISCELLANEOUS. THIS AMENDMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND DELIVERED SHALL BE DEEMED AN
ORIGINAL AND ALL OF WHICH COUNTERPARTS, TAKEN TOGETHER, SHALL CONSTITUTE ONE AND
THE SAME INSTRUMENT.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first written above.

 

HESKA CORPORATION 

DIAMOND ANIMAL HEALTH, INC. 

 

 

 

 

By

/s/ Jason Napolitano

 

By

/s/ Jason Napolitano

 

Its

Chief Financial Officer

 

Its

Chief Financial Officer

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

 

 

By

/s/ Tim Ulrich

 

 

 

Tim Ulrich, Vice President

 

 

7

--------------------------------------------------------------------------------

 

Exhibit A to Second Amendment

 

Compliance Certificate

 

To:

 

 

 

Wells Fargo Business Credit

 

 

Date:

 

, 200

 

 

 

 

Subject:

 

Heska Corporation

 

 

Financial Statements

 

In accordance with our Third Amended and Restated Credit and Security Agreement
dated as of December 30, 2005 (the “Credit Agreement”), attached are the
financial statements of Heska Corporation (“Heska”) as of and for
                                , 20       (the “Reporting Date”) and the
year-to-date period then ended (the “Current Financials”). All terms used in
this certificate have the meanings given in the Credit Agreement.

 

I certify that, to the best of my knowledge, the Current Financials have been
prepared in accordance with GAAP, subject to year-end audit adjustments, and
fairly present the Borrowers’ financial condition and the results of its
operations as of the date thereof.

 

                                                                                               
Events of Default. (Check one):

 

o                                    The undersigned does not have knowledge of
the occurrence of a Default or Event of Default under the Credit Agreement.

 

o                                    The undersigned has knowledge of the
occurrence of a Default or Event of Default under the Credit Agreement and
attached hereto is a statement of the facts with respect to thereto.

 

                                                                                               
I hereby certify to the Lender as follows:

 

o                                    The Reporting Date does not mark the end of
one of the Borrowers’ fiscal quarters, hence I am completing all paragraphs
below except paragraph 4.

 

o                                    The Reporting Date marks the end of one of
the Borrowers’ fiscal quarters, hence I am completing all paragraphs below .

 

                                                                                               
Financial Covenants. I further hereby certify as follows:

 

                1.             ACCOUNTS PAYABLE.  PURSUANT TO SECTION 6.5 OF THE
CREDIT AGREEMENT, AS OF THE REPORTING DATE, PAST DUE PAYABLES ON A CONSOLIDATED
BASIS WAS $                                  , WHICH O SATISFIES O DOES NOT
SATISFY THE REQUIREMENT THAT THE BORROWERS HAVE NO PAST DUE PAYABLES.

 

--------------------------------------------------------------------------------

 

                2.             SPREAD. PURSUANT TO SECTION 2.7 OF THE CREDIT
AGREEMENT, AS OF THE REPORTING DATE, HESKA’S PRIOR-FISCAL-YEAR NET INCOME WAS,
ON A CONSOLIDATED BASIS, $                                  , WHICH DETERMINES A
BASE SPREAD OF             % PURSUANT TO THE TABLE BELOW.  HESKA O HAS O HAS NOT
RAISED AT LEAST $1,500,000 IN ADDITIONAL CAPITAL AS OF THE REPORTING DATE,
LEADING TO AN O INCREASE O DECREASE FROM THE BASE SPREAD OF             %, SO
THAT THE APPLICABLE SPREAD IS EQUAL TO             %.

 

Prior Fiscal Year Net Income

 

Spread

 

 

 

 

Less than $0

2.00

%

 

 

 

Greater than or equal to $0 but less than $2,500,000

1.00

%

 

 

 

Greater than or equal to $2,500,000

0.00

%

 

                3.             MINIMUM CAPITAL. PURSUANT TO SECTION 6.12 OF THE
CREDIT AGREEMENT, AS OF THE REPORTING DATE, HESKA’S CAPITAL WAS, ON A
CONSOLIDATED BASIS, $                                  , WHICH O SATISFIES O
DOES NOT SATISFY THE REQUIREMENT THAT SUCH AMOUNT BE NOT LESS THAN
$                           ON THE REPORTING DATE, AS SET FORTH IN THE TABLE
BELOW AND ADJUSTED, IF APPLICABLE, IN ACCORDANCE WITH SECTION 6.12:

 

2

--------------------------------------------------------------------------------

 

 

[***] — Certain information on this page have been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

Date

 

Minimum Capital

 

 

 

 

July 31, 2007

[***]

 

August 31, 2007

[***]

 

September 30, 2007

[***]

 

October 31, 2007

[***]

 

November 30, 2007

[***]

 

December 31, 2007

[***]

 

January 31, 2008

[***]

 

February 29, 2008

[***]

 

March 31, 2008

[***]

 

April 30, 2008

[***]

 

May 31, 2008

[***]

 

June 30, 2008 and the last day of each month thereafter

[***]

 

 

                4.             MINIMUM NET INCOME.  PURSUANT TO SECTION 6.13 OF
THE CREDIT AGREEMENT, AS OF THE REPORTING DATE, HESKA’S NET INCOME WAS, ON A
CONSOLIDATED BASIS, $                                  , WHICH O SATISFIES O
DOES NOT SATISFY THE REQUIREMENT THAT SUCH AMOUNT BE NO LESS THAN
$                             ON THE REPORTING DATE, AS SET FORTH IN THE TABLE
BELOW AND ADJUSTED, IF APPLICABLE, IN ACCORDANCE WITH SECTION 6.13:

 

Period

 

Minimum Net
Income

 

Nine months ending September 30, 2007

[***]

 

Twelve months ending December 31, 2007

[***]

 

Three months ending March 31, 2008

[***]

 

Six months ending June 30, 2008

[***]

 

 

                5.             MINIMUM LIQUIDITY.  PURSUANT TO SECTION 6.14 OF
THE CREDIT AGREEMENT, AS OF THE REPORTING DATE, HESKA’S LIQUIDITY WAS, ON A
CONSOLIDATED BASIS, $                                  , WHICH O SATISFIES O
DOES NOT SATISFY THE REQUIREMENT THAT SUCH AMOUNT BE NO LESS THAN $1,500,000 ON
THE REPORTING DATE.

 

3

--------------------------------------------------------------------------------

 

                6.             MINIMUM INDIVIDUAL BOOK NET WORTH.  PURSUANT TO
SECTION 6.15 OF THE CREDIT AGREEMENT, AS OF THE REPORTING DATE, HESKA’S BOOK NET
WORTH WAS $                                   AND DIAMOND’S BOOK NET WORTH WAS
$                                  , WHICH O SATISFIES O DOES NOT SATISFY THE
REQUIREMENT THAT SUCH AMOUNTS BE NO LESS THAN ZERO ON THE REPORTING DATE.

 

                7.             MAXIMUM CONTRIBUTIONS.  PURSUANT TO
SECTION 7.4(A)(V) OF THE CREDIT AGREEMENT, AS OF THE REPORTING DATE, HESKA’S
FISCAL YEAR-TO-DATE AGGREGATE CONTRIBUTIONS TO NON-BORROWER SUBSIDIARIES WAS
$                                  , WHICH O SATISFIES O DOES NOT SATISFY THE
REQUIREMENT THAT SUCH AMOUNTS BE NO MORE THAN $700,000 DURING ANY FISCAL YEAR.

 

                8.             CAPITAL EXPENDITURES.  PURSUANT TO SECTION 7.10
OF THE CREDIT AGREEMENT, FOR THE FISCAL YEAR-TO-DATE PERIOD ENDING ON THE
REPORTING DATE, HESKA’S CAPITAL EXPENDITURES WERE, IN THE AGGREGATE AND ON A
CONSOLIDATED BASIS, $                               WHICH O SATISFIES O DOES NOT
SATISFY THE REQUIREMENT THAT SUCH AMOUNT BE NOT MORE THAN
$                               DURING THE PERIOD ENDING ON THE REPORTING DATE,
AS SET FORTH IN THE TABLE BELOW AND ADJUSTED, IF APPLICABLE, IN ACCORDANCE WITH
SECTION 7.10:

 

4

--------------------------------------------------------------------------------

 

[***] — Certain information on this page have been omitted and filed separately
with the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.

 

Date

 

Maximum Capital
Expenditures

 

July 31, 2007

[***]

 

August 31, 2007

[***]

 

September 30, 2007

[***]

 

October 31, 2007

[***]

 

November 30, 2007

[***]

 

December 31, 2007

[***]

 

January 31, 2008

[***]

 

February 29, 2008

[***]

 

March 31, 2008

[***]

 

April 30, 2008

[***]

 

May 31, 2008

[***]

 

June 30, 2008

[***]

 

 

Attached hereto are all relevant facts in reasonable detail to evidence the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.

 

 

HESKA CORPORATION

 

 

 

 

 

 

 

By

 

 

 

Its

 

 

5

--------------------------------------------------------------------------------