Exhibit 10.1
AMENDMENT TO SECURED CONVERTIBLE
PROMISSORY NOTES
     THIS AMENDMENT TO SECURED CONVERTIBLE PROMISSORY NOTES (the “Agreement”) is
effective as of July 1, 2007, by and among Sutura, Inc., a Delaware corporation
(the “Company”), Pandora Select Partners L.P., a British Virgin Islands limited
partnership (“Pandora”), Whitebox Hedged High Yield Partners L.P., a British
Virgin Islands limited partnership (“WHHY”), Whitebox Convertible Arbitrage
Partners L.P., a British Virgin Islands limited partnership (“WCAP”), Whitebox
Intermarket Partners L.P., a British Virgin Islands limited partnership (“WIP”)
and Gary S. Kohler (“Kohler”) and Scot W. Malloy (“Malloy”), each residents of
the State of Minnesota. Each of Pandora, WHHY, WCAP, WIP, Kohler and Malloy may
be referred to herein as a “Whitebox Party” or collectively as the “Whitebox
Parties”.
     WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to a Purchase Agreement dated September 17, 2004 (the “Original Purchase
Agreement”), pursuant to which the Investors each purchased a convertible
promissory note (each, an “Original Note” and together, the “Original Notes”)
and a warrant to purchase shares of the Company’s Common Stock (each, an
“Original Warrant” and together, the “Original Warrants”) from the Company in
consideration of a collective $6,550,000 loan.
     WHEREAS, the Company, Pandora, WHHY and WIP are parties to a second
Purchase Agreement dated March 24, 2005 (the “Second Purchase Agreement”),
pursuant to which Pandora, WHHY and WIP each purchased an additional convertible
promissory note (each, a “March 2005 Note” and together, the “March 2005 Notes”)
and an additional warrant to purchase the Company’s Common Stock (each, a
“March 2005 Warrant” and together, the “March 2005 Warrants”) in consideration
of a collective $3,000,000 new loan.
     WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to an Amendment to Secured Convertible Promissory Notes and Warrants
dated September 7, 2005 (the “First Amendment”), pursuant to which the parties
agreed to amend certain provisions of the Original Notes, Original Warrants,
March 2005 Notes and March 2005 Warrants.
     WHEREAS, the Company, Pandora, WHHY, WCAP and WIP are parties to a third
Purchase Agreement dated September 7, 2005 (the “Third Purchase Agreement”),
pursuant to which Pandora, WHHY, WCAP and WIP each purchased an additional
convertible promissory note (each, a “September 2005 Note” and together, the
“September 2005 Notes”) and an additional warrant to purchase the Company’s
Common Stock (each, a “September 2005 Warrant” and together, the “September 2005
Warrants”) in consideration of a collective $7,000,000 new loan.
     WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to a Second Amendment to Secured Convertible Promissory Notes and
Warrants dated March 30, 2006 (the “Second Amendment”), pursuant to which the
parties agreed to amend certain provisions of the Original Notes, March 2005
Notes, September 2005 Notes, March 2005 Warrants and September 2005 Warrants.

 

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     WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to an undated Letter Agreement (the “Letter Agreement”), entered into by
the parties in August, 2006, pursuant to which the parties agreed to amend
certain provisions of the Original Notes, March 2005 Notes, September 2005
Notes, Original Warrants, March 2005 Warrants and September 2005 Warrants.
     WHEREAS, Sutura, Pandora, WHHY, WCAP, WIP, Kohler and Malloy entered into a
Purchase Agreement dated August 25, 2006 (the “Fourth Purchase Agreement”),
pursuant to which Pandora, WHHY, WCAP, WIP, Kohler and Malloy each converted
their respective notes issued in June and July of 2006, converted certain
amounts of interest due under prior notes and purchased shares of Sutura’s
common stock, par value $0.001 per share.
     WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to a fifth Purchase Agreement dated December 13, 2006 (the “Fifth
Purchase Agreement”), pursuant to which Pandora, WHHY, WCAP and WIP each
purchased additional convertible promissory notes in December, 2006 and March,
2007 (each, a “2006/2007 Note” and together, the “2006/2007 Notes”) in
consideration of a collective $3,000,000 new loan.
     WHEREAS, certain payments of principal and interest due under the Original
Notes, March 2005 Notes and September 2005 Notes become due and/or are required
to commence on July 1, 2007.
     WHEREAS, in connection with proposed additional funding by Pandora, WHHY,
WCAP and WIP in the principal amount of $1,150,000, the parties desire to amend
certain provisions of the Original Notes, the March 2005 Notes the
September 2005 Notes and the 2006/2007 Notes (each sometimes referred to herein
as a “Note” and collectively, as the “Notes”).
     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

 

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          1. Amendment to Original Notes. Each of the Original Notes is amended
as follows:

(a)   Section 2(b) is amended and restated to read in its entirety as follows:

“(b) On July 1, 2009, the remaining outstanding principal balance of this Note
will be due and payable in a single lump sum together with all then-accrued, but
unpaid interest.”

(b)   Section 2(c) to each of the Original Notes is hereby deleted in its
entirety.   (c)   Section 3(b) is amended and restated to read in its entirety
as follows:

“(b) The Conversion Rate shall initially be equal to $0.08 per share.”
          2. Amendment to March 2005 Notes. Each of the March 2005 Notes is
amended as follows:

(a)   Section 2(b) is amended and restated to read in its entirety as follows:

“(b) On July 1, 2009, the remaining outstanding principal balance of this Note
will be due and payable in a single lump sum together with all then-accrued, but
unpaid interest.”

(b)   Section 2(c) to each of the March 2005 Notes is hereby deleted in its
entirety.   (c)   Section 3(b) is amended and restated to read in its entirety
as follows:

“(b) The Conversion Rate shall initially be equal to $0.08 per share.”

 

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          3. Amendment to September 2005 Notes. Each of the September 2005 Notes
is amended as follows:

(a)   Section 2(b) to each of the September 2005 Notes is hereby deleted in its
entirety.   (b)   Section 2(c) is amended and restated to read in its entirety
as follows:

“(b) On July 1, 2009 ( the “Maturity Date”), the remaining outstanding principal
balance of this Note will be due and payable in a single lump sum together with
all then-accrued, but unpaid interest.”Section 2(c)

(c)   Section 2(d) to each of the September 2005 Notes is hereby deleted in its
entirety.   (d)   Section 4(b) is amended and restated to read in its entirety
as follows:

“(b) The Conversion Rate shall initially be equal to $0.08 per share.”
          4. Amendment to 2006/2007 Notes. Each of the 2006/2007 Notes is
amended as follows:

(a)   Section 2(a)(i) is hereby deleted in its entirety.   (b)  
Section 2(a)(ii) is hereby deleted in its entirety.

          5. Interest Payments on Original Notes, March 2005 Notes,
September 2005 Notes and 2006/2007 Notes. The parties agree that the Company may
pay any interest payments due to any Whitebox Party pursuant to any Note by
issuing to such Whitebox Party a promissory note dated as of the interest due
date. The principal amount of such promissory note shall be the amount of the
then due interest payment and the remaining terms and provisions of such
promissory note shall be the same terms and provisions as are then in effect for
the respective Note.
          6. Consent Fee. In connection with this Amendment, and as a condition
hereof, the principal balance outstanding under each Original Note, March 2005
Note and September 2005 Note shall be increased by three percent (3%) effective
as of the date hereof.
          7. Entire Agreement. This Agreement constitutes the entire agreement
and understanding of the parties concerning the amendment of the Notes and
expressly supersedes all prior agreements and commitments of the parties,
whether oral or written. Unless amended by this Agreement, all other terms and
conditions of the Notes remain in full force and effect.

 

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          8. Amendment. No modification, amendment or waiver of any provision of
this Agreement shall be binding unless in a subsequent writing signed by all
parties, in the case of an amendment or modification, or by the party to be
charged thereby, in the case of a waiver. Any waiver shall be limited to the
circumstances or event specifically referred to in the waiver instrument and
shall not be deemed a waiver of any other term of this Agreement or of the same
circumstances or event upon any recurrence of such circumstance or event.
          9. Counterparts. This Agreement may be executed by facsimile and in
counterparts and by different parties on different counterparts, with the same
effect as if the signatures were on the same instrument.
          10. Further Assurances. Each party agrees to execute and deliver such
additional documents and perform such additional acts as may be reasonably
necessary or appropriate to effectuate, carry out, and consummate the terms and
conditions of this Agreement and the transactions contemplated thereby.
[Signature page follows.]

 

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

                  SUTURA, INC.
 
           
 
  By                           David Teckman,         President and Chief
Executive Officer
 
                PANDORA SELECT PARTNERS L.P.
 
           
 
  By                  
 
      Name    
 
           
 
      Its    
 
           
 
                WHITEBOX HEDGED HIGH YIELD PARTNERS L.P.
 
           
 
  By                  
 
      Name    
 
           
 
      Its    
 
           
 
                WHITEBOX CONVERTIBLE ARBITRAGE PARTNERS L.P.
 
           
 
  By                  
 
      Name    
 
           
 
      Its    
 
           
 
                WHITEBOX INTERMARKET PARTNERS L.P.
 
           
 
  By                  
 
      Name    
 
           
 
      Its    
 
             
 
                      Gary S. Kohler  
 
                      Scot W. Malloy