Exhibit 10.5
FIRST AMENDMENT TO CONVERTIBLE SENIOR
SUBORDINATED ZERO-COUPON PROMISSORY NOTE
     THIS FIRST AMENDMENT TO CONVERTIBLE SENIOR SUBORDINATED ZERO-COUPON
PROMISSORY NOTE (this “Amendment”) is made and entered into as of the 10th day
of December, 2007, by and among Third Wave Technologies, Inc., a Delaware
corporation (the “Company”), and Stark Onshore Master Holding LLC (“Holder”).
STATEMENT OF PURPOSE
     The Company is indebted to Holder pursuant to that certain Convertible
Senior Subordinated Zero-Coupon Promissory Note dated December 20, 2006, in the
original principal amount at maturity of $20,000,000 (the “Note”). The Company
and Holder have agreed to certain modifications and amendments to the Note as
provided for herein.
     NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

1.  
Amendment of Section 4. Section 4 of the Note is hereby amended by adding the
following clauses at the end thereof:

  (xii)  
any “event of default” under (and as defined in) any agreement evidencing
Subordinated Indebtedness; or
    (xiii)  
the validity of or the Securities Purchase Agreement or this Note shall be
contested by any legislative, executive or judicial body of any jurisdiction, or
any treaty, law, regulation, communiqué, decree, ordinance or policy of any
jurisdiction shall purport to render any material provision of the Securities
Purchase Agreement or this Note invalid or unenforceable or shall purport to
prevent or materially delay the performance or observance by the Company of its
obligations under the Securities Purchase Agreement or this Note;
    (xiv)  
there is a failure to perform in any agreement to which the Company is a party
with a third party or parties resulting in a right by such third party or
parties to accelerate the maturity of any Indebtedness in an amount in excess of
$500,000, and such acceleration right is exercised;
    (xv)  
the Company makes any payment on account of Subordinated Indebtedness except as
permitted by the Subordination Agreement;
    (xvi)  
Any license, permit or approval held by the Company from any Government
Authority shall have been suspended, canceled or revoked and such suspension,
cancellation or revocation could reasonably be expected to have a Material
Adverse Effect, and such suspension, cancellation or revocation .shall not have
been cured within 30 days;

 

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  (xvii)  
The Company has failed to comply with the requirements of the Securities
Exchange Act of 1934 in a manner which could reasonably be expected to have a
Material Adverse Effect; or
    (xviii)  
if the Cash and Cash Equivalents is less than $18,500,000.

2.  
Amendment of Section 6. Section 6 of the Note is hereby amended by adding the
following clauses at the end thereof:

  (c)  
Payments on Subordinated Indebtedness. So long as this Note is outstanding, the
Company shall not make any payment on Subordinated Indebtedness except as
permitted by the Subordination Agreement.
    (d)  
Amendments to Subordinated Debt Documents. So long as this Note is outstanding,
the Company shall not agree to any modification or amendment of any Subordinated
Documents (as such term is defined in the Subordination Agreement) that is
prohibited by the Subordination Agreement.

3.  
Amendment of Section 19. Section 19 of the Note is hereby amended as follows:

  (a)  
The following definitions are added:

  (i)  
“Cash and Cash Equivalents” means the amount shown as such on the consolidated
balance sheet of the Company and its subsidiaries at the time such balance sheet
is filed with the SEC on Form 10-Q or Form 10-K under the Securities Exchange
Act of 1934 or otherwise made available to the Company’s stockholders.
    (ii)  
“Government Authority” means any government, governmental department, ministry,
cabinet, commission, board, bureau, agency, tribunal, regulatory authority,
instrumentality, judicial, legislative, fiscal, or administrative body or
entity, domestic or foreign, federal, state or local having jurisdiction over
the matter or matters and Person or Persons in question, including, without
limitation, the SEC.
    (iii)  
“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, prospects, condition (financial or otherwise) or property of the
Company, (b) the validity or enforceability of any provision of the Securities
Purchase Agreement or this Note, (c) the ability of the Company to timely
perform its obligations under the Securities Purchase Agreement or this Note or
(d) the rights and remedies of Holder under the Securities Purchase Agreement or
this Note.
    (iv)  
“Subordinated Indebtedness” is defined in the Subordination Agreement by and
between the Holder and Deerfield Private Design Fund, L.P. and Deerfield Private
Design International, L.P. dated December 10, 2007.

  (b)  
The definition of “Change of Control” is amended and restated to read as
follows:

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  (i)  
“Change of Control” means any Major Transaction (as such term is defined in
subsection (a)(ii) of Article II of the Subordination Agreement) or any
Fundamental Transaction other than (i) any reorganization, recapitalization or
reclassification of the Common Stock in which holders of the Company’s voting
power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly,
the voting power of the surviving entity or entities necessary to elect a
majority of the members of the board of directors (or their equivalent if other
than a corporation) of such entity or entities, or (ii) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company.

4.  
Full Force and Effect. Except as expressly provided herein, this Amendment shall
not amend or modify the terms and conditions of the Note, which terms and
conditions shall remain in full force and effect.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal as of the date first above written.

         
 
       
 
  THIRD WAVE TECHNOLOGIES, INC.
 
       
 
  By:   /s/ Kevin Conroy
 
       
 
  Name:   Kevin Conroy
 
  Title:   President and CEO
 
       
 
  STARK ONSHORE MASTER HOLDING LLC
 
       
 
  By:   /s/ Brian H. Davidson
 
       
 
  By:   STARK OFFSHORE MANAGEMENT LLC, its Manager
 
  Name:   Brian H. Davidson
 
  Title:   Member