Document:

Exhibit 10.24

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

BETWEEN

HESKA CORPORATION

AND

JOHN R. FLANDERS

 

This Amendment to Employment Agreement is dated effective as of January 1,
2008 (this “Amendment”) and amends the Employment Agreement dated as of December 11,
2006 (the “Employment Agreement”), between Heska Corporation, a Delaware
corporation (“Company”), and John R. Flanders (“Employee”).  Unless otherwise defined in herein, all
capitalized terms used herein shall have the meaning ascribed to them in the
Employment Agreement.

 

RECITALS

 

Section 10 of the Employment Agreement permits the parties to
modify the Employment Agreement in writing, and the Employee and Company have
agreed to modify the Employment Agreement to the extent set forth in this
Amendment.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, including Employee’s continued employment with Company,
the receipt and sufficiency of which are hereby acknowledged, Employee and
Company hereby agree as follows:

 

1.            Subsection 6(c)(iii) of
the Employment Agreement is amended and restated in its entirety to read as set
forth below:

 

(iii)         
The parties agree that for the purposes of this Employment Agreement, an “involuntary
termination” due to a “change of control” will be deemed to have occurred when
Employee is no longer employed by the Company’s successor following a “change
of control” because the Employee’s position is eliminated within nine (9) months
of the “change of control” or when Employee’s job authority, duties or
responsibilities are materially diminished within nine (9) months of the “change
of control” and Employee elects to resign; provided, however,
that prior to any such resignation, Employee shall give Company written notice
of the existence of the condition which Employee believes constitutes such
material diminution (which notice must be given within ninety (90) days of the
initial existence of the condition) and such condition shall remain uncured for
a period of thirty (30) days after the date of such notice.  For purposes of this subsection 6(c)(iii) and
without in any manner limiting the circumstances that may give rise to a
material diminution, Employee’s job authority, duties or responsibilities shall
be deemed to be materially diminished if, but not limited to, the following: (1) Employee’s
authority 

 

 

 

with
the Company or its successor is, or Employee’s duties or responsibilities are,
materially diminished relative to Employee’s authority, duties and
responsibilities as in effect immediately prior to such change; (2) Employee
suffers a material diminution in base salary as in effect immediately prior to
such diminution; (3) there is a material change in the geographic location
of Employee’s principal place of employment such that the new location results
in a commute for Employee that is greater than fifty (50) road miles longer
than Employee’s commute prior to the relocation; (4) there occurs any
material breach by the Company or its successor of any provision of this
Employment Agreement; or (5) any acquiring or successor company fails to
assume or be bound by the terms of this Employment Agreement in connection with
a change of control.

 

2.            Section 6(c) of the Employment Agreement is
amended by inserting immediately after Subsection 6(c)(iv) of the
Employment Agreement a new Subsection 6(c)(v), which shall read in its entirety
as set forth below:

 

 

(v)         
If Employee is a “specified employee” within the meaning of Section 1.409A-1(i) of
the Treasury regulations as of the date of termination, then payments to
Employee hereunder shall not be made before the date that is six (6) months
after the date of termination (or if earlier, the date of death of Employee); provided,
however, that during such six-month period, Company shall make any and
all payments contemplated hereunder to the extent such payments do not exceed
two times the lesser of (i) Employee’s annualized compensation, based upon
the annual rate of compensation for the calendar year preceding the year in which
the date of termination occurs, or (ii) the maximum amount that may be
taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Internal Revenue Code of 1986, as amended, for the year in which the
date of termination occurs; and provided further that any amounts deferred
hereunder shall be paid in a lump-sum amount at the expiration of such
six-month period.  It is the parties’
intent that no payment made or to be made hereunder shall be subject to the
provisions of Section 409A(a)(1)(B) of the Internal Revenue Code of
1986, as amended. Accordingly, notwithstanding any payment date or schedule
specified above, the parties agree to work expeditiously to amend this
Agreement to conform to their intent as set forth in this Section.

 

3.            All
other terms and conditions of the Employment Agreement shall remain in full
force and effect. This Amendment, together with the Employment Agreement,
contains all the terms and conditions agreed upon by the parties hereto
regarding the subject matter hereof and thereof. All prior agreements,
promises, negotiations and representations, either oral or written, relating to
the subject matter of this Amendment or the Employment Agreement not expressly
set forth in this Amendment or the Employment Agreement are of no force or
effect.

 

2

 

4.            Any
waiver, alteration or modification of any of the terms of this Amendment or the
Employment Agreement shall be valid only if made in writing and signed by the
parties hereto.

 

5.            This
Amendment may be executed in counterparts, each of which shall constitute an
original but all of which together shall constitute one and the same
document.  This Amendment to the extent
signed and delivered by facsimile or other electronic means will be treated in
all manner and respects as an original agreement or instrument and will be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person.

 

[Signature Page(s) to Follow]

 

3

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the day and year first above written.

 

 

	
  HESKA
  CORPORATION

  	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Mark D. Cicotello

  	
   

  	
  /s/
  John R. Flanders

  	
   

  
	
  Name
  Mark D. Cicotello

  	
   

  	
  Name:
  John R. Flanders

  	
   

  
	
  Title:
  VP of Human Resources

  	
   

  	
  Title:
  VP, General Counsel

  	
   

  
					

 

 

 

[Signature Page to Amendment to Employment Agreement]Exhibit 10.29

 

[***] — 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.

 

FIRST AMENDMENT TO THIRD AMENDED AND RESTATED 

CREDIT AND SECURITY AGREEMENT

 

This Amendment, dated as of December 5, 2006, 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 the same may be hereafter amended from time to time, 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.     Defined Terms. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein. 
In addition, Section 1.1 of the Credit Agreement is amended by
adding or amending, as the case may be, the following definitions:

 

                “Additional
Capital Increase” shall have the meaning set forth in Section 2.22.

 

                “Available
Additional Capital” means [***] of the amount, if any, by which Additional
Capital exceeds [***].

 

                “Capital
Expenditures” for any Borrower for a period means the sum of (a) any
expenditure of money for the purchase or construction of assets, or for
improvements or additions thereto during such period, which are capitalized on
such Borrower’s balance sheet, whether financed or unfinanced, but excluding
expenditures to purchase Rental Inventory, plus (b) all expenditures of
money to purchase Rental Inventory in excess of the Rental Inventory Cap during
the fiscal year in which such period occurs.

 

 

 

 

[***] — 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.

 

                “Investment Cap”
means [***], unless said amount is increased pursuant to Section 2.22, in
which event it means the amount to which said amount is increased.

 

                “Rental Inventory
Cap” means $1,500,000, unless said amount is increased pursuant to Section 2.22,
in which event it means the amount to which said amount is increased.

 

2.     Inventory Cap. The figure “$4,500,000” in clause (iii) of
the definition of “Borrowing Base” is replaced by the figure “$4,750,000.”

 

3.     Use of Available Additional Capital. Article 2 of
the Credit Agreement is hereby amended by inserting therein a new Section 2.22
to read in its entirety as follows:

 

                “Section 2.22
Use of Available Additional Capital. 
Pursuant to the procedure set forth in this Section 2.22 and so
long as no Default Period then exists, the Borrowers from time to time may
increase one or more of the Investment Cap, the Rental Inventory Cap and the
Capital Expenditures amounts set forth in Section 7.10 in an aggregate
amount equal to Available Additional Capital (the “Additional Capital Increase”).  Before making an Additional Capital Increase:

 

                (a)  the
Borrowers shall send to the Lender a written request containing a statement by
a responsible officer of the Borrowers setting forth in sufficient detail the
amount of Additional Capital raised as of that time and the amounts of
Available Additional Capital which the Borrowers requests approval for to
allocate to each of the Investment Cap, the Rental Inventory Cap and the
Capital Expenditures amounts set forth in Section 7.10; and

 

                (b)  the
Lender shall send a written acknowledgement to the Borrowers agreeing to the
amount of Available Additional Capital.”

 

4.     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 April 30 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;”

 

2

 

5.     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):

 

	
  Date

  	
   

  	
  Minimum Capital

  	
   

  
	
  November 30, 2006

  	
  $

  	
  3,800,000

  	
   

  
	
  December 31, 2006

  	
  $

  	
  4,900,000

  	
   

  
	
  January 31, 2007

  	
  $

  	
  3,750,000

  	
   

  
	
  February 28, 2007

  	
  $

  	
  3,500,000

  	
   

  
	
  March 31, 2007

  	
  $

  	
  4,400,000

  	
   

  
	
  April 30, 2007

  	
  $

  	
  4,300,000

  	
   

  
	
  May 31, 2007

  	
  $

  	
  4,200,000

  	
   

  
	
  June 30, 2007

  	
  $

  	
  4,850,000

  	
   

  
	
  July 31, 2007 and the last day of each month thereafter

  	
  $

  	
  4,900,000

  	
   

  

 

In addition to the foregoing, if Heska makes a purchase of intellectual
property rights by June 30, 2007, 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):

 

	
   

  	
   

  	
  Minimum Net

  	
   

  
	
  Period

  	
   

  	
  Income

  	
   

  
	
  Twelve months ending December 31, 2006

  	
  $

  	
  750,000

  	
   

  
	
  Three months ending March 31, 2007

  	
  $

  	
  (1,500,000

  	
  )

  
	
  Six months ending June 30, 2007

  	
  $

  	
  (600,000

  	
  )

  

 

In addition to the foregoing, if Heska makes a purchase of intellectual
property rights by June 30, 2007, 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 May 31, 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.”

 

6.     Investments. Clause (ix) of Section 7.4(a) of
the Credit Agreement is hereby amended to read in its entirety as follows:

 

                “(ix)  unless
a Default Period exists or would exist immediately after or as a result of any
such purchase or investment, a purchase of intellectual property rights
concerning immunodiagnostic technology or an investment in an equity position
in a company in the immunodiagnostic industry, not to exceed the Investment
Cap, which purchase or investment shall occur on or before June 30, 2007.”

 

7.     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:

 

	
   

  	
   

  	
  Maximum Capital

  	
   

  
	
  Period

  	
   

  	
  Expenditures

  	
   

  
	
  November 30, 2006

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2006

  	
  $

  	
  2,500,000

  	
   

  
	
  January 31, 2007

  	
  $

  	
  750,000

  	
   

  
	
  February 28, 2007

  	
  $

  	
  750,000

  	
   

  
	
  March 31, 2007

  	
  $

  	
  750,000

  	
   

  
	
  April 30, 2007

  	
  $

  	
  1,500,000

  	
   

  
	
  May 31, 2007

  	
  $

  	
  1,500,000

  	
   

  
	
  June 30, 2007

  	
  $

  	
  1,500,000

  	
   

  

 

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.”

 

8.     Compliance Certificate. Exhibit B to the Credit
Agreement is replaced in its entirety by Exhibit A to this Amendment.

 

9.     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.

 

 

4

 

10.   Consent to Merger. The Lender hereby
consents to the merger of Heska Holdings AG into Heska AG.

 

11.   Conditions Precedent. This Amendment,
including the consent set forth in paragraph 10, 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.

 

12.   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 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.

 

13.   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.

 

14.   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 

 

 

5

 

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.

 

15.   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.

 

16.   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

  	
   

  	
   

  	
   

  

 

 

6

 

Exhibit A to First 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

  	
  2.75

  	
  %

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

  	
  1.75

  	
  %

  
	
  Greater than or equal to $2,500,000

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  

 

                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:

 

	
  Date

  	
   

  	
  Minimum Capital

  	
   

  
	
  November 30, 2006

  	
  $

  	
  3,800,000

  	
   

  
	
  December 31, 2006

  	
  $

  	
  4,900,000

  	
   

  
	
  January 1, 2007

  	
  $

  	
  3,750,000

  	
   

  
	
  February 28, 2007

  	
  $

  	
  3,500,000

  	
   

  
	
  March 31, 2007

  	
  $

  	
  4,400,000

  	
   

  
	
  April 30, 2007

  	
  $

  	
  4,300,000

  	
   

  
	
  May 31, 2007

  	
  $

  	
  4,200,000

  	
   

  
	
  June 30, 2007

  	
  $

  	
  4,850,000

  	
   

  
	
  July 31, 2007 and the last day of each month thereafter

  	
  $

  	
  4,900,000

  	
   

  

 

 

2

 

                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

  	
   

  
	
  Twelve months ending December 31, 2006

  	
  $

  	
  750,000

  	
   

  
	
  Three months ending March 31, 2007

  	
  $

  	
  (1,500,000

  	
  )

  
	
  Six months ending June 30, 2007

  	
  $

  	
  (600,000

  	
  )

  

 

                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.

 

                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:

 

 

3

 

	
   

  	
   

  	
  Maximum Capital

  	
   

  
	
  Date

  	
   

  	
  Expenditures

  	
   

  
	
  November 30, 2006

  	
  $

  	
  2,500,000

  	
   

  
	
  December 31, 2006

  	
  $

  	
  2,500,000

  	
   

  
	
  January 1, 2007

  	
  $

  	
  750,000

  	
   

  
	
  February 28, 2007

  	
  $

  	
  750,000

  	
   

  
	
  March 31, 2007

  	
  $

  	
  750,000

  	
   

  
	
  April 30, 2007

  	
  $

  	
  1,500,000

  	
   

  
	
  May 31, 2007

  	
  $

  	
  1,500,000

  	
   

  
	
  June 30, 2007

  	
  $

  	
  1,500,000

  	
   

  

 

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

  

 

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]