EXHIBIT 99.1
BCC ACQUISITION II LLC
C/O BAY CITY CAPITAL FUND I, L.P.
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November 21, 2005
CONFIDENTIAL
Ocean Park Advisors, LLC
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Ladies and Gentlemen:
BCC Acquisition II LLC, a Delaware limited liability company
("BCCAII"), has agreed to pay to Diametrics Medical, Inc., a Minnesota
corporation ("DMED"), an amount up to but not to exceed $75,000 (the
"Commitment"), pursuant to the terms of a letter agreement dated the date
hereof.
On the date that is 10 days from the mailing of the information
required by Rule 14f-1 under the Securities Exchange Act of 1934, as amended, to
the shareholders of DMED, in consideration for the payment of $8,300.00, BCCAII
shall sell, assign and transfer to Ocean Park Advisors, LLC ("Ocean Park") and
M.A.G. Capital, LLC ("MAG" and, together with Ocean Park, the "Purchasers"),
free and clear of all liens, all of BCCAII's right, title and interest in and to
all debt and equity securities, including warrants to purchase such securities,
owned by BCCAII and listed on Exhibit A (the "Securities"); provided, that
BCCAII's obligation to effectuate such sale, assignment and transfer shall be
conditioned upon (i) the receipt by BCCAII of general release, substantially in
the form attached hereto as Exhibit C, from each Purchaser and each Subscriber
and (ii) the effectiveness of the appointment of two designees of Ocean Park to
the board of directors of DMED. To evidence and effectuate such sale, assignment
and transfer, BCCAII shall deliver to the Purchasers the certificates or other
documentation representing the Securities, if applicable, together with duly
executed assignment documents, substantially in the form attached as Exhibit B.
The Purchasers shall, and hereby do, effective upon the sale,
assignment and transfer of the Securities contemplated hereby, assume the
obligations of BCCAII under, and agree to be bound by, the Subordination
Agreement, dated as of December 15, 2004, by and between BCCAII and the other
junior creditors, DMED, the collateral agent and the senior creditors.
By execution of a counterpart signature page to this letter agreement,
each "Subscriber" (as defined in the Subscription Agreement) party to the
Subscription Agreement, dated as of December 14, 2004 (the "Subscription
Agreement"), by and among DMED and the Subscribers party thereto, hereby
consents to the sale, assignment and transfer of the Securities
by BCCAII to the Purchasers contemplated by this letter agreement and, in
conjunction therewith, releases DMED from any and all obligations pursuant to
Section 9.1(q) of the Subscription Agreement to enforce the provisions of the
Limited Standstill Agreement, dated as of December 15, 2004 (the "Limited
Standstill"), by and between DMED, BCCAII and the other signatories thereto,
with respect to such sale, assignment and transfer.
By execution of the signature page to this letter agreement, DMED
hereby consents to the sale, assignment and transfer of the Securities by BCCAII
to the Purchasers contemplated by this letter agreement and releases any and all
restrictions applicable thereto pursuant to the Limited Standstill or otherwise.
The undersigned acknowledges that the Purchasers are purchasing the
Securities in reliance on the representations and warranties made to the
Purchasers as of the date hereof and as of the date of the transfer of the
securities to the Purchasers, in the form set forth on Exhibit D hereto.
This letter agreement shall be interpreted in accordance with and
governed by the laws of the State of California applicable to agreements made
and to be performed wholly within that jurisdiction, without reference to the
conflicts of laws principles thereof.
This letter agreement may be executed in counterparts, each one of
which shall be deemed an original and all of which taken together shall
constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
Sincerely,
BCC ACQUISITION II, LLC
By: Bay City Capital Fund I, L.P., its
Manager
By: Bay City Capital Management LLC, its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, Manager and Managing
Director
ACCEPTED AND AGREED TO THIS
21ST DAY OF NOVEMBER, 2005
OCEAN PARK ADVISORS, LLC
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇ III
Its: Managing
M.A.G. CAPITAL, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Managing Member
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
DIAMETRICS MEDICAL, INC.
By: /s/ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Sr. Vice President of Finance and CFO
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
LONGVIEW EQUITY FUND, LP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: CEO, Investment Advisor
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
LONGVIEW FUND, LP
By: /s/ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: CFO, Investment Advisor
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
LONGVIEW INTERNATIONAL EQUITY FUND, LP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: CEO, Investment Advisor
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
MERCATOR MOMENTUM FUND III L.P.
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Portfolio Manager
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
MERCATOR MOMENTUM FUND L.P.
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Portfolio Manager
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
MONARCH POINTE FUND, LTD.
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Portfolio Manager
ACKNOWLEDGED, AGREED AND CONSENTED TO
THIS 21ST DAY OF NOVEMBER, 2005
CAMDEN INTERNATIONAL LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Director
EXHIBIT A
SECURITIES OWNED BY BCCAII
TITLE AND CLASS AMOUNT CERTIFICATE NUMBER
--------------- ------ ------------------
Convertible Senior Secured Notes $6,684,083 principal amount* N/A
Due August 4, 2005
Series G Convertible Preferred 5,000 shares 1
Stock
Stock Purchase Warrant, dated Warrant to purchase 686,579.58 N/A
December 15, 2004 shares of Common Stock
Stock Purchase Warrant dated Warrant to purchase 3,000,000 N/A
December 15, 2004 shares of Common Stock
Warrant to Purchase Common Stock, Warrant to purchase 1,000,000 N/A
dated December 15, 2004 shares of Common Stock
* BCCAII transferred an undivided interest and participation in these Notes
to Banca della Svizzera Italiana and Banca del Gottardo with respect to
$318,334.80 in principal amount. Banca della Svizzera Italiana and Banca
del Gottardo have consented to the transfer of $302,417.80 of such
interests by BCCAII to Ocean Park pursuant to this letter agreement.
EXHIBIT B
FORM OF INSTRUMENT OF TRANSFER
[SEE ATTACHED]
DIAMETRICS MEDICAL, INC.
INSTRUMENT OF TRANSFER
FOR VALUE RECEIVED, the undersigned ("Assignor") does hereby sell, assign
and transfer unto Ocean Park Advisors, LLC and M.A.G. Capital, LLC
("Assignees"), free and clear of all liens, all right, title and interest of
Assignor in and to the securities of Diametrics Medical, Inc. (the "Company")
listed on Exhibit A hereto, together with all rights and privileges associated
therewith, and Assignees do hereby accept the assignment and transfer of said
securities, and Assignor hereby irrevocably constitutes and appoints Assignees
the true and lawful attorney of Assignor, with full power of substitution, for
and in the name of Assignor but on behalf and for the benefit of Assignees, and
their successors and assigns, to transfer said securities on the books and
records of the Company and to demand and receive from time to time any and all
rights and privileges of any kind in respect of same.
Dated as of __________ __, 2005
Assignor
BCC ACQUISITION II, LLC
By: Bay City Capital Fund I, L.P.,
its Manager
By: Bay City Capital Management LLC, its
general partner
By:
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▇▇▇▇ ▇▇▇▇▇▇, Manager and Managing
Director
In the presence of:
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Witness
Assignees
OCEAN PARK ADVISORS, LLC
By:
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Name:
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Title:
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M.A.G. CAPITAL, LLC
By:
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Name:
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Title:
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EXHIBIT A
SECURITIES TRANSFERRED
TITLE AND CLASS AMOUNT CERTIFICATE NUMBER
--------------- ------ ------------------
Convertible Senior Secured Notes $6,684,083 principal amount* N/A
Due August 4, 2005
Series G Convertible Preferred 5,000 shares 1
Stock
Stock Purchase Warrant, dated Warrant to purchase 686,579.58 N/A
December 15, 2004 shares of Common Stock
Stock Purchase Warrant dated Warrant to purchase 3,000,000 N/A
December 15, 2004 shares of Common Stock
Warrant to Purchase Common Stock, Warrant to purchase 1,000,000 N/A
dated December 15, 2004 shares of Common Stock
* BCCAII transferred an undivided interest and participation in these Notes
to Banca della Svizzera Italiana and Banca del Gottardo with respect to
$318,334.80 in principal amount. Banca della Svizzera Italiana and Banca
del Gottardo have consented to the transfer of $302,417.80 of such
interests by BCCAII to Ocean Park.
EXHIBIT C
FORM OF GENERAL RELEASE
[SEE ATTACHED]
GENERAL RELEASE
For good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the undersigned party ("Releasor") hereby agrees
as follows:
1. Release. Releasor releases BCC Acquisition II LLC and its
predecessor entities, affiliates and subsidiaries (collectively "BCCAII"), and
its past and present shareholders, employees and former employees, agents,
directors, officers, attorneys, predecessors, successors, assigns, heirs,
executors, administrators, and all other persons, firms, corporations,
associations, partnerships, or entities having any legal relationship to BCCAII
(collectively, "Releasees"), from any and all claims, demands and causes of
action of any kind or nature, whether known or unknown or suspected or
unsuspected to Releasor, which Releasor now owns or holds, or has at any time
before this owned or held against any of them relating to, arising out of, or in
any way connected with BCCAII.
2. California Civil Code Section 1542. It is ▇▇▇▇▇▇▇▇'s intention that
▇▇▇▇▇▇▇▇'s execution of this Agreement will forever bar any released claims,
demand, cause of action, charge and grievance related to BCCAII and the
Releasees. Because this is ▇▇▇▇▇▇▇▇'s intention, Releasor expressly waives any
and all rights and benefits conferred upon Releasor by the provisions of Section
1542 of the California Civil Code. Section 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
3. Remedies, Attorney Fees, Binding Arbitration. Releasor will not
bring any action against BCCAII or the Releasees with respect to any claims,
demands or causes of action released pursuant to in this Agreement. In the event
Releasor brings any such action: (a) BCCAII will be entitled to all lawful
remedies; and (b) all other provisions of this Agreement will remain in full
force and effect. In the event of any dispute arising out of or related to this
Agreement, the parties agree to enter into binding arbitration under the
commercial rules of the American Arbitration Association. The location for such
arbitration shall be Minneapolis, Minnesota. The governing law shall be
Minnesota law. The prevailing party shall be entitled to recover reasonable
attorney's fees and costs.
4. Enforceability. If any term or provision of this Agreement is held
to be invalid or unenforceable, the remaining terms or provisions of this
Agreement will continue to be valid and will be performed, construed and
enforced to the fullest extent permitted by law, and the invalid or
unenforceable term will be deemed amended and limited in accordance with the
intent of the parties, as determined from the face of the Agreement, to the
extent necessary to permit the maximum enforceability or validation of the term
or provision.
5. Headings. Paragraph headings are for the convenience of the parties
only.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: __________ __, 2005
OCEAN PARK ADVISORS, LLC
By:
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Name:
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Its:
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
M.A.G. CAPITAL, LLC
By:
------------------------------------
Name:
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Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
LONGVIEW EQUITY FUND, LP
By:
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Name:
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Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
LONGVIEW FUND, LP
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
LONGVIEW INTERNATIONAL EQUITY FUND, LP
By:
------------------------------------
Name:
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Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
MERCATOR MOMENTUM FUND III L.P.
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: _________ __, 2005
MERCATOR MOMENTUM FUND L.P.
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has executed and delivered this General
Release as of the day and year set forth below.
Date: __________ __, 2005
CAMDEN INTERNATIONAL LTD.
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
EXHIBIT D
REPRESENTATIONS AND WARRANTIES
[SEE ATTACHED]
REPRESENTATION AND WARRANTIES
BCC Acquisition II LLC, a Delaware limited liability company ("BCCAII")
hereby represents and warrants to Ocean Park Advisors, LLC ("Ocean Park") and
M.A.G. Capital, LLC ("MAG" and, together with Ocean Park, the "Purchasers")as
follows:
1. Existence, Good Standing and Power. BCCAII is a limited liability
company validly existing and in good standing under the laws of the State of
Delaware. BCCAII has all requisite limited liability company power and authority
to execute and deliver the documents and instruments to be executed and
delivered by BCCAII in connection with the sale, assignment, and transfer (the
"Assignment") of securities (the "Securities") of Diametrics Medical, Inc.
("DMED") held by BCCAII to Ocean Park and M.A.G Capital, LLC (the "Purchaser")
as described in the letter agreement, dated as of November 21, 2005 (the "Letter
Agreement"), among BCCAII and the Purchasers. Capitalized terms used and not
defined in this agreement have the meanings set forth in the Letter Agreement.
2. Authority. The undersigned is authorized to execute and deliver these
representations and other documents and instruments to be executed by BCCAII in
connection with the Assignment. Execution and delivery of these representations
and the other documents and instruments to be executed and delivered by BCCAII
in connection with the Assignment have been duly authorized by all necessary
limited liability company action on the part of BCCAII.
3. Third Party Approvals. The execution and delivery by BCCAII of these
representations and other documents and instruments to be executed by BCCAII in
connection with the Assignment do not require any consents, waivers,
authorizations or approvals of any third persons or entities with respect to
BCCAII which have not been obtained by BCCAII. Except for public filings
required pursuant to Section 13d and Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules and regulations related thereto, no filings
with any third persons or entities are required by BCCAII in connection with the
Assignment.
4. Title to the Securities. Except as noted in Exhibit A to the Letter
Agreement, BCCAII is the record and beneficial owner of the Securities free and
clear of any and all liens. The BCCAII has requisite limited liability company
power and authority to sell, transfer, assign and deliver the Securities as
contemplated by the Assignment, and such delivery will convey to the Purchasers
good and valid title to the Securities, free and clear of any and all liens
(other than liens created by the Purchasers or their respective affiliates,
liens in favor of the Subscribers or liens pursuant to the Limited Standstill).
Date: November 21, 2005
BCC ACQUISITION II, LLC
By: Bay City Capital Fund I, L.P.,
its Manager
By: Bay City Capital Management LLC,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Manager and Managing
Director
EXHIBIT A
SECURITIES TRANSFERRED
TITLE AND CLASS AMOUNT CERTIFICATE NUMBER
--------------- ------ ------------------
Convertible Senior $6,684,083 principal N/A
Secured Notes Due amount*
August 4, 2005
Series G Convertible 5,000 shares
Preferred Stock
Stock Purchase Warrant, Warrant to purchase N/A
dated December 15, 2004 686,579.58 shares of
Common Stock
Stock Purchase Warrant Warrant to purchase N/A
dated December 15, 2004 3,000,000 shares of
Common Stock
Warrant to Purchase Warrant to purchase N/A
Common Stock, dated 1,000,000 shares of
December 15, 2004 Common Stock
* BCCAII transferred an undivided interest and participation in these Notes
to Banca della Svizzera Italiana and Banca del Gottardo with respect to
$318,334.80 in principal amount. Banca della Svizzera Italiana and Banca
del Gottardo have consented to the transfer of $302,417.80 of such
interests by BCCAII to Ocean Park pursuant to this letter agreement.