Document:

ex10-4.htm

 

Exhibit 10.4

March 26, 2014

VIA FEDEX AND EMAIL

Heska Corporation

3760 Rocky Mountain Avenue

Loveland, CO 80538

Attn: Jason Napolitano

Email: jason.napolitano@heska.com

	
Re:

	
Accounting for CEO Compensation; Conditional Waiver of Cuattro 18-Month Call Option

Dear Jason:

Reference is made to that certain Amended and Restated Operating Agreement of Heska Imaging US, LLC ("Heska Imaging"), dated as of February 22, 2013 (the "Operating Agreement") by and among Heska Corporation ("Heska"), Cuattro, LLC (the "Member Representative"), Kevin S. Wilson, Shawna M. Wilson, Rodney A. Lippincott, Steven M. Asakowicz and Clint Roth, DVM (collectively, with Member Representative, the "Continuing Members"). Capitalized terms used but not defined herein shall have the meanings set forth in the Operating Agreement.

Accounting for CEO Compensation. Consistent with clause (i)(F) of the definition of "Operating Income" under Article I of the Operating Agreement, no compensation expense, including but not limited to charges related to stock-based compensation, for compensation earned by Kevin S. Wilson pursuant to his Employment Agreement with Heska dated as of the date hereof (the "New Employment Agreement") shall be allocated to, or included in any tax return (including supporting data and documentation) or calculation of Operating Income with respect to, Heska Imaging under the Operating Agreement for so long as the New Employment Agreement is in force and effect and Heska has not acquired 100% of the equity interest in Heska Imaging (the "Accounting Interpretation").

Conditional Waiver of Cuattro 18-Month Call Option. Whereas, pursuant to Section 9.05(c) of the Operating Agreement, the Member Representative has the right, but not the obligation, to exercise the Cuattro 18-Month Call Option prior to the expiration of the Cuattro 18-Month Call Period.

Now, therefore, if, and only if, the stockholders of Heska approve the Share Increase Proposal at the Annual Meeting (as such terms are defined in the Employment Agreement), pursuant to Sections 9.05(a) and 11.04 of the Operating Agreement, the Member Representative hereby irrevocably waives, effective on the date of such approval of the Share Increase Proposal, and the Continuing Members whose signatures are set forth below hereby irrevocably consent to such waiver of, its right to exercise the Cuattro 18-Month Call Option from and after such date (the "Waiver"). If the stockholders of Heska do not approve the Share Increase Proposal at the

 

  

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Annual Meeting, the Waiver is void ab initio and the Cuattro 18-Month Call Option shall remain in full force and effect.

Please indicate Heska's acknowledgment and acceptance of the Waiver and the Accounting Interpretation by signing in the space provided below and returning an executed copy of this letter by email to:

Cuattro, LLC

PO Box 4605

Edwards, CO 81632

Attn: Kevin S. Wilson

Email: kevin.wilson@heska.com

This letter may be executed one or more counterparts and may be executed by original or facsimile signature, all of which taken together shall constitute one and the same original document.

[Signature page follows]

  

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Sincerely,

CUATTRO, LLC,

as the Member Representative

By: The Wilson Family Trust, its sole member

By: /s/ Kevin S. Wilson                                                             

       Kevin S. Wilson, its trustee

By: /s/ Kevin S. Wilson                                                   

       Kevin S. Wilson, its manager

By:                                                        

       Doug Wilson, Jr., its manager

Acknowledged, agreed and consented to, as of the date first written above:

	
 

 

/s/ Kevin S. Wilson                                                      

Kevin S. Wilson

	
 

 

/s/ Shawna M. Wilson                                                                

Shawna M. Wilson

	
 

 

/s/ Rodney A. Lippincott                                                      

Rodney A. Lippincott

	
 

 

/s/ Steven M. Asakowicz                                                     

Steven M. Asakowicz

	
 

 

/s/ Clint Roth                                                          

Clint Roth, DVM

	  

Acknowledged and agreed to as of March 26, 2014:

HESKA CORPORATION

By: /s/ Jason Napolitano                                                                                       

       Jason Napolitano, its Chief Financial Officer

 

  

3ex10-5.htm

Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act.  Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

Exhibit 10.5

EIGHTH AMENDMENT

TO

AMENDED AND RESTATED

BOVINE VACCINE DISTRIBUTION AGREEMENT

 

This Eighth Amendment ("Eighth Amendment") is entered into as of the 20th day of August 2013 ("Effective Date") by and between DIAMOND ANIMAL HEALTH, INC., d/b/a HESKA DES MOINES, an Iowa corporation with offices at 2538 Southeast 43rd Street, Des Moines, Iowa 50317 ("Diamond") and AGRI LABORATORIES, LTD., a Delaware corporation, with offices at 20927 State Route K, St. Joseph, Missouri 64505 ("Distributor") as an amendment to that certain Amended and Restated Bovine Vaccine Distribution Agreement dated as of September 30, 2002 between Diamond and Distributor (the "Original Agreement"), as amended by that certain First Amendment dated as of September 20, 2004 (the "First Amendment") that certain Second Amendment dated as of December 10, 2004 (the "Second Amendment")  that certain Third Amendment dated as of May 26, 2006 (the "Third Amendment") that certain Fourth Amendment dated as of November 16, 2007 (the "Fourth Amendment") that certain Fifth Amendment dated as of December 23, 2010 (the “Fifth Amendment”) that certain Sixth Amendment dated as of July 25, 2011 (the Sixth Amendment”) that certain Seventh Amendment dated as of February 1, 2013 (“the Seventh Amendment”) (collectively, the "Agreement").

 

WHEREAS, Diamond and Distributor are parties to the Agreement providing for the distribution of certain bovine antigens; and

 

WHEREAS, Diamond and Distributor desire to amend the Agreement on the terms and conditions of this Eighth Amendment.

 

 Exhibit A, attached hereto, shall hereby revise and update the pricing of Exhibit A as stated in the Seventh Amendment to the Original Agreement.

 

Notwithstanding any provision of the Agreement to the contrary, this Eighth Amendment shall be publicly available information for SEC filing, press release and other discussion purposes; provided, the parties shall agree to a draft of the Eighth Amendment (the “Redacted Version”) including highlighted items which shall be redacted from any initial SEC filing and shall be deemed Confidential Information under Section 13.05 of the Agreement.  If the parties do not mutually agree on the Redacted Version within thirty (30) days after the Effective Date, this Eighth Amendment shall be null and void.

 

 This Eighth Amendment is hereby incorporated by reference into the Agreement as if fully set forth therein, the Agreement as amended by this Eighth Amendment shall continue in full force and effect following execution and delivery hereof, and references to the term "Agreement" shall include this Eighth Amendment.  In the event of any conflict between the terms and conditions of the Original Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, Sixth Amendment, Seventh Amendment, and this Eighth Amendment, the terms and conditions of this Eighth Amendment shall control.

 

 

 

  

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IN WITNESS WHEREOF, the parties have caused this Eighth Amendment be executed by their duly authorized representatives as of the date first written above.

 

DIAMOND ANIMAL HEALTH, INC.

d/b/a Heska Des Moines

By:           /s/ Laurie Peterson                                                            

Its:           Vice President

AGRI LABORATORIES, LTD.

By:   /s/ Steve Schram      

Its:           CEO/President

  

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Portions of this Exhibit have been redacted pursuant to a request for confidential treatment under Rule 24b-2 of the General Rules and Regulations under the Securities Exchange Act. Omitted information, marked “[***]” in this exhibit, has been filed with the Securities and Exchange Commission together with such request for confidential treatment.

 

Exhibit A

 

LEAD TIME FOR HESKA – DIAMOND ANIMAL HEALTH: FIVE (5) MONTHS

 

	

Product / Size

	

DAH Item Number

	
     2014

PRICE LIST

	
Titanium 3 (50ds)

	
        [***]

	
     [***]

	
Titanium 3 (10ds)

	
        [***]

	
     [***]

	
Titanium 5 (50ds)

	
        [***]

	
     [***]

	
Titanium 5 (10ds)

	
        [***]

	
     [***]

	
Titanium 5 L5 (5ds) (HB Claim)

	
        [***]

	
     [***]

	
Titanium 5 L5 (10ds) (HB Claim)

	
        [***]

	
     [***]

	
Titanium 5 L5 (50ds) (HB Claim)

	
        [***]

	
     [***]

	
Titanium BRSV 3 (50ds)

	
        [***]

	
     [***]

	
Titanium IBR (50ds)

	
        [***]

	
     [***]

	
Titanium IBR (10ds)

	
        [***]

	
     [***]

	
Titanium 4 L5 (50dose) (Non HB Claim)

	
        [***]

	
     [***]

	
Titanium 4 L5 (50ds) (HB Claim)

	
        [***]

	
     [***]

	
Titanium IBR LP (50ds)

	
        [***]

	
     [***]

	
Titanium 3 LP (50ds)

	
        [***]

	
     [***]

	
MasterGuard 10 (10ds)

	
        [***]

	
     [***]

	
MasterGuard 10 (25ds)

	
        [***]

	
     [***]

	
Master Guard 5 (25ds)

	
        [***]

	
     [***]

	
MasterGuard Preg 5 (25ds)1

	
        [***]

	
     [***]

	
[***]

	
        [***]

	
     [***]

Transfer pricing of products above to [***] to be not less than above-otherwise to be determined by AgriLabs.

1 The MasterGuard Preg 5 (25ds) sold in [***] only, is sold as two (2) bottles of product, DAH Item Numbers [***].

Batch Size – Minimum Order Quantity (Minimum Quantity for less than Batch Size: [***] units)

	
Titanium:

	
[***]

	
Titanium

	
[***]

	
Titanium IBR LP:

	
[***]

	
Titanium 3 LP:

	
[***]

	
MG 10:

	
[***]

	
MG 5:

	
[***]

	
MG Preg 5:

	
[***]

Set up charge to divide any Minimum Order Quantity into more than one private label batch: [***] for each batch after the first batch.

NOTE:  DATING

Products with [***] dating will have minimum [***].  Special orders that require pulling products off existing orders could have less than 

[***] dating and will be communicated to and agreed upon by AgriLabs.

Bulk Packaging

 

Diamond                              Product                                Size                       Min/Max                         Transfer

Item Number                                                                                            Lot Size                          Price

[***]                           TITANIUM 3                                [***]                       [***]                          [***]

[***]                           TITANIUM 5                                [***]                       [***]                          [***]

 

 

[***]                           TITANIUM IBR                           [***]                       [***]                          [***]

Product to be shipped LABELED in a bulk shipper- [***] of product with [***] of Diluent.

NOTE:  These prices are effective starting with deliveries January 1, 2014 through December 31, 2014.

Agri agrees to obtain written approval from Heska for the intended use of each product (including number of doses) prior to the

initial bid.  Heska agrees to provide written approval or rejection thereof to Agri within [***] of receipt of each request.

                                                                         Signatures to appear on next page

  

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Signature page to Exhibit A:

DIAMOND ANIMAL HEALTH, INC.                    AGRI LABORATORIES, LTD.

HESKA CORPORATION

BY:         /s/ Laurie Peterson                          BY:             /s/ Steve Schram               

TITLE:   General Manager                              TITLE        CEO                                                        

DATE:   11 October 2013                                DATE:      10/14/13                                                       

  

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