EXHIBIT 4.2 (B)
SECOND WAIVER AND AMENDMENT
---------------------------
TO FIRST AMENDED INVESTORS' RIGHTS AGREEMENT
--------------------------------------------
THIS SECOND WAIVER AND AMENDMENT TO THE FIRST AMENDED INVESTORS' RIGHTS
AGREEMENT (the "Agreement") is made as of the 14th day of July, 1998, among
Heska Corporation, a Delaware corporation (the "Company"), Novartis Produkte AG
(formerly Ciba-Geigy Limited), Charter Ventures, Charter Ventures II, L.P. and
Volendam Investeringen N.V. (the "Holders"):
W I T N E S S E T H:
WHEREAS, the Company and the Holders are parties to that certain First
Amended Investors' Rights Agreement, dated as of April 12, 1996, as amended by
that certain Waiver and Amendment to First Amended Investor's Rights Agreement
dated as of January 22, 1998 (collectively, the "Investors' Rights Agreement");
WHEREAS, the Company proposes to enter into that certain Asset Purchase
Agreement (the "Purchase Agreement") by and among the Company, Diamond Animal
Health, Inc., an Iowa corporation and wholly owned subsidiary of the Company,
and Bayer Corporation, an Indiana corporation ("Bayer"), pursuant to which Bayer
will sell and assign certain real property to Diamond and in consideration for
such sale, Bayer or its affiliates (the New Investor, as defined in Section 2
below) will receive shares of Common Stock of the Company, the exact number of
which will be determined at the closing of the transactions contemplated by the
Purchase Agreement (the "Bayer Shares"); and
WHEREAS, the Holders desire that the transactions contemplated by the
Purchase Agreement be consummated, and, as a condition thereof and to induce
such action, the Holders are willing to enter into this Agreement to permit the
New Investor to become a party to the Investors' Rights Agreement with respect
to the Bayer Shares, as set forth in Section 2 below.
In consideration of the foregoing and the promises and covenants herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Consent and Waiver Agreement Pursuant to Section 6.1 of the Investor's
----------------------------
Rights Agreement, the Holders hereby consent, on behalf of themselves and all
other stockholders of the Company having rights under the Investors' Rights
Agreement, to the amendments to the Investors' Rights Agreement set forth in
this Agreement, and hereby waive the provisions of Section 2.11 of the
Investors' Rights Agreement with respect to the registration rights granted to
the New Investors pursuant to Section 2 of this Agreement.
2. Additional Parties to the Agreement. Schedule B to the Investors'
-----------------------------------
Rights Agreement is hereby amended to include Bayer, or any other affiliate or
affiliates of Bayer designated by it to receive the Bayer Shares pursuant to the
Purchase Agreement (collectively, the "New Investor") as a party; provided,
however, that such New Investor shall be added as a party or as parties to the
Investors' Rights Agreement only with respect to Section 2.3 thereof and related
sections of the Investors' Rights Agreement; and provided further, that the
"piggyback" registration rights granted to the New Investor pursuant to this
Section 2 and Section 2.3 of the
Investors' Rights Agreement shall be granted and remain exercisable only for a
period of one (1) 2.abyear after the date of consummation of the transactions
contemplated by the Purchase Agreement.
3. Amendments to Agreement. Subject to the limitations set forth in
-----------------------
Section 2 above, the New Investor is referred to (individually or collectively)
as "Holder" and the Bayer Shares are collectively referred to as "Registrable
Securities" for purposes of the Investors' Rights Agreement.
4. Effectiveness. The waiver and amendment set forth in this Agreement
-------------
shall be effective as of the date first above written, and, except as expressly
modified by this Agreement, the Investors' Rights Agreement, as originally
written and as subsequently amended, shall remain in full force and effect.
5. Counterparts. This Agreement may be executed by facsimile and in two
------------
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same original instrument. This
Agreement will be binding upon the Company and the Holders (including the New
Investor) and their respective successors, assigns, heirs and personal
representatives.
6. Severability. If one or more provisions of this Agreement are held to
------------
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
7. Entire Agreement. This Agreement, together with the Investors' Rights
----------------
Agreement, constitutes the full and entire understanding and agreement between
the parties with regard to the subjects hereof and thereof.
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
HESKA CORPORATION
By: /s/ Deborah E. Robbins
----------------------------------------------
Name Deborah E. Robbins
--------------------------------------------
Title Vice President and General Counsel
-------------------------------------------
Address 1825 Sharp Point Drive
Fort Collins, Colorado 80525
HOLDERS:
-------
NOVARTIS PRODUKTE AG
(now: Novartis Animal Health, Inc.)
By: /s/ P. Kornicker /s/ Jeff Johnson
----------------------------------------------
Name P. Kornicker Jeff Johnson
---------------------------------------------
Title Legal Counsel Bus. Development
--------------------------------------------
Mgr Address P.O. Box
------------------------------------
CH-4002 Basel (Switzerland)
------------------------------------
3
CHARTER VENTURES
By: /s/ A. Barr Dolan
----------------------------------------------
Name____________________________________________
Title___________________________________________
Address ____________________________________
____________________________________
CHARTER VENTURES II, L.P.
By: /s/A. Barr Dolan
---------------------------------------------
Name____________________________________________
Title___________________________________________
Address_________________________________________
VOLENDAM INVESTERINGEN N.V.
By: /s/ Anneke Soedhoe /s/Andries Kroon
----------------------------------------------
Name MeesPierson Trust (Curacao) N.V.
--------------------------------------------
Title Managing Director
-------------------------------------------
Address John B. Gorsirqweg 14
-----------------------------------------
Curacao, Netherlands Antilles
-----------------------------------------
4