NINTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
Exhibit 10.1
[***] – 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.
NINTH AMENDMENT TO
SECOND AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of May 10, 2005, is made by and between Heska Corporation, a Delaware corporation (“Heska”), Diamond Animal Health, Inc., an Iowa corporation (“Diamond”) (each of Heska and Diamond may be referred to herein individually as a “Borrower” and collectively as the “Borrowers”), and Xxxxx Fargo Business Credit, Inc., a Minnesota corporation (the “Lender”).
Recitals
The Borrowers and the Lender are parties to a Second Amended and Restated Credit and Security Agreement dated as of June 14, 2000 (as amended to date and as the same may be hereafter amended from time to time, the “Credit Agreement”). Capitalized terms used in these recitals have the meanings given to them in the Credit Agreement unless otherwise specified.
The Borrowers have requested that certain amendments be made to the Credit Agreement, which the Lender is willing to make pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are defined in the Credit Agreement shall have the same meanings as defined therein, unless otherwise defined herein. In addition, Section 1.1 of the Credit Agreement is amended by adding or amending, as the case may be, the following definitions:
| “Liquidity” means the sum of Cash plus Excess Collateral Base less Past Due Payables. |
| “Past Due Payables” means accounts payable (other than accounts payable to Affiliates) that are 60 days or more past due. |
2. Accounts Payable. The last two sentences of Section 6.5 of the Credit Agreement are deleted and replaced by the following sentence:
| “From May 31, 2005 through September 30, 2005, the Borrowers on a consolidated basis will at all times maintain Past Due Payables at not more than $750,000; and at all other times, no Borrower will have any Past Due Payables.” |
3. Minimum Capital. Section 6.12 of the Credit Agreement is hereby amended to read in its entirety as follows:
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
| “Section 6.12 Minimum Capital. Heska will maintain, on a consolidated basis, as of each date listed below, its Capital at an amount not less than the amount set forth opposite such date: |
| Date
April 30, 2005 May 31, 2005 June 30, 2005 July 31, 2005 August 31, 2005 September 30, 2005 October 31, 2005 November 30, 2005 December 31, 2005 January 31, 2006 February 28, 2006 March 31, 2006 April 30, 2006 May 31, 2006 |
Minimum Capital
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4. Indebtedness to Subsidiary. Section 7.2(c) of the Credit Agreement is hereby amended to read in its entirety as follows:
| “(c) indebtedness of such Borrower (i) relating to liens of such Borrower permitted in accordance with Section 7.1, (ii) arising out of guaranties of such Borrower permitted under Section 7.3, (iii) arising for such Borrower as a result of an investment in or loan to such Borrower by another Borrower in accordance with Section 7.4, or (iv) in the case of Heska, at all times on or before December 31, 2005, indebtedness to Heska Holding AG in an amount not to exceed $1,500,000, and thereafter, zero.” |
5. Compliance Certificate. Exhibit G to the Credit Agreement is replaced in its entirety by Exhibit A to this Amendment.
6. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any advance or letter of credit thereunder.
7. Waiver of Defaults. The Borrowers are in default of (a) Section 6.5 of the Credit Agreement for all periods from January 31, 2005 through Xxxxx 00, 0000, (x) Section 7.2 of the Credit Agreement as of February 28, 2005, as a result of Heska’s incurrence of approximately $900,000 of indebtedness to Heska Holding AG (collectively, the “Existing Defaults”). Upon the terms and subject to the conditions set forth in this Amendment, the Lender hereby waives the Existing Defaults. This waiver shall be effective only in this specific instance and for the specific purpose for which it is given, and this waiver shall not entitle the Borrowers to any other or further waiver in any similar or other circumstances.
8. Conditions Precedent. This Amendment, including the waiver set forth in paragraph 7, shall be effective when the Lender shall have received an executed original hereof.
9. Representations and Warranties. The Borrowers hereby represent and warrant to the Lender as follows:
| (a) The Borrowers have all requisite power and authority to execute this Amendment and to perform all of its obligations hereunder, and this Amendment has been duly executed and delivered by the Borrowers and constitute the legal, valid and binding obligation of the Borrowers, enforceable in accordance with their terms. |
| (b) The execution, delivery and performance by the Borrowers of this Amendment have been duly authorized by all necessary corporate action and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to the Borrowers, or the articles of incorporation or by-laws of the Borrowers, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Borrower is a party or by which it or its properties may be bound or affected. |
| (c) All of the representations and warranties contained in Article V of the Credit Agreement are correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date. |
10. No Other Waiver. Except as set forth in paragraph 7, the execution of this Amendment and acceptance of any documents related hereto shall not be deemed to be a waiver of any Default or Event of Default under the Credit Agreement or breach, default or event of default under any Security Document or other document held by the Lender, whether or not known to the Lender and whether or not existing on the date of this Amendment.
11. Release. The Borrowers hereby absolutely and unconditionally release and forever discharge the Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown.
12. Costs and Expenses. The Borrowers hereby reaffirm their agreement under the Credit Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the Lender in connection with the Loan Documents, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
foregoing, the Borrowers specifically agree to pay all fees and disbursements of counsel to the Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. The Borrowers hereby agree that the Lender may, at any time or from time to time in its sole discretion and without further authorization by the Borrowers, make a loan to the Borrowers under the Credit Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses.
13. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.
|
HESKA CORPORATION By /s/ XXXXX XXXXXXXXXX Xxxxx Xxxxxxxxxx Its Chief Financial Officer XXXXX FARGO BUSINESS CREDIT, INC. By /s/ [***] [***], Vice President |
DIAMOND ANIMAL HEALTH, INC. By /s/ XXXXX XXXXXXXXXX Xxxxx Xxxxxxxxxx Its Chief Financial Officer |
Exhibit A to Ninth Amendment
Compliance Certificate
To:
Xxxxx Fargo Business Credit, Inc.
Date:
, 20
Subject: Heska Corporation
Financial Statements
In accordance with our Second Amended and Restated Credit and Security Agreement dated as of June 14, 2000 (the “Credit Agreement”), attached are the financial statements of Heska Corporation (“Heska”) as of and for ________________, 20___ (the “Reporting Date”) and the year-to-date period then ended (the “Current Financials”). All terms used in this certificate have the meanings given in the Credit Agreement.
I certify that, to the best of my knowledge, the Current Financials have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly present the Borrowers’ financial condition and the results of its operations as of the date thereof.
Events of Default. (Check one):
| [ ] |
The undersigned does not have knowledge of the occurrence of a Default or Event of Default
under the Credit Agreement. |
| [ ] |
The undersigned has knowledge of the occurrence of a Default or Event of Default under the
Credit Agreement and attached hereto is a statement of the facts with respect to thereto. |
I hereby certify to the Lender as follows:
| [ ] |
The Reporting Date does not xxxx the end of one of the Borrowers’ fiscal quarters,
hence I am completing all paragraphs below except paragraph 4. |
| [ ] |
The Reporting Date marks the end of one of the Borrowers' fiscal quarters, hence I am completing
all paragraphs below. |
Financial Covenants. I further hereby certify as follows:
1. Accounts Payable. Pursuant to Section 6.5 of the Credit Agreement, as of the Reporting Date, Past Due Payables on a consolidated basis was $_________________, which [ ] satisfies [ ] does not satisfy the requirement that the Borrowers have no more than $750,000 in Past Due Payables during the period from May 31, 2005 through September 30, 2005, and no Past Due Payables at all other times. |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
2. Spread. Pursuant to Section 2.7 of the Credit Agreement, as of the Reporting Date, Heska’s Permanent Capital was, on a consolidated basis, $_________________, which [ ] exceeds [ ] does not exceed the corresponding Minimum Capital covenant (set forth in paragraph 3 below) by at least $1,000,000. |
3. Minimum Capital. Pursuant to Section 6.12 of the Credit Agreement, as of the Reporting Date, Heska’s Capital was, on a consolidated basis, $_________________, which [ ] satisfies [ ] does not satisfy the requirement that such amount be not less than $_____________ on the Reporting Date, as set forth in the table below: |
| Date
April 30, 2005 May 31, 2005 June 30, 2005 July 31, 2005 August 31, 2005 September 30, 2005 October 31, 2005 November 30, 2005 December 31, 2005 January 31, 2006 February 28, 2006 March 31, 2006 April 30, 2006 May 31, 2006 |
Minimum Capital
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4. Minimum Net Income. Pursuant to Section 6.13 of the Credit Agreement, as of the Reporting Date, Heska’s Net Income was, on a consolidated basis, $_________________, which [ ] satisfies [ ] does not satisfy the requirement that such amount be no less than $______________ on the Reporting Date, as set forth in the table below: |
| Period
Twelve months ended December 31, 2004 Three months ending March 31, 2005 Six months ending June 30, 2005 Nine months ending September 30, 2005 Twelve months ending December 31, 2005 Fifteen months ending March 31, 2006 |
Minimum Net Income
[***] [***] [***] [***] [***] [***] |
5. Minimum Liquidity. Pursuant to Section 6.14 of the Credit Agreement, as of the Reporting Date, Heska’s Liquidity was, on a consolidated basis, $_________________, which [ ] satisfies [ ] does not satisfy the requirement that such amount be no less than $1,500,000 on the Reporting Date. |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
6. Minimum Individual Book Net Worth. Pursuant to Section 6.15 of the Credit Agreement, as of the Reporting Date, Heska’s Book Net Worth was $_________________ and Diamond’s Book Net Worth was $_________________, which [ ] satisfies [ ] does not satisfy the requirement that such amounts be no less than zero on the Reporting Date. |
7. Capital Expenditures. Pursuant to Section 7.10 of the Credit Agreement, as of the Reporting Date, Heska’s Capital Expenditures were, in the aggregate and on a consolidated basis, $_______________ which [ ] satisfies [ ] does not satisfy the requirement that such amount be not more than $_______________ during the period ending on the Reporting Date, as set forth in the table below: |
| Period
Twelve months ended December 31, 2004 Three months ending Xxxxx 00, 0000 Xxxxxx months ending December 31, 2005 Four months ending April 30, 2006 Five months ending May 31, 2006 |
Maximum Capital Expenditures
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Attached hereto are all relevant facts in reasonable detail to evidence, and the computations of the financial covenants referred to above. These computations were made in accordance with GAAP.
| HESKA CORPORATION By Its |
