FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED
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.
FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED
This Amendment, dated as of October 16, 2008, 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 Bank, National Association, operating through its Xxxxx Fargo Business Credit operating division (the "Lender").
Recitals
The Borrowers and the Lender are parties to a Third Amended and Restated Credit and Security Agreement dated as of December 30, 2005, (as amended to date and as the same may be hereafter amended from time to time, the "Credit Agreement").
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:
"Maturity Date" means, (i) with respect to the Term B Advances, June 30, 2009; provided, however if the Lender receives an updated valuation of the Mortgaged Property, as defined in each of the Factory Mortgage and the Farm Mortgage, acceptable to the Lender, in the Lender's sole discretion, "Maturity Date" with respect to the Term B Advances shall mean May 30, 2010, and (ii) with respect to all other Advances, June 30, 2011.
"Prepayment Factor" means one percent (1%) through and including June 30, 2009, and one half of one percent (0.50%) thereafter.
"Prior Year Capital Base" for a given fiscal year means the amount of Heska's Capital as of December 31 of the prior fiscal year, as reflected on Heska's internally prepared financial statements; provided, however that such amount shall adjust upwards or downwards, respectively on a dollar-for-dollar basis by an
amount equal to the amount by which Heska's Capital, as evidenced by Heska's audited balance sheet as of December 31 of such year, differs from the amount of Capital reflected on Heska's internally prepared financial statements for such date.
2. Spread. Section 2.7 of the Credit Agreement is hereby amended to read in its entirety as follows:
"Section 2.7 Spread. The spread (the "Spread") means the percentage set forth in the table below opposite the applicable prior-fiscal-year Net Income of the Borrowers, which percentage shall change annually effective as of the first day of the month following the month in which the Borrowers delivers to the Lender their audited financial statements for the prior fiscal year (amounts in parentheses denote negative numbers); provided, however, that in no case shall any decrease in the Spread occur during a Default Period:
Prior Fiscal Year Net Income |
|
Spread |
Less than $0 |
|
2.00% |
Greater than or equal to $0 but less than $2,500,000 |
|
1.00% |
Greater than or equal to $2,500,000 but less than $5,000,000 |
|
0.00% |
Greater than or equal to $5,000,000 |
|
(0.05%)" |
3. Audit Fees. Section 2.9(b) of the Credit Agreement is hereby amended to read it its entirety as follows:
"(b) Audit Fees. The Borrowers shall pay the Lender fees in connection with any collateral exams, audits or inspections conducted by or on behalf of the Lender of any Collateral or the Borrowers' operations or business at the rates established from time to time by the Lender as its collateral exam fees (which fees are currently $125 per hour per collateral examiner), together with all actual out-of-pocket costs and expenses incurred in conducting any such collateral examination or inspection; provided, however, that so long as no Default Period exists and average Availability (computed on a 90-day rolling average basis, as reasonably determined by the Lender) exceeds $2,000,000 the Lender will not demand reimbursement for more than two such collateral exams in any calendar year."
4. Financial Covenants. Sections 6.12, 6.13 and 6.16 of the Credit Agreement are hereby amended to read in their entireties as follows:
"Section 6.12 Minimum Capital. Heska will maintain, on a consolidated basis, as of each date listed below, its Capital at an amount not less than the amount set forth opposite such date:
|
-2- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Date |
|
Minimum Capital |
July 31, 2008 |
|
[***] |
August 31, 2008 |
|
[***] |
September 30, 2008 |
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[***] |
October 31, 2008 |
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[***] |
November 30, 2008 |
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[***] |
December 31, 2008 |
|
[***] |
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|
|
After December 31, 2008, Heska will maintain, on a consolidated basis, as of each date listed below, its Capital at an amount not less than the Prior Year Capital Base plus the minimum capital factor set forth opposite such date (amounts in parentheses denote negative numbers):
Date |
|
Minimum Capital Factor |
January 31 |
|
[***] |
February 28 |
|
[***] |
March 31 |
|
[***] |
April 30 |
|
[***] |
May 31 |
|
[***] |
June 30 |
|
[***] |
July 31 |
|
[***] |
August 31 |
|
[***] |
September 30 |
|
[***] |
October 31 |
|
[***] |
November 30 |
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[***] |
December 31 |
|
[***] |
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|
Provided, however, that the covenant levels set forth in this Section 6.12 shall be adjusted upwards or downwards, respectively on a dollar-for-dollar basis, by an amount equal to the dollar amount paid by Heska for the redemption or repurchase of shares of its capital stock as permitted by Section 7.5(c), from the date Heska redeems or repurchases the shares through the end of the fiscal year in which such redemption or repurchase occurs."
"Section 6.13 Minimum Net Income. Heska will achieve, on a consolidated basis, during each period described below, Net Income in an amount not less than the amount set forth opposite such period (amounts in parentheses denote negative numbers):
|
-3- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Period |
|
Minimum Net Income |
Three months ending March 31 of each fiscal year |
|
[***] |
Six months ending June 30 of each fiscal year |
|
[***] |
Nine months ending September 30 of each fiscal year |
|
[***] |
Twelve months ending December 31 of each fiscal year |
|
[***] |
|
|
|
|
"Section 6.16 |
[Reserved]." |
5. Investments. Clause (v) of Section 7.4(a) of the Credit Agreement is hereby amended to read in its entirety as follows:
"(v) unless a Default Period exists or would exist immediately after or as a result of any such advance or contribution, advances or contributions by Heska to any Subsidiary that is not a Borrower; provided, however, that (A) both before and after such advance or contribution Heska's Tangible Net Worth must equal or exceed $100,000 and (B) all contributions and advances made in reliance on this subsection (v) shall not exceed $700,000 in the aggregate in any fiscal year;"
6. Stock Repurchase. Section 7.5 of the Credit Agreement is hereby amended to read in its entirety as follows:
"Section 7.5 Dividends. Such Borrower will not declare or pay any dividends (other than dividends payable solely in stock of such Borrower) on any class of its stock or make any payment on account of the purchase, redemption or other retirement of any shares of such stock or make any distribution in respect thereof, either directly or indirectly; provided, however, that so long as no Default Period then exists or would occur immediately following or as a result of such action, (a) any Borrower that is a Subsidiary of Heska may pay dividends to Heska so long as such Subsidiary's Tangible Net Worth both before and after such dividend equals or exceeds $100,000; (b) Heska may repurchase capital stock of Heska held by any employee provided Heska is required to do so pursuant to any employee equity subscription agreement, stock ownership plan or stock option agreement in effect from time to time; and provided further that the aggregate price paid for all such repurchased, redeemed, acquired or retired capital shall not exceed $100,000 during any fiscal year; and (c) Heska may repurchase capital stock of Heska held by [***] or any other shareholder of Heska who is not an
|
-4- |
officer of Heska, provided that Availability (assuming for purposes of such calculation, that such redemption had already been made) during the 90 days prior to and immediately following such redemption is greater than $1,750,000 at all times; and provided further that the aggregate price paid for all such repurchased, redeemed, acquired or retired capital shall not exceed $2,000,000 through the Maturity Date of the Revolving Advance. Notwithstanding the foregoing, the exercise of stock options for the purchase of Heska's capital stock shall not, by means of any deemed repurchase of shares as a result of a cashless exercise or otherwise, cause a breach of this Section 7.5.
7. Capital Expenditures. Section 7.10 of the Credit Agreement is hereby amended to read in its entirety as follows:
"Section 7.10 Capital Expenditures. The Borrowers, together with any Affiliates, will not incur or contract to incur, in the aggregate, Capital Expenditures in the aggregate during the fiscal year-to-date period ending on any date described below in excess of the amount set forth opposite such date:
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-5- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Period |
|
Maximum Capital Expenditures |
July 31, 2008 |
|
[***] |
August 31, 2008 |
|
[***] |
September 30, 2008 |
|
[***] |
October 31, 2008 |
|
[***] |
November 30, 2008 |
|
[***] |
December 31, 2008 |
|
[***] |
January 31 of each fiscal year thereafter |
|
[***] |
February 28 of each fiscal year thereafter |
|
[***] |
March 31 of each fiscal year thereafter |
|
[***] |
April 30 of each fiscal year thereafter |
|
[***] |
May 31 of each fiscal year thereafter |
|
[***] |
June 30 of each fiscal year thereafter |
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[***] |
July 31 of each fiscal year thereafter |
|
[***] |
August 31 of each fiscal year thereafter |
|
[***] |
September 30 of each fiscal year thereafter |
|
[***] |
October 31 of each fiscal year thereafter |
|
[***] |
November 30 of each fiscal year thereafter |
|
[***] |
December 31 of each fiscal year thereafter |
|
[***] |
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In addition to the foregoing, the amounts set forth above shall be adjusted upward on a dollar-for-dollar basis by the amount allocated for such purpose in accordance with Section 2.22, from the date of such increase through the end of the fiscal year in which such increase occurs."
8. Compliance Certificate. Exhibit B to the Credit Agreement is replaced in its entirety by Exhibit A to this Amendment for periods ending during fiscal year 2008, and by Exhibit B to this Amendment for all periods thereafter.
9. No Other Changes. Except as explicitly amended by this Amendment, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall apply to any advance or letter of credit thereunder.
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-6- |
10. Waiver of Defaults. The Borrowers are in default of Section 6.1(f) of the Credit Agreement as of May 31, 2008, as a result of their failure to deliver projected balance sheets and income statements for each of the subsequent twelve months to the Lender (the "Existing Default"). Upon the terms and subject to the conditions set forth in this Amendment, the Lender hereby waives the Existing Default. 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.
11. Conditions Precedent. This Amendment shall be effective when the Lender shall have received an executed original hereof, together with the following, each in form and substance acceptable to the Lender in its sole discretion:
(a) A Certificate of Authority of the Borrowers certifying as to the resolutions of the boards of directors of the Borrowers approving the execution and delivery of this Amendment.
(b) Such other matters as the Lender may require.
12. Representations and Warranties. The Borrowers hereby represent and warrant to the Lender as follows:
(a) The Borrowers have all requisite power and authority to execute this Amendment and the Replacement Notes and to perform all of its obligations hereunder, and this Amendment and the Replacement Notes have 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 and the Replacement Notes have been duly authorized by all necessary corporate action and do not (i) require any authorization, consent or approval by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any provision of any law, rule or regulation or of any order, writ, injunction or decree presently in effect, having applicability to the Borrowers, or the articles of incorporation or by-laws of the Borrowers, or (iii) result in a breach of or constitute a default under any indenture or loan or credit agreement or any other agreement, lease or instrument to which any Borrower is a party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in Article V of the Credit Agreement are correct on and as of the date hereof as though made on and as of such date, except to the extent that such representations and warranties relate solely to an earlier date.
13. No Other Waiver. Except as specifically set forth in paragraph 10, the execution of this Amendment and acceptance of the Replacement Notes and 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
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-7- |
document held by the Lender, whether or not known to the Lender and whether or not existing on the date of this Amendment.
14. Release. The Borrowers hereby absolutely and unconditionally release and forever discharge the Lender, and any and all participants, parent corporations, subsidiary corporations, affiliated corporations, insurers, indemnitors, successors and assigns thereof, together with all of the present and former directors, officers, agents and employees of any of the foregoing, from any and all claims, demands or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which any Borrower has had, now has or has made claim to have against any such person for or by reason of any act, omission, matter, cause or thing whatsoever arising from the beginning of time to and including the date of this Amendment, whether such claims, demands and causes of action are matured or unmatured or known or unknown.
15. Costs and Expenses. The Borrowers hereby reaffirm their agreement under the Credit Agreement to pay or reimburse the Lender on demand for all costs and expenses incurred by the Lender in connection with the Loan Documents, including without limitation all reasonable fees and disbursements of legal counsel. Without limiting the generality of the foregoing, the Borrowers specifically agree to pay all fees and disbursements of counsel to the Lender for the services performed by such counsel in connection with the preparation of this Amendment and the documents and instruments incidental hereto. The Borrowers hereby agree that the Lender may, at any time or from time to time in its sole discretion and without further authorization by the Borrowers, make a loan to the Borrowers under the Credit Agreement, or apply the proceeds of any loan, for the purpose of paying any such fees, disbursements, costs and expenses.
16. Miscellaneous. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts, taken together, shall constitute one and the same instrument.
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-8- |
[***] – 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.
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 Its Chief Financial Officer |
DIAMOND ANIMAL HEALTH, INC.
By /s/ Xxxxx Xxxxxxxxxx Its Chief Financial Officer |
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By [***] [***], Vice President |
|
|
-9- |
Exhibit A to First Amendment
Compliance Certificate
To: ______________________ |
Xxxxx Fargo Business Credit
Date: __________________, 2008 |
Subject: Heska Corporation |
Financial Statements
In accordance with our Third Amended and Restated Credit and Security Agreement dated as of December 30, 2005 (the "Credit Agreement"), attached are the financial statements of Heska Corporation ("Heska") as of and for ________________, 20___ (the "Reporting Date") and the year-to-date period then ended (the "Current Financials"). All terms used in this certificate have the meanings given in the Credit Agreement.
I certify that, to the best of my knowledge, the Current Financials have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly present the Borrowers' financial condition and the results of its operations as of the date thereof.
|
Events of Default. (Check one): |
|
o |
The undersigned does not have knowledge of the occurrence of a Default or Event of Default under the Credit Agreement. |
|
o |
The undersigned has knowledge of the occurrence of a Default or Event of Default under the Credit Agreement and attached hereto is a statement of the facts with respect to thereto. |
|
I hereby certify to the Lender as follows: |
|
o |
The Reporting Date does not xxxx the end of one of the Borrowers' fiscal quarters, hence I am completing all paragraphs below except paragraph 4. |
|
o |
The Reporting Date marks the end of one of the Borrowers' fiscal quarters, hence I am completing all paragraphs below. |
|
Financial Covenants. I further hereby certify as follows: |
1. Accounts Payable. Pursuant to Section 6.5 of the Credit Agreement, as of the Reporting Date, Past Due Payables on a consolidated basis was $_________________, which o satisfies o does not satisfy the requirement that the Borrowers have no Past Due Payables.
|
-10- |
[***] – 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 prior-fiscal-year Net Income was, on a consolidated basis, $_________________, which determines a base Spread of ______% pursuant to the table below (amounts in parentheses denote negative numbers).
Prior Fiscal Year Net Income |
|
Spread |
Less than $0 |
|
2.00% |
Greater than or equal to $0 |
|
|
Greater than or equal to $2,500,000 |
|
|
Greater than or equal to $5,000,000 |
|
(0.05%) |
3. Minimum Capital. Pursuant to Section 6.12 of the Credit Agreement, as of the Reporting Date, Heska's Capital was, on a consolidated basis, $_________________, which o satisfies o does not satisfy the requirement that such amount be not less than $_____________ on the Reporting Date, as set forth in the table below and adjusted, if applicable, in accordance with Section 6.12:
Date |
|
Minimum Capital |
July 31, 2008 |
|
[***] |
August 31, 2008 |
|
[***] |
September 30, 2008 |
|
[***] |
October 31, 2008 |
|
[***] |
November 30, 2008 |
|
[***] |
December 31, 2008 |
|
[***] |
|
|
|
4. Minimum Net Income. Pursuant to Section 6.13 of the Credit Agreement, as of the Reporting Date, Heska's Net Income was, on a consolidated basis, $_________________, which o satisfies o does not satisfy the requirement that such amount be no less than $______________ on the Reporting Date, as set forth in the table below:
|
-11- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Period |
|
Minimum Net Income |
Three months ending March 31 of each fiscal year |
|
[***] |
Six months ending June 30 of each fiscal year |
|
[***] |
Nine months ending September 30 of each fiscal year |
|
[***] |
Twelve months ending December 31 of each fiscal year |
|
[***] |
|
|
|
5. Minimum Liquidity. Pursuant to Section 6.14 of the Credit Agreement, as of the Reporting Date, Heska's Liquidity was, on a consolidated basis, $_________________, which o satisfies o does not satisfy the requirement that such amount be no less than $1,500,000 on the Reporting Date.
6. Minimum Individual Book Net Worth. Pursuant to Section 6.15 of the Credit Agreement, as of the Reporting Date, Heska's Book Net Worth was $_________________ and Diamond's Book Net Worth was $_________________, which o satisfies o does not satisfy the requirement that such amounts be no less than zero on the Reporting Date.
7. Maximum Contributions. Pursuant to Section 7.4(a)(v) of the Credit Agreement, as of the Reporting Date, Heska's fiscal year-to-date aggregate contributions to non-Borrower Subsidiaries was $_________________, which o satisfies o does not satisfy the requirement that such amounts be no more than $700,000 during any fiscal year.
8. Capital Expenditures. Pursuant to Section 7.10 of the Credit Agreement, for the fiscal year-to-date period ending on the Reporting Date, Heska's Capital Expenditures were, in the aggregate and on a consolidated basis, $_______________ which o satisfies o does not satisfy the requirement that such amount be not more than $_______________ during the period ending on the Reporting Date, as set forth in the table below and adjusted, if applicable, in accordance with Section 7.10:
|
-12- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Period |
|
Maximum Capital Expenditures |
July 31, 2008 |
|
[***] |
August 31, 2008 |
|
[***] |
September 30, 2008 |
|
[***] |
October 31, 2008 |
|
[***] |
November 30, 2008 |
|
[***] |
December 31, 2008 |
|
[***] |
|
|
|
Attached hereto are all relevant facts in reasonable detail to evidence the computations of the financial covenants referred to above. These computations were made in accordance with GAAP.
HESKA CORPORATION
By _____________________________________
Its _____________________________________
|
-13- |
Exhibit B to First Amendment
Compliance Certificate
To: ______________________ |
Xxxxx Fargo Business Credit
Date: __________________, 2008 |
Subject: Heska Corporation |
Financial Statements
In accordance with our Third Amended and Restated Credit and Security Agreement dated as of December 30, 2005 (the "Credit Agreement"), attached are the financial statements of Heska Corporation ("Heska") as of and for ________________, 20___ (the "Reporting Date") and the year-to-date period then ended (the "Current Financials"). All terms used in this certificate have the meanings given in the Credit Agreement.
I certify that, to the best of my knowledge, the Current Financials have been prepared in accordance with GAAP, subject to year-end audit adjustments, and fairly present the Borrowers' financial condition and the results of its operations as of the date thereof.
|
Events of Default. (Check one): |
|
o |
The undersigned does not have knowledge of the occurrence of a Default or Event of Default under the Credit Agreement. |
|
o |
The undersigned has knowledge of the occurrence of a Default or Event of Default under the Credit Agreement and attached hereto is a statement of the facts with respect to thereto. |
|
I hereby certify to the Lender as follows: |
|
o |
The Reporting Date does not xxxx the end of one of the Borrowers' fiscal quarters, hence I am completing all paragraphs below except paragraph 4. |
|
o |
The Reporting Date marks the end of one of the Borrowers' fiscal quarters, hence I am completing all paragraphs below. |
|
Financial Covenants. I further hereby certify as follows: |
1. Accounts Payable. Pursuant to Section 6.5 of the Credit Agreement, as of the Reporting Date, Past Due Payables on a consolidated basis was $_________________, which o satisfies o does not satisfy the requirement that the Borrowers have no Past Due Payables.
|
-14- |
[***] – 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 prior-fiscal-year Net Income was, on a consolidated basis, $_________________, which determines a base Spread of ______% pursuant to the table below (amounts in parentheses denote negative numbers).
Prior Fiscal Year Net Income |
|
Spread |
Less than $0 |
|
2.00% |
Greater than or equal to $0 |
|
|
Greater than or equal to $2,500,000 |
|
|
Greater than or equal to $5,000,000 |
|
(0.05%) |
|
|
|
3. Minimum Capital. Pursuant to Section 6.12 of the Credit Agreement, as of the Reporting Date, Heska's Capital was, on a consolidated basis, $_________________, which o satisfies o does not satisfy the requirement that such amount be $________________ on the Reporting Date, an amount not less than the Prior Year Capital Base plus the minimum capital factor set forth opposite such date, and adjusted, if applicable, in accordance with Section 6.12 (amounts in parentheses denote negative numbers):
Date |
|
Minimum Capital Factor |
January 31 |
|
[***] |
February 28 |
|
[***] |
March 31 |
|
[***] |
April 30 |
|
[***] |
May 31 |
|
[***] |
June 30 |
|
[***] |
July 31 |
|
[***] |
August 31 |
|
[***] |
September 30 |
|
[***] |
October 31 |
|
[***] |
November 30 |
|
[***] |
December 31 |
|
[***] |
|
|
|
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,
|
-15- |
[***] – 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.
$_________________, which o satisfies o does not satisfy the requirement that such amount be no less than $______________ on the Reporting Date, as set forth in the table below:
Period |
|
Minimum Net Income |
Three months ending March 31 of each fiscal year |
|
[***] |
Six months ending June 30 of each fiscal year |
|
[***] |
Nine months ending September 30 of each fiscal year |
|
[***] |
Twelve months ending December 31 of each fiscal year |
|
[***] |
|
|
|
5. Minimum Liquidity. Pursuant to Section 6.14 of the Credit Agreement, as of the Reporting Date, Heska's Liquidity was, on a consolidated basis, $_________________, which o satisfies o does not satisfy the requirement that such amount be no less than $1,500,000 on the Reporting Date.
6. Minimum Individual Book Net Worth. Pursuant to Section 6.15 of the Credit Agreement, as of the Reporting Date, Heska's Book Net Worth was $_________________ and Diamond's Book Net Worth was $_________________, which o satisfies o does not satisfy the requirement that such amounts be no less than zero on the Reporting Date.
7. Maximum Contributions. Pursuant to Section 7.4(a)(v) of the Credit Agreement, as of the Reporting Date, Heska's fiscal year-to-date aggregate contributions to non-Borrower Subsidiaries was $_________________, which o satisfies o does not satisfy the requirement that such amounts be no more than $700,000 during any fiscal year.
8. Capital Expenditures. Pursuant to Section 7.10 of the Credit Agreement, for the fiscal year-to-date period ending on the Reporting Date, Heska's Capital Expenditures were, in the aggregate and on a consolidated basis, $_______________ which o satisfies o does not satisfy the requirement that such amount be not more than $_______________ during the period ending on the Reporting Date, as set forth in the table below and adjusted, if applicable, in accordance with Section 7.10:
|
-16- |
[***] – Certain information on this page have been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
Period |
|
Maximum Capital Expenditures |
January 31 |
|
[***] |
February 28 |
|
[***] |
March 31 |
|
[***] |
April 30 |
|
[***] |
May 31 |
|
[***] |
June 30 |
|
[***] |
July 31 |
|
[***] |
August 31 |
|
[***] |
September 30 |
|
[***] |
October 31 |
|
[***] |
November 30 |
|
[***] |
December 31 |
|
[***] |
|
|
|
Attached hereto are all relevant facts in reasonable detail to evidence the computations of the financial covenants referred to above. These computations were made in accordance with GAAP.
HESKA CORPORATION
By _____________________________________
Its _____________________________________
|
-00- |
XXXXX XXXXXXXXX TO THIRD AMENDED AND RESTATED
This Amendment (the "Amendment"), dated as of October 16, 2008, 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 Bank, National Association, operating through its Xxxxx Fargo Business Credit operating division (the "Lender").
RECITALS
A. The Borrowers and the Lender are parties to a Third Amended and Restated Credit and Security Agreement dated as of December 30, 2005, (as amended to date and as the same may be hereafter amended from time to time, the "Credit Agreement").
B. The Borrowers wish to use or continue to use of the following treasury management service or services (each a "Service", and if more than one, the "Services") offered by the Lender:
|
Loan Manager Service |
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Lockbox and Collection Account Service |
C. Each Service will now be offered to the Borrowers pursuant to a service description applicable to that Service (a "Service Description") that will supplement the Master Agreement, and if the Borrowers are currently using a Service, a new Service Description will replace the existing agreement or other document currently in effect between the parties governing such Service, which agreement or other document will be mutually terminated by the parties pursuant to the terms of this Amendment.
D. The Borrowers and the Lender also wish to amend the Credit Agreement to eliminate references to the Lockbox Agreement and the Collateral Account Agreementpreviously in effect between them, and to make certain conforming changes to the Credit Agreement to accommodate the Service or Services being extended to the Borrowers referenced above.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties agree as follows:
1. Services and Service Descriptions. The Lender will extend to the Borrowers the following Service or Services, each of which will supplement and is incorporated as the agreement of the parties under the terms of Master Agreement:
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The Loan Manager Service Description |
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The Lockbox and Collection Account Service Description |
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2. Lockbox and Collection Account Service.The Lockbox and Collection Account Service Description attached to this Amendment that supplements the Master Agreement will terminate and replace in its entirety the Lockbox Agreement and the Collateral Account Agreement previously in effect between the parties. The Credit Agreement is amended to provide that each reference in it to the Lockbox Agreement and the Collateral Account Agreement shall be deemed to refer to the Lockbox and Collection Account Service Description to the Master Agreement, and that each reference to the "Collateral Account" shall mean the "Collection Account" as defined in the Lockbox and Collection Account Service Description. Any discrepancies that may exist between the terms of the Credit Agreement and the terms of the Master Agreement as supplemented by the Lockbox and Collection Account Service Description shall be resolved in favor of the Master Agreement as supplemented.
3. Loan Manager Service. The Credit Agreement shall be amended to provide that Advances made through the Xxxxx Fargo Loan Manager Service will be initiated by the Lender and credited to the Account, as that term is defined in the Loan Manager Service Description, as a Revolving Advance as of the end of each Business Day in an amount equal to the Loan Manager Advance Amount as defined in the Loan Manager Service Description, subject to the limitation that any Advance shall not exceed the amount, if any, by which the Borrowing Base exceeds the principal balance of the Revolving Note and the L/C Amount. The Credit Agreement shall be further amended to provide that the Lender shall have no obligation to make an Advance through Loan Manager at any time, and may terminate the Loan Manager Service in its discretion at any time. If the Lender terminates Loan Manager, then the Borrowers may continue to request Advances in accordance with the other provisions of the Credit Agreement.
4. References. All references in the Credit Agreement to "this Agreement" shall be deemed to refer to the Credit Agreement as amended by this Amendment, and any and all references in the Security Documents to the Credit Agreement shall be deemed to refer to the Credit Agreement as amended by this Amendment. The defined term "Security Documents" shall be amended to include any Service Description to the Master Agreement that relates to either the Lockbox and Collection Account Service or to the Collection Account Service, whichever may be applicable.
5. No Other Changes. Except as explicitly amended by the terms of this Amendment, all of the terms and conditions of the Credit Agreement shall otherwise remain in full force and effect.
6. Representations and Warranties; Acknowledgement of Receipt. Each Borrower hereby represents and warrants to the Lender that such Borrower has all requisite power and authority to execute this Amendment, and to perform all of its obligations hereunder, and this Amendmenthas been duly executed and that this Amendment has been delivered such Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms. The Borrowers also acknowledge receipt of the above referenced Service Descriptions.
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[***] – 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.
7. Execution in Counterparts; Delivery of Counterparts. This Amendment may be authenticated by the parties in any number of counterparts, each of which will be deemed an original, and all such counterparts, taken together, shall constitute one and the same instrument. Delivery by fax or by encrypted e-mail or e-mail file attachment of any counterpart to this Amendment that has been authenticated by an authorized signature will be deemed to be an authenticated original. The Borrowers shall send the original authenticated counterpart to the Lender by first class U.S. mail or by overnight courier, but the Borrowers' failure to deliver the original of this Amendment shall not affect its validity, enforceability, and binding effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.
HESKA CORPORATION By /s/ Xxxxx Xxxxxxxxxx Its Chief Financial Officer |
DIAMOND ANIMAL HEALTH, INC. By /s/ Xxxxx Xxxxxxxxxx Its Chief Financial Officer |
XXXXX FARGO BANK, NATIONAL ASSOCIATION By [***] [***], Vice President |
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