Exhibit 10.21
LIMITED WAIVER AND AMENDMENT
Reference is made to (i) the Note Purchase Agreement, dated as of August 4,
1998 (as amended by that First Amendment to Note Purchase Agreement, dated as of
April 7, 2003, and further amended by that Second Amendment and Limited Waiver
to Note Purchase Agreement, dated as of August 13, 2003, the "NPA; capitalized
terms used herein without definition shall be used as defined in the NPA), among
Diametrics Medical, Inc. (the "Company") and the noteholders parties thereto
(the "Noteholders"), and (ii) the Convertible Senior Secured Fixed Rate Notes
due August 4, 2005 of the Company issued to the Noteholders pursuant to the NPA,
as amended by that certain Allonge to First Amended and Restated Convertible
Senior Secured Fixed Rate Notes dated August 13, 2003 (the "Notes"), and (iii)
the Stock Purchase Warrants of the Company dated April 7, 2003 issued to the
Noteholders (the "First Amendment Warrants").
This Limited Waiver and Amendment is being signed in connection with and as
a condition precedent to the issuance of up to 30,000 shares of the Company's
Series F Convertible Preferred Stock to be issued pursuant to that certain
Subscription Agreement dated January 14, 2004 among the Company and Mercator
Momentum Fund, L.P., Mercator Momentum Fund III L.P. and Long View Fund L.P.
(collectively, the "Purchasers") (the "Subscription Agreement"), a copy of which
is attached hereto as Exhibit A, and the Certificate of Designation for the
Series F Convertible Preferred Stock, a copy of which is attached hereto as
Exhibit B.
The Company and each Noteholder hereby agree as follows:
(a) subject to section (d) below, provided the interest payments due on
December 31, 2003 and March 31, 2004 pursuant to Section 3.1 of the Notes are
paid in full in cash on June 30, 2004, the Noteholders hereby waive the
Company's failure to make such interest payments on such dates and the interest
payments due on such dates shall be deferred and shall become due and payable in
full on June 30, 2004, and, in each case, the Noteholders further waive any
right to default interest provided under Section 3.2 of the Note with respect to
such payments on June 30, 2004;
(b) as contemplated by Section 13.1 of the NPA and Section 10 of the First
Amendment to Note Purchase Agreement, all unreimbrused reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses of counsel for the
Noteholders) will be paid by the Company as directed by the Noteholders in full
on June 30, 2004 in conjunction with the payment of interest to the Noteholders
on such date;
(c) (i) the Purchase Price, as defined in the First Amendment Warrants, is
hereby amended to be equal to $0.34 per share and (ii) the dates on which the
First Amendment Warrants become exercisable pursuant to Section 1.1 of the First
Amendment Warrants are amended as follows:
Cumulative Percentage of
Date: Number of Shares Exercisable
----- ----------------------------
December 31, 2003 33-1/3%
March 31, 2004 66-2/3%
June 30, 2004 100%
(d) the agreement of the Noteholders to waive and defer interest payments
pursuant to section (a) above and reimbursement of expenses pursuant to section
(b) above is subject to and conditioned upon the Company filing a registration
statement on Form S-3 to register the Registrable Securities (as defined in
Section 8.1(a) of the First Amendment to Note Purchase Agreement) pursuant to
Section 8 of the First Amendment to Note Purchase Agreement within thirty (30)
days of the date hereof (except if the Company is not then eligible to register
for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form), and, in the event that such
registration statement is not filed by such date, the limited waiver and
deferrals under sections (a) or (b) shall be deemed null and void ab initio;
(e) Except as amended hereby, all other terms and conditions of the NPA,
the Notes and the First Amendment Warrant remain in full force and effect.
(f) The validity, construction and enforceability of this Limited Waiver
and Amendment shall be governed by the internal law of the State of Minnesota,
without regard to conflict of law principles.
(g) This Limited Waiver and Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same document.
(h) This Limited Waiver and Amendment shall be binding upon the Company,
the Noteholders and their respective successors and assigns, and shall inure to
the sole benefit of the Company, the Noteholders and the successors and assigns
of the Company and the Noteholders.
(i) This Limited Waiver and Amendment shall be limited precisely as written
and shall not be deemed or otherwise construed to (i) constitute a waiver of any
Default or Event of Default (except as set forth herein) or (ii) prejudice any
right, power or remedy which the Noteholders may now have or may have in the
future under or in connection with the NPA, the Notes and the First Amendment
Warrant (after giving effect to this Limited Waiver and Amendment).
Dated: January 14, 2004, effective as of December 30, 2003
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BCC ACQUISITION II LLC
By: THE BAY CITY CAPITAL FUND I, L.P.
Its: Manager
By: Bay City Capital Management LLC
Its: General Partner
By: /s/ Xxxx Craves
--------------------------------------------
Name: Xxxx Craves
Title: Managing Director
AEOW 96, LLC
By: /s/ Will Xxxxxxxxx
--------------------------------------------
Name: Will Xxxxxxxxx
Title: Trustee
XXXXXX X. AND XXXXXX X. XXXX
MEMORIAL FOUNDATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President, Northeast Pennsylvania Trust
Company, as Trustee
XXXXXX X. XXXX REVOCABLE TRUST
By: /s/ Xxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Co-Trustee
DIAMETRICS MEDICAL, INC.
By: /s/ W. Xxxx Xxxxxxxx
--------------------------------------------
Name: W. Xxxx Xxxxxxxx
Title: Senior Vice President of Finance
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EXHIBIT A
---------
Subscription Agreement
(Filed separately)
4
EXHIBIT B
---------
Certificate of Designation for Series F Convertible Preferred Stock
(Filed separately)
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