Document:

EX-10.20

EXHIBIT 10.20

AMENDMENT

Reference is made to the Common Stock Purchase Warrants of Diametrics Medical, Inc. (the
“Company”) referenced on Schedule A hereto (the “Schedule A Warrants”) and on Schedule B
hereto (the “Schedule B Warrants”, and together with the Schedule A Warrants, the “Warrants”) that
have been assigned to Longview Equity Fund, LP, Longview Fund, LP, Longview International Equity
Fund, LP and Camden International (collectively, the “Warrant Holders”) by the original holders
thereof.

This Amendment is being signed in connection with and as a condition precedent to the issuance
of up to $3,000,000 in aggregate principal amount of convertible notes to be issued pursuant to
that certain Subscription Agreement dated December 14, 2004 among the Company and the purchasers
parties thereto.

The Company and the Warrant Holders hereby agree as follows:

1. Paragraph 1.1 of the Schedule A Warrants is hereby amended in its entirety to read as
follows:

“This Warrant is exercisable in whole or in part (but not as to any fractional share of
Common Stock), at any time and from time to time, but prior to 6:00 p.m. on the Expiration
Date set forth above.”

2. Paragraph 1.2 of the Schedule A Warrants is hereby amended to provide that the exercise
price shall be $0.01 per share.

3. The second sentence of Paragraph 1.4 of the Schedule A Warrants is hereby amended to read
as follows:

“Payment of the Warrant Price may be in cash, certified or official bank check payable to the
order of the Company, wire transfer of funds to the Company’s account, or by tender of promissory
notes of the Company (or any combination of any of the foregoing) in the amount of the Warrant
Price for each share being purchased.”

4. The Purchase Price, as defined in the Schedule B Warrants, is hereby amended to be $0.01
per share of Common Stock.

5. Section 1.1 of the Schedule B Warrants is hereby amended in its entirety to read as
follows:

“Time for Exercise. This Warrant may be exercised in whole or in part at
anytime and from time to time, but prior to 5:00 p.m. on April 7, 2008.”

6. The second sentence of Section 1.2 of the Schedule B Warrants is hereby amended to read as
follows:

“Payment of the Purchase Price may be in cash, certified or official bank check payable
to the order of the Company, wire transfer of funds to the Company’s account, or by tender
of promissory notes of the Company (or any combination of any of the foregoing) in the
amount of the Purchase Price for each share being purchased.”

7. A new Section 5 is hereby added to the Schedule B Warrants to read as follows:

“5. Maximum Exercise. The Holder shall not be entitled to exercise this Warrant on
an exercise date, in connection with that number of shares of Common Stock which would be in excess
of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its
affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of
more than 9.99% of the outstanding shares of Common Stock on such date. For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject
to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the
issuance of more than 9.99%. The restriction described in this paragraph may be revoked upon
sixty-one (61) days prior notice from the Holder to the Company. The Holder may allocate which of
the equity of the Company deemed beneficially owned by the Holder shall be included in the 9.99%
amount described above and which shall be allocated to the excess above 9.99%.”

8. Except as hereby amended, all other terms of the Warrants remain in full force and effect.

9. The shares of common stock underlying the Warrants were previously registered for resale by
the Company on a registration statement filed with the Securities and Exchange Commission on Form
S-1 (SEC File No. 333-112785) and Form S-1 (SEC File No. 333-116703). The Company agrees to file a
post-effective amendment to each of the Form S-1s to reflect the change in ownership of the
Warrants and to update the prospectus therein within 15 business days of the date hereof. The
Company’s failure to file the two post-effective amendments to the Form S-1s within 15 business
days of the date hereof, or the Company’s failure to have such post-effective amendments declared
effective within 30 days of the date of filing, will be deemed an Event of Default under the Note
(as defined in the Subscription Agreement).

10. The validity, construction and enforceability of this Amendment shall be governed by the
internal law of the State of Minnesota, without regard to conflict of law principles.

11. This 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.

12. This Amendment shall be binding upon the Company, the Warrant Holder and their respective
successors and assigns, and shall inure to the sole benefit of the Company, the Warrant Holder and
the successors and assigns of the Company and the Warrant Holder.

	 	 	 
	Dated: December 15, 2004

	 	DIAMETRICS MEDICAL, INC.

By: /s/ David B. Kaysen

Name: David B. Kaysen

Title: President and CEO
	 
	 	 
	
 
	 	LONGVIEW EQUITY FUND, LP

By: /s/ Wayne H. Coleson

Name: Wayne H. Coleson

Title: Investment Advisor
	 
	 	 
	
 
	 	LONGVIEW FUND, LP

By: /s/ S. Michael Rudolph

Name: S. Michael Rudolph

Title: Investment Advisor
	 
	 	 
	
 
	 	LONGVIEW INTERNATIONAL EQUITY FUND, LP

By: /s/ Wayne H. Coleson

Name: Wayne H. Coleson

Title: Investment Advisor
	 
	 	 
	
 
	 	CAMDEN INTERNATIONAL

By: /s/ Deirdre M. McCoy

Name: Deirdre M. McCoy

Title: Director
	 
	 	 

1

Schedule A

Warrants Assigned to Warrant Holders

	 	 	 	 	 	 	 
	Original Warrant Holder	 	Date of Original Warrant	 	Warrants Assigned
	Mercator Momentum Fund, LP

	 	May 28, 2004
	 	 	2,180,721	 
	 
	 	 	 	 	 	 
	Mercator Momentum Fund III, LP

	 	May 28, 2004
	 	 	3,269,770	 
	 
	 	 	 	 	 	 
	Monarch Pointe, Ltd.

	 	May 28, 2004
	 	 	1,257,695	 
	 
	 	 	 	 	 	 
	Mercator Advisory Group LLC

	 	May 28, 2004
	 	 	1,291,814	 
	 
	 	 	 	 	 	 
	BCC Acquisition II LLC

	 	May 28, 2004
	 	 	1,000,000	 
	 
	 	 	 	 	 	 

2

Schedule B

Warrants Assigned to Warrant Holders

	 	 	 	 	 	 	 
	Original Warrant Holder	 	Date of Original Warrant	 	Warrants Assigned
	BCC Acquisition II LLC

	 	April 7, 2003
	 	 	1,000,000	 
	 
	 	 	 	 	 	 

3EX-10.3

Exhibit 10.3

THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO DIAMETRICS MEDICAL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

	 
	 

	Right to Purchase    shares of Common Stock of Diametrics Medical, Inc.

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

No. 2004-DEC-001 Issue Date: December 15, 2004

DIAMETRICS MEDICAL, INC., a corporation organized under the laws of the State of Minnesota
(the “Company”), hereby certifies that, for value received,    , or its assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at
any time after the Approval Date until 5:00 p.m., E.S.T on the fifth anniversary of the Issue Date
(the “Expiration Date”), up to    fully paid and nonassessable shares of the common stock of
the Company (the “Common Stock”), $.01 par value per share at a per share purchase price of $0.025.
The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is
referred to herein as the “Purchase Price.” The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided herein. The Company may reduce
the Purchase Price without the consent of the Holder. Capitalized terms used and not otherwise
defined herein shall have the meanings set forth in that certain Subscription Agreement (the
“Subscription Agreement”), dated December 14, 2004, entered into by the Company and the Holder.

As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:

(a) The term “Company” shall include Diametrics Medical, Inc. and any corporation which shall
succeed or assume the obligations of Diametrics Medical, Inc. hereunder.

(b) The term “Common Stock” includes (a) the Company’s Common Stock, $.01 par value per share,
as authorized on the date of the Subscription Agreement, and (b) any other securities into which or
for which any of the securities described in (a) may be converted or exchanged pursuant to a plan
of recapitalization, reorganization, merger, sale of assets or otherwise.

(c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.

1

1. Exercise of Warrant.

1.1. Number of Shares Issuable upon Exercise. From and after the Issue Date through
and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of
this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this
Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.

1.2. Full Exercise. This Warrant may be exercised in full by the Holder hereof by
delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto
(the “Subscription Form”) duly executed by such Holder and surrender of the original Warrant within
five (5) days of exercise, to the Company at its principal office or at the office of its Warrant
Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer or by certified or
official bank check payable to the order of the Company, in the amount obtained by multiplying the
number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price
then in effect.

1.3. Partial Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place provided in
subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the
Holder in the Subscription Form by (b) the Purchase Price then in effect. On any such partial
exercise, the Company, at its expense, will forthwith issue and deliver to or upon the order of the
Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of
Common Stock for which such Warrant may still be exercised.

1.4. Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:

(a) If the Company’s Common Stock is traded on an exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation (“NASDAQ”), National Market System, the
NASDAQ SmallCap Market or the American Stock Exchange, LLC, then the closing or last sale price,
respectively, reported for the last business day immediately preceding the Determination Date;

(b) If the Company’s Common Stock is not traded on an exchange or on the NASDAQ National
Market System, the NASDAQ SmallCap Market or the American Stock Exchange, Inc., but is traded in
the over-the-counter market, then the average of the closing bid and ask prices reported for the
last business day immediately preceding the Determination Date;

(c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly
traded, then as the Holder and the Company agree, or in the absence of such an agreement, by
arbitration in accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by education and training
to pass on the matter to be decided; or

(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any
event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of
this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the
Warrants are outstanding at the Determination Date.

1.5. Company Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its continuing obligation to
afford to such Holder any rights to which such Holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any
such request, such failure shall not affect the continuing obligation of the Company to afford to
such Holder any such rights.

1.6. Trustee for Warrant Holders. In the event that a bank or trust company shall have
been appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2, such bank or
trust company shall have all the powers and duties of a warrant agent (as hereinafter described)
and shall accept, in its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

 1.7 Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this Warrant in full or in part, and in any
event within five (5) days thereafter, the Company at its expense (including the payment by it of
any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder
hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct
in compliance with applicable securities laws, a certificate or certificates for the number of duly
and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then
Fair Market Value of one full share of Common Stock, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder is entitled upon
such exercise pursuant to Section 1 or otherwise.

2. Cashless Exercise.

(a) If a Registration Statement (as defined in the Subscription Agreement) (“Registration
Statement”) is effective and the Holder may sell its shares of Common Stock upon exercise hereof
pursuant to the Registration Statement, this Warrant may be exercisable in whole or in part for
cash only as set forth in Section 1 above. If no such Registration Statement is available, then
payment upon exercise may be made at the option of the Holder either in (i) cash, wire transfer or
by certified or official bank check payable to the order of the Company equal to the applicable
aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants
in accordance with Section (b) below or (iii) by a combination of any of the foregoing methods, for
the number of Common Stock specified in such form (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.

(b) Subject to the provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value
(as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this
Warrant at the principal office of the Company together with the properly endorsed Subscription
Form in which event the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:

X=Y (A-B)

A

Where X= the number of shares of Common Stock to be issued to the holder

	 	 	 	Y= the number of shares of Common Stock
purchasable under the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being exercised (at the
date of such calculation)

	 	 	 	A= the Fair Market Value of one share of the
Company’s Common Stock (at the date of such calculation)

	 	 	 	B= Purchase Price (as adjusted to the date of such
calculation)

(c) The Holder may employ the cashless exercise feature described in Section (b) above only
during the pendency of a Non-Registration Event as described in Section 11 of the Subscription
Agreement.

For purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood and
acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to
have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the Subscription
Agreement.

3. Adjustment for Reorganization, Consolidation, Merger, etc.

3.1. Reorganization, Consolidation, Merger, etc. In case at any time or from time to
time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person or (c) transfer all or substantially all of its properties or assets to any other person
under any plan or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and adequate provision shall
be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in
Section 1, at any time after the consummation of such reorganization, consolidation or merger or
the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common
Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective
date, the stock and other securities and property (including cash) to which such Holder would have
been entitled upon such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

3.2. Dissolution. In the event of any dissolution of the Company following the
transfer of all or substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and other securities
and property (including cash, where applicable) receivable by the Holder of the Warrants after the
effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a
“Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Warrants.

3.3. Continuation of Terms. Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable to the Other
Securities and property receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have expressly assumed the
terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in
full force and effect after the consummation of the transaction described in this Section 3, then
only in such event will the Company’s securities and property (including cash, where applicable)
receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section
3.2.

3.4 Share Issuance. Until the Expiration Date, if the Company shall issue any Common
Stock except for the Excepted Issuances (as defined in the Subscription Agreement), prior to the
complete exercise of this Warrant for a consideration less than the Purchase Price that would be in
effect at the time of such issue, then, and thereafter successively upon each such issue, the
Purchase Price shall be reduced to such other lower issue price. For purposes of this adjustment,
the issuance of any security or debt instrument of the Company carrying the right to convert such
security or debt instrument into Common Stock or of any warrant, right or option to purchase Common
Stock shall result in an adjustment to the Purchase Price upon the issuance of the above-described
security, debt instrument, warrant, right, or option and again at any time upon any subsequent
issuances of shares of Common Stock upon exercise of such conversion or purchase rights if such
issuance is at a price lower than the Purchase Price in effect upon such issuance. The reduction
of the Purchase Price described in this Section 3.4 is in addition to the other rights of the
Holder described in the Subscription Agreement.

4. Extraordinary Events Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding
Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding
shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by
multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as
so adjusted, shall be readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock that the Holder of
this Warrant shall thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise
by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect
on the date of such exercise.

5. Certificate as to Adjustments. In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the
Company at its expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based, including a statement of (a) the consideration
received or receivable by the Company for any additional shares of Common Stock (or Other
Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of
Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase
Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as
provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 11
hereof).

6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements.
From and after the Approval Date, the Company will at all times reserve and keep available, solely
for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant. This Warrant entitles the
Holder hereof to receive copies of all financial and other information distributed or required to
be distributed to the holders of the Company’s Common Stock.

7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder
hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor’s
endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and
together with an opinion of counsel reasonably satisfactory to the Company that the transfer of
this Warrant will be in compliance with applicable securities laws, the Company at its expense,
twice, only, but with payment by the Transferor of any applicable transfer taxes, will issue and
deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in
the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form
(each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of
shares of Common Stock called for on the face or faces of the Warrant so surrendered by the
Transferor. No such transfers shall result in a public distribution of the Warrant.

8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security
reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation,
on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute
and deliver, in lieu thereof, a new Warrant of like tenor.

9. Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in the Subscription
Agreement. The terms of Section 11 of the Subscription Agreement are incorporated herein by this
reference. Upon the occurrence of a Non-Registration Event, or in the event the Company is unable
to issue Common Stock upon exercise of this Warrant that has been registered in a Registration
Statement described in Section 11 of the Subscription Agreement, within the time periods described
in the Subscription Agreement, which Registration Statement must be effective for the periods set
forth in the Subscription Agreement, or from and after the occurrence of an Approval Default (as
defined in the Subscription Agreement), then upon written demand made by the Holder, the Company
will pay to the Holder of this Warrant, in lieu of delivering Common Stock, a sum equal to the
closing price of the Company’s Common Stock on the principal market or exchange upon which the
Common Stock is listed for trading on the trading date immediately preceding the date notice is
given by the Holder, less the Purchase Price, for each share of Common Stock designated in such
notice from the Holder.

10. Maximum Exercise. The Holder shall not be entitled to exercise this Warrant on an
exercise date, in connection with that number of shares of Common Stock which would be in excess of
the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its
affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of
more than 9.99% of the outstanding shares of Common Stock on such date. For the purposes of the
immediately preceding sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject
to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the
issuance of more than 9.99%. The restriction described in this paragraph may be revoked upon
sixty-one (61) days prior notice from the Holder to the Company. The Holder may allocate which of
the equity of the Company deemed beneficially owned by the Subscriber shall be included in the
9.99% amount described above and which shall be allocated to the excess above 9.99%.

11. Warrant Agent. The Company may, by written notice to the Holder of the Warrant,
appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities)
on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section
7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any
such issuance, exchange or replacement, as the case may be, shall be made at such office by such
Warrant Agent.

12. Transfer on the Company’s Books. Until this Warrant is transferred on the books
of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.

13. Notices. All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below
or to such other address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second business day following the
date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications
shall be: (i) if to the Company to: Diametrics Medical, Inc., 3050 Centre Pointe Drive, Suite 150,
St. Paul, MN 55113, Attn: David B. Kaysen, President & CEO, telecopier number: (651) 639-8549, with
a copy by telecopier only to: Kenneth L. Cutler, Esq., Dorsey & Whitney LLP, 50 South Sixth Street,
Suite 1500, Minneapolis, MN 55402, telecopier number: (612) 340-7800, and (ii) if to the Holder, to
the address and telecopier number listed on the first paragraph of this Warrant, with a copy by
telecopier only to: Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
10176, telecopier number: (212) 697-3575.

14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws of New York. Any dispute
relating to this Warrant shall be adjudicated in New York County in the State of New York. The
headings in this Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.

2

IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	 	 	 
	
 
	 	DIAMETRICS MEDICAL, INC.

By:
	
 
	 	 
	
 
	 	Name: David B. Kaysen

Title: President and CEO
	 
	 	 
	Witness:

	 	

	 
	 	 

3

Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO: DIAMETRICS MEDICAL, INC.

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.   ), hereby
irrevocably elects to purchase (check applicable box):

   shares of the Common Stock covered by such Warrant; or

   the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless
exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such shares at the price per
share provided for in such Warrant, which is $   . Such payment takes the form of (check
applicable box or boxes):

   $   in lawful money of the United States; and/or

   the cancellation of such portion of the attached Warrant as is exercisable for a total of
   shares of Common Stock (using a Fair Market Value of $  per share for purposes of
this calculation); and/or

   the cancellation of such number of shares of Common Stock as is necessary, in accordance with
the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of
shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section
2.

The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to    whose address is
   

    .

The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant to registration of
the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant
to an exemption from registration under the Securities Act.

	 	 	 
	Dated:   

	 	(Signature must conform to name of holder

as specified on the face of the Warrant)

(Address)

4

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s)
named below under the heading “Transferees” the right represented by the within Warrant to purchase
the percentage and number of shares of Common Stock of DIAMETRICS MEDICAL, INC. to which the within
Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of DIAMETRICS MEDICAL, INC. with full power of
substitution in the premises.

	 	 	 	 	 
	Transferees

	 	Percentage Transferred
	 	Number Transferred
	 

	 	 
	 	 

	 	 	 
	Dated:    ,    

Signed in the presence of:

(Name)

ACCEPTED AND AGREED:

[TRANSFEREE]

(Name)

	 	

(Signature must conform to name

of holder as specified on the

face of the warrant)

(address)

(address)
	 
	 	 

5

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