WAIVER NO. 1
This Waiver No. 1, made as of April 14, 1999 (this "Waiver"), is by
and among Nitinol Medical Technologies, Inc. (the "Company"), on the one hand,
and Whitney Subordinated Debt Fund, L.P., on the other hand. Capitalized terms
used herein and not otherwise defined have the meanings assigned to such terms
in the Purchase Agreement (as defined below).
W I T N E S S E T H
WHEREAS, the Company and the Purchaser are parties to the Subordinated
Note and Common Stock Purchase Agreement, dated as of July 8, 1998 (the
"Purchase Agreement"), regarding the Company's $20,000,000 subordinated notes
due September 30, 2003;
WHEREAS, the Company has requested the Purchaser to waive compliance
with certain covenants contained in the Purchase Agreement for the fiscal
quarter ended March 31, 1999.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
1. The Purchaser hereby waives compliance by the Company with the
provisions of Section 9.8(e) of the Purchase Agreement solely with respect to
the fiscal quarter ended March 31, 1999 and waives compliance by the Company
with the provisions of Sections 8.1(a) and 8.1(c) of the Purchase Agreement
through the date hereof; provided, however, that such waiver shall only become
effective upon execution by the Company of Amendment No. 1 to the Purchase
Agreement in the form attached hereto as Exhibit A.
2. As consideration in respect of this Waiver, the Company hereby
covenants and agrees that it shall issue to the Purchaser, promptly after the
date hereof, a stock purchase warrant exercisable for the purchase of 25,000
shares of the common stock of the Company. Such warrant shall contain weighted
average antidilution protection and the strike price of such warrant shall be
equal to the closing price of the common stock of the Company on the date
3. This Waiver may be signed in counterparts, and by the various
parties on separate counterparts. Each set of counterparts which contains the
signature of each of the parties shall constitute a single instrument with the
same effect as if the signature thereto were upon the same instrument. The
parties hereto agree that each
party shall accept facsimile signatures as legally sufficient, binding and
admissible evidence of the execution of this Waiver.
4. Except as expressly modified by this Waiver, all of the terms and
provisions of the Purchase Agreement (including as the same shall be amended by
that certain Amendment No. 1 in the form attached hereto as Exhibit A) and the
Notes shall continue in full force and effect and all parties hereto shall be
entitled to the benefits thereof.
5. If the financial statements and operating results as reported in
the Company's 10-Q for the quarter ended March 31, 1999 are materially better,
as determined in the Purchaser's sole discretion, than reported by the Company
in its April 13, 1999 revised 1999 consolidated budget for the aforementioned
quarter, the Purchaser shall have the right to revise the covenant levels
included in Amendment No. 1 in the form attached hereto as Exhibit A to reflect
the Company's improved performance.
6. The Company agrees to engage RAS Management Advisors, Inc. no
later than April 16, 1999 to review and perform an analysis, as reasonably
directed by the Purchaser, of the Company's working capital accounts and
7. This Waiver shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the principals of conflict
of laws of such state.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
signed by their respective duly authorized officers as of the date first written
NITINOL MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President and CEO
WHITNEY SUBORDINATED DEBT FUND, LP
By: /s/ Xxxxxx X. X'Xxxxx
A General Partner