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Exhibit 10.31    
    

[***]—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.

 
 

DISTRIBUTION AGREEMENT    
    

        THIS DISTRIBUTION AGREEMENT (this "Agreement") is made as of October 1, 2004 (the
"Effective Date") by and between i-STAT Corporation, a Delaware corporation having its principal place of business at 104 Windsor Center
Drive, East Windsor, New Jersey 08520 USA ("i-STAT") and an Affiliate of Abbott Laboratories, and Heska Corporation, a Delaware corporation,
having its principal place of business at 1613 Prospect Parkway, Fort Collins, Colorado 80525, USA ("Heska"). 

W I T N E S S E T H:  

        WHEREAS, i-STAT is a manufacturer of diagnostic health care equipment and reagents and desires to
obtain a distributor of Products (as hereinafter defined) in the animal health care market ("Field" as hereinafter defined) in the Territory (as
hereinafter defined); 

        WHEREAS, Heska is a distributor of various products in the Field in the Territory; 

        WHEREAS, Heska and i-STAT previously executed a distribution agreement dated as of February 9, 1998, which was amended
and restated as of February 24, 1999, under which Heska distributed products for i-STAT in the Field in the Territory (the "Prior
Agreement"); and 

        WHEREAS, in accordance with the terms and conditions hereof, i-STAT is willing to appoint Heska as its exclusive distributor
of Products in the Territory, and Heska is willing to accept such appointment. 

        NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and upon the terms and subject to the conditions
set forth below, Heska and i-STAT hereby agree as follows: 

ARTICLE 1—DEFINITIONS  

        The following words and phrases, when used herein with initial capital letters, shall have the meanings set forth or referenced below: 

	1.1
	"Affiliate" shall mean, with respect to each Party (as hereinafter defined), any legal entity that is, directly or indirectly,
controlling, controlled by or under common control with such Party. For purposes of this definition, a Party shall be deemed to control another entity if it owns or controls, directly or indirectly,
more than fifty percent (50%) of the voting equity of the other entity (or other comparable ownership interest for an entity other than a corporation).

	1.2
	"Analyte" shall mean an individual compound, protein or fragment thereof, or substance that is the target of quantitative or
qualitative measurement.

	1.3
	"Analyzer" shall mean a device that processes Cartridges (as hereinafter defined) and is capable of detecting at least one
(1) Analyte for use in the Field, and specifically excludes analyzers designed primarily for use in patient self-testing.

	1.4
	"Base Cartridge Target" shall mean, for each Contract Year (as hereinafter defined), the minimum unit number of Cartridge purchases
required to be made by Heska and its Affiliates during such Contract Year as set forth in Section 2.4 and  Section 2.5.

	1.5
	"Business Day" shall mean any day other than a day which is a Saturday or Sunday or other day on which commercial banks in New York,
New York are authorized or required to remain closed. 

 

	1.6
	"Calendar Quarter" shall mean a period of three (3) consecutive calendar months commencing on January 1, April 1,
July 1 or October 1 of any Contract Year.

	1.7
	"Cartridge" shall mean the disposable test component of a particular Product that contains one or more sensor chips and fluid handling
channels and operates on an Analyzer.

	1.8
	[***}

	1.9
	"Cartridge Purchases" shall mean, pursuant to Section 11.2, for each Contract
Year, the unit number of Cartridges purchased by Heska and its Affiliates from i-STAT. For the purposes of this definition, a Cartridge shall be considered purchased in the Contract Year
in which it was delivered after having been duly ordered pursuant to Section 3.3.

	1.10
	"Cartridge Sales" means the number of units of Cartridges Sold in the Field in the Territory by Heska directly to: (a) Dealers
(as hereinafter defined) for resale to End Users; or (b) End Users; net of returns and unpaid Cartridges.

	1.11
	"Change of Control" shall mean: (a) the consolidation or merger of Heska or any Affiliate of Heska with or into any Third Party
wherein the shareholders of Heska immediately prior to such transaction shall cease to be the holders of at least fifty percent (50%) of the outstanding securities of the surviving corporation in such
transaction; (b) the assignment, sale, transfer, lease or other disposition of all or substantially all of the assets of Heska; or (c) the acquisition by any Third Party or group of
Third Parties acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission
("SEC") under the Securities and Exchange Act of 1934) of more than fifty percent (50%) of the outstanding shares of voting stock of Heska.

	1.12
	"Confidential Information" shall mean any and all technical data, information, materials and other know-how, including
trade secrets, presently owned by or developed by, on behalf of, either Party and/or its Affiliates during the Term (as hereinafter defined) which relates to a Product, its development, manufacture,
promotion, marketing, distribution, sale or use and any and all financial data and information relating to the business of either of the Parties and/or of their Affiliates, which a Party and/or its
Affiliates discloses to the other Party and/or its Affiliates in writing and identifies as being confidential, or if disclosed orally, visually or through some other media, is identified as
confidential at the time of disclosure and is summarized in writing within thirty (30) days of such disclosure and identified as confidential, except any portion thereof which:

	(a)
	is
known to the receiving Party and/or its Affiliates at the time of the disclosure, as evidenced by its written records;

	(b)
	is
disclosed to the receiving Party and/or its Affiliates by a Third Party having a right to make such disclosure;

	(c)
	becomes
patented, published or otherwise part of the public domain through no fault of the receiving Party and/or its Affiliates; or

	(d)
	is
independently developed by or for the receiving Party and/or its Affiliates without use of Confidential Information disclosed hereunder, as evidenced by its written records.

	1.13
	"Contract Year" shall mean each consecutive twelve (12) month period prior to the termination of this Agreement, beginning on
January 1 and ending on December 31 of each such Contract Year.

	1.14
	"Counterfeit Products" shall have the meaning set forth in Section 4.10.

	1.15
	"Dealer" shall mean a natural person, corporation, partnership, trust, joint venture, government authority or other legal entity or
organization in the Territory, other than Heska or i-STAT and/or 

 

their
respective Affiliates, which purchases Products from Heska for the purpose of resale to End Users for use in the Field. 

	1.16
	[***]

	1.17
	"End User" shall mean a natural person, corporation, partnership, trust, joint venture, government authority or other legal entity or
organization in the Field in the Territory, other than Heska or i-STAT and/or their respective Affiliates, that purchases Products under this Agreement for its own use or consumption in
the Field, and excluding any Third Party use in the human healthcare market.

	1.18
	"Extended Warranty" shall have the meaning set forth in Section 7.1.

	1.19
	"Extension Term" shall mean each additional Contract Year, if any, following the Initial Term or another Extension Term, as set forth
in Section 10.1.

	1.20
	"Field" shall mean the animal health care market specifically excluding the human health care market.

	1.21
	[***]

	1.22
	"Incremental Cartridge Purchases" shall have the meaning set forth in  Section 3.6.1.

	1.23
	[***]

	1.24
	"Initial Term" shall mean the time beginning on the Effective Date and ending on [***].

	1.25
	"Most Favored Price" shall have the meaning set forth in Section 2.14.

	1.26
	"Notice Date Time" shall mean the period of time beginning on January 1 and ending on May 15 immediately following any
Contract Year in which Cartridge Purchases were less than the Base Cartridge Target.

	1.27
	"Notice Period" shall mean a period of time, the length of which shall be set forth in  Section 2.13, which shall begin upon the receipt by Heska of i-STAT's written
notice of i-STAT's decision to exercise its
termination rights as set forth in Section 2.6 and during which time Heska shall maintain non-exclusive rights to Sell Products in
accordance with this Agreement.

	1.28
	"Party" shall mean i-STAT or Heska and "Parties" shall mean i-STAT and Heska.

	1.29
	"Products" shall mean the products manufactured by or for i-STAT listed on  Exhibit 1.29.

	1.30
	"Purchase Price" shall mean the price for Analyzers, Cartridges and other Products purchased by Heska and its Affiliates from
i-STAT and its Affiliates hereunder, as set forth on Exhibit 1.29 and more fully described in  Section 3.6.

	1.31
	[***]

	1.32
	"Sale", "Sell" or "Sold" shall mean to
sell, hire, let, rent, lease or otherwise dispose of Product to a Third Party or Affiliate, provided such Affiliate is an end user of Products for commercial purposes for monetary or other valuable
consideration. "Sale", "Sell" or "Sold" shall not include a transaction where samples of Product are supplied without charge to a Third Party or Affiliate for marketing or demonstration purposes or in
connection with clinical or other experimental trials.

	1.33
	"Technical Documentation" shall mean all documents prepared by i-STAT in the ordinary course of business that describe the
Products in terms of their intended use and Product claims. Such documents may take the form of user instructions, system manuals, product updates or technical bulletins, but are not limited to such
forms.

	1.34
	"Technical Support" shall have the meaning set forth in Section 4.8. 

 

	1.35
	"Term" shall have the meaning set forth in Section 10.1.

	1.36
	"Territory" shall mean the entire world except Japan.

	1.37
	"Third Party" shall mean a natural person, corporation, partnership, trust, joint venture, governmental authority or other legal
entity or organization other than the Parties and/or their Affiliates. 

ARTICLE 2—APPOINTMENT TO MARKET AND DISTRIBUTE  

	2.1
	Exclusive Appointment in the Territory.    As of the Effective Date and subject to  Section 2.4and
Section 2.5 below, i-STAT hereby appoints Heska and its
Affiliates for the Term as i-STAT's exclusive distributor of Products in the Field in the Territory, and Heska accepts such appointment. As exclusive distributor in the Field in the
Territory, Heska shall have the sole and exclusive right to market, promote, Sell and distribute Products in the Territory for use in the Field, which right shall operate to exclude all others,
including i-STAT, its Affiliates and all Third Parties; provided, however, that
i-STAT may maintain certain consultative and technical staff, at i-STAT's expense, to assist Heska in connection with such marketing, promotion, sales and distribution efforts,
in accordance with Article 4. In furtherance of this exclusive grant to Heska and its Affiliates, i-STAT hereby agrees to use its
commercially reasonable efforts to ensure that any Products Sold outside the Field are not Sold directly or indirectly by i-STAT distributors to End Users. Nothing contained in this
Agreement shall limit or be interpreted to limit i-STAT or i-STAT's Affiliates from directly selling products not listed on  Exhibit 1.29 in the Territory.

	2.2
	Non-exclusive Appointment in Japan.    As of the Effective Date and subject to  Section 2.4 and Section 2.5 below, i-STAT hereby appoints Heska and its
Affiliates for the Term as i-STAT's non-exclusive distributor of Products in the Field in Japan, and Heska accepts such appointment. Heska shall have the
non-exclusive right to market, promote, Sell and distribute Products in Japan for use in the Field.

	2.3
	Heska's Obligations.    Heska shall purchase Products for distribution and Sale in the Field in the Territory exclusively
from i-STAT. Heska shall maintain, at its own expense, a commercially reasonable inventory of Products for the Sale, promotion and delivery of the Products and for managing customer
satisfaction with the Products. Heska shall not promote, market or Sell any Product for use outside the Field. Recognizing the end use of the Products in healthcare, Heska shall not solicit or Sell
any Product to an End User or other Third Party (including a Dealer) that Heska has, or should have, reason to believe will redistribute Products or otherwise direct Products for use to customers
outside the Field. Heska promptly shall take all reasonable actions to prevent Sales of Products to customers, including Sales by Dealers, known or identified by Heska to be outside the Field. Upon
i-STAT's request, if and to the extent Heska or its Dealers Sells Products to customers outside the Field, Heska shall remit to i-STAT an amount equal to the difference
between: (a) the amount of sales billed by Heska from Sales of such Products (net of duties, freight, replacements, returns, refunds and taxes); and (b) the Purchase Price paid to
i-STAT. The Cartridge units Sold outside the Field shall not be included in Cartridge Purchases for the purpose of meeting the minimum purchase requirements of  Sections 2.4 and 2.5.

	2.4
	Minimum Purchase Requirements during the Initial Term.    Subject to  Sections 2.6,
 2.7 and 2.9, Cartridge Purchases
shall be greater than or equal to the Base Cartridge Target for each Contract Year during the Initial Term, which, for purposes of this Agreement, shall be as set forth in the following  Table 2.4;
provided, that Cartridge Sales shall be at least ninety-five percent (95%) of Cartridge Purchases during such Contract
Year. 

 

Table 2.4  

	Contract Year
 
	 	Base Cartridge Target

	Balance of 2004	 	[***]
	2005	 	[***]
	2006	 	[***]
	2007	 	[***]
	2008	 	[***]
	2009	 	[***]

For
example, if Heska has 2007 Cartridge Purchases of [***] and 2007 Cartridge Sales of [***], Heska shall have fulfilled the requirements of
this Section 2.4 ([***] Cartridge Purchases and Cartridge Sales are 95.3% Cartridge Purchases). In a separate example, if
Heska has 2007 Cartridge Purchases of [***] and 2007 Cartridge Sales of [***], Heska shall not have fulfilled the requirements of this  Section 2.4 (since Heska would have met the Cartridge
Purchases requirement, but would have Cartridge Purchases of 94.9% of Cartridge Sales, less
than the required 95%). 

	2.5
	Minimum Purchase Requirements during any Extension Term.    Subject to  Sections 2.6, 2.7 and 2.9, Cartridge Purchases
shall be greater than or equal to the Base Cartridge Target for each Contract Year during any Extension Term, which for purposes of this Agreement, shall be calculated as set forth in the following  Table 2.5; provided, that Cartridge Sales shall be at least ninety-five percent (95%) of Cartridge Purchases during such Contract Year. 

Table 2.5  

	Contract Year
 
	 	Base Cartridge Target

	n	 	(2009 Base Cartridge Target * [***]

For
example, if the [***], then the 2010 Base Cartridge Target will be equal to [***], calculated as follows: [***]. In this
example, the 2011 Base Cartridge Target will be equal to [***], calculated as follows: [***]. 

	2.6
	Implications of Failure to Meet Minimum Purchase Requirements.    i-STAT's sole remedy for Heska's failure to
meet the Base Cartridge Target in Sections 2.4 or 2.5 in any Contract Year shall be to terminate
this Agreement upon prior written notice to Heska as set forth in Section 2.13; provided, however, that i-STAT shall meet with Heska
to discuss under what terms and conditions, if any, Heska may continue to distribute Products hereunder; and provided, further, that such failure to meet the Base Cartridge Target shall not be
considered as a breach of this Agreement.

	2.7
	Failure to Supply Minimum Purchase Requirements.    If during any Contract Year, i-STAT is unable to supply
Cartridges properly forecasted and ordered hereunder pursuant to Article 3, the Base Cartridge Target for such Contract Year shall be reduced by
the number of such Cartridges ordered by Heska pursuant to the terms of this Agreement and not supplied by i-STAT hereunder during such Contract Year. i-STAT, shall consider in
good faith the impact of a material interruption in supply on Heska's ability to achieve future Base Cartridge Targets in subsequent Contract Years and shall consider in good faith reasonable
adjustments to Base Cartridge Targets proposed by Heska for such subsequent Contract Years; provided, however, that any decision regarding any reduction to future Base Cartridge Targets shall be at
i-STAT's sole discretion.

	2.8
	Right of First Offer.    As long as Heska is i-STAT's exclusive distributor of Products in the Field in the
Territory, i-STAT shall, prior to offering any other or new products to any Third Party for resale in the Field in the Territory, first offer in writing (which for the purposes of this
Section 2.8 

 

may
be by e-mail) to Heska the opportunity to negotiate with i-STAT in good faith to include such products as a Product hereunder on such terms and conditions as are mutually
acceptable to the Parties. 

	2.9
	Discontinued Products.    i-STAT shall have the right to discontinue the manufacture of any Product hereunder. If
i-STAT, in its sole discretion, decides to discontinue the manufacture of any Product, i-STAT shall: (a) provide written notice to Heska as follows: (i) for
Analyzers, upon twelve (12) months' prior written notice; and (ii) for all other Products, upon one hundred eighty (180) days' prior written notice; and (b) negotiate in
good faith with Heska an adjustment to the Base Cartridge Targets set forth in Sections 2.4 and  2.5; provided, that no adjustment shall be made if a discontinued Product is replaced by an equivalent
Product at an equivalent price. If the Parties are unable to agree on an adjustment, if any, to the Base Cartridge Targets as a result of good faith negotiations under clause (b) of the
preceding sentence, they will follow the procedures set forth in Section 11.9 to establish an adjustment, if any. i-STAT may
materially alter the performance of any or all of the Products upon ninety (90) days' prior written notice to Heska. i-STAT shall use commercially reasonable efforts to provide to
Heska reasonable quantities of repair and/or replacement parts, on an as needed basis, for Analyzers for at least three (3) years from the date of discontinuance of manufacture or sale of
Analyzers or introduction of a materially altered Product for which parts are not interchangeable. i-STAT also shall use commercially reasonable efforts to consult with Heska prior to any
discontinuance of the manufacture of any Product or material alteration of any Product where such alteration, in i-STAT's reasonable opinion, would impact applicable regulatory approvals
of Heska and / or marketing of the Products by Heska.

	2.10
	Selling Price.    Heska, in its sole discretion, shall determine the final sales price of Products Sold by Heska to Third
Parties in the Field in the Territory, and no other term or provision in this Agreement shall be interpreted or deemed to provide i-STAT with any right to determine the final sales price
of Products Sold by Heska hereunder. Heska or its appointed Dealers solely shall be responsible for seeking and obtaining all pricing approvals from all applicable authorities in those countries in
the Territory where Heska is distributing Products in the Field.

	2.11
	Heska's Sales Efforts.    Heska shall use commercially reasonable efforts to offer for Sale, Sell, have Sold, use, have
used, market, have marketed, distribute, have distributed and import Products in the Field in the Territory, as more fully set forth in  Article 4.

	2.12
	Appointment of Dealers.    Heska shall have the right to appoint Dealers for the sale of the Products in the Field in the
Territory. Heska agrees that, if it enters into an agreement or arrangement with any Dealer to allow such Dealer to offer for Sale, Sell, have Sold, use, have used, market, have marketed, distribute,
have distributed, import and have imported Products in the Field in any country or region of the Territory, Heska shall restrict such Dealer's activities to sales of Products in the Field for use in
the Field by affirmatively restricting the Dealer from reselling Products to Third Parties outside the Field. Heska shall name i-STAT as the "third party beneficiary" for the purposes of
enforcing this provision in any agreement or arrangement with a Third Party for Sale of Products in the Field.

	2.13
	Termination Notice Provisions.    In the event that i-STAT exercises its right to terminate this Agreement in
any given Contract Year for failure to meet the Base Cartridge Target in such Contract Year pursuant to Section 2.6, such termination shall be
effective upon expiration of the Notice Period, determined as follows:

	(a)
	Six
(6) months if [***];

	(b)
	Twelve
(12) months if [***];

	(c)
	Eighteen
(18) months if [***]; 

 

	(d)
	Twenty-four
(24) months if [***]; or

	(e)
	Thirty-six
(36) months if [***]. 

In
order to terminate the Agreement pursuant to Section 2.6, i-STAT must give written notice during the Notice Date Time. Upon
receipt of written notice, Heska's distributorship rights in the Field in the Territory shall become non-exclusive and remain non-exclusive throughout the Notice Period. 

For
example, Heska has [***], Heska receives written notice of termination from i-STAT on January 15, 2008 and the Parties meet to discuss this situation on
February 1, 2008 but cannot agree on amended terms under which Heska would continue to distribute Products. Pursuant to Sections 1.8 and  1.27,
[***], which under Section 2.13, results in a Notice Period of
twenty-four (24) months. Thus, in this example, the Agreement would terminate on January 15, 2010. 

	2.14
	Most Favored Pricing.    If, during any time period in which Heska is a non-exclusive distributor hereunder
(including any time period set forth in Section 2.13), i-STAT shall sell Products in the Field in the Territory to any other
distributor, dealer or Third Party at a price lower than the Purchase Price then paid by Heska hereunder (the "Most Favored Price"), then
i-STAT shall give Heska prior written notice of the Most Favored Price and the period it is to be in effect and Heska shall be entitled to such Most Favored Price for such Product for so
long as such lower price is in effect for any other distributor, dealer or Third Party in the Field in the Territory.

	2.15
	Restoration of Exclusivity and Cancellation of Termination.    If, following any Contract Year in which Cartridge Purchases
were less than the Base Cartridge Target, Heska's Cartridge Purchases for the subsequent Contract Year are equal to or greater than Base Cartridge Target for the subsequent Contract Year,
i-STAT shall consider in good faith restoring exclusivity to Heska as described in Section 2.1 and canceling the notice of
termination previously sent to Heska; provided, however, that such restoration of exclusivity shall be
only to the extent i-STAT has not made alternative contractual arrangements that would preclude restoring Heska's exclusivity in any part of the Territory.

	2.16
	Competitive Products.    In furtherance of its duties and in recognition of the unique healthcare and related
responsibilities in connection with the distribution of the Products, during the Term Heska shall not anywhere in the Territory promote, market, distribute or Sell any hand held device performing any
tests performed by the Products, including new Products, if any, added to this Agreement pursuant to the terms and conditions set forth in this Agreement. Heska shall exclusively use the
i-STAT control products set forth on Exhibit 1.29 unless i-STAT gives prior written approval for substitution.

	2.17
	EU Commission Directive.    In accordance with the EU Commission Directive on Vertical
Agreements, the covenant not to sell competitive products set forth in Section 2.16 for countries in the European Union
("EU") shall be for no longer than five (5) years after the Effective Date. Heska agrees that if Heska has maintained exclusivity as set forth in  Sections 2.4 and 2.5 during the Term, that Heska will meet with i-STAT to negotiate
in good faith the terms, if any, under which the covenant not to sell competitive products in the EU may be extended (if any). 

ARTICLE 3—MANUFACTURE, SUPPLY AND DELIVERY OF PRODUCTS  

	3.1
	Manufacture, Sale and Purchase of Products.    During the Term, i-STAT shall use commercially reasonable efforts
to manufacture or have manufactured, release, sell and deliver to Heska those units of Products as are consistent with the forecasting process, lead times and terms and conditions of this Agreement
and as are ordered by Heska hereunder. i-STAT shall manufacture or have manufactured, release, sell and deliver each such Product in accordance with each Product's Specifications and all
applicable rules and regulations applicable to the manufacture or sale of 

 

Products
in the Territory in the Field, including as applicable, those rules and regulations of the FDA, including QSRs (including applicable cGMPs), and in accordance with all other applicable laws
and regulations of countries in which Heska sells Products. 

	3.2
	Rolling Forecasts.    Thirty (30) days after the Effective Date, Heska shall provide i-STAT with a monthly
forecast of its requirements of the Products for the first full Contract Year. On or before the fifth (5th) day prior to the beginning of each subsequent calendar month during the Term, Heska shall
provide i-STAT with a rolling 12-month forecast, the first three (3) months of which will be firm purchase orders binding on Heska, the last nine (9) months of
each shall consist of Heska's best estimate forecast of its requirements of Products.

	3.3
	Product Orders.    Heska shall order Products on purchase orders consistent with the process set forth in  Section 3.2. All purchase order forms shall specify the quantities of each Product ordered, requested delivery dates, the identity of Products
ordered, Product price, and delivery and shipping instructions including carrier selected. All orders will be governed by the terms of this Agreement. To the extent that any purchase order,
confirmation of acceptance or other document contains terms in conflict with, or in addition to, the terms of this Agreement, such conflicting or additional terms shall not be binding on the Parties
unless agreed upon in advance by the Parties.

	3.4
	Acceptance of Purchase Orders.    i-STAT shall within five (5) Business Days notify Heska of any purchase
order (or partial purchase order) accepted, rejected, or delayed, and the reason for any such rejection or delay. No purchase order shall be binding upon i-STAT until accepted by
i-STAT. Purchase orders not rejected within five (5) Business Days shall be deemed accepted. Heska may not modify any purchase order after its acceptance by i-STAT
without i-STAT's prior consent. All purchase orders shall provide i-STAT with no less than ninety (90) days notice to the requested shipping date from i-STAT
after receipt of the purchase order. Heska understands and agrees that optimum dating of Products shipped cannot be assured for Products shipped in connection with purchase orders placed less than
ninety (90) days prior to the requested shipment date of Product from i-STAT.

	3.5
	Firm Order Changes.    If, before submitting a purchase order form to i-STAT, Heska requests an increase to
binding forecasts for the three (3) month firm forecast timeframe and such increase is no more than one hundred twenty percent (120%) of the amount of Products (on a
Product-by-Product basis) originally reflected in forecasts, i-STAT shall use commercially reasonable efforts to accommodate such increases within reasonable
manufacturing capabilities and efficiencies, taking into account other orders and forecasts. If such increases reflects an increase of more than one hundred twenty percent (120%) of the amount of
Products (on a Product-by-Product basis) originally reflected in Heska's binding forecasts, i-STAT shall advise Heska of any additional costs associated with
manufacturing such increased number of Products in such timeframe, and if Heska indicates to i-STAT that i-STAT should proceed to manufacture such increased amount of Products,
i-STAT shall use reasonable commercial efforts to manufacture such increased number of Products, and Heska shall bear all costs reasonably associated with such manufacturing increases.
Such payments shall be payable within thirty (30) days of receipt of i-STAT's invoice for such charges.

	3.6
	Purchase Prices.    Purchase Prices for the Products are listed on  Exhibit 1.29.

	3.6.1
	Rebates.    [***]

	3.6.2
	Pricing Adjustments.    At the end of the Initial Term and each Extension Term thereafter, Purchase Prices may be adjusted
at i-STAT's sole discretion for inflationary increases in production costs. Such increase shall be at the rate of increase in the U.S. PPI (Producer Price Index) since the Effective Date
of the Agreement for the Initial Term or since the last inflationary adjustment for each Extension Term. 

  

	3.6.3
	Increased Manufacturing Costs.    If i-STAT experiences an increase in Product manufacturing costs that exceed
ten percent (10%) for any Product during any Contract Year, i-STAT and Heska shall meet and negotiate in good faith to determine whether an adjustment to the Purchase Price for that
Product is appropriate in the circumstances.

	3.6.4
	Taxes.    All Purchase Prices for Product are calculated for delivery as set forth in  Section 3.7. The Purchase Prices do not include insurance, freight, customs, duties, taxes, any foreign, federal, state or local taxes that may
be applicable to Products including, without limitation, sales, excise, value-added, withholding, and other taxes other than taxes based upon i-STAT's net income and other similar charges.
Customs duties and charges, if any, shall be borne by Heska. Any and all export and import licenses or approvals shall be obtained by Heska at its expense. When i-STAT has the legal
obligation to collect such taxes, the appropriate amount shall be added to Heska's invoice and paid by Heska unless Heska provides i-STAT with a valid tax exemption certificate authorized
by the appropriate taxing authority.

	3.7
	Delivery of Product.    

	3.7.1
	Delivery; Determination of Method of Transportation.    Products shall be delivered FCA (Incoterms 2000)
i-STAT's U.S. warehouse or other i-STAT warehouse. The method of transportation of the Products, shipping destination and the carrier selected shall be as specified by Heska in
its purchase orders.

	3.7.2
	Risk of Loss.    Risk of loss for Products shall pass to Heska, FCA (Incoterms 2000) i-STAT's warehouse site.

	3.7.3
	Title.    Title shall pass to Heska when Products are transferred to Heska's designated courier at i-STAT's
warehouse site.

	3.8
	Payments Due; Credit Limits.    All payments due and payable hereunder shall be made by check or wire transfer within thirty
(30) days from the date of the invoice. All payments shall be made without set-off or counterclaim and free and clear of and without deduction for any other charges of any kind. The
invoiced amount shall be paid by Heska to i-STAT by: (a) wire transfer to the bank listed on Exhibit 3.8 or otherwise
specified by i-STAT, or (b) certified bankers check. i-STAT reserves the right to change the payment or credit terms at any time upon ninety (90) days' prior
notice to Heska. Any invoiced amount not received within thirty (30) days of the date the payment was due shall be subject to a service charge of the lesser of one and one-half
percent (1.5%) per month or the maximum rate permitted by law. All exchange, interest, banking collection and other charges shall be at Heska's expense. Decreases in Heska's credit limit will be based
on i-STAT's evaluation of Heska's financial performance over the previous six (6) months and/or Heska's payment history with i-STAT over the past immediate twelve
(12) months. If Heska disagrees with any notice of a change in payment terms or decrease in credit limit, Heska may dispute the decision with the President of Abbott's Point of Care business
and discuss options for resolution. The resolution to the disputed decrease in credit limit shall be at the sole discretion of the President of Abbott Point of Care division. If Heska believes the
resolution reached by the President of Abbott Point of Care is inequitable, Heska may enter into alternative dispute resolution with i-STAT. Notwithstanding anything in this Agreement or
any exhibit attached hereto to the contrary: (y) all costs for Heska and i-STAT associated with such alternative dispute resolution shall be borne solely by Heska, regardless of the
decision by the neutral in the alternative dispute resolution process; and (z) such alternative dispute resolution, if requested by Heska for this issue, shall be only for this specific issue,
and no other issue shall be added to the process.

	3.9
	Currency Basis.    All prices including Product Prices for Products and payments therefor shall be in U.S. dollars. 

 

	3.10
	Acceptance of Product.    Heska shall not be obligated to accept any Product that does not meet the applicable
i-STAT specifications as set forth in the Analyzer's operators' manuals, or the Cartridges' product inserts, if any, as registered in the Territory. i-STAT shall provide Heska
with thirty (30) days' advance notice of a change or issuance of new Analyzer operator manuals or Cartridge product inserts. Heska shall inspect all Products upon delivery in a commercially
reasonable manner. Failure by Heska to give notice of defective or damaged Product within the time periods specified in Section 3.11 shall be
deemed a waiver of i-STAT's obligations as stated herein, with respect to such defect or damage only.

	3.11
	Defective and Improper Delivery; Product Returns.    If Heska or a Dealer or End User claims that: (a) any Product
shipped directly by i-STAT hereunder was damaged in transit to the End User; (b) incorrect Product was shipped; or (c) that there was a shortage in the shipment, and notice
in writing of such damage, incorrect shipment or shortage is provided to i-STAT within thirty (30) days of receipt of the shipment by the End User then, upon receipt of such notice,
i-STAT's sole obligation shall be to either replace any damaged or incorrectly shipped Product, make up any shortfall or refund any Purchase Price paid by Heska, at i-STAT's
option. If any Product is claimed by Heska, a Dealer or End User to be defective and i-STAT is notified in writing of such defect within thirty (30) days of receipt of the Product
by the End User or, in the case of a latent defect, i-STAT is notified in writing within fifteen (15) days of discovery of such latent defect within the warranty period stated in  Section 7.2,
then i-STAT's sole obligation shall be to either repair of replace any Product found by i-STAT to be
defective. If Heska claims a credit pursuant to this Section 3.11, such claim shall be accompanied by the original invoice issued by Heska to the
End User or Dealer returning the Product. Upon request by i-STAT, Heska shall deliver to i-STAT, at Heska's cost, any returned Product with regard to which the credit is
claimed. i-STAT solely shall determine in good faith the amount of any credit due Heska, if any, and to the extent any returned Product is defective, reimburse Heska for reasonable freight
expenses directly related to delivering said Product to i-STAT. In the event that i-STAT issues a Product recall and requests that Heska return Products to i-STAT
as a result of such recall, i-STAT shall reimburse Heska for reasonable freight expenses directly related to such recall. There will be no Product returns accepted except as set forth in
this Section 3.11. 

ARTICLE 4. MARKETING OF PRODUCTS  

	4.1
	Marketing.    Heska shall, at its own expense, use commercially reasonable efforts to market and promote the Products in the
Territory. Heska's promotional activities shall include, but shall not be not limited to: (a) including the Products in its appropriate catalogs, promotional mailings and like publications,
(b) developing, preparing and placing advertising concerning the Products in appropriate media or through appropriate direct mail; (c) exhibiting the Products at appropriate trade shows
and exhibitions, (d) conducting appropriate market research as it deems necessary or desirable; and (e) rendering other services customarily rendered by a distributor of veterinary
medical products; provided, that by October 31 of each Contract Year, Heska shall provide i-STAT with a list of all proposed trade
shows and exhibitions that it plans to attend in the next Contract Year. Heska may develop printed sales and promotional materials relating to the Products in the local language at its own expense.
Heska shall provide such materials, if any, which have not been previously approved to i-STAT for i-STAT's review and approval, which approval shall not be unreasonably delayed
or withheld. i-STAT shall review such materials within fifteen (15) Business Days, and i-STAT's failure to object to any materials within such fifteen
(15) Business Days of sending shall be deemed approval. If i-STAT objects to the material, Heska shall modify such materials accordingly.

	4.2
	Catalogs, Bulletins.    At Heska's written request, i-STAT shall provide Heska with reasonable quantities of
brochures, instructional material, advertising literature and other relevant Technical 

 

Documentation
regarding the Products, at no charge to Heska. Such documents shall be in the English language, and may be in other languages to the extent already available. Heska, at its own cost, may
provide a translation of the documents into the local language. Such translations shall be made available to i-STAT for review and comment before dissemination. 

	4.3
	Follow-up Training.    At Heska's reasonable written request, i-STAT shall provide
follow-up training, as mutually agreed by the Parties, at Heska's facility. i-STAT shall pay for its employees' salaries and their travel and travel-related expenses, including
meals, lodging and other living expenses. For training situations not covered by this Section 4.3, the Parties shall discuss how to equitably
share the travel and related expenses.

	4.4
	Strategy Meetings.    Periodically during the Term (but not less than once per Contract Year) while Heska is the exclusive
distributor of Products in the Field in the Territory, Heska and i-STAT shall review topics which may include Heska's marketing and selling strategy, training of End Users, inventory, and
other practices with a view toward maximizing End Users' use of and satisfaction with Products.

	4.5
	Quality Assurance Audit.    Heska agrees that upon a minimum fifteen (15) days notice from i-STAT,
representatives of i-STAT, during normal business hours, shall be permitted to visit all locations where Heska maintains inventory of Products to conduct a quality assurance audit of such
facilities and/or an on-site surveillance of the inventory storage tracking. i-STAT shall have the right during reasonable business hours, to inspect the books and records of
Heska relating to Product complaint documentation. In the event that an audit reveals items that i-STAT determines should be corrected by Heska, i-STAT shall provide, in
writing, within thirty (30) days of such audit, a list of such items and any proposed corrective action to be taken by Heska. Heska shall respond within fifteen (15) days of receiving
i-STAT's notification of the corrective action to be taken and an estimated completion date. If the parties disagree as to whether corrective action is necessary, the matter shall be
resolved in accordance with the alternative dispute resolution procedures set forth in Section 11.9.

	4.6
	Sales Personnel.    Heska, at its sole cost and expense, shall engage, compensate, supervise, train and maintain such
competent, qualified personnel as may be reasonably required to, deliver, promote, market, sell, distribute, provide technical service and support for the Products, and End User complaint handling in
the Territory.

	4.7
	Training For Heska and End Users.    i-STAT shall provide Heska personnel such training, at i-STAT's
expense, as Heska may request in writing and that i-STAT, at its sole discretion, deems reasonable. Notwithstanding the above, all expenses incurred by Heska's personnel in connection with
such training, including without limitation, travel and other per diem expenses shall be borne by Heska. Heska, at its own cost, shall provide adequate Product training for its End User's on the use
and storage of the Products. Heska, prior to shipment of Products to an End User, shall provide to each such End User Product storage and use instructions, and shall provide its End Users with
commercially reasonable training and support within two (2) months after delivery of the first shipment of Products to an End User. Heska shall use commercially reasonable efforts to ensure
that all introductory training is made available to End Users within the first week after receipt of Analyzers and Cartridges. Heska shall, in its discretion, make appropriate use of training
materials and Technical Documentation supplied by i-STAT.

	4.8
	Technical Support.    Heska agrees to be responsible as the first point of contact for technical support with the End User.
Heska will further provide technical support on the usage of Products by the End Users based upon information supplied by i-STAT, at no cost to i-STAT. The term
"Technical Support" shall mean, without limitation, problem resolution, explanation of functionality and collection of incident reports.
i-STAT will provide technical service support to Heska as i-STAT deems reasonably necessary, but not to any Dealers appointed by Heska. 

 

	4.9
	Modified and New Products.    Heska agrees to provide timely comprehensive information to its Dealers or End Users, as
appropriate, with respect to newly available Products, discontinuance of Products and changes in existing Products, including, but not limited to, performance specification changes and required
software upgrades in Analyzers (which may or may not be coupled to specific lots of Cartridges). Heska agrees to use commercially reasonable efforts, which shall depend on the circumstance involved
and whether the End User is utilizing Products, to ensure that each End User in the Territory makes any such performance specification changes and software upgrades in a timely manner.

	4.10
	Counterfeit Products.    If Heska is offered the opportunity to purchase or otherwise becomes aware of any counterfeit
products similar in look and/or function to Analyzer or Cartridge Products (as listed on Exhibit 1.29) manufactured by an entity other than
i-STAT ("Counterfeit Products"), Heska shall promptly notify i-STAT thereof. Heska covenants and agrees not to purchase any
Counterfeit Products, and the failure of Heska to comply with the foregoing covenant and agreement shall constitute grounds for immediate termination of this Agreement by written notice to such effect
sent by i-STAT. Such termination of this Agreement shall be effective as of the date of receipt of any such notice by Heska. In addition, Heska acknowledges that its purchase of
Counterfeit Products will cause i-STAT irreparable harm and that i-STAT shall have the right to equitable and injunctive relief, in addition to money damages, in the case of
such action by Heska. i-STAT acknowledges and agrees that Counterfeit Products do not include, and Heska shall be permitted to sell and/or license in the Field, any products that Heska
offers to Heska's End Users that would allow Heska's End Users to print test results from an Analyzer on standard sized paper and combine such results with test results from other diagnostic products
Heska sells in the Field.

	4.11
	Inventory Levels.    Heska shall maintain a commercially reasonable supply of Product to meet the demands of End Users,
taking into account the order and shipping lead times set forth in this Agreement.

	4.12
	Warranty Services.    Heska shall provide a technical liaison and assistance to End Users for warranty service of the
Products, at no cost to i-STAT or the End Users. In addition, at the written request of i-STAT, Heska shall perform certain warranty repairs during the term of the warranty,
which shall be billed to and paid by i-STAT at mutually agreed upon labor rates.

	4.13
	Books and Records.    Heska shall maintain books and records in keeping with standard industry practice regarding the
performance of its obligations hereunder including monthly Cartridge unit Sales to Dealers and End Users that Heska Sells to directly, aggregated monthly in each country or region, and shall retain
such records during the Term and for three (3) years thereafter. Heska shall provide to i-STAT annually within thirty (30) days following the end of each Contract Year, a
report that provides Cartridge unit Sales to Dealers and End Users that Heska Sells to directly, aggregated monthly in each country or region, and the calculation of the percentage of Cartridges Sold
to customers by country or region, beginning with the first report of Contract Year 2005. Such books and records shall be in accordance with generally accepted accounting principles reflecting each
Product's unit Sales and per country or region in the Territory. Upon thirty (30) days' prior written notice to Heska (but not more frequently than once in any Contract Year, unless there is a
dispute, then as frequently as is necessary), Heska's books and records relating to the matters described herein shall be open for inspection. To conduct such inspection, i-STAT shall
retain, at its own expense, an independent certified public accountant reasonably acceptable to Heska. Such examination shall occur at Heska's principal place of business during normal business hours
for the sole purpose of verifying the accuracy of such calculations. Such independent accountant shall be required to execute a mutually acceptable confidentiality agreement and shall report to
i-STAT only the amount of any discrepancy, if any, in the calculations. Such examination rights may be exercised by the Parties only with respect to records for the
then-current Contract Year and the immediately prior Contract Year. i-STAT shall bear the cost of such audit, unless the audit reveals 

 

an
underreporting of unit Sales of greater than one percent (1%) or a value of Ten Thousand US Dollars (US $10,000) (whichever is the greater), in which case Heska shall reimburse i-STAT
for its reasonable expenses incurred in connection with such audit. 

	4.14
	Corrupt Practices.    Heska shall not use any compensation hereunder as payment to any government official or employee of
any country in the Territory for the purpose of influencing such person's decisions or actions regarding the Products. 

ARTICLE 5. INTELLECTUAL PROPERTY RIGHTS  

	5.1
	i-STAT Markings.    Heska shall not omit or alter patent numbers, trade names or trademarks, numbers or series or
any other i-STAT markings affixed on the Products obtained from i-STAT or alter Product labeling. Heska shall, however, be entitled to mark the Products with its trademark or
trade name in prominent place, subject to i-STAT's prior written consent, not to be unreasonably withheld. Heska is not authorized to use the trademark and trade name "i-STAT"
or any other trademark or trade name of i-STAT in any manner except to indicate that i-STAT is the manufacturer of the Products and, consistent with the provisions of  Section 5.2 and during the
Term of this Agreement and only in the Field in the Territory, that Heska is an independent distributor for
i-STAT and is selling i-STAT's Products. Heska shall acquire no rights in the i-STAT trademark and trade name, or any other trademark owned by i-STAT.

	5.2
	Use of Trademarks and Tradenames.    i-STAT hereby authorizes Heska to use, on a nonexclusive basis for the Term,
without cost to Heska other than payment for the Products, the trademark "i-STAT" and any other trademarks, service marks or tradenames used by i-STAT to identify the Products
(the "Marks"), solely to identify i-STAT as the manufacturer of the Products and for Heska's distribution of Products and related
performance under this Agreement. The Marks and the goodwill associated therewith are and shall remain the exclusive property of i-STAT. Heska shall not: (a) use the Marks as part
of any composite mark including any elements not approved in advance in writing by i-STAT; (b) challenge the validity or enforceability of the Marks (unless such restriction is
illegal); (c) acquire any proprietary rights in the Marks by reason of any activities under this Agreement or otherwise. All uses of the Marks by Heska and any additional goodwill created
thereby shall inure to the exclusive benefit of i-STAT. i-STAT, at all times during the Term on reasonable notice, shall have the right to inspect the materials and services on
or in connection with which the Marks are used in order to assure i-STAT that its quality standards relating to the Products and Heska's servicing and other Mark-pertinent
provisions of this Agreement are being observed. If at any time i-STAT shall reasonably object to any use to which the Marks are put, Heska shall promptly cease any such use.

	5.3
	License to Use Computer Software.    All software, on whatever media and in whatever form, i-STAT shall deliver
to Heska hereunder (the "Software") is and shall remain the property of i-STAT and its suppliers and licensors thereof and shall only be
used in accordance with the terms of this Agreement and any End User License Agreements (each, a "EULA") distributed therewith. Software contains
copyrighted and proprietary trade secrets of i-STAT (and its suppliers and licensors), and Heska shall keep the Software in confidence. Heska shall not copy, use or disassemble the
Software unless agreed by i-STAT. Heska shall have the right to reproduce Software only for: (a) one backup/archival copy; and (b) installation on and use with equipment
designated by i-STAT as suitable therefor and for use solely with the Products distributed by Heska. Heska shall reproduce the copyright and other proprietary notices of i-STAT
and Third Parties present in the Software delivered to Heska. Heska's license to use and distribute the Software shall terminate on the earlier of: (w) termination of this Agreement;
(x) discontinuance of use of the designated equipment for the Software; (y) discontinuance of payment of periodic license and maintenance fees, if any; or (z) breach by Heska of
any of the above given terms; provided, that End Users' license rights shall continue in accordance with each EULA. All copies 

 

of
Software with respect to which the license hereunder is terminated shall be returned to i-STAT within thirty (30) days after such termination. Heska shall deliver to each End
User a copy of i-STAT's EULA, which shall inform them that such Software is and shall remain the property of i-STAT and its suppliers and licensors. Copies of the translated
materials shall be provided by Heska to i-STAT for inclusion in the technical file before any CE marked Product is distributed in Heska's territory in the Field. 

ARTICLE 6. REGULATORY MATTERS  

	6.1
	Regulatory Compliance.    Heska shall advise i-STAT promptly of all government regulations outside of the United
States affecting the importation, use, Sale, record maintenance and disposal of the Products, and shall be responsible for compliance therewith. Without limiting the foregoing, Heska shall obtain from
competent governmental authorities outside the United States such import permits, licenses, exemptions from customs duties and governmental approvals and consents required in connection with the
execution and performance of this Agreement. All governmental permits, registrations, licenses, exemptions and consents outside the United States specifically relating to Products shall be sought,
where applicable and where possible, in the name of and shall, at the end of the Term, be the exclusive property of i-STAT. Heska shall not take any action which would, or fail to take any
action where such failure would, directly or indirectly result in or constitute a violation by Heska of any applicable law, treaty, ruling or regulation in the Territory relating to the Products,
including, without limitation, laws and regulations relating to the export, resale and distribution of the Products and laws and regulations requiring the reporting of adverse medical events to
government authorities in the Territory. When needed for sales or regulatory compliance purposes, Heska shall provide at Heska's expense any additional translations of labels, labeling, and
instructions consistent with the regulatory requirements of the competent authority in each country of the Territory and shall ensure that all users are provided with such translated materials.

	6.2
	Compliance with U.S. Regulations.    Heska understands and acknowledges that i-STAT is subject to regulation by
agencies of the U.S. Government, including but not limited to, the U.S. Department of Treasury which prohibit the sale, export or diversion of products and technology to certain countries
("Prohibited Countries"), which countries, as of the Effective Date, are Iran, Sudan and Cuba. Heska hereby warrants that it shall not Sell, directly or
indirectly, any Products to Dealers or End Users which it knows or reasonably should know will resell or export the Product to Third Parties in Prohibited Countries. Furthermore, any and all
obligations of i-STAT to provide the Products, as well as any other technical information and assistance, is subject to United States laws and regulations which govern the license and
delivery of technology and products abroad by persons subject to the jurisdiction of the United States, including without limitation the Export Administration Act of 1979, as amended, any successor
legislation, and the Export Administration Regulations issued by the Department of Commerce, Bureau of Industry and Security. Heska agrees to cooperate with i-STAT in order to maintain
compliance with the applicable export regulations.

	6.3
	Notice of Certain Events; Adverse Event Reporting.    Each Party shall promptly notify the other after it becomes aware of
any of the following events: alleged infringement of the Trademarks or patents applicable to a Product by any third party; alleged infringement of the trademark, patent or proprietary rights of others
in connection with actions taken hereunder; liability claims relating to a Product and any other event that may reasonably be expected to have a material adverse effect upon the sale or distribution
of a Product in the Territory.

	6.4
	Product Changes; Labeling.    Heska may affix its label on catalogs and Products being distributed by Heska in the Field in
the Territory during the Term; provided, i-STAT shall have been provided with a catalog and a photograph of each Product with Heska's label
affixed in the same manner in 

 

which
the Products will be distributed and shall have approved such label, such approval not to be unreasonably withheld and such approval not required for Products being sold with the Heska label
affixed as of the Effective Date. If i-STAT shall reasonably object to the manner in which such label is affixed, Heska shall promptly cease any such use and change its use to comply with
the i-STAT's requirements. Heska shall bear the cost of packaging and labeling changes requested by Heska and approved by i-STAT. 

	6.5
	Traceability.    i-STAT and Heska shall each maintain such traceability records with respect to the Product as
shall be necessary to comply with applicable laws and local "Good Manufacturing Practices" regulations.

	6.6
	Reliability Reporting.    Each Party shall promptly report in writing to the other any substantial failure of the Product,
material change in the statistically demonstrated reliability of the Product or other material information relevant to the reliability of a Product of which such Party becomes aware.

	6.7
	Recall or Advisory Actions.    If either Party proposes to recall a Product or issue an advisory letter regarding reliability
of or defects in a Product, then such Party shall first notify the other in writing or by telecommunication in a timely manner prior to making such recall or issuing such advisory letter. Each Party
shall endeavor to reach an Agreement with the other regarding the manner, text and timing of any publicity to be given such matters in time to comply with any applicable regulatory requirements, but
such Agreement shall not be a precondition to any action that a Party deems necessary to protect users of a Product or to comply with any applicable governmental orders. In the event
i-STAT should request Heska to recall a Product, Heska shall take all appropriate actions to recall such Product. i-STAT shall bear the expenses of any recall requested by it
or resulting from defective manufacture, or packaging by i-STAT. Heska shall bear the expenses of any recall resulting from improper storage, handling or delivery by Heska. In cases where
the recall is unrelated to any fault of either Party, the expense of the recall shall be borne by the Parties equally. For the purposes of this Agreement, expenses of recall include, without
limitation, the expense of notification and destruction or return of the recalled Product, but not the expense or service fees associated with salesmen's time which shall be borne by Heska.

	6.8
	Translation of Technical Documents.    Consistent with Section 4.2, as
required by local regulatory laws or regulations, Heska shall translate Technical Documents into the local language(s) of End Users and shall revise such translation in accordance with the changes to
the Technical Documents that may be made from time to time by i-STAT. Such translation shall at a minimum meet all regulatory requirements of the Territory and be of a standard deemed
appropriate for veterinary products and comparable with that provided for other products sold into the animal health care market in the Territory. Heska will provide any documents translated into the
local language to i-STAT for review and shall revise such translation according to i-STAT's comments. 

ARTICLE 7. REPRESENTATIONS AND WARRANTIES  

	7.1
	Product Warranty to End Users.    Heska shall pass through to End Users i-STAT's standard written limited
warranty for all Products. Heska shall not alter or expand such warranty; provided, however, that nothing in this Agreement limits Heska's ability to provide its own warranty on any of the Products to
its End Users (an "Extended Warranty") so long as Heska is responsible for satisfying any obligations under such Extended Warranty.

	7.2
	Warranty.    i-STAT shall extend to Heska and to Heska's Dealers or End Users standard product warranties, as
modified from time to time upon thirty (30) days prior written notice to Heska, the current version of which is attached as Exhibit 7.2;
provided, however, that any modification to any such product warranties shall apply only to Products the Sales of which are made after the effective date of such product warranties. 

 

	7.3
	Heska's Warranty.    Heska represents and warrants that it has obtained or will obtain all required approvals of local
governments in connection with this Agreement.

	7.4
	Disclaimer of Warranties.    EXCEPT FOR THE LIMITED WARRANTIES PROVIDED IN  SECTIONS 7.1 AND 7.2, i-STAT MAKES NO OTHER REPRESENTATIONS OR WARRANTIES OF ANY
KIND, AND THE WARRANTIES OF i-STAT ARE IN LIEU OF ALL OTHER WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF
NONINFRINGEMENT OF ANY THIRD PARTY PATENTS, COPYRIGHTS OR MARKS. EXCEPT FOR THE WARRANTY PROVIDED FOR IN SECTIONS 7.1 AND  7.2, i-STAT MAKES NO
WARRANTY OF ANY KIND TO END USERS OF HESKA HEREUNDER. 

ARTICLE 8. INDEMNIFICATION  

	8.1
	Indemnification by Each Party.    During the Term and for two (2) years thereafter, i-STAT and Heska shall
each at all times indemnify and hold the other Party and their respective Affiliates, stockholders, directors, officers, employees and agents harmless from and against all liabilities, losses, claims,
damages and expenses, including reasonable attorneys' fees and disbursements ("Claims"), to the extent that such arise out of or are in connection with a breach of any covenant, agreement, warranty or
representation made by it herein; provided, however, that i-STAT shall not hold Heska and its respective Affiliates, stockholders, directors, officers, employees and agents harmless to the
extent that such Claims arise out of or are in connection with a breach of any covenant, agreement, warranty or representation made by Heska regarding the Products (including but not limited to any
Extended Warranty). In the event of any Third Party action, the indemnified Party shall have the right to participate in the defense, at its own expense, with counsel of its own choosing.

	8.2
	Indemnification by Heska.    Heska shall indemnify i-STAT against all claims, losses, damages, liabilities and
expenses, including reasonable attorneys' fees and disbursements, incurred by i-STAT arising with respect to the sale, distribution or use of a Product to the extent caused by any action
or omission of Heska or its stockholders, directors, officers, employees or agents. Heska shall indemnify, defend and hold i-STAT harmless against all claims, liabilities, costs and
expenses (including the reasonable fees of attorneys and other professionals) incurred by, or threatened against, i-STAT in connection with any representation or warranty by Heska
(including any Extended Warranty of the Products provided by Heska) or Heska's personnel inconsistent with: (a) the foregoing limited warranty and disclaimer of i-STAT; or
(b) publications of i-STAT concerning the Products.

	8.3
	Infringement Indemnification by i-STAT.    i-STAT shall indemnify Heska against all claims, losses,
damages, liabilities and expenses, including reasonable attorneys' fees and disbursements, incurred by Heska arising with respect to, out of or in connection with any claim that the Products or the
Software infringe any copyright, patent, trade secret, trademark, or other proprietary right of any third party; provided that i-STAT is notified promptly in writing of the claim and Heska
provides reasonable assistance in the settlement or defense of such claim; provided, that Product or Software are not altered by Heska except as specifically directed by i-STAT. If a
Product or Software is held to constitute an infringement and its use as contemplated by this Agreement is enjoined or threatened to be enjoined, i-STAT shall at its option and expense:
(a) procure for Heska the right to continue to Sell and distribute the Products or the Software; (b) replace or modify the Products or the Software with a version that is
non-infringing; or (c) discontinue manufacture and/or sales of the Product in affected countries. In the event that i-STAT discontinues the manufacture and/or sale of a
Product pursuant to this Section 8.3 in any affected country, such discontinuance shall not be considered a breach of this Agreement, and the
Parties shall negotiate in good faith an adjustment, if any, to the Base Cartridge Targets set forth in 

  

 Sections 2.4 and 2.5. If the Parties are unable to agree on an adjustment, if any, to the Base Cartridge Targets as a
result of good faith negotiations under the preceding sentence, they will follow the procedures set forth in Section 11.9 to establish an
adjustment, if any. 

	8.4
	Limitation of Liability.    UNDER NO CIRCUMSTANCES SHALL A PARTY BE RESPONSIBLE TO THE OTHER PARTY FOR INDIRECT, SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE SALE, DELIVERY, NONDELIVERY, SERVICING, USE, MAINTENANCE, SUPPORT, CONDITION OR POSSESSION OF PRODUCTS. 

ARTICLE 9. CONFIDENTIALITY  

	9.1
	Confidentiality.    Neither Party shall use for any purpose, other than as contemplated by this Agreement, or divulge to any
Third Party, any Confidential Information provided to such Party by the other Party, except as may be required by law or judicial order.

	9.2
	Public Announcements.    Neither Party shall make any public announcement concerning this Agreement, nor make any public
statement which includes the name of the other Party or any of its Affiliates, or otherwise use the name of the other Party or any of its Affiliates in any public statement or document, except as may
be required by law, including the requirements of the SEC, or judicial order, without the written consent of the other Party, which written consent shall not be withheld unreasonably. 

ARTICLE 10. TERM AND TERMINATION  

	10.1
	Effective Date and Term. The initial term of this Agreement shall commence as of the Effective Date and expire as of
[***] (the "Initial Term"), unless sooner terminated as expressly provided in this  Article 10 or Section 2.6. THIS AGREEMENT WILL RENEW AUTOMATICALLY FOR ADDITIONAL ONE
(1) YEAR TERMS (EACH, AN "EXTENSION TERM"), UNLESS SOONER TERMINATED AS EXPRESSLY PROVIDED IN THIS ARTICLE
10 OR SECTION 2.6. The Initial Term and all Extension Terms are sometimes referred to herein as the
"Term."

	10.2
	Termination For Cause By Either Party. In addition to the rights of the Parties to terminate this Agreement as provided hereinabove,
either Party may terminate this Agreement for cause upon written notice to the other Party in the event the other Party: (a) appoints a receiver, executes an assignment for the benefit of
creditors or files or otherwise becomes subject to bankruptcy or insolvency proceedings; or (b) materially breaches this Agreement and fails to cure such breach within sixty (60) days
after receipt of written notice of breach from the non-breaching Party, as such cure period may be extended for such additional period as the non-breaching Party reasonably
determines that the breaching Party is diligently pursuing a cure of such breach.

	10.3
	By i-STAT for a Change of Control under Certain Circumstances. If Heska undergoes a Change of Control, Heska or the
controlling entity following the Change of Control shall notify i-STAT within thirty (30) days of such Change of Control. Such notice shall inform i-STAT of the identify
of the entity involved in the Change of Control with Heska, and of the parent corporation, if any, of the entity involved in the Change of Control with Heska. i-STAT shall have the right
to terminate this Agreement within six (6) months of such notice if Heska has a Change of Control to an entity that, in i-STAT's sole opinion, competes with i-STAT or
its Affiliates or, in i-STAT's reasonable business judgment, would harm i-STAT's position in, the human blood and/or veterinary diagnostics market; provided, that if Heska
believes that i-STAT's determination is unreasonable, the Parties shall follow the procedure set forth in Section 11.9 to make the determination. 

  

	10.4
	Effect of Termination. Upon the termination of this Agreement:

	(a)
	The
Parties shall immediately cease the use of any Confidential Information of the other Party and, in the case of Heska, of the Marks, except as permitted in this  Section 10.4.

	(b)
	Unless
this Agreement is terminated by i-STAT for Heska's breach or bankruptcy, and subject to i-STAT's rights as provided in this  Section 10.4, (i) i-STAT shall honor all accepted purchase orders
providing for delivery of Product within thirty
(30) days of the date of termination and for which Heska pays in full prior to shipment, and (ii) Heska may Sell Products on a nonexclusive basis but otherwise on the terms set forth in
this Agreement its remaining inventory of Products for a period of up to ninety (90) days following the date of termination.

	(c)
	i-STAT
shall have the right (but not the obligation), upon prior written notice to Heska given within ten (10) days after termination to purchase from Heska all or
any portion of the Products in its inventory at the time of such termination for credit against outstanding invoices, or for cash refund to the extent there are no invoices then outstanding. Any
credit or refund due Heska for such Product shall be equal to the Purchase Price of the Product, less any discounts or credits previously received.

	(d)
	Heska
shall return to i-STAT all promotional and sales training materials provided to Heska by i-STAT under this Agreement.

	(e)
	To
the extent permitted by law, Heska shall assign to i-STAT and deliver to i-STAT any import permits, health resignations, licenses, exemptions from customs
duties and governmental consents of any nature specifically relating to i-STAT Products, which Heska may have or retain directly or indirectly in connection with the Products imported,
Sold and/or distributed under this Agreement, which it has not yet assigned or waived, or which have not yet been delivered prior to termination.

	(f)
	Heska
shall not, in the final six months of any notification of termination (or such actual time after notice and before actual termination, if shorter), undertake any actions
intended or designed to cause End Users or Dealers to purchase higher than normal levels of inventory of Products.

	10.5
	Continuing Obligations. Upon any termination of this Agreement (except termination for cause by Heska due to i-STAT's
breach), at i-STAT's election and in accordance with i-STAT's instructions, Heska shall: (a) cooperate in referring End Users to i-STAT or to such other
persons as i-STAT may direct for continuing purchase of Products and related services; (b) transfer to i-STAT or its nominees all outstanding maintenance contracts for
the Products; and (c) provide i-STAT with a list of each End User who purchased Product through Heska, including records of all Software updates performed. Following termination of
this Agreement for any reason, Heska shall have no further obligations to End Users with respect to Software updates and maintenance or technical support. Nothing in this Agreement shall be construed
as preventing Heska from soliciting End Users for other products following the termination of this Agreement.

	10.6
	Survival. The following Articles and Sections shall survive termination of the Agreement: Articles 1,
7, 8, 9, 10 and 11 and Sections 3.6, 3.8, 3.9, 3.11,  4.12 and 4.13. In addition, all provisions that survive termination, that are irrevocable or that arise
due to termination shall survive in accordance with their terms. Any other provisions of this Agreement contemplated by their terms to pertain to a period of time following termination of this
Agreement shall survive for the specified period of time only. 

 

ARTICLE 11. MISCELLANEOUS  

	11.1
	Notices. All written notices and other communications between the Parties shall be in the English language and shall be deemed
effective on the date they are received by certified air mail or confirmed facsimile addressed to the other Party at the address or facsimile number stated below. 

	If to i-STAT:	 	i-STAT Corporation

104 Windsor Center Drive

East Windsor, New Jersey 08520

Attn: Vice-President, Sales and Marketing

Telephone Number: (609) 443-9300

Facsimile Number: [***]
	

With copy to:	
 	

Divisional Vice President, Medical Products Group

Domestic Legal Operations

D-322, Building AP6D

100 Abbott Park Road

Abbott Park, Illinois 60064-6049

Facsimile Number: [***]
	

If to Heska:	
 	

Heska Corporation

1613 Prospect Parkway

Fort Collins, Colorado 80525

Attn: Chief Financial Officer

Telephone Number: (970) 493-7272

Facsimile Number: [***]
	

With copy to:	
 	

Osborn Maledon, P.A.

Attn: William M. Hardin, Esq.

2929 North Central Ave.

Suite 2100

Phoenix, AZ 85012

Telephone Number: [***]

Facsimile Number: [***]

	11.2
	Annual Cartridge Purchases Calculation. Following each Contract Year, the number of Cartridge Purchases for such Contract Year shall
be determined as set forth in Subsections 11.2.1 and 11.2.2 and the Parties shall execute and attach to
this Agreement the "Annual Cartridge Purchase Calculation" form set forth on Exhibit 11.2 completed for such Contract Year.

	11.2.1
	i-STAT Provides i-STAT Calculation. Within forty (40) days after the end of each Contract Year,
i-STAT shall provide Heska in writing with i-STAT's calculation of Heska's Cartridge Purchases in such Contract Year (the "i-STAT
Calculation"). If Heska disagrees with the i-STAT Calculation, Heska shall have thirty (30) days after receipt of the i-STAT Calculation to
respond in writing, with (a) Heska's estimate; (b) the difference between Heska's estimate and the i-STAT Calculation; and (c) purchase order level detail so that
i-STAT may verify the i-STAT Calculation. If i-STAT disagrees with Heska's calculation and Heska requests, in writing, purchase order level detail for the
i-STAT Calculation, i-STAT shall provide such information. If the exchange of such information does not resolve the dispute, the Parties shall negotiate in good faith to
determine the actual Cartridge Purchases in such Contract Year and, if such dispute is not resolved within thirty (30) days, the dispute shall be resolved pursuant to  Section 11.9.

 

	11.2.2
	i-STAT Does Not Provide i-STAT Calculation. If i-STAT fails to provide Heska with the
i-STAT Calculation within forty (40) days after the end of a given Contract Year, Heska shall provide i-STAT, in writing, with Heska's calculation of Heska's Cartridge
Purchases in such Contract Year (the "Heska Calculation") within seventy (70) days after the end of such Contract Year. If i-STAT
disagrees with the Heska Calculation, i-STAT shall have thirty (30) days after receipt of the Heska Calculation to respond, in writing, with (i) i-STAT's
estimate, (ii) the difference between i-STAT's estimate and the Heska Calculation, and (iii) purchase order level detail so that Heska may verify the Heska Calculation. If
Heska disagrees with i-STAT's calculation and i-STAT requests, in writing, purchase order level detail for the Heska Calculation, Heska shall provide such information. If the
exchange of such information does not resolve the dispute, the Parties shall negotiate in good faith to determine the actual Cartridge Purchases in such Contract Year and, if such dispute is not
resolved within thirty (30) days, the dispute shall be resolved pursuant to Section 11.9.

	11.3
	[***].

	11.3.1
	[***].

	11.3.2
	[***].

	11.4
	Binding Effect/Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors
and assigns. Neither Party shall have the right to assign any of its rights or obligations under this Agreement without the prior written consent of the other Party; provided,
however, that without such written consent, i-STAT shall have the right to assign its rights hereunder to an Affiliate of i-STAT and Heska shall have
the right to assign this Agreement to any corporation controlled by Heska which has, as one of its principal lines of business, the sale of diagnostic equipment for the veterinary market. In the event
that a Change of Control of Heska does not involve a competitor of i-STAT (pursuant to Section 10.3 of this Agreement) Heska shall
have the right to assign this Agreement without i-STAT's consent in connection with a Change of Control; provided, that i-STAT
has not terminated this Agreement in the time frame provided in, and pursuant to the terms and conditions set forth in, Section 10.3.

	11.5
	Waivers. Any waiver by either of the Parties hereto of any rights arising from a breach of any covenants or conditions of this
Agreement shall not be construed as a continuing waiver of other breaches of the same nature or other covenants or conditions of this Agreement. Any failure by one of the Parties to assert its rights
for or upon any breach of this Agreement shall not be deemed to be a waiver of such rights, nor shall such waiver be implied from the acceptance of any payment.

	11.6
	Relationship of the Parties. Nothing in this Agreement or any other document or agreement between the Parties shall constitute or be
deemed to constitute a partnership or joint venture between the Parties. The relationship between Heska and i-STAT shall be that of buyer and seller. No officer, agent or employee of one
Party shall under any circumstances be considered the agent, employee or representative of the other Party. Neither Party shall have the right to enter into any contracts or binding commitments in the
name of or on behalf of the other Party in any respect whatsoever.

	11.7
	Force Majeure. Neither Party shall be liable to the other Party or in default hereunder by reason of any delay or omission caused by
fire, flood, strike, lockout, civil or military authority, insurrection, war, embargo, container or transportation shortage or delay of suppliers due to such causes, and delivery dates shall be
extended to the extent of any delays resulting from the foregoing or similar causes. In the event of a Product shortage, i-STAT shall have the right to allocate its available Product among
Heska and all other customers of i-STAT in such a manner as i-STAT, in its sole 

 

discretion,
considers equitable, and the Parties shall negotiate in good faith an adjustment to the Base Cartridge Targets set forth in  Section 2.7. 

	11.8
	Governing Law. This Agreement shall in all respects be governed by, and construed in accordance with, the internal laws (and not the
laws of conflicts) of the State of New Jersey. The United Nations Convention on Contracts for the International Sale of Goods (1980), as amended, is specifically excluded from application to this
Agreement.

	11.9
	Alternative Dispute Resolution. Any and all disputes, controversies or claims arising out of or relating to this Agreement, or the
breach, termination, or invalidity thereof, including but not limited to the resolution of potential issues described in various provisions of this Agreement that expressly refer to this
Section 11.9 (including but not limited to Sections 2.9, 4.5, 8.3 and 10.3) shall be finally settled pursuant to the dispute resolution procedures set forth on Exhibit 11.9.

	11.10
	Severability. If any provision of this Agreement for any reason shall be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the
same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

	11.11
	Entire Agreement. This Agreement, including the exhibits, constitutes the entire understanding of the Parties with respect to the
subject matter hereof, and supersedes all prior or contemporaneous writings or discussions, including but not limited to the Prior Agreement. Except as otherwise expressly provided, no agreement
varying or extending the terms of this Agreement shall be binding on either Party unless in a writing signed by an authorized representative of each Party.

	11.12
	Headings. The headings of the paragraphs and subparagraphs of this Agreement have been added for the convenience of the parties and
shall not be deemed a part hereof.

	11.13
	Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute a single
Agreement. In proving this Agreement, it shall be necessary to produce or account for more than one counterpart signed by the Party with respect to whom proof is sought. 

(Remainder
of page intentionally left blank) 

 

        IN
WITNESS WHEREOF, each Party has caused this Distribution Agreement to be executed on its behalf by its duly authorized officer as of the Effective Date. 

	i-STAT Corporation	 	Heska Corporation
	

By:	
 	

/s/ John Mooradian
 JOHN MOORADIAN	
 	

By:	
 	

/s/ Jason Napolitano
 JASON NAPOLITANO
	

Its:	
 	

President	
 	

Its:	
 	

Chief Financial Officer
	

Date:	
 	

October 29, 2004	
 	

Date:	
 	

October 28, 2004

   LIST OF EXHIBITS  

	Exhibit Number
 
	 	Exhibit Name

	1.16	 	[***]
	1.29	 	Products and Purchase Prices
	3.8	 	Bank Wire Transfer Information
	7.1	 	End User Warranties
	11.2	 	Annual Cartridge Purchase Calculation
	11.3A	 	[***]
	11.3B	 	[***]
	11.3C	 	[***]
	11.3D	 	[***]
	11.3E	 	[***]
	11.3F	 	[***]
	11.9	 	Alternative Dispute Resolution

 

EXHIBIT 1.16  

[***]

 

Exhibit 1.29

PRODUCTS AND PURCHASE PRICES  

Analyzer and Associated Parts Price List  

	Analyzer

Product No.
 
	 	Description
	 	Price

	210002	 	Series 200 analyzer	 	[***]
	111700	 	HP Portable Printer	 	[***]
	111501	 	Portable printer Paper	 	[***]
	111502	 	HP Portable Printer AC Adapter	 	[***]
	112102	 	Printer Cradle w/o IR Link	 	[***]
	111003	 	9 Volt lithium batteries (6/box)	 	[***]
	131000	 	Aqueous Controls Level 1	 	[***]
	131500	 	Aqueous Controls Level 2	 	[***]
	132000	 	Aqueous Controls Level 3	 	[***]
	135681	 	Calibration Verification Set	 	[***]
	136400	 	Level 1 ACT Control (Kit)	 	[***]
	136500	 	Level 2 ACT Control (Kit)	 	[***]
	111400	 	Capillary tubes 65 μL	 	[***]
	112202	 	IR Link with cradle	 	[***]
	112212	 	Analyzer programming kit	 	[***]
	011996-01	 	i-STAT Binders	 	[***]
	620001	 	i-STAT System Manual—UK English	 	[***]
	620002	 	i-STAT System Manual—German	 	[***]
	620003	 	i-STAT System Manual—French	 	[***]
	620004	 	i-STAT System Manual—Spanish	 	[***]
	620005	 	i-STAT System Manual—Italian	 	[***]
	620006	 	i-STAT System Manual—Dutch	 	[***]
	620007	 	i-STAT System Manual—Swedish	 	[***]
	NOT Available	 	i-STAT System Manual—Portuguese	 	[***]
	130100	 	Electronic Simulator	 	[***]
	SRP200	 	Analyzer repair cost—non warranty	 	[***]
	SRP230	 	Portable printer repair cost	 	[***]

 

Exhibit 1.29

PRODUCTS AND PURCHASE PRICES  

Cartridge Price List  

	 
	 	 
	 	 
	 	United States
	 	Rest of World

	Cartridge

Product No.
 
	 	 
	 	 

	 	Description
	 	Qty/Box
	 	Price/Test
	 	Price/Box
	 	Price/Test
	 	Price/Box

	220300	 	EG7+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	220200	 	EG6+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	220100	 	G3+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	125000-02	 	EC8+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	121000-02	 	6+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	123000-02	 	EC6+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	121500-02	 	EC4+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	120100-02	 	G	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	320100	 	creatinine	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	220400	 	CG8+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	420300	 	ACT	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	220550	 	CG4+	 	25	 	[***]	 	[***]	 	[***]	 	[***]
	120500-02	 	E3+	 	25	 	[***]	 	[***]	 	[***]	 	[***]

 

Exhibit 1.29

PRODUCTS AND PURCHASE PRICES  

Service Repair Parts  

	i-STAT Part Number
 
	 	Description
	 	Price

	010762-01	 	10 pin connector Digital Bd	 	[***]
	010559-01	 	20 pin Connector—Nyebar	 	[***]
	011882-01	 	200 Cover Screw	 	[***]
	012378-01	 	200 Display (Double)	 	[***]
	011678-01 02	 	200 Display (Single)	 	[***]
	011832-01	 	200 External Back Housing	 	[***]
	012086-01	 	200 Housing Feet	 	[***]
	012203-01 01	 	200 Hybrid Flex Cable	 	[***]
	010534-01	 	200 Thermal Probe	 	[***]
	012156-01	 	5 Minute Epoxy	 	[***]
	010760-01	 	9 pin connector Digital Bd.	 	[***]
	010941-02 01	 	Abbott Boxes	 	[***]
	012369-01	 	Assy, Battery Cable	 	[***]
	012369-01 01	 	Battery Flex Assembly	 	[***]
	010501-01 01	 	Bowed Clip	 	[***]
	010941-01	 	Boxes (i-STAT)	 	[***]
	010087-02	 	BT101—Lithium Battery (Double)	 	[***]
	012333-01 01	 	BT1—Lithium Battery (Single)	 	[***]
	012328-01 01	 	C119 / C124	 	[***]
	010032-05	 	Capcitor—C186	 	[***]
	012217-01 01	 	Cartridge Door	 	[***]
	015506-01	 	Clip Retainer	 	[***]
	012055-01	 	Cover, Battery compartment	 	[***]
	011856-02	 	Damper (Double Length)	 	[***]
	011856-05	 	Damper (Double Width)	 	[***]
	011856-04	 	Damper (Quad Length)	 	[***]
	011856-03	 	Damper (Triple Length)	 	[***]
	012378-01	 	Display—(Double bd.)	 	[***]
	011678-02	 	Display—(Single bd.)	 	[***]
	012605-01 01	 	Display block, Hantronix	 	[***]
	010091-01	 	Display Window	 	[***]
	010618-01	 	FLASH U56(U109)	 	[***]
	010500-01 01	 	Flat Clip	 	[***]
	015384-01 02	 	Follower Arm Assembly	 	[***]
	015473-01 03	 	Fork	 	[***]
	012341-01 02	 	Front Housing (AID Keypad)	 	[***]
	010491-01 02	 	Guide Pin	 	[***]
	012368-01	 	Harness flex cable (200 single board)	 	[***]
	010731-01	 	Hybrid	 	[***]
	012203-01	 	Hybrid Flex cable	 	[***]
	012023-01	 	Keypad PCB Rivet	 	[***]
	012278-01	 	Keypad PCB Screw	 	[***]
	012340-01 05	 	Keypad PCB—Double bd.	 	[***]
	012891-01 01	 	Latch	 	[***]
	012373-01 01	 	Latch Retainer	 	[***]
	010087-02	 	Lithium battery—200 analyzer	 	[***]
	010493-01	 	Pivot Pin	 	[***]
	010627-01	 	R120	 	[***]
	010070-26	 	Ram U57 (U106)	 	[***]
	010070-27	 	RTC (DP8570A)	 	[***]
	010572-01 03	 	Spiral, Spring Latch	 	[***]
	010763-01	 	Start Cycle Switch double board	 	[***]
	010764-01	 	Start Cycle Switch single board	 	[***]
	010534-01	 	Thermal probes	 	[***]
	010311-01	 	Threadlocker 222	 	[***]
	010070-05	 	U105 / U112	 	[***]
	010070-27	 	U107—RTC (DP8570A)	 	[***]
	012324-11 01	 	U53—RTC	 	[***]
	012324-01 01	 	U89—FPGA	 	[***]

   EXHIBIT 3.8

Bank Wire Transfer Information  

Domestic wires:  

Wachovia
Bank

Charlotte, NC 

ABA#
053000219 

Account
Name:    Abbott—i-STAT USD

Account Number:    [***]

Reference:    Your Company Name & Invoice # 

International wires:  

Wachovia
Bank

Charlotte, NC 

SWIFT:
PNBPUS33 

Account
Name:    Abbott—i-STAT USD

Account Number:    [***]

Reference:    Your Company Name & Invoice # 

 

EXHIBIT 7.1

CUSTOMER WARRANTIES  

Warranty

        i-STAT
warrants this medical product (excluding disposable or consumable supplies) against defects in materials and workmanship for one year from the date of shipment. If
i-STAT receives notice of such defects during the warranty period, i-STAT shall, at its option, either repair or replace products which prove to be defective. With respect to
software or firmware, if i-STAT receives notice of defects in these products during the warranty period, i-STAT shall repair or replace software media and firmware which does
not execute their programming instructions due to such defects. i-STAT does not warrant that the operating of the software, firmware or hardware shall be uninterrupted or error free. If
i-STAT is unable, within a reasonable time, to repair or replace any product to a condition as warranted, Buyer shall be entitled to a refund of the purchase price upon return of the
product to i-STAT. 

        Note:
Warranty rights may vary from state to state, province to province and country to country. 

Limitations
of Warranty 

        The
foregoing warranty shall not apply to defects resulting from: 

	1.
	Improper
or inadequate maintenance by Buyer or an unauthorized person, 
	2.
	Using
accessories and/or consumables that are not approved by i-STAT, 
	3.
	Buyer-supplied
software or interfacing, 
	4.
	Unauthorized
repairs, modifications, misuse, or damage caused by disposable batteries, or rechargeable batteries not supplied by Abbott. 
	5.
	Operating
outside of the environmental specifications of the product, or 
	6.
	Improper
site preparation or maintenance. 

        THE
WARRANTY SET FORTH ABOVE IS EXCLUSIVE AND NO OTHER WARRANTY, WHETHER WRITTEN OR ORAL, IS EXPRESSED OR IMPLIED. ABBOTT SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OR MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. 

 

EXHIBIT 11.2

ANNUAL CARTRIDGE PURCHASE CALCULATION  

	Contract Year:	 	    
	 	 	 	 
	

i-STAT Calculation:	
 	

    
	
 	

date provided to Heska:	
 	

    

	

Approved by Heska:	
 	

o Yes / o No*	
 	

date approved/rejected by Heska:	
 	

    

	
*if No:	
 	

 	
 	

 	
 	

 
	Heska Estimate:	 	    
	 	date provided to i-STAT:	 	    

	

Approved by i-STAT:	
 	

o Yes / o No**	
 	

date approved/rejected by i-STAT:	
 	

    

	
**if No:	
 	

 	
 	

 	
 	

 
	Agreed Calculation:	 	    
	 	date agreed:	 	    

Official Determination of Cartridge Purchases

for Contract Year                          is:
                        .  

	i-STAT Corporation	 	Heska Corporation
	

By:	
 	

    
	
 	

By:	
 	

    

	

Its:	
 	

    
	
 	

Its:	
 	

    

	

Date:	
 	

    
	
 	

Date:	
 	

    

 

EXHIBIT 11.3A  

        [***] 

 

EXHIBIT 11.3B  

        [***] 

 

EXHIBIT 11.3C  

        [***] 

 

EXHIBIT 11.3D  

        [***] 

   EXHIBIT 11.3E  

        [***] 

 

EXHIBIT 11.3F  

        [***] 

 

EXHIBIT 11.9

ALTERNATIVE DISPUTE RESOLUTION  

        The parties recognize that from time to time a dispute may arise relating to either party's rights or obligations under this Agreement. The parties agree that any
such dispute shall be resolved by the Alternative Dispute Resolution ("ADR") provisions set forth in this Exhibit, the result of which shall be binding
upon the parties. 

        To
begin the ADR process, a party first must send written notice to the other party in accordance with the terms of the Agreement describing the dispute and requesting attempted
resolution by good faith negotiations between their respective president or principal executive officer(s) (or their designees) of the affected subsidiaries, divisions, or business units within
twenty-eight (28) days after such notice is received (all references to "days" in this ADR provision are to calendar days). If the matter has not been resolved within twenty-eight
(28) days of the notice of dispute, or if the parties fail to meet within
such twenty-eight (28) days, either party may initiate an ADR proceeding as provided herein. The parties shall have the right to be represented by counsel in such a proceeding. 

        1.     To
begin an ADR proceeding, a party shall provide written notice to the other party in accordance with the terms of the Agreement of the issues to be resolved by ADR.
Within fourteen (14) days after its receipt of such notice, the other party may, by written notice to the party initiating the ADR, add additional issues to be resolved within the same ADR. 

        2.     Within
twenty-one (21) days following receipt of the original ADR notice, the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable to agree on a mutually acceptable neutral within such period, either party may request the President of the CPR Institute
for Dispute Resolution ("CPR"), 366 Madison Avenue, 14th Floor, New York, New York 10017, to select a neutral pursuant to the following procedures: 

        (a)   The
CPR shall submit to the parties a list of not less than five (5) candidates within fourteen (14) days after receipt of the request, along with a  Curriculum Vitae for each candidate. No
candidate shall be an employee, director, shareholder or Affiliate of either party or any of their subsidiaries
or affiliates. 

        (b)   Such
list shall include a statement of disclosure by each candidate of any circumstances likely to affect his or her impartiality. 

        (c)   Each
party shall number the candidates in order of preference (with the number one (1) signifying the greatest preference) and shall deliver the list to the CPR
within seven (7) days following receipt of the list of candidates. If a party believes a conflict of interest exists regarding any of the candidates, that party shall provide a written
explanation of the conflict to the CPR along with its list showing its order of preference for the candidates. Any party failing to return a list of preferences on time shall be deemed to have no
order of preference. 

        (d)   If
the parties collectively have identified fewer than three (3) candidates deemed to have conflicts, the CPR immediately shall designate as the neutral the
candidate for whom the parties collectively have indicated the greatest preference. If a tie should result between two candidates, the CPR may designate either candidate. If the parties collectively
have identified three (3) or more candidates deemed to have conflicts, the CPR shall review the explanations regarding conflicts and, in its sole discretion, may either (i) immediately
designate as the neutral the candidate for whom the parties collectively have indicated the greatest preference, or (ii) issue a new list of not less than five (5) candidates, in which
case the procedures set forth in subparagraphs 2(a)-2(d) shall be repeated.

 

        3.     No
earlier than twenty-eight (28) days or later than fifty-six (56) days after selection, the neutral shall hold a hearing to resolve each of
the issues identified by the parties. The ADR proceeding shall take place at a location agreed upon by the parties. If the parties cannot agree, the neutral shall designate a location other than the
principal place of business of either party or any of their subsidiaries or Affiliates. 

        4.     At
least seven (7) days prior to the hearing, each party shall submit the following to the other party and the neutral: 

        (a)   a
copy of all exhibits on which such party intends to rely in any oral or written presentation to the neutral; 

        (b)   a
list of any witnesses such party intends to call at the hearing, and a short summary of the anticipated testimony of each witness; 

        (c)   a
proposed ruling on each issue to be resolved, together with a request for a specific damage award or other remedy for each issue. The proposed rulings and remedies
shall not contain any recitation of the facts or any legal arguments and shall not exceed one (1) page per issue. The parties agree that neither side shall seek as part of its remedy any
punitive damages. 

        (d)   a
brief in support of such party's proposed rulings and remedies, provided that the brief shall not exceed twenty (20) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR proceeding. 

        Except
as expressly set forth in subparagraphs 4(a)-4(d), no discovery shall be required or permitted by any means, including depositions, interrogatories, requests for
admissions, or production of documents. 

        5.     The
hearing shall be conducted on two (2) consecutive days and shall be governed by the following rules: 

        (a)   Each
party shall be entitled to five (5) hours of hearing time to present its case. The neutral shall determine whether each party has had the five
(5) hours to which it is entitled. 

        (b)   Each
party shall be entitled, but not required, to make an opening statement, to present regular and rebuttal testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument. Cross-examination of witnesses shall occur immediately after their direct testimony, and cross-examination time shall be charged against the party conducting
the cross-examination. 

        (c)   The
party initiating the ADR shall begin the hearing and, if it chooses to make an opening statement, shall address not only issues it raised but also any issues raised
by the responding party. The responding party, if it chooses to make an opening statement, also shall address all issues raised in the ADR. Thereafter, the presentation of regular and rebuttal
testimony and documents, other evidence, and closing arguments shall proceed in the same sequence. 

        (d)   Except
when testifying, witnesses shall be excluded from the hearing until closing arguments. 

        (e)   Settlement
negotiations, including any statements made therein, shall not be admissible under any circumstances. Affidavits prepared for purposes of the ADR hearing also
shall not be admissible. As to all other matters, the neutral shall have sole discretion regarding the admissibility of any evidence. 

        6.     Within
seven (7) days following completion of the hearing, each party may submit to the other party and the neutral a post-hearing brief in support of
its proposed rulings and remedies, provided

 
that such brief shall not contain or discuss any new evidence and shall not exceed ten (10) pages. This page limitation shall apply regardless of the number of issues raised in the ADR
proceeding. 

        7.     The
neutral shall rule on each disputed issue within fourteen (14) days following completion of the hearing. Such ruling shall adopt in its entirety the proposed
ruling and remedy of one of the parties on each disputed issue but may adopt one party's proposed rulings and remedies on some issues and the other party's proposed rulings and remedies on other
issues. The neutral shall not issue any written opinion or otherwise explain the basis of the ruling. 

        8.     The
neutral shall be paid a reasonable fee plus expenses. These fees and expenses, along with the reasonable legal fees and expenses of the prevailing party (including
all expert witness fees and expenses), the fees and expenses of a court reporter, and any expenses for a hearing room, shall be paid as follows: 

        (a)   If
the neutral rules in favor of one party on all disputed issues in the ADR, the losing party shall pay 100% of such fees and expenses. 

        (b)   If
the neutral rules in favor of one party on some issues and the other party on other issues, the neutral shall issue with the rulings a written determination as to how
such fees and expenses shall be allocated between the parties. The neutral shall allocate fees and expenses in a way that bears a reasonable relationship to the outcome of the ADR, with the party
prevailing on more issues, or on issues of greater value or gravity, recovering a relatively larger share of its legal fees and expenses. 

        9.     The
rulings of the neutral and the allocation of fees and expenses shall be binding, non-reviewable, and non-appealable, and may be entered as a
final judgment in any court having jurisdiction. 

        10.   Except
as provided in paragraph 9 or as required by law, the existence of the dispute, any settlement negotiations, the ADR hearing, any submissions (including
exhibits, testimony, proposed rulings, and briefs), and the rulings shall be deemed Confidential Information. The neutral shall have the authority to impose sanctions for unauthorized disclosure of
Confidential Information. 

        11.   All
ADR hearings shall be conducted in the English language. 

QuickLinks

Exhibit 10.31

DISTRIBUTION AGREEMENTQuickLinks
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Exhibit 10.32    
    

[***]—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
  AMENDED AND RESTATED
  BOVINE VACCINE DISTRIBUTION AGREEMENT    
    

        This Second Amendment ("Second Amendment") is entered into as of the 10th day of December, 2004
("Effective Date") by and between DIAMOND ANIMAL HEALTH, INC., 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") (together, the "Agreement"). 

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

        WHEREAS,
Distributor made the 2004 Prepayment of [***] pursuant to Section 3.04(ii) of the Agreement in April 2004 and subsequently, pursuant to the
First Amendment, Distributor made an additional [***] prepayment to Diamond toward the purchase of Products and/or Initial Products for Contract Year 2005 (collectively, the
"[***] Prepayment"); and 

        WHEREAS,
Distributor and Diamond are parties to a Research, Development and License Agreement dated as of September 20, 2004 (the
"[***] R & D Agreement"), providing
for the development [***] (the "[***] Products"); and 

        WHEREAS,
Distributor and Diamond are parties to a Research, Development and License Agreement dated as of the date hereof (the "[***] R&D
Agreement"), providing for the development [***] (the "[***] Product"); and 

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

        NOW,
THEREFORE, the parties agree as follows: 

        1.    Definitions.    Capitalized terms used herein shall have the meanings ascribed to them in the Agreement, unless
otherwise defined herein. 

        2.    Amendment Fee.    

          (i)  The
[***] Prepayment shall be retained by Diamond as a non-refundable fee paid by Distributor to Diamond for this Second Amendment
(the "Amendment Fee"). No portion of the [***] Prepayment shall be credited toward Distributor's obligations to purchase and pay
for Products. Each of (i) the last two (2) sentences of Section 3.04(ii) of the Original Agreement and (ii) Section 2 of the First Amendment is hereby deleted in its
entirety and shall have no further force or effect. 

         (ii)  If
at any time prior to the end of Contract Year 2009, Diamond's manufacturing facility is shut down and Diamond is unable to supply Products to Distributor as a result
of a regulatory order or force majeure event (as defined in Section 8 of the Agreement) (a "Shut Down Event"), for a period of greater than four
(4) consecutive calendar months (the last day of such four (4) month period, the "Trigger Date"), Diamond shall reimburse to Distributor a
portion of the Amendment Fee as follows: [***] for every month prior to January 2010 in which a Shut Down Event continues, including [***] for
each of the four (4) months beginning on the commencement of the Shut Down Event and ending upon the Trigger Date (the "Shut Down Payment"). Any
such

 
Shut Down Payment shall be made in monthly installments of [***], beginning on the Trigger Date, and continuing on the first day of each calendar month thereafter until the
Shut Down Payment is paid in full. 

        3.    Amendment of Loan.    Pursuant to Section 3.06 of the Agreement, Diamond delivered to Distributor the New
Note to evidence the Loan. Upon execution and delivery of this Second Amendment, the parties shall cancel the New Note and execute and deliver a substitute Note in the form attached hereto as  Exhibit A. 

        4.    Exclusivity.    

          (i)  The
first sentence of Section 1.02 of the Agreement is hereby deleted in its entirety and replaced with the following sentences: 

Distributor's
distribution rights under the Agreement shall be exclusive worldwide for all products identified on Exhibit A attached to the
Agreement and Additional Products added pursuant to Section 2 through Contract Year 2009, except as set forth in this paragraph, and unless earlier terminated in accordance with the provisions
of the Agreement. Distributor's distribution rights under the Agreement shall be nonexclusive during the remaining term of the Agreement following Contract Year 2009, unless Distributor is granted
additional exclusivity rights in accordance with Section 11 of the Second Amendment. 

Except
for the first sentence of Section 1.02 of the Agreement, the remaining provisions of Section 1.02 of the Agreement shall remain in full force and effect. 

         (ii)  Section 3
of the First Amendment is hereby deleted in its entirety and shall have no further force or effect. 

        5.    Territory.    Section 1.03 of the Agreement is hereby deleted in its entirety and replaced with the
following paragraph: 

Subject
to the terms and conditions of this Agreement, Distributor is authorized to sell, have sold and otherwise distribute Products and Additional Products added pursuant to Section 2
(hereafter collectively referred to as ("All Products") in the following territories: (i) worldwide through June 30,
2005, limited only as provided in Section 1.02, and (ii) only in the United States, Africa, China, Mexico and Taiwan through December 15, 2009, limited only as provided in
Section 1.02; provided, that notwithstanding any provision of this Agreement to the contrary, Distributor shall have no distribution rights in Canada after December 15, 2009. 

        6.    Minimums.    

          (i)  The
table set forth in Section 1.04(ii)(A)(1) of the Agreement is hereby deleted in its entirety and replaced with the following table: 

	Contract Year Ending December 15,
 
	 	Minimum Qualified Revenue

	2004	 	[***]
	2005	 	[***]
	2006	 	[***]
	2007	 	[***]
	2008	 	[***]

         (ii)  The
table set forth in Section 1.04(ii)(A)(2) of the Agreement is hereby deleted in its entirety and replaced with the table set forth in Section 6(i) of
this Second Amendment.

 

        (iii)  The
table set forth in Section 1.04(ii)(B) of the Agreement is hereby deleted in its entirety and replaced with the following table: 

	Contract Year Ending December 15,
 
	 	Minimum Initial Product Revenue

	2004	 	[***]
	2005	 	[***]
	2006	 	[***]
	2007	 	[***]
	2008	 	[***]

        (iv)  In
Contract Year 2006 and subsequent Contract Years, if a License has not issued for [***] Products on or before June 30 in any such
Contract Year, the Minimum Qualified Revenue and Minimum Initial Product Revenue set forth in each table in paragraphs (i) through (iii) above shall be reduced by [***]
for such Contract Year, in addition to any adjustment required under Section 6(v) below. 

         (v)  In
Contract Year 2006 and subsequent Contract Years, if a License has been issued for [***] Product on or before June 30 in any such
Contract Year, the Minimum Qualified Revenue and Minimum Initial Product Revenue set forth in each table in paragraphs (i) through (iii) above shall be increased by
[***] for such Contract Year, in addition to any adjustment required under Section 6(iv) above. 

        (vi)  Distributor
shall use its best efforts to maximize sales of Products during the term of the Agreement, in excess of the Minimum Qualified Revenue. 

        7.    Additional Prepayments; Take-or-Pay Obligations.    The Agreement is hereby amended to
add the following new Section 3.04(iii): 

        3.04(iii)(A)    For
purposes of the Agreement, "Contract Quarter" shall mean the quarterly periods during each Contract Year
beginning on December 16, March 16, June 16, and September 16. For purposes of this Agreement, Qualified Revenue for any Contract Year or Contract Quarter includes the
Purchase Price of Products ordered by Distributor for delivery in such Contract Year or Contract Quarter, even if Diamond is unable to make timely delivery in such Contract Year or Contract Quarter. 

        (B)  On
or before the first day of each Contract Quarter in Contracts Years 2005 through 2009, inclusive, Distributor shall pay to Diamond an amount equal to
[***], which amount shall be credited, effective upon issuance of Diamond invoices, against the invoice prices for Products to be shipped in such Contract Year (each, a
"Minimum Prepayment"). Distributor shall not be required to make a Minimum Prepayment during a Shut Down Event. 

        (C)  If
Qualified Revenues are less than [***] in Contract Year 2005, then Distributor shall pay an amount equal to such shortfall to Diamond;
provided, that Distributor shall not be obligated to make such payment if a Shut Down Event occurs during Contract Year 2005. 

        (D)  If
Qualified Revenues are less than [***] in any Contract Quarter during Contract Years 2006 through 2009, inclusive, then Distributor shall pay
to Diamond an amount equal to such shortfall; provided, that Distributor shall not be obligated to make such payment for any Contract Quarter in which a Shut Down Event occurs or continues. 

        (E)  Diamond
shall be entitled to retain any portion of the Minimum Prepayments not credited to actual purchases of Products to satisfy Distributor's
take-or-pay obligations in the preceding paragraphs (C) and (D). Distributor's obligation to make the take-or-pay payments pursuant to
paragraphs (C) and (D) above shall be absolute, regardless of whether or not Distributor elects to make an Additional Payment or Additional Initial Product Payment to

 
maintain its exclusivity under the Agreement and regardless of whether Distributor's exclusivity under the Agreement shall have terminated for any other reason. 

        8.    Price Adjustment [***].    Notwithstanding any provision of the Agreement (and its
Exhibits) to the contrary, the price for [***] shall be increased as set forth on Exhibit B attached hereto, effective
upon execution and delivery of this Second
Amendment; provided, that the effective date of such price increase for [***] to be distributed in Africa shall be September 1, 2005. 

        9.    Returns.    Section 5.05 of the Agreement is hereby deleted in its entirety and shall be of no further
force and effect, effective as of December 16, 2004; provided, that Distributor may return Products shipped during Contract Year 2004 in accordance with such Section 5.05 on or before
December 15, 2004. 

        10.    Special Termination Right.    Section 6.04 of the Agreement is hereby redesignated as
Section 6.05 and the following new Section 6.04 is hereby added to the Agreement: 

        6.04    Special Termination Right.    Diamond shall have the right, but not the obligation, to terminate this
Agreement, effective as of December 15, 2010, upon at least 270 days prior written notice to Distributor; provided, that all of the following conditions have been met: 

          (i)  a
License has issued prior to the beginning of Contract Year 2008 with respect to monovalent and combination [***] Products; 

         (ii)  a
License has issued prior to the beginning of Contract Year 2008 with respect to a [***] Product; 

        (iii)  a
License has issued prior to the beginning of Contract Year 2008 with respect to [***]; 

        (iv)  Distributor
has maintained its exclusive distribution rights in accordance with the terms of the Agreement for both Contract Years 2008 and 2009; and 

         (v)  Distributor's
aggregate, cumulative Qualified Revenue for Contract Years 2004 through 2009, inclusive, is less than [***]. 

        11.   The
Agreement is hereby amended to add the following new Section 3.07 (see Examples 1 and 2 of  Exhibit C): 

        3.07    [***] Compensation.    If a License is not issued for [***] on
or before January 31, 2006, Diamond shall elect (the "[***] Election") to take one of the following actions for the
benefit of Distributor, such election to be made at Diamond's sole discretion: (i) pay to Distributor monthly installments of [***] for each full or partial month after
January 2006 in which a License has not issued, not to exceed 30 months ("[***] Installments"), or alternatively,
(ii) grant to Distributor one additional month of exclusive distribution rights under this Agreement for each month after January 2006 in which a License has not issued, not to exceed
30 months ("[***] Extension"). Diamond shall make the [***] Election, if required, on or before
the later of (x) 90 days after such License has issued or (y) July 31, 2007; provided, that if such License is not issued on or before July 31, 2007, the
[***] Election shall be made on July 31, 2007. If Diamond elects to make the [***] Installments, the first such [***]
installment shall be made on the first day of the month after Diamond makes the [***] Election and shall continue on the first day of each succeeding month until the number of
installments payable under (i) above has been made. If Diamond elects to grant the [***] Extension, such additional months of exclusive rights shall begin on
December 16, 2009 or, such earlier date, if any, on which Distributor's exclusivity rights would otherwise terminate under the terms and conditions of this Agreement. No Minimum Qualified
Revenue requirement shall apply during the period of any [***] Extension.

 

        12.    Reimbursement under [***] R&D Agreement.    For the purposes of Section 12(a)
and (b), "[***] Spending" shall mean, as of a particular date, the lesser of (i) the [***]
Expenditures (as defined in the [***] R&D Agreement) incurred as of such date, times [***] or (ii) [***]. 

        (a)   If
a License has not issued for one or more of the [***] Products on or before June 15, 2008, Diamond shall pay to Distributor, in
eighteen (18) equal and consecutive monthly installments beginning July 15, 2008 and ending December 15, 2009, an amount equal to one-half (1/2) of the
[***] Spending as of June 15, 2008 (the "Interim Reimbursement"). 

        (b)   If
a License has not issued for one or more of the [***] Products on or before December 15, 2009, Diamond shall pay to Distributor no
later than January 1, 2010, an amount equal to one-half (1/2) of the [***] Spending as of December 15, 2009 less the Interim
Reimbursement (the "Final Payment") (see Example 3 of  Exhibit C). 

        13.    Confidentiality of Agreement.    Notwithstanding any provision of the Agreement to the contrary, this Second
Amendment shall be publicly available information for SEC filing, press release and other
discussion purposes; provided, that the highlighted items set forth in Exhibit D attached hereto shall be redacted from any initial SEC filings
and shall be deemed Confidential Information under Section 13.05 of the Agreement. The parties also agree to a press release to announce this Second Amendment, attached hereto as  Exhibit E.

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

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

	 	 	DIAMOND ANIMAL HEALTH, INC.
	 	 	 	 	 
	 	 	By:	 	/s/  JASON NAPOLITANO      
 JASON NAPOLITANO
	 	 	Its:	 	Chief Financial Officer

	 	 	 	 	 
	 	 	 	 	 
	 	 	AGRI LABORATORIES, LTD.
	 	 	 	 	 
	 	 	By:	 	/s/  STEVE SCHRAM      
 STEVE SCHRAM
	 	 	Its:	 	President/CEO

EXHIBIT A

 AMENDED AND RESTATED

PROMISSORY NOTE  

	$500,000.00	 	as of April 15, 2002

Des Moines, Iowa

        FOR
VALUE RECEIVED, the undersigned DIAMOND ANIMAL HEALTH, INC., an Iowa corporation ("Maker"), promises to pay to AGRI
LABORATORIES, LTD., a Delaware corporation ("Holder"), or order, at such place as the Holder of this Note shall designate in writing, the sum of
Five Hundred Thousand Dollars ($500,000.00) in lawful money of the United States of America. Beginning from the date hereof interest shall accrue until the effective date of that certain Second
Amendment to the Distribution Agreement (defined below) on the outstanding principal balance at the "prime rate" plus one-quarter percent (1/4%) per annum and thereafter, at
the "prime rate" plus one percent (1%) per annum. Accrued interest shall be paid quarterly on each quarterly anniversary of the date of this Note, and shall accrue based upon a thirty-day
month and a 360-day year. Principal under this Note shall be paid in one annual installment on May 31, 2006. 

        All
principal and any accrued but unpaid interest shall be due and payable on the maturity date of this Note. 

        Notwithstanding
any provision of this Note to the contrary, all principal and unpaid accrued interest shall be due and payable on the ninetieth (90th) day following the date that either
(i) Holder's exclusivity rights under that certain Amended and Restated Bovine Vaccine Distribution Agreement dated as of September 30, 2002, as amended (the
"Distribution Agreement") are terminated due to
Distributor's nonpayment of any Additional Payment under the Distribution Agreement or (ii) in the event of a merger, sale or fifty percent (50%) change in ownership of Maker. 

        The
"prime rate" shall be the annual rate of interest announced from time to time by Wells Fargo Business Credit, Inc. ("Wells
Fargo") as its prime rate. The interest accruing on the principal balance of this Note shall fluctuate from time to time concurrently with changes in the prime rate, effective
as of the date any change in the prime rate is publicly announced. If Wells Fargo ceases to announce the prime rate, the prime rate as published in the Wall Street Journal in its "Money Rates" section
or a similar financial publication shall be used, as reasonably determined by Maker. 

        Maker
shall have the right at any time or from time to time to prepay all or a portion of the principal or interest without premium or penalty, and such prepayments shall be applied
first to accrued interest and then to principal. 

        If
default be made in the payment of any of the installments of principal, interest, or other amounts when due under this Note, the entire principal sum and accrued interest and all
other amounts due hereunder shall become due at the option of Holder if not paid within ten (10) days of written notice to Maker. 

        In
the event garnishment, attachment, levy or execution is issued against any substantial or material portion of the property or assets of Maker, or any of them if more than one, or upon
the happening of any event which constitutes a default pursuant to the terms of any agreement or other instrument entered into or given in connection herewith, or upon the adjudication of Maker, or
any of them if more than one, a bankrupt, such event shall be deemed a default hereunder and Holder may declare this Note immediately due and payable without notice to Maker or exercise any of its
remedies hereunder or at law or equity. Should suit be brought to recover on this Note, or should the same be placed in the hands of an attorney for collection, Maker promises to pay all reasonable
attorneys' fees and costs incurred in connection therewith. 

        Failure
of Holder to exercise any option hereunder shall not constitute a waiver of the right to exercise the same in the event of any subsequent default, or in the event of continuance
of any existing default.

        Maker
waives demand, diligence, presentment for payment, protest and notice of demand, protest, nonpayment and exercise of any option hereunder. Maker agrees that the granting without
notice of any extension or extensions of time for payment of any sum or sums due hereunder, or for the
performance of any covenant, condition or agreement hereof shall in no way release or discharge the liability of Maker hereof. 

        This
Note shall be governed by the laws of the State of Iowa. 

        Time
is of the essence of this Note and each and every term and provision hereof. 

        This
Note is secured by that certain Security Agreement, dated as of even date herewith, by and between Maker and Holder. Debtor and its affiliates are parties to that certain Second
Amended and Restated Credit and Security Agreement by and between Debtor and Wells Fargo Business Credit, Inc., fka Norwest Business Credit, Inc., a Minnesota corporation
("Wells Fargo"), originally dated June 4, 2000, as amended, that certain Loan Agreement dated as of April 4, 1994 and related Promissory
Note between the City of Des Moines, Iowa and Debtor, as amended, and that certain CEBA Loan Agreement dated January 20, 1994 and related Promissory Notes between Iowa Department of Economic
Development and Debtor, as amended (collectively, the "Senior Loan Agreements" and the lender parties thereto collectively, the
"Senior Lenders"). This Note and Maker's obligations hereunder shall be junior and subordinated to all any and all indebtedness and obligations for
borrowed money (including, without limitation, principal, premium (if any), interest, fees, charges, expenses, costs, professional fees and expenses, and reimbursement obligations)
("Indebtedness") at any time owing by Debtor to the Senior Lenders, their successors and assigns under the Senior Loan Agreements or otherwise, and the
extension, renewal or refinancing (including without limitation any additional advances made in connection therewith) of all or any portion of such Indebtedness by any of the Senior Lenders or any
successor lender and any and all security interests securing any portion of such Indebtedness and additional advances from time to time (such Indebtedness, additional advances and security interests,
the "Senior Indebtedness"). Holder hereby agrees to take such actions, and to execute and deliver such documents and instruments, as shall be requested
from time to time by any holder of Senior Indebtedness to confirm and further implement such subordination. In addition, this Note is subject to the terms and conditions of that certain Subordination
Agreement dated as of even date herewith by and among Maker, Holder and Wells Fargo. 

        This
Note replaces that certain Amended and Restated Promissory Note dated as of April 15, 2004 given by Maker to Holder. 

        THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR PERTAINING TO THIS NOTE.

	 	 	DIAMOND ANIMAL HEALTH, INC., an Iowa

corporation, Maker
	 	 	By	 	/s/  JASON NAPOLITANO      
 JASON NAPOLITANO
	 	 	Its:	 	Chief Financial Officer

        THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT BY AGRI LABORATORIES, LTD. IN FAVOR OF WELLS FARGO BUSINESS CREDIT, INC. DATED
AS OF APRIL 15, 2002.

EXHIBIT B  

 Pricing for [***]  

	[***]	 	[***]
	

[***]	
 	

[***]
	

[***]	
 	

[***]
	

[***]	
 	

[***]

EXHIBIT C  

 Calculation Examples  

Example 1—Assume (i) a License for [***] Products is never obtained, (ii) Diamond elects, on
July 31, 2007, to extend Distributor's exclusivity rights and (iii) Distributor's exclusivity rights are set to expire after December 15, 2009. In this example, Distributor would
maintain an additional 30 months of exclusivity, or until June 15, 2011. Alternatively, if Diamond elects, on July 31, 2007, to make cash payments to Distributor, Diamond would
make 30 consecutive monthly payments of [***] beginning on August 1, 2007 which would total [***]. 

Example 2—Assume (i) a License for [***] Products is obtained on June 15, 2007, (ii) Diamond
elects, on September 13, 2007, to extend Distributor's exclusivity rights and (iii) Distributor's exclusivity rights are set to expire after December 15, 2009. In this example,
Distributor would maintain an additional 17 months of exclusivity, or until May 15, 2011. Alternatively, if Diamond elects, on September 13, 2007, to make cash payments to
Distributor, Diamond would make 17 consecutive monthly payments of [***] beginning on October 1, 2007 which would total [***]. 

Example 3—At June 15, 2008, [***] Spending is [***], and at December 15, 2009,
[***] Spending is [***]. A License for the [***] Product has not been obtained by December 15, 2009. This is covered
under Section 12(a) and (b). As a License for the [***] Product has not been obtained as of June 15, 2008, Diamond would begin to make Interim Reimbursement
payments equal to [***] per month beginning on July 15, 2008 and ending on December 15, 2009 for a total of [***], such monthly payments
calculated as one half of [***] Interim [***] Spending divided by 18. On January 1, 2010, Diamond would make the Final Payment to Distributor of
[***], calculated as one half of [***] less the total amount of the Interim Reimbursement ([***]). In this example, Distributor
collects [***] ([***] + [***]) or half of its original investment in the failed research project. 

EXHIBIT D  

 Redacted Form of Second Amendment  

EXHIBIT E  

[PRESS
RELEASE LOGO OF HESKA CORPORATION] 

FOR
IMMEDIATE RELEASE 

At Heska Corporation:
  Jason Napolitano, Executive Vice President & CFO

        (970) 493-7272, Ext. 4105 

Heska Corporation Announces Amended Agreement with AgriLabs  

        FORT COLLINS, CO, December 13, 2004—Heska Corporation (NASDAQ:HSKA) today announced that an amendment
to the current distribution agreement with Agri Laboratories, Ltd., or AgriLabs, has been signed. Under the amendment, currently outstanding prepayments from AgriLabs will be considered an upfront fee
and the pricing on certain products has been increased. AgriLabs' minimums to maintain exclusivity on certain bovine vaccines have been significantly reduced and no longer increase annually, although
the minimums are subject to adjustment in certain circumstances. 

        Under
the amendment, AgriLabs will continue to enjoy access to these bovine vaccines in the United States, Africa, China, Mexico and Taiwan to December 2013. Subject to minimum purchase
requirements, AgriLabs' rights in these regions will be exclusive at least to December 2009 and could remain exclusive up to December 2013 based on other contractual arrangements. Heska will be free
to sell these bovine vaccines to any party of its choosing in other regions of the world. AgriLabs will also maintain non-exclusive rights to these bovine vaccines in Canada to December 2009. 

        In
addition, two separate research and development agreements have been signed with AgriLabs. These agreements specified risk sharing provisions where AgriLabs has agreed to fund the
initial research and
development expenditures, but will be entitled to certain additional product rights and/or reimbursement of expenditures under certain circumstances. The research and development programs are intended
to enhance the quality of the current line of bovine vaccines. 

        "We
are pleased we have found a mutually agreeable solution to this matter," said Robert Grieve, Heska's Chairman and CEO. "AgriLabs has been an excellent customer of ours in the past
and we are happy we will continue to benefit from their livestock market expertise in the future." 

        "We
have long been impressed with these vaccines, which we sell under our label and tradenames Titanium® and MasterGuard®", said Steve Schram, AgriLabs' President
and CEO. "We are hopeful that the research and development agreements we have signed will allow us to maintain the leadership position we have established in the marketplace with these vaccines." 

About Heska  

        Heska Corporation (NASDAQ: HSKA) sells advanced veterinary diagnostic and other specialty veterinary products. Heska's state-of-the-art offerings to its customers
include diagnostic and monitoring instruments and supplies as well as single use, point-of-care tests, vaccines and pharmaceuticals. The company's core focus is on the canine and feline markets where
it strives to develop high value products for unmet needs in veterinary medicine. For further information on Heska and its products, visit the company's website at www.heska.com. 

About AgriLabs  

        AgriLabs, Ltd. is the largest private label marketer of veterinary vaccines and pharmaceuticals in the United States. AgriLabs is proficient in sales, marketing
and technology transfer of current and future compounds or antigens for both food and companion animal markets. The AgriLabs distribution network of distributor owners is the largest in the United
States and has the ability to efficiently reach the livestock and consumer marketplace through various veterinary, direct and retail channels. For

additional information on AgriLabs and its products or distributors, visit the company website at www.agrilabs.com. 

Forward-Looking Statements  

        This announcement contains express or implied forward-looking information about Heska's products, business relationships and research and
development activities. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Heska's actual results, performance or achievements to be
materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Heska's achievement of these results may be affected by many factors,
including among others, the following: uncertainties relating to reliance on the sales and marketing efforts of a third party, over which Heska has no direct control; competition; uncertainties
regarding the outcome of research and development projects currently contemplated; delays in or failure to achieve market acceptance of any products resulting from such research and development
activities; the failure of third party distribution network members who have purchased large quantities of Heska's products in the past to continue to do so in the future; uncertainties related to
Heska's ability to obtain and maintain costly regulatory approvals for its products; uncertainties related to Heska's ability to successfully market and sell its current and any future products,
including in nations where such products are not currently sold; reliance on key personnel; and the risks set forth in Heska's filings and future filings with the Securities and Exchange Commission,
including those set forth in Heska's Annual Report on Form 10-K for the year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2004.  

### 

QuickLinks

Exhibit 10.32

SECOND AMENDMENT TO AMENDED AND RESTATED BOVINE VACCINE DISTRIBUTION AGREEMENT

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