EXHIBIT 99.2
Hypertension Diagnostics, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Alpha Capital Aktiengesellschaft
▇▇▇▇▇▇▇▇▇▇▇ Limited Partnership
Palisades Equity Fund, ▇.▇.
▇▇▇▇▇ Enterprises Ltd.
Bristol Investment Fund, Ltd.
October 15, 2002
Re: Waiver of Existing Defaults
Ladies and Gentlemen:
Unless otherwise specified, capitalized terms used in this letter have
the meanings set forth in that certain Subscription Agreement dated March 27,
2002 (the "Agreement") by and between Hypertension Diagnostics, Inc. (the
"Company") and Alpha Capital Aktiengesellschaft, ▇▇▇▇▇▇▇▇▇▇▇ Limited
Partnership, Palisades Equity Fund, L.P., ▇▇▇▇▇ Enterprises Ltd., Bristol
Investment Fund, Ltd., as subscribers (the "Subscribers").
1. Existing Defaults. The following events shall each be an "Existing
Default" and collectively the "Existing Defaults":
a. The failure of the Company to obtain the Approval on or before
the Approval Date;
b. The failure of the Company to comply with the requirement for
continued listing on The Nasdaq SmallCap Market for a period
of seven (7) consecutive trading days because the minimum bid
price of its Common Stock was less than $1.00 (the "Bid Price
Default"); and
c. The receipt by the Company on August 27, 2002 of a notice from
The Nasdaq Stock Market, Inc. stating that the Company is not
in compliance with the requirements for continued listing
because of the failure of the Company's Common Stock to
maintain a minimum bid price of $1.00 for a period of thirty
(30) consecutive trading days.
2. Non-Registration Event. The following shall be an "Event:" the
occurrence of a Non-Registration Event resulting from the registration
of less than 125% of the amount of Common Shares necessary to allow
full conversion of the Notes, if any shall have occurred.
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3. Waiver. Subject to the satisfaction of the conditions set forth in
Section 4 and 5 below, each of the Subscribers: (a) waives the Bid
Price Default whether now existing or existing as of and after the
Special Meeting Date, effective as of the Special Meeting Date; (b)
waives each and every Existing Default, other than the Bid Price
Default, whether now existing or existing as of and through the Special
Meeting Date, all effective as of the Special Meeting Date; and (c)
waives the Event, whether now existing or existing as of and through
the Registration Statement Date, effective as of the Registration
Statement Date (collectively (a), (b) and (c) are the "Waiver").
Further, each of the Subscribers: (a) agrees that upon effectiveness of
the Waiver, each provision of the Agreement, the Note and the Warrant
shall be read as if no Existing Default or Event waived by the Waiver
had ever existed; and (b) consents and agrees that the Company may make
a public announcement of the terms of this letter on the date of
execution. The Company agrees that, except with respect to paragraph
(a) above of this Section 3, the Waiver shall not be deemed to be a
consent to, waiver of or modification of any other term or condition of
the Agreement, the Note or the Warrant for any date after the Special
Meeting Date or the Registration Statement Date, as the case may be.
Further, the Waiver is not a course of action upon which the Company
may rely in the future.
4. Conditions Precedent. The effectiveness of the Waiver is subject to
satisfaction of the following conditions precedent:
a. Solicitation. The Company shall engage ▇.▇. ▇▇▇▇ & Co., Inc.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as a solicitation agent
in connection with the Company's Special Meeting of
Shareholders scheduled for September 25, 2002 and as
subsequently adjourned or postponed (the "Special Meeting");
and
b. Shareholder Approval. The Company shall obtain the Approval on
or before October 25, 2002, with the actual date of the
Approval being referred to as the "Special Meeting Date" in
this letter.
5. Additional Condition Precedent. In addition to the conditions precedent
described in Section 4, the effectiveness of the Waiver with respect to
the Event is subject to the additional condition precedent that the
Company file on or before November 15, 2002 a registration statement to
register for resale an additional 750,000 shares of its Common Stock
issuable upon conversion of the Notes, with such date of filing being
referred to in this letter as the "Registration Statement Date."
6. Governing Law. This letter will be construed and enforced in accordance
with the substantive laws of the State of New York without giving
effect to the conflicts of laws principles of any jurisdiction.
7. Entire Agreement. This letter contains the entire understanding of the
parties hereto with respect to the subject matter contained herein.
There are no restrictions, promises, warranties, covenants, or
undertakings, other than those expressly provided for herein. This
letter supersedes all prior agreements and undertakings between the
parties with respect to such subject matter.
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8. Severability of Invalid Provision. If any one or more covenant or
agreement provided in this letter should be contrary to law, then such
covenant or agreement will be null and void and will in no way affect
the validity of the other provisions of this letter, which will
otherwise be fully effective and enforceable.
9. Counterparts. This letter may be executed in any number of
counterparts, each of which will be an original, but all of which will
constitute one and the same instrument. Any executed counterpart of
this letter delivered by facsimile or other electronic transmission to
a party to this letter will constitute an original counterpart of this
letter.
10. No Other Modification. Except as expressly amended by the terms of this
letter, all other terms of the Agreement remain unchanged and in full
force and effect.
If you are in agreement with the foregoing, please sign where
indicated.
Very Truly Yours,
HYPERTENSION DIAGNOSTICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its: President
Accepted and Agreed:
ALPHA CAPITAL AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Its: Director
▇▇▇▇▇▇▇▇▇▇▇ LIMITED PARTNERSHIP
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
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Its: Chief Operating Officer
PALISADES EQUITY FUND, L.P.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Its: General Partner
▇▇▇▇▇ ENTERPRISES LTD.
By:
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Its: Authorized Officer
BRISTOL INVESTMENT FUND, LTD.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
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Its: Director
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