Exhibit 10.1
PROMISSORY NOTE

      $365,550   July 2, 2007

     FOR VALUE RECEIVED, the undersigned, Sutura, Inc., a Delaware corporation
(the “Maker”), hereby promises to pay to the order of Whitebox Hedged High Yield
Partners, L.P., a British Virgin Islands limited partnership, or its assigns
(the “Payee”), at such place as the Payee may designate in writing, the
principal sum of Three Hundred Sixty-Five Thousand Five Hundred Fifty Dollars
($365,550) under the terms set forth herein. This Note is one of a series of
four Notes (together, the “Series Notes") being issued by Maker on the date
hereof.
1. Interest. The unpaid principal balance hereof from time to time outstanding
shall bear interest from the date hereof at the rate of twelve percent (12%) per
annum.
2. Payment. Except as otherwise provided herein, and subject to any default
hereunder, the principal and interest hereof is payable as follows:
     (a) The entire outstanding principal amount of the Note together with all
accrued but unpaid interest shall be due and payable in cash or otherwise
immediately available funds in one balloon payment on the sixtieth (60th) month
anniversary of this Note (the “Maturity Date”).
     (b) Maker may prepay this Note, in whole or in part, upon five (5) days
prior written notice to Payee at a cost equal to accrued interest plus the
present value of the note discounted at a rate equal to (x) the then U.S.
Treasury rate for 5-year Notes as reported by Bloomberg on the date of such
Prepayment Notice, plus (y) 100 basis points. All Prepayments shall be applied
first to accrued but unpaid interest and then to principal.
3. Demand Right for Early Payment. Payee shall have the one-time right, in its
sole and absolute discretion, to require Maker to pay all outstanding principal
amounts and accrued but unpaid interest due under this Note by providing Maker
with written notice of such payment requirement no sooner than November 1, 2007,
but no later than November 15, 2007 (the “Payment Notice”). Upon receipt of such
Payment Notice, Maker shall pay all such amounts in cash or otherwise
immediately available funds on or prior to November 20, 2007. The failure of
Payee to provide the Payment Notice within the required time period will
constitute a waiver of such right without further action of either party.
4. Mandatory Prepayment Upon Sale Transaction. If Maker or its controlling
stockholders enter into a definitive agreement relating to a Sale Transaction,
Maker shall give Payee at least fifteen (15) days prior written notice of the
proposed date for consummation of the Sale Transaction. Despite any other
provisions hereof, the entire principal balance of this Note, and all accrued
but unpaid interest, shall be due and payable immediately prior to (and as a
condition of) the closing on the Sale Transaction. In addition to the payment of
outstanding principal and any accrued but unpaid interest, Maker shall also pay
to Payee a prepayment penalty amount equal to the present value of the remaining
unpaid coupons that would otherwise by paid thru maturity but for the Sale
Transaction discounted at a rate equal to (x) the then U.S.

 

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Treasury rate for 5-year Notes as reported by Bloomberg on the date of such
Prepayment Notice, plus (y) 100 basis points.
For purposes of this Note, a “Sale Transaction” shall mean the sale, license or
other disposition of all or substantially all of Maker’s assets, the sale or
exchange of a majority of the outstanding voting stock of Maker or the merger or
consolidation of Maker into or with any other entity (except in the case where
the holders of Maker’s voting stock prior to consummation of such merger or
consolidation hold at least a majority of the outstanding voting securities of
the surviving entity).
4. Default. The occurrence of any one or more of the following events shall
constitute an event of default, upon which Payee may declare the entire
principal amount of this Note, together with all accrued but unpaid interest, to
be immediately due and payable:
     (a) The Maker shall fail to make any required payment of principal or
interest when due, and such failure shall continue through five days after Payee
gives written notice of such failure to Maker.
     (b) The Maker shall be in default of any term or provision of any of the
promissory notes sold pursuant that certain Purchase Agreement dated
September 7, 2005 among Maker, the Payee and the other purchasers named therein
(the “September 2005 Notes"), or any of the promissory notes sold pursuant to
that certain Purchase Agreement dated March 25, 2005 among Maker, the Payee and
the other purchasers named there (the “March 2005 Notes"), or any of the
promissory notes sold pursuant to that certain Purchase Agreement dated
September 17, 2004 among Maker, the Payee and the other purchasers named therein
(the “September 2004 Notes"), "), or any of the promissory notes sold pursuant
to that certain Purchase Agreement dated December 13, 2006 among Maker, the
Payee and the other purchasers named therein (the “December 2006 Notes"), and
such default is not cured within five days after written notice from Payee to
Sutura.
     (c) The Maker shall become insolvent or shall fail to pay, or become unable
to pay, its debts as they become due; or any bankruptcy, reorganization, debt
arrangement or other proceeding under any bankruptcy or insolvency law shall be
instituted by or against the Maker.
     (d) The Maker incurs an event of default under the terms of any of the
other Series Notes.
     Without limiting the above, the Maker acknowledges that payment on the
scheduled due date in Sections 2 is of essence and that any failure to timely
pay any installment of principal or interest (within any permitted grace period
above) permits Payee to declare this Note immediately due in cash in its
entirety without any prior notice of any kind to Maker, except for the specific
notices provided above. Further, the Maker agrees that any event of default
under this Note shall constitute an event of default under each of the other
Series Notes, the December 2006 Notes, the September 2005 Notes, the March 2005
Notes and the September 2004 Notes.
5. Applicable Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THE NOTE
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF

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MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
6. Waivers. The Maker hereby waives presentment for payment, notice of dishonor,
protest and notice of payment and all other notices of any kind in connection
with the enforcement of this Note.
7. No Setoffs. The Maker shall pay principal and interest under the Note without
any deduction for any setoff or counterclaim.
8. Costs of Collection. If this Note is not paid when due, the Maker shall pay
Payee’s reasonable costs of collection, including reasonable attorney’s fees.

            SUTURA, INC.
 
      By:           David Teckman, President and        Chief Executive Officer 
   

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