Exhibit 10.43

LIMITED WAIVER AND CONSENT

          Reference is made to (i) the Subscription Agreement, dated as of
December 14, 2004 (the “Subscription Agreement”), among Diametrics Medical, Inc.
(the “Company”) and the subscribers parties thereto (collectively, the
“Noteholders”), (ii) those Convertible Notes due December 15, 2007 of the
Company issued to the Noteholders pursuant to the Subscription Agreement
(collectively, the “Notes”), (iii) those Common Stock Purchase Warrants dated
December 15, 2004 of the Company issued to the Noteholders pursuant to the
Subscription Agreement (collectively, the “Warrants”), (iv) the Security and
Pledge Agreement, the Trademark Security Agreement, the Debenture and the Charge
Over Shares, each dated December 15, 2004 and entered into by the Company for
the benefit of the Noteholders in connection with the Subscription Agreement
(collectively, the “Security Documents”), and (v) the Amendment of warrants,
dated December 15, 2004, among the Company and certain of the Noteholders
(namely, Longview Equity Fund, LP, Longview Fund, LP, Longview International
Equity Fund, LP, and Camden International) (the “Amendment”). Capitalized terms
used herein without definition shall be used as defined in the Subscription
Agreement.

          This Limited Waiver and Consent is being signed in connection with the
issuance of up to $150,000 in aggregate principal amount of additional
convertible notes (the “New Notes”) and related warrants to purchase up to
3,750,000 shares of common stock (the “New Warrants”), to be issued to Mercator
Momentum Fund III, L.P., Mercator Momentum Fund, L.P. and Monarch Pointe Fund,
Ltd. (together, the “Mercator Funds”) pursuant to the Subscription Agreement as
partial funding of the second tranche described therein. The Company and each
Noteholder hereby agrees as follows:

          1. Provided the interest and principal payments due on May 1, 2005,
June 1, 2005 and July 1, 2005 pursuant to Sections 1.1 and 1.2 of the Notes are
paid in full on August 1, 2005, the Noteholders hereby consent to defer the
Company’s obligation to make such interest and principal payments on such dates,
and, in each case, the Noteholders further consent to defer any right to default
interest provided under Section 1.3 of the Notes with respect to such interest
and principal payments.

          2. Provided that the Registration Statement described in
Section 11.1(iv) and 11.1(v) of the Subscription Agreement and the
post-effective amendments described in Section 9 of the Amendment are filed with
the Commission at the earlier of (i) 30 days after the filing of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2004, or (ii) May 31,
2005, the Noteholders hereby waive as Events of Default and Non-Registration
Events pursuant to each of the Notes, the Subscription Agreement, the Warrants,
the Security Documents and the Amendment the Company’s failure to (a) comply
with its reporting requirements in Section 9.1(d) of the Subscription Agreement,
and (b) comply with its registration requirements in Sections 11.1(iv), 11.1(v)
and 11.2(a) of the Subscription Agreement, Section 9 of the Warrants and
Section 9 of the Amendment, and further waive their right to claim a Mandatory
Redemption Payment or Liquidated Damages in connection therewith. The
Noteholders further consent to defer any right to default interest provided
under Section 1.3 of the Notes with respect thereto.

 

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          3. The parties acknowledge that the conditions to the Second Closing
have not been met, and that there is no further obligation on the part of the
Noteholders to purchase the Second Closing Notes. Notwithstanding the foregoing,
concurrently herewith the Mercator Funds agree to purchase and the Company shall
sell to the Mercator Funds the New Notes and New Warrants in the amounts
designated on Schedule A attached hereto. The New Notes shall be identical to
the Notes, except that the maturity date shall be the third anniversary of the
date of issuance of the New Notes. The New Warrants shall have the terms
specified in Section 3 of the Subscription Agreement. Attached hereto as
Schedule B is the Use of Proceeds received by the Company from the New Notes.

          4. Except as amended hereby, all other terms and conditions of the
Subscription Agreement, the Notes, the Security Documents and the Amendment
remain in full force and effect.

          5. The provisions of the Subscription Agreement regarding notice,
governing law, venue and consent to jurisdiction are incorporated by reference
into this Limited Waiver and Consent and made a part hereof.

          6. This Limited Waiver and Consent 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.

          7. This Limited Waiver and Consent shall be limited precisely as
written and shall not be deemed or otherwise construed to (i) constitute a
waiver of any Event of Default or Non-Registration Event (except as may be 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
Subscription Agreement, the Notes, the Security Documents and/or the Amendment
(after giving effect to this Limited Waiver and Consent).

          8. This Limited Waiver and Consent may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterparty shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same document.

Dated: May 2, 2005.

            THE COMPANY:

DIAMETRICS MEDICAL, INC.
      By:   /s/ David Kaysen         Name:   David Kaysen        Title:   Chief
Executive Officer and President        THE NOTEHOLDERS:
[see attached signature pages]
                     

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            NOTEHOLDER:

LONGVIEW EQUITY FUND, LP
      By:   /s/ Wayne Coleson       Name:  Wayne Coleson      Title:  Investment
Manager        LONGVIEW FUND, LP
      By:   /s/ S. Michael Rudolph       Name:  S. Michael Rudolph      Title: 
CFO and Managing Member        LONGVIEW INTERNATIONAL
EQUITY FUND, LP
      By:   /s/ Wayne Coleson       Name:  Wayne Coleson      Title:  Investment
Manager        CAMDEN INTERNATIONAL
      By:   /s/ Deirdre M. McCoy       Name:  Deirdre M. McCoy      Title: 
Director     

 

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              NOTEHOLDER:
 
            MERCATOR MOMENTUM FUND III, L.P.
 
       

  By:   /s/ David Firestone

  Name:   David Firestone

  Title:   Managing Partner
 
            MERCATOR MOMENTUM FUND, L.P.
 
       

  By:   /s/ David Firestone

  Name:   David Firestone

  Title:   Managing Partner
 
            MONARCH POINTE FUND, LTD.
 
       

  By:   /s/ David Firestone

  Name:   David Firestone

  Title:   Managing Partner

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Schedule A

Allocation

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Schedule B

Use of Proceeds

The proceeds from the New Notes will be used by the Company for general working
capital purposes.

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