Document:

exv10w6

 

Exhibit 10.6

WARRANT NO. 2005-2

To
Purchase Shares of Common Stock

of

SUTURA, INC.

     This Warrant and the Securities issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933 (the “1933 Act”) or under any state securities or “Blue
Sky” laws (“Blue Sky Laws”). No transfer, sale, assignment, pledge, hypothecation or other
disposition of this Warrant or the Securities issuable upon exercise of this Warrant or any
interest therein may be made except (a) pursuant to an effective registration statement under the
1933 Act and any applicable Blue Sky Laws or (b) if the Corporation has been furnished with an
opinion of counsel for the holder, which opinion and counsel shall be reasonably satisfactory to
the Corporation, to the effect that no registration is required because of the availability of an
exemption from registration under the 1933 Act and applicable Blue Sky laws.

     THIS CERTIFIES THAT, for good and valuable consideration Whitebox Hedged High Yield Partners,
L.P., a British Virgin Islands limited partnership (the “Holder”), or the Holder’s registered
assigns, is entitled to subscribe for and purchase from Sutura, Inc., a Delaware corporation (the
“Corporation”), at any time on or after March 24, 2005, to and including March 24, 2010, the number
of fully paid and nonassessable shares of the Common Stock of the Corporation computed below at the
price per share computed below (the “Warrant Exercise Price”), subject to the anti-dilution and
price protection provisions of this Warrant.

     The shares which may be acquired upon exercise of this Warrant are referred to herein as the
“Warrant Shares.” As used herein, the term “Holder” means the Holder, any party who acquires all
or a part of this Warrant as a registered transferee of the Holder, or any record holder or holders
of the Warrant Shares issued upon exercise, whether in whole or in part, of the Warrant. The term
“Common Stock” means the common stock, $0.00025 par value per share, of the Corporation.

     This Warrant is subject to the following provisions, terms and conditions:

1. Computing the Number of Warrant Shares.

     (a) Computation Without Merger. Prior to the effective date of the proposed merger
(the “Merger”) of the Corporation into Technology Visions Group, Inc., a Delaware corporation
(“TVG”), pursuant to an Agreement and Plan of Merger dated November 22, 2004 (the “Merger
Agreement”), the number of Warrant Shares that the Holder may
acquire upon the full exercise hereof (subject to adjustment as otherwise provided by this Warrant)
shall be computed as follows:

WS = (D / 4) / ($150,000,000 / N), where

 

 

“WS” is the number of Warrant Shares that may be purchased pursuant to this Warrant,

“D” is $530,000, being the original dollar amount of a Secured Convertible Promissory Note
issued by the Corporation to the Holder hereof contemporaneously with the issuance hereof
(the “Note”) and

“N” is the number of shares of Common Stock of the Corporation outstanding on the date of
the original issuance of this Warrant, assuming the exercise or conversion of all then
outstanding options, warrants or other rights to acquire shares of the Corporation’s
Common Stock or securities convertible or exchangeable for Common Stock (or convertible or
exchangeable for securities themselves convertible or exchangeable for Common Stock), but
without assuming (i) the conversion of the Note or any other Secured Convertible
Promissory Notes that are part of the same series (together, the “Series Notes”) or (ii)
the exercise of this Warrant or warrants issued to the other holders of Series Notes
(together, the “Series Warrants”).

     (b) Computation With Merger. If the Corporation consummates the Merger into TVG pursuant to
the Merger Agreement, the number of Warrant Shares that the Holder may acquire upon the full
exercise hereof (subject to adjustment as otherwise provided by this Warrant) from and after the
effective date of the Merger shall be computed as follows:

WS = the greater of:

(i) (D / 4) / ($150,000,000 / “New N”), where “New N” is the number of shares of TVG
Common Stock outstanding on the effective date of the Merger immediately after the
consummation thereof, assuming the exercise of all then outstanding options, warrants or
other rights to acquire shares of TVG Common Stock or securities convertible or
exchangeable for TVG Common Stock (or convertible or exchangeable for securities
themselves convertible or exchangeable for TVG Common Stock), but without assuming (i) the
conversion of the Series Notes or (ii) the exercise of the Series Warrants

or

(ii) (D / 4) / “AP,” where “AP” is the average closing bid price (rounded to the nearest
$0.01 per share) for TVG Common Stock (“TVG Common Stock”) on a national stock exchange,
on the Nasdaq system or on the OTC Bulletin Board (as applicable) for the 20 trading day
period commencing sixty (60) days following the effective date of the Merger (the “Testing
Period”), all as reported by bigcharts.com (or if this service is discontinued, such other
reporting service

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acceptable to the Holder). If during the Testing Period, TVG effects a stock split
or dividend, reverse split or combination or other recapitalization or
reorganization of or relating to its outstanding Common Stock (a “TVG
Reorganization Transaction”), then in computing the average closing bid price for
TVG Common Stock, a proportional adjustment shall be made to the reported closing
bid prices for those trading days during the Testing Period. The “AP” computed
pursuant to the foregoing is referred to below as the “TVG AP.”

2. Computing the Warrant Exercise Price.

     (a) Computation Without Merger. Prior to the effective date of
the Merger into TVG
pursuant to the Merger Agreement, the Warrant Exercise Price per share shall be computed as follows
(subject to adjustment as otherwise provided by this Warrant):

WP = $150,000,000 / N, where “WP” is the Warrant Exercise Price.

     (b) Computation With Merger. If the Corporation consummates the Merger into TVG pursuant to
the Merger Agreement, the Warrant Exercise Price from and after the effective date of the Merger
shall be computed as follows (subject to adjustment as otherwise provided by this Warrant):

WP = the greater of:

(i) $150,000,000 / New N or

(ii) the TVG AP.

3. Exercise for Cash or on Cashless Basis; Transferability.

     (a) The rights represented by this Warrant may be exercised by the Holder hereof, in
whole or in part (but not as to a fractional share of Common Stock), by written notice of exercise
(in the form attached hereto) delivered to the Corporation at the principal office of the
Corporation prior to the expiration of this Warrant and accompanied or preceded by the surrender of
this Warrant along with a check in payment of the Warrant Exercise Price for such Warrant Shares.

     (b) In the alternative, payment may be made at the option of Holder by instructing the
Corporation to withhold from the shares of Common Stock to be issued upon exercise of this Warrant
a number of whole or fractional shares of Common Stock equal to the number of shares for which the
Warrant is being exercised (including any shares to be surrendered) multiplied by the Warrant
Exercise Price per share, and then divided by the “Market Price” (as defined in Section 10 below)
of a share of Common Stock.

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     (c) Except as provided in Section 9 hereof, this Warrant may not be sold, transferred,
assigned, hypothecated or divided into two or more Warrants of smaller denominations, nor may any
Warrant Shares issued pursuant to exercise of this Warrant be transferred. In no event may this
Warrant be transferred and divided (without any exercise hereof) into any denomination(s) of less
than 100 Warrant Shares.

4. Exchange and Replacement. Subject to Sections 3 and 9 hereof, this Warrant is exchangeable upon
the surrender hereof by the Holder to the Corporation at its office for new Warrants of like tenor
and date representing in the aggregate the right to purchase the number of Warrant Shares
purchasable hereunder, each of such new Warrants to represent the right to purchase such number of
Warrant Shares (not to exceed the aggregate total number purchasable hereunder) as shall be
designated by the Holder at the time of such surrender. Upon receipt by the Corporation of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and,
in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and
upon surrender and cancellation of this Warrant, if mutilated, the Corporation will make and
deliver a new Warrant of like tenor, in lieu of this Warrant. This Warrant shall be promptly
canceled by the Corporation upon the surrender hereof in connection with any exchange or
replacement. The Corporation shall pay all expenses, taxes (other than stock transfer taxes), and
other charges payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Section 4.

5. Issuance of the Warrant Shares.

     (a) The Corporation agrees that the Warrant Shares shall be and are deemed to be
issued to the Holder as of the close of business on the date on which this Warrant shall have been
surrendered and the payment made for such Warrant Shares as aforesaid. Subject to the provisions
of paragraph (b) of this Section 5, certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time after the rights represented by this Warrant shall
have been so exercised, and, unless this Warrant has expired, a new Warrant representing the right
to purchase the number of Warrant Shares, if any, with respect to which this Warrant shall not then
have been exercised shall also be delivered to the Holder.

     (b) Notwithstanding the foregoing, however, the Corporation shall not be required to deliver
any certificate for Warrant Shares upon exercise of this Warrant except in accordance with
exemptions from the applicable securities registration requirements or registrations under
applicable securities laws. Except as described in Section 11, nothing herein shall obligate the
Corporation to effect registrations under federal or state securities laws. If registrations are
not in effect and if exemptions are not available when the Holder seeks to exercise the Warrant,
the Warrant exercise period will be extended, if need be, to prevent the Warrant from expiring,
until such time as either registrations become effective or exemptions are available, and the
Warrant shall then
remain exercisable for a period of at least 30 calendar days from the date the Corporation delivers
to the Holder written notice of the availability of such registrations or exemptions. The Holder
agrees to execute such documents and make such representations,

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warranties and agreements as may be required solely to comply with the exemptions relied upon by
the Corporation, or the registrations made, for the issuance of the Warrant Shares.

6. Covenants of the Corporation. The Corporation covenants and agrees that all Warrant Shares will,
upon issuance, be duly authorized and issued, fully paid, non-assessable and free from all taxes,
liens and charges with respect to the issue thereof. The Corporation further covenants and agrees
that during the period within which the rights represented by this Warrant may be exercised, the
Corporation will at all times have authorized and reserved for the purpose of issue or transfer
upon exercise of the subscription rights evidenced by this Warrant a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this Warrant.

7. Anti-dilution Adjustments. The provisions of this Warrant are subject to adjustment as provided
in this Section 7. No adjustment shall be made pursuant to this Section 7 if the same adjustment
has already been made pursuant to another provision of this Warrant.

     (a) Stock Splits, Dividends and Combinations. The otherwise applicable Warrant Exercise Price
shall be adjusted from time to time such that in case the Corporation shall hereafter:

          (i) pay any dividends on any class of stock of the Corporation payable in Common Stock or
securities convertible into Common Stock;

          (ii) subdivide its then outstanding shares of Common Stock into a greater number
of shares; or

          (iii) combine outstanding shares of Common Stock, by reclassification or
otherwise;

then, in any such event, the Warrant Exercise Price in effect immediately prior to such event shall
(until adjusted again pursuant hereto) be adjusted immediately after such event to a price
(calculated to the nearest full cent) determined by dividing (A) the number of shares of Common
Stock outstanding immediately prior to such event, multiplied by the then existing Warrant Exercise
Price, by (B) the total number of shares of Common Stock outstanding immediately after such event
(including in each case the maximum number of shares of Common Stock issuable in respect of any
securities convertible into Common Stock), and the resulting quotient shall be the adjusted Warrant
Exercise Price per share. An adjustment made pursuant to this Subsection shall become effective
immediately after the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to this Subsection, the Holder of
any Warrant thereafter surrendered for exercise shall become entitled to receive shares of two or
more classes of capital stock or shares of Common Stock and other capital stock of the Corporation,
the Board of Directors (whose determination shall be

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conclusive) shall determine the allocation of the adjusted Warrant Exercise Price between or among
shares of such classes of capital stock or shares of Common Stock and other capital stock. All
calculations under this Subsection shall be made to the nearest cent or to the nearest 1/100 of a
share, as the case may be. In the event that at any time as a result of an adjustment made
pursuant to this Subsection, the holder of any Warrant thereafter surrendered for exercise shall
become entitled to receive any shares of the Corporation other than shares of Common Stock,
thereafter the Warrant Exercise Price of such other shares so receivable upon exercise of any
Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock contained in this Section.

     (b) Mechanics of Adjustment for Stock Splits, Dividends and Combinations. Upon each adjustment
of the Warrant Exercise Price pursuant to Section 7(a) above, the Holder of each Warrant shall
thereafter (until another such adjustment) be entitled to purchase at the adjusted Warrant Exercise
Price the number of shares, calculated to the nearest full share, obtained by multiplying the
number of shares specified in such Warrant (as adjusted as a result of all adjustments in the
Warrant Exercise Price in effect prior to such adjustment) by the Warrant Exercise Price in effect
prior to such adjustment and dividing the product so obtained by the adjusted Warrant Exercise
Price.

     (c) Consolidations, Mergers and Reorganization Events. In case of any consolidation or merger
to which the Corporation is a party other than a merger or consolidation in which the Corporation
is the continuing corporation, or in case of any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an entirety, or in the case of any
statutory exchange of securities with another corporation (including any exchange effected in
connection with a merger of a third corporation into the Corporation), there shall be no adjustment
under Subsection (a) of this Section 7; but the Holder of each Warrant then outstanding shall have
the right thereafter to convert such Warrant into the kind and amount of shares of stock and other
securities and property which he would have owned or have been entitled to receive immediately
after such consolidation, merger, statutory exchange, sale or conveyance had such Warrant been
converted immediately prior to the effective date of such consolidation, merger, statutory
exchange, sale or conveyance and, in any such case, if necessary, appropriate adjustment shall be
made in the application of the provisions set forth in this Section with respect to the rights and
interests thereafter of any Holders of the Warrant, to the end that the provisions set forth in
this Section shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation to any shares of
stock and other securities and property thereafter deliverable on the exercise of the Warrant. The
provisions of this Subsection shall similarly apply to successive consolidations, mergers,
statutory exchanges, sales or conveyances.

     (d) Adjustments for Diluting Issues. In addition to the adjustments of the Warrant Exercise
Price provided above, the Warrant Exercise Price shall be subjected to further

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adjustment from time to time as follows (the main operative provision hereof is in Section
7(d)(iii) below):

          (i) Special Definitions:

               (A) “Options” shall mean rights, options or warrants (other than as
excluded by Section 7(d)(i)(D) below) to subscribe for, purchase or otherwise acquire either Common
Stock or Convertible Securities (as defined herein).

               (B) “Original Issue Date” shall mean the date hereof.

               (C) “Convertible Securities” shall mean securities (other than as
excluded by Section 7(d)(i)(D) below) convertible, either directly or indirectly, into or
exchangeable for Common Stock.

               (D) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or,
deemed to be issued) by the Corporation after the Original Issue Date other than shares of Common
Stock issued (or deemed to be issued):

                    1. to employees, consultants or directors pursuant to stock option, stock grant, stock
purchase or similar plans or arrangements approved by the Corporation’s Board of Directors;

                    2. as a dividend or other distribution in connection with which an adjustment to the Warrant
Exercise Price is made;

                    3. in a merger, consolidation, acquisition or similar business combination that is approved by
the Corporation’s Board of Directors;

                    4. pursuant to credit, lease or other commercial financing arrangements with parties not
affiliated with the Corporation that are approved by the Corporation’s Board of Directors;

                    5. in exchange for technology or other non-cash assets as approved by the Corporation’s Board
of Directors;

                    6. pursuant to any rights or agreements outstanding on the Original Issue Date (including
those rights relating to the Series Notes and the Series Warrants);

                    7. following the Merger, pursuant to any rights or agreements between TVG and other third
parties outstanding on the Original Issue Date; or

                    8. if the Holder agrees in writing that such shares shall not constitute Additional Shares of
Common Stock.

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          (ii) Deemed Issue of Additional Shares of Common Stock. Except as otherwise provided in
Section 7(d), in the event the Corporation at any time or from time to time after the Original
Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the
determination of any holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares (as set forth in the instrument relating
thereto without regard to any provisions contained therein for a subsequent adjustment of such
number) of Common Stock issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall
be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case
such record date shall have been fixed, as of the close of business on such record date, provided
that in any such case in which Additional Shares of Common Stock are deemed to be issued:

               (A) no further adjustment in the Warrant Exercise Price shall be made upon the subsequent
issue of such Convertible Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;

               (B) if such Options or Convertible Securities by their terms provide, with the passage of time
or otherwise, for any increase or decrease in the consideration payable to the Company, or increase
or decrease in the number of shares of Common Stock issuable upon the exercise, conversion or
exchange thereof, the Warrant Exercise Price computed upon the original issue thereof or upon the
occurrence of a record date with respect thereto, and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed to reflect such
increase or decrease;

               (C) upon the expiration of any such Option or any rights of conversion or exchange under such
Convertible Securities which shall not have been exercised, the Warrant Exercise Price computed
upon the original issue thereof or upon occurrence of a record date with respect thereto, and any
subsequent adjustments based thereon, shall, upon such expiration:

                    1. in the case of Convertible Securities or Options for
Common Stock, be recomputed as though the only Additional Shares of Common Stock issued were shares
of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or
exchange of such Convertible Securities, and the consideration received therefor was the
consideration actually received by the Company for the issue of all such Options, whether or not
exercised, plus the consideration actually received by the Company upon such exercise, or for the
issue of all such Convertible Securities, whether or not converted or exchanged, plus the
additional consideration, if any, actually received by the Company upon such conversion or
exchange; and

                    2. in the case of Options for Convertible Securities, be recomputed as though only the
Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time
of issue of such Options and the consideration received by the Company for the Additional Shares of
Common Stock deemed to have been then issued was the

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consideration actually received by the Company for the issue of all such Options, whether or not
exercised, plus the consideration deemed to have been received by the Company upon the issue of the
Convertible Securities with respect to which such Options were actually exercised.

               (D) no readjustment pursuant to Section 7(d) shall have the effect of increasing the Warrant
Exercise Price to an amount which exceeds the Warrant Exercise Price existing immediately prior to
the original adjustment with respect to the issuance of such Options or Convertible Securities, as
adjusted for any Additional Shares of Common Stock issued (or deemed to be issued) between such
original adjustment date and such readjustment date; and

               (E) in the case of any Option or Convertible Security with respect to which the maximum number
of shares of Common Stock issuable upon exercise or conversion or exchange thereof is not
determinable, no adjustment to the Warrant Exercise Price shall be made until such number becomes
determinable.

          (iii) Adjustments for Issuance of Additional Shares of Common Stock. If the Company, at any
time after the issuance of this Warrant, shall issue any Additional Shares of Common Stock
(otherwise than as provided in the Sections 7(a) and 7(c) above) at a price per share less than the
applicable Warrant Exercise Price then in effect or without consideration, then the applicable
Warrant Exercise Price upon each such issuance shall be adjusted to that price (rounded to the
nearest cent) determined by multiplying the applicable Warrant Exercise Price then in effect by a
fraction, (i) the numerator of which shall be equal to the sum of (A) the number of shares of
Common Stock outstanding immediately prior to the issuance of such Additional Shares of Common
Stock plus (B) the number of shares of Common Stock (rounded to the nearest whole share) which the
aggregate consideration for the total number of such Additional Shares of Common Stock so issued
would purchase at a price per share equal to the applicable Warrant Exercise Price then in effect,
and (ii) the denominator of which shall
be equal to the number of shares of Common Stock outstanding immediately after the issuance of such
Additional Shares of Common Stock.

               In addition to the other limitations provided herein, the provisions of this Section 7(d)(iii)
shall not apply under any of the circumstances for which an adjustment is provided in Sections
7(a), 7(b) or 7(c) above. No adjustment of the applicable Warrant Exercise Price shall be made
under this Section 7(d) upon the issuance of any Additional Shares of Common Stock which are issued
pursuant to any Options or Convertible Securities if upon the issuance of such Options or
Convertible Securities (x) any adjustment shall have been made pursuant to Section 7(d)(ii) above
or (y) no adjustment was required pursuant to this Section 7(d)(iii). No adjustment of the
applicable Warrant Exercise Price shall be made under this Section 7(d)(iii) in an amount less than
$.01 per share, but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment, if any, which together with any adjustments
so carried forward shall amount to $.01 per share or more;
provided, however, that upon any
adjustment of the applicable Warrant Exercise Price as a result of any dividend or distribution
payable in Common Stock or Convertible Securities or the reclassification, subdivision or
combination of Common Stock into a greater or smaller

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number of shares, the foregoing figure of $.01 per share (or such figure as last adjusted) shall be
adjusted (to the nearest one-half cent) in proportion to the adjustment in the applicable Warrant
Exercise Price.

          (iv) Determination of Consideration. For purposes of this Section 7(d), the consideration
received by the Corporation for any Additional Shares of Common Stock issued (or deemed to be
issued) shall be computed as follows:

               (A) Cash and Property. Such consideration shall:

                    (i) insofar as it consists of cash, be computed at the aggregate
amount of cash received by the Corporation;

                    (ii) insofar as it consists of securities and the value of such securities is not determinable
by reference to a separate agreement, (A) if the securities are then traded on a national
securities exchange or the Nasdaq Stock Market (or a similar national quotation system), then the
value shall be computed based on the average of the closing prices of the securities on such
exchange or system over the thirty (30)-day period ending on the date of receipt by the
Corporation, (B) if the securities are actively traded over-the-counter, then the value shall be
computed based on the average of the closing bid prices over the thirty (30) day ending on the date
of receipt by the Corporation, and (C) if there is no active public market, then the value shall be
computed based on the fair market value thereof on the date of receipt by the Corporation, as
determined in good faith by the Board of Directors;

                    (iii) insofar as it consists of property other than cash and securities, be computed at the
fair market value thereof at the time of such issuance, as determined in good faith by the Board of
Directors; and

                    (iv) if Additional Shares of Common Stock are issued (or deemed to be issued) together with
other shares or securities or other assets of the Corporation for consideration which cover both,
by the proportion of such consideration so received, computed as provided in the immediately
preceding Sections 7(d)(iv)(A)(i), 7(d)(iv)(A)(ii) and 7(d)(iv)(A)(iii), as determined in good
faith by the Board of Directors.

               (B) Options and Convertible Securities. The consideration received by the Corporation for
Additional Shares of Common Stock deemed to have been issued pursuant to Section 7(d) relating to
Option and Convertible Securities, shall be the sum of (x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or Convertible
Securities, plus (y) the minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained therein for a subsequent
adjustment of such consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such Options for Convertible

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Securities and the conversion or exchange of such Convertible Securities.

     (e) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of
the Warrant Exercise Price or the number of Warrants covered hereby pursuant to this Section 7, the
Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the written request at any time of the Holder, furnish or cause to be
furnished to the Holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) the Warrant Exercise Price at the time in
effect, and
(iii) the number of shares of Common Stock and the amount, if any, of other property which
at
the time would be received upon the exercise of this Warrant.

8. No Voting Rights. This Warrant shall not entitle the Holder to any voting rights or other rights
as a shareholder of the Corporation.

9. Notice of Transfer of Warrant or Resale of the Warrant Shares; Assumption upon Merger.

     (a) Subject to the sale, assignment, hypothecation or other transfer restrictions
set forth in Section 3 hereof, the Holder, by acceptance hereof, agrees to give written notice to
the Corporation before transferring this Warrant or transferring any Warrant Shares of such
Holder’s intention to do so, describing briefly the manner of any proposed transfer. Promptly upon
receiving such written notice, the Corporation shall present copies thereof to the Corporation’s
counsel. If in the opinion of such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the Corporation, as
promptly as practicable, shall notify the Holder of such opinion, whereupon the Holder shall be
entitled to transfer this Warrant or to dispose of Warrant Shares received upon the previous
exercise of this Warrant, all in accordance with the terms of the notice delivered by the Holder to
the Corporation; provided that an appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer thereof necessary or
advisable in the opinion of counsel and satisfactory to the Corporation to prevent further
transfers which would be in violation of Section 5 of the 1933 Act and applicable state securities
laws; and provided further that the prospective transferee or purchaser shall execute such
documents and make such representations, warranties and agreements as may be required solely to
comply with the exemptions relied upon by the Corporation for the transfer or disposition of the
Warrant or Warrant Shares.

     (b) If, in the opinion of the Corporation’s counsel, the proposed transfer or disposition of
this Warrant or such Warrant Shares described in the written notice given pursuant to this Section
9 may not be effected without registration or qualification of this Warrant or such Warrant Shares,
the Corporation shall promptly give written notice thereof to the Holder, and the

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Holder will limit its activities in respect to such transfer or disposition as, in the opinion of
such counsel, are permitted by law.

     (c) Upon the consummation of the proposed Merger of the Corporation with TVG, the rights and
obligations of the Corporation under this Warrant shall be assumed by TVG and any reference to the
Corporation herein shall thereafter be deemed to be a reference to TVG.

10. Fractional Shares. Fractional shares shall not be issued upon the exercise of this Warrant,
but in any case where the holder would, except for the provisions of this Section, be entitled
under the terms hereof to receive a fractional share, the Corporation shall, upon the exercise of
this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the
sum of (a) the excess, if any, of the Market Price of such fractional share over the proportional
part of the Warrant Exercise Price represented by such fractional share, plus (b) the proportional
part of the Warrant Exercise Price represented by such fractional share. For purposes of this
Section and Section 3(b) above, the term “Market Price” with respect to shares of Common Stock of
any class or series means the last reported sale price or, if none, the average of the last
reported closing bid and asked prices on any national or regional securities exchange or quoted in
the National Association of Securities Dealers, Inc.’s Automated Quotations System
(“Nasdaq”), or if not listed on a national or regional securities exchange or quoted in Nasdaq, the
closing bid price as reported by bigcharts.com (or if this service is discontinued, such other
reporting service acceptable to the Holder), or if no quotations in such Common Stock are
available, the fair market value of the shares as determined in good faith by the Board of
Directors of the Corporation.

11. Registration Rights. Holder shall have registration rights for the Warrant Shares as described
in the Amended Registration Rights Agreement of this same date.

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     IN WITNESS WHEREOF, Sutura, Inc. has caused this Warrant to be signed by its duly authorized
officer and this Warrant to be dated March 24, 2005.

	 	 	 	 	 	 	 
	 	 	SUTURA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Anthony A. Nobles, President and	 	 
	 

	 	 	 	Chief Executive Officer	 	 

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EXERCISE FORM

(To Be Executed by the Registered Holder in Order to Exercise the Warrant)

To: Sutura, Inc.

The undersigned hereby irrevocably elects to exercise the attached Warrant to purchase for cash,
                     of the shares issuable upon the exercise of such Warrant, and requests that
certificates for such shares (together with a new Warrant to purchase the number of shares, if any,
with respect to which this Warrant is not exercised) shall be issued in the name of:

	 	 	 	 	 	 	 
	 

	 	NAME:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	SOC. SEC. or	 	 	 	 
	 

	 	TAX I.D. NO.	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	ADDRESS:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date:                     , 20      .

	 	 	 	 

	 	 
	 

	 	 	 	Signature *	 	 

 

			
	*	 	The signature on the Notice of Exercise of Warrant must correspond to the name as written
upon the face of the Warrant in every particular without alteration or
enlargement or any change whatsoever. When signing on behalf of a corporation, partnership,
trust or other entity, please indicate your position(s) and title(s) with such entity.

 

 

ASSIGNMENT FORM

(To be Executed by the Registered Holder in Order to Transfer the Warrant)

To: Sutura, Inc.

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto
                                                                                 the right to purchase the securities of Sutura, Inc. to which the
within Warrant relates and appoints                                         , attorney, to transfer said right on
the books of Sutra, Inc. with full power of substitution in the premises.

	 	 	 	 	 
	Dated:                     20       

	 	 

	 	 
	 

	 	(Signature)	 	 
	 
	 	 	 	 
	 

	 	Address:exv10w7

 

EXHIBIT 10.7

PURCHASE AGREEMENT

          THIS PURCHASE AGREEMENT (the “Agreement”) is entered into as of the 7th day of September,
2005, by and among Sutura, Inc., a Delaware corporation; 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”); and Whitebox Intermarket Partners, L.P., a
British Virgin Islands limited partnership (“WIP”). Pandora, WHHY, WCAP and WIP are individually
referred to herein as a “Purchaser” and together as the “Purchasers.”

R E C I T A L S :

          WHEREAS, effective on August 19, 2005, Sutura, Inc., a Delaware corporation (“Premerger
Sutura”) was merged with and into Technology Visions Group, Inc., a Delaware corporation (“TVG”),
pursuant to which the separate existence of Premerger Sutura ceased and TVG continued as the
surviving corporation. As part of that merger, the name of TVG was changed to Sutura, Inc. (the
“Company”). All references herein to the Company refer to Sutura, Inc. on a post-merger basis.

          WHEREAS, in consideration of $1,113,000, $2,219,000, $2,779,000 and $889,000 each
(representing $7,000,000 in the aggregate), the Company proposes to issue to Pandora, WHHY, WCAP
and WIP, respectively, and each such Purchaser desires to severally (and not jointly) purchase, a
corresponding secured convertible promissory note in the form attached as Exhibit A (each, a “Note”
and together, the “Notes”) and a warrant in the form attached as Exhibit B (each, a “Warrant” and
together, the “Warrants”) to purchase (subject to certain adjustments) shares of the Company’s
common stock, $0.001 par value (the “Common Stock”).

          NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter
set forth, the parties hereto agree as follows:

SECTION 1. AGREEMENT TO SELL AND PURCHASE

          1.1. Authorization of Transactions. On or prior to the closing of the transactions
contemplated in this Agreement (the “Closing”), the Company shall have authorized the sale and
issuance to the Purchasers of the Notes, Warrants and the shares of Common Stock issuable upon
conversion of the Notes, payment on the Notes and exercise of the Warrants (collectively, the
“Shares”).

          1.2. Sale and Purchase. Subject to the terms and conditions hereof, at the Closing, the
Company hereby agrees to issue and sell to each Purchaser, and each Purchaser severally (and not
jointly) agrees to purchase from the Company, such Purchaser’s respective Note and Warrant for an
aggregate purchase price from all Purchasers of $7,000,000.

 

 

SECTION 2. CLOSINGS, DELIVERIES AND PAYMENTS

          2.1. Closing. The Closing shall take place at 10:00 a.m. on the date hereof at the offices of
the Purchasers’ legal counsel, Messerli & Kramer P.A., in Minneapolis, Minnesota, or at such other
time or place as the Company and the Purchasers may mutually agree (the “Closing Date”). At the
Closing, subject to the terms and conditions hereof, the Company will issue, sell and deliver to
each Purchaser its respective Note and Warrant, against payment by each Purchaser of its allocable
portion of the $7,000,000 aggregate purchase price by certified check or wire transfer of
immediately available funds. At the Closing, the Company shall also execute and deliver to the
Purchasers the Second Amended Registration Rights Agreement in the form attached as Exhibit C (the
“Registration Rights Agreement”), the Second Amended Security Agreement in the form attached as
Exhibit D (the “Security Agreement”) and the Second Amended Patent and Trademark Security Agreement
in the form attached as Exhibit E (the “Patent and Trademark Security Agreement”).

SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

          The Company hereby makes the following representations and warranties to each of the
Purchasers as of the Closing Date and, as to the 510(k) clearance and CE mark described in Section
3.16, covenants to so comply with the requirements thereof from and after the Closing Date so long
as any portion of any of the Notes remain outstanding.

          3.1. Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware. The
Company’s only subsidiaries are (i) Sutura B.V., which is wholly-owned by the Company and which, in
turn, owns all of the outstanding capital stock of Sutura B.V. France SARL and Sutura GmbH; and
(ii) Technology Visions, Inc., a California corporation. The Company has all requisite corporate
power and authority to own and operate its properties and assets, to execute and deliver this
Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Security Agreement and
the Patent and Trademark Security Agreement (together, the “Transaction Documents”), to pledge
(subject to receipt of the consent referred to in Section 5.1(a)) certain of the Company’s assets
as described in the Security Agreement and the Patent and Trademark Security Agreement as security
for the Notes (the “Collateral”), to issue and sell the Shares upon conversion of the Notes, upon
payment on the Notes and upon exercise of the Warrants, to carry out the provisions of the
Transaction Documents, and to carry on its business as presently conducted and as presently
proposed to be conducted. The Company is duly qualified to do business and is in good standing in
each jurisdiction in which the nature of its activities and of its properties (both owned and
leased) makes such qualification necessary, except for those jurisdictions in which failure to be
so qualified would not have a material adverse effect on the Company, or its business or
properties, taken as a whole.

          3.2. Capitalization. The authorized capital stock of the Company consists of 2,000,000 shares
of Preferred Stock, par value $0.001 per share, of which, as of the Closing Date, no shares are
issued and outstanding, and 500,000,000 shares of Common Stock, par value $0.001 per share, of
which [188,171,777] shares are issued and outstanding. As of the Closing

-2-

 

Date, and except as disclosed on Schedule 3.2, the Company has no outstanding options, warrants or
other rights to acquire any capital stock, or securities convertible or exchangeable for capital
stock or for securities themselves convertible or exchangeable for capital stock (together,
“Convertible Securities”). As of the Closing Date, and except as disclosed on Schedule 3.2, the
Company has no agreement or commitment to sell or issue any shares of capital stock or Convertible
Securities. All issued and outstanding shares of the Company’s capital stock (i) have been duly
authorized and validly issued, (ii) are fully paid and nonassessable, (iii) are free from any
preemptive and cumulative voting rights and (iv) were issued pursuant to valid exemptions under
federal and state securities laws. As of the Closing Date, and except as disclosed on Schedule
3.2, there are no outstanding rights of first refusal or proxy or shareholder agreements of any
kind relating to any of the Company’s securities to which the Company or any of its executive
officers and directors is a party or as to which the Company otherwise has knowledge of. When
issued in compliance with the provisions of the Notes and the Warrants (and upon payment as
provided by the Warrants), the Shares will be validly issued, fully paid and nonassessable, and
will be free of any liens or encumbrances; provided, however, that the Shares may be subject to
restrictions on transfer under applicable state and federal securities laws.

          3.3. Authorization; Binding Obligations. All corporate action on the part of the Company,
its officers, directors and shareholders necessary for the authorization of the Transaction
Documents, the performance of all obligations of the Company hereunder and thereunder at the
Closing, including the pledge of the Collateral as security for the Notes, and the authorization,
sale, issuance and delivery of the Shares upon conversion of the Notes, upon payment on the Notes
and upon exercise of the Warrants, has been taken or will be taken prior to the Closing. The
Transaction Documents, when executed and delivered, will be valid and binding obligations of the
Company enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) to the extent that the
enforceability of the indemnification provisions of the Registration Rights Agreement may be
limited by applicable laws. The sale of the Shares upon exercise of the Warrants or upon
conversion of the Notes or upon payment on the Notes is not and will not be subject to any
preemptive rights or rights of first refusal.

          3.4. Financial Statements. Premerger Sutura’s audited consolidated balance sheet at December
31, 2004, and the audited consolidated statements of operations, cash flows and stockholders’
deficit of Premerger Sutura for the years ended, December 31, 2004 and 2003, and Premerger Sutura’s
unaudited consolidated balance sheet at June 30, 2005, and the unaudited consolidated statements of
operations and cash flows of Premerger Sutura for the six months ended June 30, 2005 and 2004 (all
of the foregoing together, the “Premerger Sutura Financial Statements”) fairly present in all
material respects the consolidated financial condition, operating results and cash flow of
Premerger Sutura as of the respective dates and for the respective periods covered thereby. TVG’s
audited balance sheet at December 31, 2004, and the audited statements of operations, cash flows
and stockholders’ deficit of TVG for the years ended December 31, 2004 and 2003, and the unaudited
balance sheet at June 30, 2005, and the unaudited statements of operations and cash flows of TVG
for the six months ended June 30,

-3-

 

2005 and 2004 (all of the foregoing together, the “TVG Financial Statements” and together with
Premerger Sutura Financial Statements, the “Financial Statements”) fairly present in all material
respects the financial condition, operating results and cash flow of TVG as of the respective dates
and for the respective periods covered thereby. The Financial Statements have been prepared in
accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis (except as may be indicated in the notes thereto) and comply in all material
respects with applicable accounting requirements and the rules and regulations of the Securities
and Exchange Commission (the “Commission”) as in effect at the time of filing with the Commission.
The Financial Statements are in the form as publicly filed with the Commission. For purposes
hereof, “Latest Statement Date” means June 30, 2005 and “Latest Financial Statements” means the
unaudited financial statements of Premerger Sutura and TVG at and for the six months ended June 30,
2005.

          3.5. Liabilities. The Company (i) has no material liabilities and (ii) to the best of its
knowledge, has no material contingent liabilities, in each case not otherwise disclosed in the
Latest Financial Statements or on Schedule 3.6, except (A) current liabilities incurred in the
ordinary course of business subsequent to the Latest Statement Date and (B) obligations under
contracts and commitments incurred in the ordinary course of business and not required under GAAP
to be reflected in the Latest Financial Statements, which, in both cases have not had, either in
any individual case or in the aggregate, a material adverse effect on the Company, or its business
or properties, taken as a whole.

          3.6. Certain Agreements and Actions. Except as disclosed in the Financial Statements or on
Schedule 3.6, the Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock during the periods
covered by the Financial Statements or since the Latest Statement Date, (ii) since the Latest
Statement Date, incurred any indebtedness for money borrowed or any other material liabilities out
of the ordinary course of business, (iii) except as set forth in Schedule 3.6, made any loans or
advances to any person, other than ordinary advances for travel or entertainment expenses or (iv)
sold, exchanged or otherwise disposed of any of its assets or rights, other than in the ordinary
course of business.

          3.7. Obligations of or to Related Parties. Except as disclosed on Schedule 3.7, there are no
obligations of the Company to officers, directors or key employees of the Company or, to the
Company’s knowledge, to any members of their immediate families or other affiliates, other than (i)
for accrued salaries, (ii) reimbursement for expenses reasonably incurred on behalf of the Company
and (iii) for other employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board of Directors of the
Company). Except as disclosed on Schedule 3.7, to the Company’s knowledge, none of the officers,
directors or key employees of the Company or, to the Company’s knowledge, any members of their
immediate families or other affiliates, are indebted to the Company or have any direct or indirect
ownership interest in any firm, corporation or other entity with which the Company is affiliated or
with which the Company has a business relationship, or any firm, corporation or other entity that
competes with the Company, except that such officers, directors, employees and members of their
immediate families may own securities (with beneficial ownership not exceeding 2%) in
publicly-traded companies that

-4-

 

compete with the Company. Except as disclosed on Schedule 3.7, no officer, director or key
employee of the Company, or, to the Company’s knowledge, any member of their immediate families or
other affiliates, is, directly or indirectly, interested in or a party to any material contract
with the Company. Except as disclosed on Schedule 3.7 or in the Financial Statements, the Company
is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.

          3.8. Changes. Since the Latest Statement Date, and except as disclosed on Schedule 3.8, there
has not been, to the Company’s knowledge, any event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the business, assets,
liabilities, financial condition, operations or prospects of the Company.

          3.9. Title to Properties and Assets; Liens. Except as set forth on Schedule 3.9, the Company
has good and marketable title to its properties and assets, including the properties and assets
reflected in the Latest Financial Statements, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) those resulting from taxes that have not yet become
delinquent, (ii) liens and encumbrances that do not materially detract from the value of the
property subject thereto or materially impair the operations of the Company and (iii) those that
have otherwise arisen in the ordinary course of business. With respect to the property and assets
it leases, the Company is in compliance with such leases in all material respects and, to the
Company’s knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances.
All facilities, machinery, equipment, fixtures and other properties owned, leased or used by the
Company which are reasonably necessary to the Company’s conduct of its business are in good
operating condition and repair and are reasonably fit and usable for the purposes for which they
are being used, reasonable wear and tear excepted.

          3.10. Patents and Trademarks. Schedule 3.10 contains a listing of all U.S. and foreign
patents and patent applications, and U.S. and foreign trademarks and service marks and applications
therefor, owned by, assigned to or licensed to the Company. Except as set forth on Schedule 3.10,
the Company owns or has a valid right to use all patents, trademarks, service marks, trade names,
copyrights, trade secrets, information and other proprietary rights and processes necessary for its
business as now conducted and as proposed to be conducted, without any known infringement of the
rights of others. The Company is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or other agreement, or
subject to any judgment, decree or order of any court or administrative agency, that would
interfere with their duties to the Company or that would conflict with the Company’s business as
now conducted or proposed to be conducted. None of the execution or delivery of, or the
performance of the transactions contemplated by, the Transaction Documents, the pledge of the
Collateral by the Company to secure the Notes, the carrying on of the Company’s business by the
employees of the Company nor the conduct of the Company’s business as currently conducted or
proposed to be conducted will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or instrument under which any
employee is now obligated. The Company does not believe it is or will be necessary to utilize any
inventions, trade secrets or proprietary information of any of its employees made prior to their
employment by the Company, except for

-5-

 

inventions, trade secrets or proprietary information that have been exclusively assigned to the
Company.

          Without limiting the generality of the above, neither of Cardio Medical Solutions, Inc. nor
Nobles LAI Engineering Inc., nor any other entity owned or controlled by officers, directors or key
employees of the Company, own or control any inventions, trade secrets or proprietary information
necessary for or desirable to the Company in connection with and directly related to its business
as now conducted or proposed to be conducted.

          Except as set forth in Schedule 3.10, (i) each of the Company’s employees have executed
agreements of confidentiality and non-disclosure as to the Company’s confidential information,
including its intellectual property and trade secrets, and (ii) each of the Company’s employees has
agreed to assign to the Company any and all significant conceptions and ideas for inventions,
improvements and valuable discoveries, whether patentable or not, which are conceived or made by
such employees, solely or jointly with another, during the period of employment, and which are
directly related to the business or activities of the Company and which the employee conceives as a
result of the employee’s employment by the Company (other than inventions for which no equipment,
supplies, facility or trade secret information of the Company was used and which was developed
entirely on the employee’s own time and (1) which does not relate (a) directly to the business of
the Company or (b) to the Company’s actual or demonstrably anticipated research or development or
(2) which does not result from any work performed by the employee for the Company).

          3.11. Compliance with Other Instruments. Except as disclosed on Schedule 3.11, the Company is
not in violation or default of any term of its Certificate of Incorporation or Bylaws, or in any
material respect of any mortgage, indenture, contract, agreement, instrument or contract to which
it is party or by which it is bound or of any judgment, decree, order, writ or, to its knowledge,
any statute, rule or regulation applicable to the Company that would materially and adversely
affect the business, assets, liabilities, financial condition, operations or prospects of the
Company. The execution and delivery of, and the performance of and compliance with the
transactions contemplated by, the Transaction Documents, and the issuance and sale of the Shares
upon conversion of the Notes or upon exercise of the Warrants, will not, with or without the
passage of time or giving of notice, result in any such material violation, or be in conflict with
or constitute a default under any such term, or result in the creation of any mortgage, pledge,
lien, encumbrance or charge upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets or properties, except
for such results that would not materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company.

          3.12. Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company that questions the validity of this
Agreement or the other Transaction Documents or the right of the Company to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby. Except as disclosed
in the Financial Statements or on Schedule 3.12, there is no action, suit, proceeding or
investigation or, to the Company’s knowledge, currently threatened against the Company that

-6-

 

might result, either individually or in the aggregate, in any material adverse change in the
assets, condition, affairs or prospects of the Company, financial or otherwise, or any change in
the current equity ownership of the Company. The foregoing includes, without limitation, actions
pending or threatened involving the prior employment of any of the employees of the Company, their
use in connection with the Company’s business of any information or techniques allegedly
proprietary to any of their former employers or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality.

          3.13. Tax Returns and Payments. The Company has filed all tax returns (federal, state and
local) required to be filed by it. All taxes shown to be due and payable on such returns, any
assessments imposed, and, to the Company’s knowledge, all other taxes due and payable by the
Company on or before the Closing have been paid or will be paid prior to the time they become
delinquent. The Company has not been advised (i) that any of its returns, federal, state or other,
have been or are being audited as of the date hereof or (ii) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no knowledge of any
liability of any tax to be imposed upon the properties or assets of the Company as of the date of
this Agreement that is not adequately provided for.

          3.14. Employees. The Company has no collective bargaining agreements with any of its
employees. The Company is not aware of any labor union organizing activity relating to its
employees. Except as set forth on Schedule 3.14, no employee has any agreement or contract,
written or verbal, regarding his employment. Except as disclosed on Schedule 3.14, the Company is
not a party to or bound by any currently effective employment contract, deferred compensation
arrangement, bonus plan, incentive plan, profit sharing or defined benefit plan, retirement
agreement or other employee compensation plan or agreement. To the Company’s actual knowledge, no
employee of the Company, nor any consultant with whom the Company has contracted, is in violation
of any material term of any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company; and, to the
Company’s knowledge, the continued employment by the Company of its present employees, and the
performance of the Company’s contracts with its independent contractors, will not result in any
such violation. The Company has not received any written or oral notice alleging that any such
violation has occurred. Except as disclosed on Schedule 3.14, no employee of the Company has been
granted the right to continued employment by the Company or to any material compensation following
termination of employment with the Company. The Company is not aware that any officer or key
employee, or that any group of key employees, intends to terminate their employment with the
Company, nor does the Company have a present intention to terminate the employment of any officer,
key employee or group of key employees.

          3.15. Registration Rights. Except (i) for registration rights granted pursuant to that
certain Amended Registration Rights Agreement dated March 24, 2005 (the “March 2005 Registration
Rights Agreement”), (ii) as disclosed on Schedule 3.15 or (iii) required pursuant to the
Registration Rights Agreement, the Company is presently not under any obligation, and has

-7-

 

not granted any rights, to register (as defined in the Registration Rights Agreement) any of the
Company’s presently outstanding securities or any of its securities that may hereafter be issued.

          3.16. Compliance with Laws; Permits; Company Medical Devices. Except as disclosed on
Schedule 3.16, the Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties that would materially and
adversely affect the business, assets, liabilities, financial condition, operations or prospects of
the Company. No governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be filed in connection
with the execution and delivery of, and the performance of the transactions contemplated by, the
Transaction Documents, the pledge of the Collateral to secure the Notes or the issuance of the
Shares upon conversion of the Notes upon payment of the Notes or upon exercise of the Warrants,
except such as has been duly and validly obtained or filed, or with respect to any filings that
must be made after the Closing, as will be filed in a timely manner. The Company has all
franchises, permits, licenses and any similar authority necessary for the conduct of its business
as now being conducted by it, the lack of which could materially and adversely affect the business,
properties, prospects or financial condition of the Company and the Company believes it can obtain
any similar authority for the conduct of its business as now conducted or planned to be conducted.

          With respect to the Company’s marketing and sale of minimally invasive vessel closure devices
for surgical applications (which the Company represents are the only products that the Company
manufactures, markets or sells):

	 	(i)	 	The Company has received 510(k) clearance from the U.S. Food & Drug
Administration (the “FDA”) to sell its F8 & F6 SuperStitch® devices, including its Next
Generation versions (together, the “Company Medical Devices”) in the United States;
	 
	 	(ii)	 	The Company has obtained permission from its notified body to place the CE mark
on the Company Medical Devices so as to permit their sale in European Union countries;
	 
	 	(iii)	 	The Company’s 510(k) clearance and CE mark for the Company Medical Devices are
in full force and effect and the Company has not received and anticipates no warning
letter or other notice of, and is unaware of any basis for, revocation, limitation or
modification of such 510(k) clearance or CE marking; and
	 
	 	(iv)	 	The Company manufactures the Company Medical Devices in compliance with FDA
quality system regulations and the EU Medical Device Directive and is otherwise in
compliance with all applicable FDA rules and regulations and EU directives (including
the Medical Device Directive) relating to the manufacture, marketing and sale of the
Company Medical Devices, including with respect to reporting of any device failures or
adverse reactions, except where such failure to

-8-

 

	 	 	 	comply would not materially and adversely affect the ability of the Company to sell
the Company’s Medical Devices in each EU country.

          With respect to any human clinical investigation of new or proposed medical devices by the
Company, or modifications to the Company Medical Devices, the Company is conducting each such
investigation in material compliance with applicable rules and regulations, including by obtaining
any required Investigational Device Exemption or Institutional Review Board approvals.

          3.17. Environmental and Safety Laws. The Company is not in violation of any applicable
statute, law or regulation relating to the environment or occupational health and safety, where
such violation would have a material adverse effect on the Company, and to the Company’s knowledge,
no material expenditures are or will be required in order to comply with any such existing statute,
law or regulation. Without limiting the foregoing:

	 	(i)	 	with respect to any real property owned, leased or otherwise utilized by the
Company (“Real Property”), the Company is not or has not in the past been in violation
of any Hazardous Substance Law which violation could reasonably be expected to result
in a material liability to the Company or its properties and assets;
	 
	 	(ii)	 	neither the Company nor, to the knowledge of the Company, any third party has
used, released, generated, manufactured, produced or stored, in, on, under, or about
any Real Property, or transported thereto or therefrom, any Hazardous Substances that
could reasonably be expected to result in a material liability to the Company under any
Hazardous Substance Law;
	 
	 	(iii)	 	to the knowledge of the Company, there are no underground tanks, whether
operative or temporarily or permanently closed, located on any Real Property that could
reasonably be expected to result in a material liability to the Company under any
Hazardous Substance Law;
	 
	 	(iv)	 	there are no Hazardous Substances used, stored or present at, or on, or to the
knowledge of the Company that could reasonably be expected to migrate onto any Real
Property, except in compliance with Hazardous Substance Laws; and
	 
	 	(v)	 	to the knowledge of the Company, there neither is nor has been any condition,
circumstance, action, activity or event that could reasonably be expected to be a
material violation by the Company of any Hazardous Substance Law, or to result in
liability to the Company under any Hazardous Substance Law.

          For purposes hereof, “Hazardous Substances” means (statutory acronyms and abbreviations having
the meaning given them in the definition below of “Hazardous Substances Laws”) substances defined
as “hazardous substances,” “pollutants” or “contaminants” in Section 101 of the CERCLA; those
substances defined as “hazardous waste,” “hazardous materials” or “regulated substances” by the
RCRA; those substances designated as a “hazardous substance” pursuant to Section 311 of the CWA;
those substances defined as “hazardous

-9-

 

materials” in Section 103 of the HMTA; those substances regulated as a hazardous chemical
substance or mixture or as an imminently hazardous chemical substance or mixture pursuant to
Sections 6 or 7 of the TSCA; those substances defined as “contaminants” by Section 1401 of the
SDWA, if present in excess of permissible levels; those substances regulated by the Oil Pollution
Act; those substances defined as a pesticide pursuant to Section 2(u) of the FIFRA; those
substances defined as a source, special nuclear or by-product material by Section 11 of the AEA;
those substances defined as “residual radioactive material” by Section 101 of the UMTRCA; those
substances defined as “toxic materials” or “harmful physical agents” pursuant to Section 6 of the
OSHA; those substances defined as hazardous wastes in 40 C.F.R. Part 261.3; those substances
defined as hazardous waste constituents in 40 C.F.R. Part 260.10, specifically including Appendix
VII and VIII of Subpart D of 40 C.F.R. Part 261; those substances designated as hazardous
substances in 40 C.F.R. Parts 116.4 and 302.4; those substances defined as hazardous substances or
hazardous materials in 49 C.F.R. Part 171.8; those substances regulated as hazardous materials,
hazardous substances, or toxic substances in 40 C.F.R. Part 1910; any chemical, material, toxin,
pollutant, or waste regulated by or in any other Hazardous Substances Laws; and in the regulations
adopted and publications promulgated pursuant to said laws, whether or not such regulations or
publications are specifically referenced herein.

          “Hazardous Substances Law” means any of:

	 	(i)	 	the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. Section 9601 et seq.) (“CERCLA”);
	 
	 	(ii)	 	the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.) (“Clean Water
Act” or “CWA”);
	 
	 	(iii)	 	the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) (“RCRA”);
	 
	 	(iv)	 	the Atomic Energy Act of 1954 (42 U.S.C. Section 2011 et seq.) (“AEA”);
	 
	 	(v)	 	the Clean Air Act (42 U.S.C. Section 7401 et seq.) (“CAA”);
	 
	 	(vi)	 	the Emergency Planning and Community Right to Know Act (42 U.S.C. Section 11001 et seq.)
(“EPCRA”);
	 
	 	(vii)	 	the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.)
(“FIFRA”);
	 
	 	(viii)	 	the Oil Pollution Act of 1990 (33 U.S.C.A. Section 2701 et seq.);
	 
	 	(ix)	 	the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.) (“SDWA”);
	 
	 	(x)	 	the Surface Mining Control and Reclamation Act of 1974 (30 U.S.C. Sections 1201 et seq.)
(“SMCRA”);

-10-

 

	 	(xi)	 	the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.) (“TSCA”);
	 
	 	(xii)	 	the Hazardous Materials Transportation Act (49 U.S.C. Section 5101 et seq.) (“HMTA”);
	 
	 	(xiii)	 	the Uranium Mill Tailings Radiation Control Act of 1978 (42 U.S.C. Section 7901 et
seq.) (“UMTRCA”);
	 
	 	(xiv)	 	the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.) (“OSHA”); and
	 
	 	(xv)	 	all other federal, state and local governmental rules which govern Hazardous Substances,
and the regulations adopted and publications promulgated pursuant to all such foregoing laws.

          3.18. Offering Valid. Assuming the accuracy of the representations and warranties of the
Purchasers contained in Section 4, the offer, sale and issuance of the Notes and the Warrants (and
the Shares issuable upon conversion of the Notes, upon payment on the Notes or upon exercise of the
Warrants) will be exempt from the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”), and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification requirements of the
State of Minnesota.

          3.19. Full Disclosure. None of this Agreement, the Notes, the Warrants, the Registration
Rights Agreement, the Security Agreement or the Patent and Trademark Security Agreement contains
any untrue statement of a material fact nor, to the Company’s knowledge and belief, omits to state
a material fact necessary in order to make the statements contained herein or therein not
misleading.

          3.20. Insurance. The Company has fire and casualty insurance policies with coverage customary
for companies similarly situated to the Company. The Company’s coverage for product liability is
described on Schedule 3.20.

          3.21. Investment Company Act. The Company is not, and will not use the proceeds from the Notes
in a manner so as to become, an “investment company,” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.

          3.22. Security Interest in Collateral. The Company owns the Collateral free and clear of all
claims, liens or encumbrances of any kind except for the security interests granted in such
Collateral pursuant to the Amended Security Agreement and the Amended Patent and Trademark Security
Agreement, each dated March 24, 2005 (the “Original Security Agreements”). Upon consummation of
the transactions as contemplated hereby, and subject to the Company’s receipt of consents from the
secured parties under the Original Security Agreements (the “Original

-11-

 

Secured Parties”), the Purchasers will, together with the Original Secured Parties, have a first
priority security interest in the Collateral.

          3.23. Foreign Corrupt Practices; Sarbanes-Oxley.

          (a) Neither the Company, nor to the knowledge of the Company, any agent or other person acting
on behalf of the Company, has (i) directly or indirectly, used any corrupt funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company (or made by any person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated in any
material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

          (b) The Company is in compliance in all material respects with all provisions of the
Sarbanes-Oxley Act of 2002 (and related rules of the Commission) that are applicable to it as of
the Closing Date.

          3.24. Brokers or Finders. Except as set forth in Schedule 3.24, the Company has not incurred
nor will incur, directly or indirectly, any liability for any brokerage or finders’ fees or agent’s
commissions or any similar charges (whether payable in cash, in equity securities or by a
combination thereof) in connection with this Agreement or any transaction contemplated hereby.

          3.25. SEC Reports. The Company has filed all reports, forms or other information required to
be filed by it under the Securities Act and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) for the twelve months preceding the date hereof or such shorter period as the
Company has been required by law to file such reports, forms or other information (the foregoing
materials being collectively referred to herein as the “SEC
Reports”) on a timely basis or has
timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

          3.26. Use of Proceeds. The Company will use the proceeds from the purchase of the Notes and
Warrants for general corporate purposes.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          Each Purchaser hereby severally, but not jointly, represents and warrants to the Company as of
each of the Closing Dates, and agrees, as follows:

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          4.1. Authorization. Such Purchaser has full power and authority to enter into this Agreement
and each of the Transaction Documents, and each such agreement, when executed and delivered by such
Purchaser, will constitute the valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) to the extent that the enforceability of
the indemnification provisions of the Registration Rights Agreement may be limited by applicable
laws.

          4.2. Investment Representations. Such Purchaser understands that neither the offer nor the
sale of the Purchaser’s Note, the Warrant or the Shares has been registered under the Securities
Act. The Purchaser also understands that the Purchaser’s Note and Warrant are being offered and
sold pursuant to an exemption from registration contained in the Securities Act based in part upon
the Purchaser’s representations contained in the Agreement. The Purchaser hereby represents and
warrants as follows:

          (a) Purchaser Bears Economic Risk. The Purchaser has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar to the Company so
that it is capable of evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. The Purchaser must bear the economic risk of this
investment indefinitely unless the Purchaser’s respective Note or Warrant (or the Shares) are
registered pursuant to the Securities Act, or an exemption from registration is available. Except
as contemplated by the Registration Rights Agreement, the Purchaser has no present intention of
selling or otherwise transferring its respective Note, the Warrant or the Shares, or any interest
therein. The Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if available, such exemption
may not allow the Purchaser to transfer all or any portion of the Purchaser’s respective Note, the
Warrant or the Shares under the circumstances, in the amounts or at the times the Purchaser might
propose.

          (b) Acquisition for Own Account. Except as contemplated by the Registration Rights Agreement,
the Purchaser is acquiring its respective Note, the Warrant and the Shares for its own account for
investment only, and not with a view towards their public distribution.

          (c) Purchaser Can Protect Its Interest. The Purchaser represents that by reason of its, or of
its management’s, business or financial experience, the Purchaser has the capacity to protect its
own interests in connection with the transactions contemplated in this Agreement, the Note, the
Warrant and the Registration Rights Agreement. Further, the Purchaser is aware of no publication
of any advertisement in connection with the transactions contemplated in the Agreement.

          (d) Accredited Investor. The Purchaser represents that it is an accredited investor within
the meaning of Rule 501 of Regulation D of the Securities Act.

-13-

 

          (e) Residence. The Purchaser represents that it is organized under the laws of the British
Virgin Islands and that its principal office is located in the State of Minnesota.

          (f) Rule 144. The Purchaser acknowledges and agrees that its respective Note and Warrant,
and, if issued, its Shares, must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. The Purchaser has been
advised or is aware of the provisions of Rule 144 promulgated under the Securities Act, which
permits limited resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things: the availability of certain current public
information about the Company, the resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being through an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as such term is defined under the
Exchange Act) and the number of shares being sold during any three-month period not exceeding
specified limitations.

          (g) Disclosure of Information. Such Purchaser believes it has received all the information it
considers necessary or appropriate for deciding whether to purchase the securities of the Company
contemplated by this Agreement and the Transaction Documents. Such Purchaser further represents
that it or he has had an opportunity to ask questions and receive answers from the Company
regarding the securities being issued by the Company pursuant to this Agreement and the Transaction
Documents and Company’s business, properties, prospects and financial condition.

          4.3. Transfer Restrictions. The Purchaser acknowledges and agrees that its respective Note
and Warrant and, if issued, its Shares, are subject to restrictions on transfer and will bear
restrictive legends.

          4.4. Limitation on Short Selling of Common Stock. The Purchaser has not and agrees not to
engage in any “short sale” (as such term is defined in Rule 3b-3 of the Exchange Act) of the
Company’s Common Stock or any hedging transaction, which establishes a net short position of the
Company’s Common Stock during the period consisting of the sixty (60) consecutive trading days
ending on August 19, 2006. The foregoing covenant shall lapse if the Company defaults in the
timely payment of any amount due under the Purchaser’s Note.

SECTION 5. CONDITIONS FOR CLOSING

          5.1. Conditions for the Company to Satisfy. The several obligations of each Purchaser to
purchase its respective Note and Warrant as contemplated by this Agreement is subject to
satisfaction of the following contingencies at or prior to the Closing:

          (a) The Company shall have obtained all third party consents required in connection herewith,
including consents from the Original Secured Parties to pledge the Collateral pari passu with the
Purchasers as security for the Notes.

          (b) The Company shall have executed and delivered to the Purchasers at Closing the Transaction
Documents.

-14-

 

          (c) The Company shall have satisfied all judgment liens, if any, against it filed of record
with the U.S. Patent and Trademark Office or otherwise.

          (d) The Company shall have paid Whitebox Advisors a $140,000 cash origination fee related to
the transactions contemplated hereby.

          (e) Babcock & Associates, legal counsel to the Company, shall have delivered an opinion to the
Purchasers with respect to the following matters (which opinion may contain customary exclusions
and limitations that are reasonably acceptable to counsel for the Purchasers):

	 	(i)	 	The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. The Company has all corporate power
and authority necessary to own its properties and to conduct its business as, to our
knowledge, it is presently conducted. The Company is qualified to do business and is
in good standing in the State of California.
	 
	 	(ii)	 	The Company has the requisite corporate power and authority to execute, deliver
and perform its obligations under the Transaction Documents.
	 
	 	(iii)	 	The Transaction Documents have been duly authorized by all necessary corporate
action on the part of the Company.
	 
	 	(iv)	 	The authorized capital stock of the Company consists of 500,000,000 shares of
Common Stock, par value $0.001 per share, and 2,000,000 shares of Preferred Stock, par
value $0.001 per share. To our knowledge, except as described above or in the Purchase
Agreement (including the schedules and exhibits thereto), there are no other presently
outstanding preemptive rights to purchase from the Company any of the authorized but
unissued stock of the Company.
	 
	 	(v)	 	Each of the Transaction Documents, when executed and delivered by the Company,
will constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.
	 
	 	(vi)	 	When issued in compliance with the provisions of the Notes and Warrants (and
upon payment as provided by the Warrants), the Shares will be validly issued, fully
paid and nonassessable.
	 
	 	(vii)	 	The execution and delivery of the Transaction Documents by the Company will
not result in (i) a violation of the Company’s Amended and Restated Certificate of
Incorporation or Bylaws, as amended or (ii) a violation of any judgment or order
specifically identified on the Schedules to the Purchase Agreement, if any.

          (f) The Company shall have procured, at its expense, UCC-type insurance in form and amount
satisfactory to the Purchasers as to the perfection and priority of the Purchasers’ security
interest in the Collateral.

-15-

 

SECTION 6. OTHER AGREEMENTS

          The Company covenants and agrees to the following (as to which the failure to comply shall
constitute an event of default under (i) the Notes, the Security Agreement and the Patent and
Trademark Security Agreement, and (ii) the notes issued pursuant to that certain Purchase Agreement
dated March 24, 2005 and that certain Purchase Agreement dated September 17, 2004).

          6.1 Reporting Requirements. The Company covenants to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act.

          6.2 Internal Accounting Controls. The Company shall maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with respect to any
differences. The Company shall maintain disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15(d)-15(e)) that are designed to ensure that material information relating
to the Company, including its subsidiaries, is made known to the certifying officers by others
within those entities, particularly during the period in which the Company’s Form 10-KSB (or 10-K)
or Form 10-QSB (or 10-Q), as the case may be, is being prepared.

          6.3. Inspection. The Company shall permit any person designated by the Purchasers to visit
and inspect any of the properties of the Company, to examine the books and records of the Company
and make copies thereof and to discuss the affairs of the Company with its officers, employees and
independent accountants at such reasonable times and intervals as the Purchasers may request;
provided, however, that each of the Purchasers and each such person designated by the Purchasers
shall have executed a confidentiality agreement reasonably acceptable to the Company.

          6.4. Observation and Participation Rights. The Purchasers shall have the right to designate a
representative to attend meetings of the board of directors or any committee thereof (whether in
person or by telephone or similar communications equipment) and to review board and committee
minutes, actions by written consent and any other information given to directors in connection with
such meetings; provided, however, that each of the Purchasers and such representative shall have
executed a confidentiality agreement reasonably acceptable to the Company. The representative
shall have the right to observe, listen, participate and speak at such meetings. The Company
reserves the right to exclude such representative from access to any material or meeting or portion
thereof if the Company believes upon advice of counsel that such exclusion is reasonably necessary
to preserve the attorney-client privilege. The decision of the board of directors with respect to
the privileged nature of such information shall be final and binding.

-16-

 

SECTION 7. MISCELLANEOUS

          7.1. Governing Law. This Agreement shall be governed by the laws of the State of Minnesota as
such laws are applied to agreements between Minnesota residents entered into and performed entirely
in Minnesota.

          7.2. Survival. The representations, warranties, covenants and agreements made herein shall
survive any investigation made by the parties and the closing of the transactions contemplated
hereby. All statements as to factual matters contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the Company hereunder
solely as of the date of such certificate or instrument.

          7.3. Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Notes, the Warrants or the Shares from time
to time.

          7.4. Entire Agreement. The Transaction Documents and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set forth herein and
therein.

          7.5. Severability. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

          7.6. Amendment and Waiver. This Agreement may be amended or modified, and any provision
hereunder may be waived, only upon the written consent of the Company and Whitebox Advisors, as
agent for the Purchasers.

          7.7. Notices. All notices, requests, consents, and other communications hereunder shall be in
writing and shall be deemed effectively given and received when delivered in person or by national
overnight courier service or by certified or registered mail, return receipt requested, or by
telecopier, addressed as follows:

	 	(a)	 	if to the Company, at
	 
	 	 	 	Sutura, Inc.

17080 Newhope Street

Fountain Valley, California 92708

Attention: Anthony A. Nobles, President and Chief Executive Officer

Facsimile: (714) 427-6354
	 
	 	 	 	with a copy to:

-17-

 

	 	 	 	Babcock & Associates

600 Anton Boulevard, 11th Floor

Costa Mesa, California 92626

Attention: Richard J. Babcock, Esq.
	 
	 	(b)	 	if to the Purchasers, in care of:
	 
	 	 	 	Whitebox Advisors, LLC

3033 Excelsior Boulevard, Suite 300

Minneapolis, Minnesota 55416

Attention: Jonathan Wood, Chief Financial Officer

Facsimile: (612) 253-6151
	 
	 	 	 	with a copy to:
	 
	 	 	 	Messerli & Kramer P.A.

150 South Fifth Street, Suite 1800

Minneapolis, Minnesota 55402

Attention: Jeffrey C. Robbins, Esq.

Facsimile: (612) 672-3777.

          7.8. Indemnification by the Company. The Company agrees to indemnify and hold the Purchasers,
their affiliates and the directors, officers, managers, employees and agents of each of the
foregoing (each, a “Purchaser Party”) harmless against any and all claims, losses, liabilities,
obligations, damages, judgments, costs or expenses (including reasonable legal fees and costs) that
any such Purchaser Party may suffer, sustain or become subject to as a result of, or in connection
with, or in any way related to or by reason of (a) any misrepresentation, breach or inaccuracy of
any representation, warranty, covenant or agreement made by the Company in any of the Transaction
Documents; or (b) the execution, delivery or performance of any of the Transaction Documents or any
transaction contemplated by any of the Transaction Documents; or (c) the merger between the Company
and Technology Visions Group, Inc. or the abandonment of the proposed merger with Millenium Holding
Group, Inc. or the termination of the Common Stock Purchase Agreement with Fusion Capital Fund II,
L.L.C.

          7.9. Expenses. At Closing, the Company shall pay the Purchaser’s counsel, Messerli & Kramer
P.A., $12,000 for its legal fees and expenses in representing the Purchasers in connection with the
transactions contemplated hereby. In addition, the Company agrees to pay or reimburse the
Purchasers for their reasonable legal fees and expenses that they may incur after the date hereof
in connection with the granting of any waiver with respect to, the modification of any of the terms
or provisions of or the enforcement of any of the Transaction Documents.

          7.10. Titles and Subtitles. The titles of the sections and subsections of the Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

-18-

 

          7.11. Counterparts. This Agreement may be delivered via facsimile or other means of
electronic communication, and may be executed in counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.

[signature page follows]

-19-

 

          IN WITNESS WHEREOF, the parties hereto have executed this Purchase Agreement as of
the date first above written.

	 	 	 	 	 	 	 	 	 
	Sutura, Inc.	 	Pandora Select Partners, L.P.,

Whitebox Hedged High Yield Partners, L.P.,

Whitebox Convertible Arbitrage Partners, L.P.

and Whitebox Intermarket Partners L.P.
	 
	 	 	 	 	 	 	 	 
	By
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Anthony A. Nobles, President and

Chief Executive Officer	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	Their	 	 
	 

	 	 	 	 	 	 	 	 

-20-

 

Exhibit A

Form of Note

-21-

 

Exhibit B

Form of Warrant

-22-

 

Exhibit C

Form of Registration Rights Agreement

-23-

 

Exhibit D

Form of Security Agreement

-24-

 

Exhibit E

Form of Patent and Trademark Security Agreement

-25-

 

Schedule 3.2

Stock Matters

-26-

 

Schedule 3.6

Certain Agreements and Actions

-27-

 

Schedule 3.7

Related Party Matters

-28-

 

Schedule 3.8

Changes

-29-

 

Schedule 3.9

Properties Matters

-30-

 

Schedule 3.10

Intellectual Property Matters

-31-

 

Schedule 3.11

Compliance Matters

-32-

 

Schedule 3.12

Litigation

-33-

 

Schedule 3.14

Employment Matters

-34-

 

Schedule 3.15

Registration Rights

-35-

 

Schedule 3.16

Violations

-36-

 

Schedule 3.20

Product Liability Insurance

-37-

 

Schedule 3.22

Encumbrances on Collateral

-38-

 

Schedule 3.24

Brokers or Finders

-39-

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