EXHIBIT 10.3
SECURITY AGREEMENT
This Security Agreement (this "Agreement"), dated as of December 6th, 2005
is made by and among Diametrics Medical, Inc. ("Debtor") and those entities
listed on the Schedule of Secured Parties attached hereto as Schedule 1
(individually, a "Secured Party" and collectively, the "Secured Parties"), each
a holder of a Convertible Secured Promissory Note in the principal amount
indicated across from each Secured Party's name on the Schedule of Secured
Parties (individually, a "Note" and collectively, the "Notes").
RECITALS
A. Debtor has executed and delivered the Notes payable to the order of the
Secured Parties as of the date hereof.
B. In connection with the Notes, Debtor desires to grant a security
interest in certain collateral to the Secured Parties as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
SECTION 1 Definitions; Interpretation.
(a) All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in the Notes.
(b) As used in this Agreement, the following terms shall have the
following meanings:
"Collateral" has the meaning set forth in Section 2.
"Documents" means this Agreement, the Notes and all other
certificates, documents, agreements and instruments delivered to Secured Parties
under the Notes or in connection with the Obligations.
"Event of Default" has the meaning set forth in Section 8.
"Lien" means any mortgage, deed of trust, pledge, security
interest, assignment, deposit arrangement, charge or encumbrance, lien, or other
type of preferential arrangement.
"Notes" has the meaning set forth in the preamble above, as
they may be amended, modified, renewed, extended or replaced from time to time.
"Obligations" means the indebtedness, liabilities and other
obligations of Debtor to the Secured Parties under or in connection with the
Notes or any of the other Documents, including, without limitation, all unpaid
principal of the Notes, all interest accrued
thereon, all fees and all other amounts payable by Debtor to the Secured Parties
thereunder or in connection therewith, whether now existing or hereafter
arising, and whether due or to become due, absolute or contingent, liquidated or
unliquidated, determined or undetermined.
"Person" means an individual, corporation, partnership, joint
venture, trust, unincorporated organization, governmental agency or authority,
or any other entity of whatever nature.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Minnesota.
(c) Where applicable and except as otherwise defined herein, terms
used in this Agreement shall have the meanings assigned to them in the UCC.
(d) In this Agreement, (i) the meaning of defined terms shall be
equally applicable to both the singular and plural forms of the terms defined;
and (ii) the captions and headings are for convenience of reference only and
shall not affect the construction of this Agreement.
SECTION 2 Security Interest.
(a) As security for the payment and performance of the Obligations,
Debtor hereby grants to each Secured Party a security interest in all of
Debtor's right, title and interest in, to and under all of its personal
property, wherever located and whether now existing or owned or hereafter
acquired or arising, including all accounts, chattel paper, commercial tort
claims, deposit accounts, documents, equipment (including all fixtures),
instruments, inventory, investment property, letter-of-credit rights, money,
general intangibles including, without limitation, all intellectual property and
all rights therein of any type or description, including, without limitation,
all inventions and discoveries, patents and patent applications, trademarks,
service marks and trade names, and applications for registration of such
trademarks, service marks and trade names, trade secrets, trade dress, trade
styles, logos, other source of business identifiers, mask-works, mask-work
registrations, mask-work applications, software, confidential and proprietary
information, and all licenses relating to any of the foregoing, all reissuance,
continuations and continuations-in-part of the foregoing, all other rights
derived from or associated with the foregoing, including the right to xxx and
recover for past infringement, and all income and royalties with respect
thereto, and all products, proceeds and supporting obligations of any and all of
the foregoing (collectively, the "Collateral").
(b) This Agreement shall create a continuing security interest in
the Collateral which shall remain in effect until terminated in accordance with
Section 20 hereof.
(c) Secured Parties acknowledge that a principal amount of $15,917
of the Senior Secured Fixed Rate Note of the Company issued August 4, 1998 may
be considered outstanding and prior in right to the security interest granted
hereunder.
SECTION 3 Financing Statements, Etc. Debtor shall execute and deliver to
each Secured Party concurrently with the execution of this Agreement, and Debtor
hereby authorizes each Secured Party to file (with or without Debtor's
signature), at any time and from time to time
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thereafter, all financing statements, assignments, amendments, continuation
financing statements, termination statements, account control agreements, and
other documents and instruments, in form reasonably satisfactory to such Secured
Party, and take all other action, as a Secured Party may reasonably request, to
perfect and continue perfected, maintain the priority of or provide notice of
the security interest of each Secured Party in the Collateral. Debtor will
cooperate with each Secured Party in obtaining control (as defined in the UCC)
of Collateral consisting of deposit accounts, investment property, letter of
credit rights and electronic chattel paper. Debtor will join with the Secured
Parties in notifying any third party who has possession of any Collateral of the
Secured Parties' security interest therein and obtaining an acknowledgment from
the third party that it is holding the Collateral for the benefit of the Secured
Parties. Debtor will not create any chattel paper without placing a legend on
the chattel paper acceptable to each Secured Party indicating that the Secured
Parties have a security interest in the chattel paper.
SECTION 4 Representations and Warranties. Debtor represents and warrants
to the Secured Parties that:
(a) Debtor is duly organized, validly existing and in good standing
under the law of the jurisdiction of its organization and has all requisite
power and authority to execute, deliver and perform its obligations under this
Agreement.
(b) The execution, delivery and performance by Debtor of this
Agreement have been duly authorized by all necessary action of Debtor, and this
Agreement constitutes the legal, valid and binding obligation of Debtor,
enforceable against Debtor in accordance with its terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any governmental authority or agency, or approval
or consent of any other Person is required for the due execution, delivery or
performance by Debtor of this Agreement, except for any filings necessary to
perfect any Liens on any Collateral.
(d) Debtor's chief executive office and principal place of business
(as of the date of this Agreement) is located at the address set forth in
Schedule 2; Debtor's jurisdiction of organization is set forth in Schedule 2;
Debtor's exact legal name is as set forth in the first paragraph of this
Agreement; and all other locations where Debtor conducts business or Collateral
is kept (as of the date of this Agreement) are set forth in Schedule 2.
(e) Debtor has rights in or the power to transfer the Collateral,
and Debtor is the sole and complete owner of the Collateral, free from any Lien,
except as set forth in Schedule 2.
(f) All of Debtor's material U.S. and foreign patents and patent
applications, copyrights (whether or not registered), applications for
copyright, trademarks, service marks and trade names (whether registered or
unregistered), and applications for registration of such trademarks, service
marks and trade names, are set forth in Schedule 2.
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(g) No control agreements exist with respect to any Collateral other
than control agreements in favor of the Secured Parties.
(h) As of the date hereof, Debtor does not have or hold any chattel
paper, letter-of-credit rights or commercial tort claims except as disclosed to
the Secured Parties; provided, however, that a failure to disclose such a claim
will not be construed to be a waiver of such claim.
(i) The names and addresses of all financial institutions and other
Persons at which Debtor maintains its deposit and securities accounts, and the
account numbers and account names of such accounts, are set forth in Schedule 2.
SECTION 5 Covenants. So long as any of the Obligations remain unsatisfied,
Debtor agrees that:
(a) Debtor shall appear in and defend any action, suit or proceeding
which may affect to a material extent its title to, or right or interest in, or
a Secured Party's right or interest in, the Collateral, and shall do and perform
all reasonable acts that may be necessary and appropriate to maintain, preserve
and protect the Collateral.
(b) Debtor shall comply in all material respects with all laws,
regulations and ordinances, and all policies of insurance, relating in a
material way to the possession, operation, maintenance and control of the
Collateral.
(c) Debtor shall give prompt written notice to each Secured Party
(and in any event not later than 10 days following any change described below in
this subsection) of: (i) any change in the location of Debtor's chief executive
office or principal place of business; (ii) any change in the locations set
forth in Schedule 2; (iii) any change in its name; (iv) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading; (v) any change in its registration as
an organization (or any new such registration); or (vi) any change in its
jurisdiction of organization; provided that Debtor shall not locate any
Collateral outside of the United States nor shall Debtor change its jurisdiction
of organization to a jurisdiction outside of the United States.
(d) Debtor shall not surrender or lose possession of, sell, lease,
rent, or otherwise dispose of or transfer any of the Collateral or any right or
interest therein, except in the ordinary course of business or unless such
Collateral is replaced by comparable Collateral of similar value; provided that
no such disposition or transfer of Collateral consisting of investment property
or instruments shall be permitted while any Event of Default exists.
(e) Debtor shall keep the Collateral free of all Liens.
(f) Debtor shall pay and discharge all taxes, fees, assessments and
governmental charges or levies imposed upon it with respect to the Collateral
prior to the date on which penalties attach thereto, except to the extent such
taxes, fees, assessments or governmental charges or levies are being contested
in good faith by appropriate proceedings.
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(g) Debtor shall maintain and preserve its legal existence, its
rights to transact business and all other material rights, franchises and
privileges necessary or desirable in the normal course of its business and
operations and the ownership of the Collateral, except in connection with any
transactions expressly permitted by the Notes or any other Document.
(h) Upon the request of a Secured Party, Debtor shall (i)
immediately deliver to such Secured Party, or an agent designated by it,
appropriately endorsed or accompanied by appropriate instruments of transfer or
assignment, all documents and instruments, all certificated securities with
respect to any investment property, all letters of credit and all accounts and
other rights to payment at any time evidenced by promissory notes, trade
acceptances or other instruments, (ii) cause any securities intermediaries to
show on their books that the Secured Parties are the entitlement holders with
respect to any investment property, and/or obtain account control agreements in
favor of the Secured Parties from such securities intermediaries, in form and
substance satisfactory to each Secured Party, with respect to any investment
property, as requested by a Secured Party, and (iii) provide such notice, obtain
such acknowledgments and take all such other action, with respect to any chattel
paper, documents and letter-of credit rights, as a Secured Party shall
reasonably specify.
SECTION 6 Collection of Accounts. Until the Secured Parties exercise their
rights hereunder to collect the accounts and other rights to payment, Debtor
shall endeavor in the first instance diligently to collect all amounts due or to
become due on or with respect to the accounts and other rights to payment. At
the request of a Secured Party, upon the occurrence and during the continuance
of any Event of Default, all remittances received by Debtor shall be held in
trust for the Secured Parties and, in accordance with such Secured Party's
instructions, remitted to the Secured Parties or deposited into account(s) of
the Secured Parties in the form received (with any necessary endorsements or
instruments of assignment or transfer). At the request of a Secured Party, upon
and after the occurrence of any Event of Default, the Secured Parties shall be
entitled to receive all distributions and payments of any nature with respect to
any investment property or instruments, and all such distributions or payments
received by the Debtor shall be held in trust for the Secured Parties and, in
accordance with a Secured Party's instructions, remitted to the Secured Parties
or deposited into account(s) with the Secured Parties in the form received (with
any necessary endorsements or instruments of assignment or transfer). Following
the occurrence of an Event of Default any such distributions and payments with
respect to any investment property held in any securities account shall be held
and retained in such securities account, in each case as part of the Collateral
hereunder. Additionally, each Secured Party shall have the right, upon the
occurrence of an Event of Default, following prior written notice to the Debtor,
to vote and to give consents, ratifications and waivers with respect to any
investment property and instruments, and to exercise all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining
thereto, as if such Secured Party were the absolute owner thereof; provided that
each Secured Party shall have no duty to exercise any of the foregoing rights
afforded to it and shall not be responsible to the Debtor or any other Person
for any failure to do so or delay in doing so.
SECTION 7 Authorization; Secured Party Appointed Attorney-in-Fact. Each
Secured Party shall have the right to, in the name of Debtor, or in the name of
such Secured Party or otherwise, upon notice to but without the requirement of
assent by Debtor, and Debtor hereby constitutes and appoints each Secured Party
(and any of such Secured Party's officers,
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employees or agents designated by such Secured Party) as Debtor's true and
lawful attorney-in-fact, with full power and authority to: (i) sign and file any
of the financing statements and other documents and instruments which must be
executed or filed to perfect or continue perfected, maintain the priority of or
provide notice of such Secured Party's security interest in the Collateral
(including any notices to or agreements with any securities intermediary); (ii)
assert, adjust, xxx for, compromise or release any claims under any policies of
insurance; (iii) give notices of control, default or exclusivity (or similar
notices) under any account control agreement or similar agreement with respect
to exercising control over deposit accounts or securities accounts; and (iv)
execute any and all such other documents and instruments, and do any and all
acts and things for and on behalf of Debtor, which such Secured Party may deem
reasonably necessary or advisable to maintain, protect, realize upon and
preserve the Collateral and the Secured Parties' security interest therein and
to accomplish the purposes of this Agreement. Each Secured Party agrees that,
except upon and during the continuance of an Event of Default, it shall not
exercise the power of attorney, or any rights granted to such Secured Party,
pursuant to clauses (ii), (iii) and (iv). The foregoing power of attorney is
coupled with an interest and irrevocable so long as the Obligations have not
been paid and performed in full. Debtor hereby ratifies, to the extent permitted
by law, all that a Secured Party shall lawfully and in good faith do or cause to
be done by virtue of and in compliance with this Section 7.
SECTION 8 Events of Default. Any of the following events which shall occur
and be continuing shall constitute an "Event of Default":
(a) Debtor shall fail to pay when due any amount of principal of or
interest on the Notes or other amount payable hereunder or under any of the
Notes or any other Document or in respect of the Obligations.
(b) Any representation or warranty by Debtor in this Agreement or in
any other Document shall prove to have been incorrect in any material respect
when made or deemed made.
(c) Debtor shall fail to perform or observe in any material respect
any other term, covenant or agreement contained in this Agreement, the Notes or
any other Document on its part to be performed or observed.
(d) Debtor shall admit in writing its inability to, or shall fail
generally or be generally unable to, pay its debts (including its payrolls) as
such debts become due, or shall make a general assignment for the benefit of
creditors; or Debtor shall file a voluntary petition in bankruptcy or a petition
or answer seeking reorganization, to effect a plan or other arrangement with
creditors or any other relief under any state or federal law relating to
bankruptcy or reorganization granting relief to debtors, whether now or
hereafter in effect ("Bankruptcy Laws"), or shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary
petition filed against Debtor pursuant to any Bankruptcy Laws; or Debtor shall
be adjudicated a bankrupt, or shall make an assignment for the benefit of
creditors, or shall apply for or consent to the appointment of any custodian,
receiver or trustee for all or any substantial part of Debtor's property, or
shall take any action to authorize any of the actions set forth above in this
paragraph; or an involuntary petition seeking any of the relief specified in
this
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paragraph shall be filed against Debtor; or any order for relief shall be
entered against Debtor in any involuntary proceeding under any Bankruptcy Laws.
(e) Debtor shall be in default under any material indebtedness.
(f) Debtor shall (i) liquidate, wind up or dissolve (or suffer any
liquidation, wind-up or dissolution), (ii) suspend its operations other than in
the ordinary course of business, or (iii) take any action to authorize any of
the actions or events set forth above in this subsection (e).
(g) Any levy upon, seizure or attachment of any of the Collateral
which shall not have been rescinded or withdrawn.
(h) Any loss, theft or substantial damage to, or destruction of, any
material portion of the Collateral (unless within 10 days after the occurrence
of any such event, Debtor furnishes to each Secured Party evidence reasonably
satisfactory to such Secured Party that the amount of any such loss, theft,
damage to or destruction of the Collateral is fully insured under policies
naming each Secured Party as an additional named insured or loss payee).
SECTION 9 Remedies.
(a) Upon the occurrence and continuance of any Event of Default, any
Secured Party may declare any of the Obligations to be immediately due and
payable and shall have, in addition to all other rights and remedies granted to
it in this Agreement, the Notes or any other Document, all rights and remedies
of a secured party under the UCC and other applicable laws. Without limiting the
generality of the foregoing, (i) each Secured Party may peaceably and without
notice enter any premises of Debtor, take possession of any the Collateral,
remove or dispose of all or part of the Collateral on any premises of such
Debtor or elsewhere, or, in the case of equipment, render it nonfunctional, and
otherwise collect, receive, appropriate and realize upon all or any part of the
Collateral, and demand, give receipt for, settle, renew, extend, exchange,
compromise, adjust, or xxx for all or any part of the Collateral, as a Secured
Party may determine; (ii) each Secured Party may require any Debtor to assemble
all or any part of the Collateral and make it available to such Secured Party at
any place and time designated by such Secured Party; (iii) each Secured Party
may secure the appointment of a receiver of the Collateral or any part thereof
(to the extent and in the manner provided by applicable law); (iv) each Secured
Party may sell, resell, lease, use, assign, license, sublicense, transfer or
otherwise dispose of any or all of the Collateral in its then condition or
following any commercially reasonable preparation or processing (utilizing in
connection therewith any of Debtor's assets, without charge or liability to such
Secured Party therefor) at public or private sale, by one or more contracts, in
one or more parcels, at the same or different times, for cash or credit, or for
future delivery without assumption of any credit risk, all as such Secured Party
deems advisable; provided, however, that Debtor shall be credited with the net
proceeds of sale only when such proceeds are finally collected by such Secured
Party. Each Secured Party shall have the right upon any such public sale, and,
to the extent permitted by law, upon any such private sale, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption, which right or equity of redemption Debtor hereby releases, to the
extent
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permitted by law. Each Secured Party shall give Debtor such notice of any
private or public sales as may be required by the UCC or other applicable law.
(b) For the purpose of enabling the Secured Parties to exercise
their rights and remedies under this Section 9 or otherwise in connection with
this Agreement, Debtor hereby grants to each Secured Party an irrevocable,
non-exclusive and assignable license (exercisable without payment or royalty or
other compensation to Debtor) to use, license or sublicense any intellectual
property Collateral.
(c) No Secured Party shall have any obligation to clean up or
otherwise prepare the Collateral for sale. No Secured Party has any obligation
to attempt to satisfy the Obligations by collecting them from any other Person
liable for them, and any Secured Party may release, modify or waive any
Collateral provided by any other Person to secure any of the Obligations, all
without affecting the Secured Parties' rights against Debtor. Debtor waives any
right it may have to require a Secured Party to pursue any third Person for any
of the Obligations. Each Secured Party may comply with any applicable state or
federal law requirements in connection with a disposition of the Collateral and
compliance will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. Each Secured Party may sell the
Collateral without giving any warranties as to the Collateral. Each Secured
Party may specifically disclaim any warranties of title or the like. This
procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If a Secured Party sells any of
the Collateral upon credit, Debtor will be credited only with payments actually
made by the purchaser, received by a Secured Party and applied to the
indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, a Secured Party may resell the Collateral and Debtor shall be
credited with the proceeds of the sale.
(d) To the extent Debtor uses the proceeds of any of the Obligations
to purchase Collateral, Debtor's repayment of the Obligations shall apply on a
"first-in, first-out" basis so that the portion of the Obligations used to
purchase a particular item of Collateral shall be paid in the chronological
order the Debtor purchased the Collateral.
(e) The cash proceeds actually received from the sale or other
disposition or collection of Collateral, and any other amounts received in
respect of the Collateral the application of which is not otherwise provided for
herein, shall be applied first to the payment of the Obligations. Any surplus
thereof which exists after payment and performance in full of the Obligations
shall be promptly paid over to Debtor or otherwise disposed of in accordance
with the UCC or other applicable law. Debtor shall remain liable to each Secured
Party for any deficiency which exists after any sale or other disposition or
collection of Collateral.
SECTION 10 Certain Waivers. Debtor waives, to the fullest extent permitted
by law, (i) any right of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling of the
Collateral or other collateral or security for the Obligations; (ii) any right
to require a Secured Party (A) to proceed against any Person, (B) to exhaust any
other collateral or security for any of the Obligations, or (C) to make or give
any presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with any of the
Collateral; and (iii) all claims, damages, and
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demands against a Secured Party arising out of the repossession, retention, sale
or application of the proceeds of any sale of the Collateral, other than claims
for violations of law and willful misconduct.
SECTION 11 Notices. All notices or other communications hereunder shall be
in writing (including by facsimile transmission or by email) and mailed, sent or
delivered to the respective parties hereto at or to their respective addresses,
facsimile numbers or email addresses set forth below their names on the
signature pages hereof, or at or to such other address, facsimile number or
email address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and other communications shall be deemed
to be delivered when a record (within the meaning of the UCC) has been (i)
delivered by hand; (ii) sent by mail upon the earlier of the date of receipt or
five business days after deposit in the mail, first class (or air mail as to
communications sent to or from the United States); (iii) sent by facsimile
transmission; or (iv) received by email.
SECTION 12 No Waiver; Cumulative Remedies. No failure on the part of a
Secured Party to exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights and remedies under this Agreement are cumulative
and not exclusive of any rights, remedies, powers and privileges that may
otherwise be available to a Secured Party.
SECTION 13 Binding Effect. This Agreement shall be binding upon, inure to
the benefit of and be enforceable by Debtor, each Secured Party and their
respective successors and assigns and shall bind any Person who becomes bound as
a debtor to this Agreement. Debtor may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder without
the prior express written consent of all of the Secured Parties. Any such
purported assignment, transfer, hypothecation or other conveyance by Debtor
without the prior express written consent of all of the Secured Parties shall be
void. Debtor acknowledges and agrees that in connection with an assignment of,
or grant of a participation in, the Obligations a Secured Party may assign, or
grant participations in, all or a portion of its rights and obligations
hereunder. Upon any assignment of a Secured Party's rights hereunder, such
assignee shall have, to the extent of such assignment, all rights of a Secured
Party hereunder. Debtor agrees that, upon any such assignment, such assignee may
enforce directly, without joinder of a Secured Party, the rights of a Secured
Party set forth in this Agreement. Any such assignee shall be entitled to
enforce a Secured Party's rights and remedies under this Agreement to the same
extent as if it were the original secured party named herein.
SECTION 14 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of California, except as
required by mandatory provisions of law and to the extent the validity or
perfection of the security interests hereunder, or the remedies hereunder, in
respect of any Collateral are governed by the law of a jurisdiction other than
California.
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SECTION 15 Entire Agreement; Amendment. This Agreement contains the entire
agreement of the parties with respect to the subject matter hereof and shall not
be amended except by the written agreement of the parties.
SECTION 16 Acts of a Secured Party. Notwithstanding anything to the
contrary herein, all actions taken hereunder by the Secured Parties or a Secured
Party shall only be taken upon obtaining the prior written agreement of the
Secured Party or Secured Parties holding at least a majority of the outstanding
Obligations.
SECTION 17 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in
any jurisdiction, it shall, as to such jurisdiction, be deemed modified to
conform to the minimum requirements of such law or regulation, or, if for any
reason it is not deemed so modified, it shall be ineffective and invalid only to
the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision
in any other jurisdiction.
SECTION 18 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.
SECTION 19 Termination. Upon payment and performance in full of all
Obligations, or upon conversion of the Notes, the security interest created
under this Agreement shall terminate and each Secured Party shall promptly
execute and deliver to Debtor such documents and instruments reasonably
requested by Debtor as shall be necessary to evidence termination of all
security interests given by Debtor to such Secured Party hereunder.
SECTION 20 Conflicts. In the event of any conflict or inconsistency
between this Agreement or the Notes, the terms of this Agreement shall control.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
as of the date first above written.
DEBTOR:
DIAMETRICS MEDICAL, INC.
By: /s/ W. Xxxxx Xxxxx
--------------------------------------
Its: Chief Executive Officer
-------------------------------------
SECURED PARTIES:
ASSET MANAGERS INTERNATIONAL LIMITED
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name:
Title Director
MONARCH POINTE FUND, LTD.
By: /s/ H. Xxxxx Xxxxxxxxx
--------------------------------
Name:
Title Portfolio Manager
SCHEDULE 1
to the Security Agreement
SCHEDULE OF SECURED PARTIES
PRINCIPAL AMOUNT
NAME OF SECURED PARTY OF NOTE
--------------------- -------
Asset Managers International Limited
c/o Pentagon Capital Management, Plc
00 Xxxxx Xxxxxx
Xxxxxx X0X 0XX $375,000
Monarch Pointe Fund, Ltd.
c/o M.A.G. Capital, LLC
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000 $375,000
TOTAL $750,000
SCHEDULE 2
to the Security Agreement
1. JURISDICTION OF ORGANIZATION:
Minnesota.
2. CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS:
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx, 00000.
3. OTHER LOCATIONS WHERE DEBTOR CONDUCTS BUSINESS OR COLLATERAL IS KEPT:
None.
4. EXISTING LIENS:
a) Judgment no. 05-02389 entered in the Court of Common Pleas, Chester
County, PA, on March 24, 2005 against Diametrics Medical, Inc. in
favor of Liberty Property Limited Partnership for the amount of
$136,945, relating to Debtor's default under the terms of a
commercial lease agreement dated January 20, 1999 and as amended on
March 25, 2002, for the lease of the premises at 000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx.
5. DEPOSIT ACCOUNTS AND SECURITY ACCOUNTS:
M&I Xxxxxxxx & Xxxxx Bank
0000 Xxxxxxx Xxx X
Xxxxxxxxx, XX 00000
Accounts # 00000000 and 00000000
Bank of America
0000 Xxxxxxxxx Xxx
Xxxxxx Xxx Xxx, XX 00000
Account # 09145-41651
6. PATENTS AND PATENT APPLICATIONS, IF ANY:
Not applicable.
7. COPYRIGHTS (REGISTERED AND UNREGISTERED) AND COPYRIGHT APPLICATIONS, IF
ANY:
Not applicable.
8. TRADEMARKS, SERVICE MARKS AND TRADE NAMES AND TRADEMARK, SERVICE XXXX
AND TRADE NAME APPLICATIONS, IF ANY:
Not applicable.
