Letter Agreement Regarding Escrow Deposit for Patent Counsel Services Claim – BCC Acquisition II LLC and Diametrics Medical, Inc.

Summary

BCC Acquisition II LLC agrees to deposit $7,000 into escrow with Ocean Park Advisors for the benefit of Diametrics Medical, Inc., relating to a claim for patent counsel services provided in 2003. This payment is conditional on the transfer of certain Diametrics securities to Ocean Park Advisors and M.A.G. Capital, LLC. The agreement clarifies that BCC Acquisition II LLC is not obligated to pay Merchant & Gould directly, and no third party is a beneficiary. The agreement is governed by California law.

EX-10.3 4 c00360exv10w3.txt LETTER AGREEMENT EXHIBIT 10.3 BCC ACQUISITION II LLC C/O BAY CITY CAPITAL FUND I, L.P. 750 BATTERY STREET, SUITE 400 SAN FRANCISCO, CA 94109 November 21, 2005 CONFIDENTIAL Diametrics Medical, Inc. 3050 Centre Pointe Drive, Suite 150 St. Paul, MN 55113 Ladies and Gentlemen: BCC Acquisition II LLC, a Delaware limited liability company ("BCCAII"), hereby agrees to deliver into escrow with Ocean Park Advisors, LLC ("OPA") (pursuant to the terms of any Escrow Agreement (as defined below)) for the benefit of Diametrics Medical, Inc., a Minnesota corporation ("DMED"), an amount equal to $7,000, in respect of a claim by Merchant & Gould with respect to certain patent counsel services provided to DMED in 2003 in connection with the ITC asset purchase transaction (the "Services"); provided that BCCAII's obligation to make such payment is conditioned upon the prior or concurrent completion of the transfer of certain DMED securities owned by BCCAII to Ocean Park Advisors, LLC and M.A.G. Capital, LLC pursuant to a letter agreement of even date herewith. This letter agreement shall in no way obligate, or be deemed to obligate, BCCAII to pay any amounts to Merchant & Gould with respect to the Services, and neither Merchant & Gould nor any other party shall be a third party beneficiary of the agreements set forth herein. The Commitment shall become part of the Escrow Deposit described in and held subject to the escrow letter agreement dated as of the date hereof among BCCAII, OPA, MAG and DMED (the "Escrow Agreement"). 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. [SIGNATURE PAGE FOLLOWS] 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. 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/ Fred Craves ------------------------------------ Fred Craves, Manager and Managing Director ACCEPTED AND AGREED TO THIS 21ST DAY OF NOVEMBER, 2005 DIAMETRICS MEDICAL, INC. By: /s/ W. Glen Winchell --------------------------------- Name: W. Glen Winchell Its: Sr. Vice President of Finance and CFO