Document:

exv10w46

 

Exhibit
10.46

SECURED CONVERTIBLE PROMISSORY NOTE

$400,000 
June 1, 2007

     FOR VALUE RECEIVED, the undersigned, Sutura, Inc., a Delaware corporation (the “Maker”),
hereby promises to pay to the order of Synapse Capital, LLC, as agent, a California limited
liability company, or its assigns (the “Payee”), at such place as the Payee may designate in
writing, the principal sum of Four Hundred Thousand Dollars ($400,000) under the terms set forth
herein. On March 5, 2007, Maker entered into a series of Notes (each a “March 2007 Note” and
together the “March 2007 Notes”) with Whitebox Hedged High Yield Partners, L.P., Pandora Select
Partners, L.P., Whitebox Convertible Arbitrage Partners, L.P., and Whitebox Intermarket Partners,
L.P. (each a “Whitebox Party” and, collectively, the “Whitebox Parties”), as provided for
under Section 6.4 of the Purchase Agreement of December, 13 2006, whereby Maker entered into a
series of Notes with the Whitebox Parties and the other purchasers named therein (each a “December
2006 Note” and, collectively, the “December 2006 Notes”). On September 7, 2005, Maker entered into
a series of Notes with the Whitebox Parties and the other purchasers named therein (each a
“September 2005 Note” and, collectively, the “September 2005 Notes”). On March 25, 2005, Maker
entered into a series of Notes with the Whitebox Parties and the other purchasers named therein
(each a “March 2005 Note” and, collectively, the “March 2005 Notes”). On September 17, 2004, Maker
entered into a series of Notes with the Whitebox Parties and the other purchasers named therein
(each a “September 2004 Note” and, collectively, the “September 2004 Notes”). The March 2007
Notes, December 2006 Notes, September 2005 Notes, March 2005 Notes and the September 2004 Notes
shall each be referred to herein as a “Series Note” and collectively, together, as the “Series
Notes”. As used herein, the terms “Whitebox Party” and “Whitebox Parties” shall also include the
other purchasers of the various Series Notes referred to above.

1. Interest. The unpaid principal balance hereof from time to time outstanding shall bear
interest from the date hereof at the rate of eight percent (8%) per annum.

2. Payment. Except as otherwise provided herein, and subject to any default hereunder, the
principal and interest hereof is payable as follows:

     (a) Interest only is payable in cash or stock (as provided below) quarterly in arrears on the
last day of each calendar quarter, beginning June 30, 2007. The parties hereby agree that the
Maker may pay interest due hereunder, or any portion thereof, by issuing to the Payee fully paid
and nonassessable shares of Maker’s Common Stock, par value $0.001 per share in lieu of cash. The
number of shares of Common Stock issuable upon payment of any portion of an interest payment
hereunder in stock shall be computed by dividing each such applicable portion of the interest
payment to be paid in shares of Common Stock by the Interest Conversion Rate (as defined below) in
effect at such time. The Maker shall not pay any portion of interest due hereunder in a form other
than cash unless an equal proportion of interest due has been paid in such form on all the Series
Notes.

 

 

     (b) The “Interest Conversion Rate” shall be equal to the greater of (A) $0.08 per share; or
(B) the average of the daily closing bid prices for the Maker’s Common Stock over a period of 30
consecutive Trading Days. The last day of such 30 day period will be the Trading Day immediately
prior to the day in which an interest payment is due. A “Trading Day” is (x) a day on which the
Common Stock is traded on the New York Stock Exchange, the American Stock Exchange, the NASDAQ
National Market, the NASDAQ SmallCap Market or OTC Bulletin Board (all “Trading Markets”), or (y)
if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the Pink Sheets, LLC (or any similar organization or
agency succeeding to its function of reporting prices). In the event the Maker and any Whitebox
Party agree to a lower interest conversion rate on any outstanding Series Note, then the Interest
Conversion Rate hereunder shall equal such lower rate on such Series Note. The lower rate referred
to in the foregoing sentence shall exclude the current rate on the March 2007 Notes and the
December 2006 Notes and any lowered rate as may be required by the terms of any additional
financing of the Maker by a Whitebox Party, provided that Payee has been permitted to participate
up to its pro rata portion of such additional financing based on the unpaid principal and accrued
interest of this Note as it bears to the total amount of unpaid principal and accrued interest of
this Note together with all Whitebox Party notes.

     (c) On December 1, 2008 (the “Maturity Date”), the remaining outstanding principal balance of
this Note will be due and payable in cash, together with all then-accrued but unpaid interest.

     (d) Except as provided herein, the Maker will have no right of early prepayment on this Note.
In the event that the Maker and any Whitebox Party agree to the prepayment of any portion of any of
the Series Notes or any other note issued to a Whitebox Party prior to the scheduled or extended
due date of such note, then Payee shall have the right (but not the obligation) to require the
prepayment of such pro rata portion of outstanding principal and/or accrued interest of this Note
based on the total to be prepaid under the relevant Series Note(s) and other Whitebox note(s) as it
bears to the total amount of unpaid principal and accrued interest of the Series Notes and other
Whitebox note(s). Any payments made pursuant to the acceleration of a note that is in default
shall be considered a prepayment that is subject to the foregoing sentence.

3. Conversion.

     (a) At any time while any portion of the principal or interest of this Note is outstanding,
the Payee may give the Maker written notice (the “Payee Notice”) of its intention to convert all or
any portion of the outstanding principal and/or accrued but unpaid interest on this Note into
shares of the Maker’s Common Stock based on a conversion rate as described below (the “Conversion
Rate”). The number of shares of Common Stock issuable upon payment of any portion of the
outstanding principal and/or accrued but unpaid interest on this Note shall be computed by
dividing each such applicable portion of the payment to be paid in shares of Common Stock by the
Conversion Rate in effect at the close of business on the date prior to the date on which the Payee
Notice is sent. Upon receipt of the Payee Notice, the Maker shall

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immediately cause certificates dated the Payee Notice date and representing these shares to be
delivered to Payee within 20 days of, and payment shall be deemed to have been made on, the date of
the Payee Notice.

     (b) The Conversion Rate shall initially be equal to $0.15. In the event the Maker and any
Whitebox Party agree to a lower conversion rate on any outstanding Series Note, then the Conversion
Rate hereunder shall equal such lower rate on such Series Note. The lower rate referred to in the
foregoing sentence shall exclude the current rate on the March 2007 Notes and the December 2006
Notes and any lowered rate as may be required by the terms of any additional financing of the Maker
by a Whitebox Party, provided that Payee has been permitted to participate up to its pro rata
portion of such additional financing based on the unpaid principal and accrued interest of this
Note as it bears to the total amount of unpaid principal and accrued interest of this Note together
with all Whitebox Party notes.

     (c) The Conversion Rate (and, as applicable, the factors above used to compute it) shall be
adjusted proportionally for any subsequent stock dividend or split, stock combination or other
similar recapitalization, reclassification or reorganization of or affecting Maker’s Common Stock.
In case of any consolidation or merger to which the Maker is a party other than a merger or
consolidation in which the Maker is the continuing corporation, or in case of any sale or
conveyance to another corporation of the property of the Maker 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
Maker), then instead of receiving shares of Maker’s Common Stock, Payee shall have the right
thereafter to receive the kind and amount of shares of stock and other securities and property
which the Payee would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale or conveyance had the same portion of this Note
been paid or 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 the Payee, 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 in
connection with this Note. The provisions of this subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

     (d) Notwithstanding the preceding, if at any time while any portion of the principal or
interest of this Note is outstanding, any or all of the Whitebox Parties provide Maker with written
notice (the “Whitebox Notice”) of their intention to convert all or any portion of the outstanding
principal and/or accrued but unpaid interest of all or any of the Series Notes that has a
conversion rate equal to or higher than the Conversion Rate on this Note, then such Whitebox Notice
shall constitute a Payee Notice hereunder (without any further action of Payee) to convert such pro
rata portion of outstanding principal and/or accrued interest of this Note based upon the total to
be converted pursuant to the Whitebox Notice as it bears to the total amount of unpaid principal
and accrued interest of the Series Notes that have a conversion rate equal to or higher than the
Conversion Rate on this Note. Upon its receipt of any Whitebox Notice, Maker shall give prompt
notice of such receipt to Payee.

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     (e) Any Common Stock issued in payment of all or any portion of the outstanding principal
and/or accrued but unpaid interest on this Note shall have those registration rights set forth for
Payee in the Registration Rights Agreement of even date herewith by and among Maker, Payee and
certain other parties thereto.

4. Security. The full and timely payment of this Note shall be secured by that certain
Fifth Amended Security Agreement and Fifth Amended Patent and Trademark Security Agreement, each of
this date (together, the “Security Agreements”), covering all of Maker’s assets. Except as
otherwise may be permitted by the Security Agreements, the security interest granted under the
Security Agreements shall be a first priority security interest subordinate to no other secured
rights, but shared with the holders of the Series Notes and the secured parties under the Security
Agreements.

5. Default. The occurrence of any one or more of the following events shall constitute an
event of default, upon which Payee may declare the entire principal amount of this Note, together
with all accrued but unpaid interest, to be immediately due and payable:

     (a) The Maker shall fail to make any required payment of principal or interest when due, and
such failure shall continue through five days after Payee gives written notice of such failure to
Maker.

     (b) [Intentionally Omitted].

     (c) [Intentionally Omitted].

     (d) The Maker shall fail to materially perform or comply with any covenant, agreement, term or
provision contained in any of the Security Agreements, and such failure shall continue through five
days after Payee gives written notice of such default to Maker.

     (e) The Maker shall be in default of any term or provision of any of the Series Notes or any
note due to a Whitebox Party, and any Whitebox Party has declared a default and has accelerated
payment of any amounts due under any such notes.

     (f) The Maker shall become insolvent or shall fail to pay, or become unable to pay, its debts
as they become due; or any bankruptcy, reorganization, debt arrangement or other proceeding under
any bankruptcy or insolvency law shall be instituted by or against the Maker.

     (g) Any representation or warranty of the Maker contained in any of the Security Agreements
shall be untrue in any material respect.

     Without limiting the above, the Maker acknowledges that payments on the various scheduled due
dates in Section 2 are of essence and that any failure to timely pay any installment of principal
or interest (within any permitted grace period above) permits Payee to declare this Note
immediately due in cash in its entirety without any prior notice of any kind to Maker, except for
the specific notices provided above.

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6. Mandatory Prepayments. If Maker or its controlling stockholders enter into a definitive
agreement relating to a Sale Transaction (as defined below), the Maker shall give
Payee at least fifteen days prior written notice of the proposed date for consummation of the Sale
Transaction. The Maker’s notice shall include a description of the proposed price, terms and
conditions of the Sale Transaction. Despite any other provisions hereof, the entire principal
balance of this Note, and all accrued but unpaid interest, shall be due and payable immediately
prior to (and as a condition of) the closing on the Sale Transaction. However, within fifteen days
after receipt of Maker’s notice, Payee may give written notice to Maker that Payee elects to
convert all or any portion of the outstanding principal and/or accrued but unpaid interest on this
Note into shares of the Maker’s Common Stock (in which case, the Payee’s notice will constitute a
Payee Notice under Section 3 above and the portion of this Note not so converted will be retired in
cash as otherwise provided in this Section).

     The Maker shall not consummate any Sale Transaction, the price, terms and conditions of which
materially deviate from those described in Maker’s notice to the Payee, without first giving the
Payee a new notice specifying such changes. Such new notice will commence a new 15-day period
during which time Payee may give its notice to Maker as provided above. Nothing in this Section
will restrict the Maker’s ability to effect a Sale Transaction if Maker complies with the foregoing
provisions hereof.

     For purposes of this Note, a “Sale Transaction” shall mean the sale, license or other
disposition of all or substantially all of Maker’s assets, the sale or exchange of a majority of
the outstanding voting stock of Maker or the merger or consolidation of Maker into or with any
other entity (except in the case where the holders of Maker’s voting stock prior to consummation of
such merger or consolidation hold at least a majority of the outstanding voting securities of the
surviving entity).

7. Applicable Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THE NOTE SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF.

8. Waivers. The Maker hereby waives presentment for payment, notice of dishonor, protest
and notice of payment and all other notices of any kind in connection with the enforcement of this
Note.

9. No Setoffs. The Maker shall pay principal and interest under the Note without any
deduction for any setoff or counterclaim.

10. Costs of Collection. If this Note is not paid when due, the Maker shall pay Payee’s
reasonable costs of collection, including reasonable attorney’s fees.

11. Payee As Agent. Maker acknowledges that Payee is holding this Note for the benefit of
itself and as agent for certain other parties which and who are parties to a Settlement Agreement
with Maker dated as of an even date herewith. By acceptance of this Note Payee represents to Maker
that it has the authority to enter into this Note and the Security Agreements and that

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Maker may rely on any act of, or notice by, Payee hereunder or under the Security Agreements as the
act and notice of all parties for which and whom it is acting as agent.

	 	 	 	 	 
	 	SUTURA, INC.

 	 
	 	By  	 	 
	 	 	David Teckman, President and 	 
	 	 	Chief Executive Officer 	 

-6-exv10w47

 

Exhibit
10.47

FIFTH AMENDED PATENT AND TRADEMARK SECURITY AGREEMENT

     THIS FIFTH AMENDED PATENT AND TRADEMARK SECURITY AGREEMENT (this “Agreement”) is made as of
June 1, 2007, by and among Sutura, Inc., a Delaware corporation (the “Company”), Pandora Select
Partners, L.P., a British Virgin Islands limited partnership (“Pandora”), Whitebox Hedged High
Yield Partners, L.P., a British Virgin Islands limited partnership (“WHHY”), Whitebox Convertible
Arbitrage Partners, L.P., a British Virgin Islands limited partnership (“WCAP”), Whitebox
Intermarket Partners, L.P., a British Virgin Islands limited partnership (“WIP”), and Gary S.
Kohler (“Kohler”) and Scot W. Malloy (“Malloy”), each residents of the State of Minnesota and
Synapse Capital, LLC, as agent, a California limited liability company (“Synapse Secured Party”).
Pandora, WHHY, WCAP, WIP, Kohler and Malloy are referred to herein individually as a “Whitebox
Secured Party” and together as the “Whitebox Secured Parties.” The Synapse Secured Party and the
Whitebox Secured Parties are referred to herein individually as a “Secured Party” and together as
the “Secured Parties”.

RECITALS

     A. The Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy entered into a Purchase Agreement
dated September 17, 2004 (the “Original Purchase Agreement”), pursuant to which Pandora, WHHY,
WCAP, WIP, Kohler and Malloy each purchased a convertible promissory note and a warrant to purchase
shares of the Company’s common stock (“Sutura Stock”) from Sutura in consideration of a collective
$6,550,000 loan (the “Original Loan”).

     B. As a condition to making the Original Loan, the Company pledged to the Secured Parties all
of the Company’s assets pursuant to the terms of a Security Agreement dated September 17, 2004 (the
"Original Security Agreement”). The Original Security Agreement provided, among other things, for
the grant by the Company to the Whitebox Secured Parties of a first priority security interest in
all of the Company’s property and assets, including, without limitation, its patents and patent
applications, its trademarks, service marks and trade names, and its applications for registration
of such trademarks, service marks and trade names. Pursuant to the Original Security Agreement,
the Company executed and delivered to the Whitebox Secured Parties a Patent and Trademark Security
Agreement dated September 17, 2004 (the “Original Patent and Trademark Security Agreement”) for
filing with the United States Patent and Trademark Office (the “PTO”), and any other relevant
recording systems in any domestic or foreign jurisdiction, as further evidence of and to effectuate
such grant of security interests in such patents and patent applications, trademarks, service marks
and trade names, and applications for registration of such trademarks, service marks and trade
names, and the other general intangibles described therein.

     C. The Company, Pandora, WHHY and WIP entered into a second Purchase Agreement dated March 24,
2005 (the “Second Purchase Agreement”), pursuant to which Pandora, WHHY and WIP each purchased an
additional convertible promissory note and an additional warrant to purchase Sutura Stock from the
Company in consideration of a collective $3,000,000 loan.

SCHEDULE A - PAGE 1 

 

     D. The Company and the Whitebox Secured Parties entered into an Amended Security Agreement
dated March 24, 2005 (the “March 2005 Security Agreement”), which superseded and replaced the
Original Security Agreement, and an Amended Patent and Trademark Security Agreement dated March 24,
2005 (the “March 2005 Patent and Trademark Security Agreement"), which superseded and replaced the
Original Patent and Trademark Security Agreement.

     E. The Company, Pandora, WHHY, WCAP and WIP entered into a third Purchase Agreement dated
September 7, 2005 (the “Third Purchase Agreement”), pursuant to which Pandora, WHHY, WCAP and WIP
each purchased an additional convertible promissory note and an additional warrant to purchase
Sutura Stock from the Company in consideration of a collective $7,000,000 new loan.

     F. The Company and the Whitebox Secured Parties entered into a Second Amended Security
Agreement dated September 7, 2005 (the “September 2005 Security Agreement”), which superseded and
replaced the March 2005 Security Agreement, and a Second Amended Patent and Trademark Security
Agreement dated September 7, 2005 (the “September 2005 Patent and Trademark Security Agreement"),
which superseded and replaced the March 2005 Patent and Trademark Security Agreement.

     G. Pandora, WHHY, WCAP and WIP each purchased additional convertible promissory notes from
Sutura on June 7, 2006, June 28, 2006 and July 31, 2006 in consideration of collective loans of
$500, 000, $500,000 and $1,160,000, respectively (the “June/July 2006 Loans") to Sutura.

     H. The Company and the Whitebox Secured Parties entered into a Third Amended Security
Agreement as of June 7, 2006 (the “June, 2006 Security Agreement"), which superseded and replaced
the September 2005 Security Agreement, and entered into the Third Amended Patent and Trademark
Security Agreement dated June 7, 2006 (the “June 2006 Patent and Trademark Security Agreement"),
which superseded and replaced the September 2005 Patent and Trademark Security.

     I. The Company and the Whitebox Secured Parties entered into a Fourth Amended Security
Agreement as of December 13, 2006 (the “December 2006 Security Agreement”, which superseded and
replaced the June 2006 Security Agreement, and entered into the Fourth Amended Patent and Trademark
Security Agreement dated December 13, 2006 (the “December 2006 Patent and Trademark Security
Agreement"), which superseded and replaced the June 2006 Patent and Trademark Security Agreement.

     J. On the date hereof Sutura and the Synapse Secured Party have entered into a Settlement
Agreement of even date herewith with certain other parties signatory thereto pursuant to which
Sutura has issued to the Synapse Secured Party (as agent for certain other parties tot the
Settlement Agreement) a convertible promissory note (the “Synapse Note”) in the principal amount of
$400,000.

     K. The Company and the Secured Parties desire to enter into this Agreement which will
supersede and replace the December 2006 Patent and Trademark Security Agreement.

SCHEDULE A - PAGE 2 

 

     Capitalized terms used herein not otherwise defined herein shall have the same meaning as set
forth in the Fifth Amended Security Agreement of even date herewith by and among the Secured
Parties (the “New Security Agreement”).

     Accordingly, the Company and Secured Parties hereby agree as follows:

SECTION 1 Security Interest.

     (a) As security for the payment and performance of the Obligations (as defined in the New
Security Agreement), the Company hereby grants to each Secured Party a security interest in and
mortgage to all of the Company’s right, title and interest in, to and under the following property,
whether now existing or owned or acquired, developed or arising during the term of this Agreement
(collectively, the “Intellectual Property Collateral”):

          (i) all patents and patent applications, domestic or foreign, all licenses relating to any of
the foregoing and all income and royalties with respect to any licenses (including, without
limitation, such patents and patent applications as described in Schedule A hereto), all
rights to sue for past, present or future infringement thereof, all rights arising therefrom and
pertaining thereto and all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof;

          (ii) all state (including common law), federal and foreign trademarks, service marks and trade
names, URLs and domain names, and applications for registration of such trademarks, service marks
and trade names, URLs and domain names, all licenses relating to any of the foregoing and all
income and royalties with respect to any licenses (including, without limitation, such marks, names
and applications as described in Schedule B hereto), whether registered or unregistered and
wherever registered, all rights to sue for past, present or future infringement or unconsented use
thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and
renewals thereof; and

          (iii) the entire goodwill of or associated with the businesses now or hereafter conducted by
the Company connected with and symbolized by any of the aforementioned properties and assets;

          (iv) all general intangibles (as defined in the UCC); and

          (v) all products and proceeds of any and all of the foregoing.

     (b) This Agreement shall create a continuing security interest in the Intellectual Property
Collateral which shall remain in effect until terminated in accordance with Section 16 hereof.

     (c) Notwithstanding the foregoing provisions of this Section 1, the grant of a security
interest as provided herein shall not extend to, and the term “Intellectual Property Collateral”
shall not include, any general intangibles of the Company (whether owned or held as licensee or
lessee, or otherwise), to the extent that (i) such general intangibles are not assignable or
capable of being encumbered as a matter of law or under the terms of the license, lease or other
agreement applicable thereto (but solely to the extent that any such restriction shall be
enforceable under applicable law), without the consent of the licensor or lessor thereof or
other applicable party thereto and (ii) such consent has not been obtained.

SCHEDULE A - PAGE 3 

 

SECTION 2 Further Assurances; Appointment of Secured Party as Attorney-in-Fact. The
Company at its expense shall execute and deliver, or cause to be executed and delivered, to Secured
Parties any and all documents and instruments reasonably necessary to perfect and continue
perfected, maintain the priority of or provide notice of such Secured Party’s security interest in
the Intellectual Property Collateral and to accomplish the purposes of this Agreement. Each
Secured Party shall have the right to, in the name of the Company, or in the name of such Secured
Party or otherwise, without notice to or assent by the Company, and the Company hereby irrevocably
constitutes and appoints each Secured Party (or any agent designated by it) acting as the Company’s
true and lawful attorney-in-fact with full power and authority, to sign the name of the Company on
all or any of such documents or instruments and perform all other acts that such Secured Party
deems necessary or advisable in order to perfect or continue to perfect, maintain the priority or
enforceability of or provide notice of such Secured Party’s security interest in, the Intellectual
Property Collateral. Following the occurrence of an Event of Default, each Secured Party shall
have the right to, in the name of the Company, or in the name of such Secured Party or otherwise,
to (A) maintain, preserve and protect the Intellectual Property Collateral and to accomplish the
purposes of this Agreement (after the occurrence of any Event of Default), (B) to defend, settle,
adjust or institute any action, suit or proceeding with respect to the Intellectual Property
Collateral (after the occurrence of any Event of Default), (C) to assert or retain any rights under
any license agreement for any of the Intellectual Property Collateral, including without limitation
any rights of the Company arising under Section 365(n) of the Bankruptcy Code (after the occurrence
of any Event of Default), and (D) to execute any and all applications, documents, papers and
instruments for Secured Party to use the Intellectual Property Collateral, to grant or issue any
exclusive or non-exclusive license or sub-license with respect to any Intellectual Property
Collateral, and to assign, convey or otherwise transfer title in or dispose of the Intellectual
Property Collateral (after the occurrence of any Event of Default); provided, however, that in no
event shall Secured Party have the unilateral power, prior to the occurrence and continuation of an
Event of Default, to assign any of the Intellectual Property Collateral to any Person, including
itself, without the Company’s written consent. Solely for purposes of the foregoing, the Company
appoints each Secured Party to act as the Company’s true and lawful attorney-in-fact, effective on
the occurrence of an Event of Default, with full power and authority to execute any and all other
documents and instruments, and to perform any and all acts and things for and on behalf of the
Company, which are necessary or advisable. The power of attorney set forth in this Section 3,
being coupled with an interest is irrevocable so long as this Agreement shall not have terminated
in accordance with Section 16.

SECTION 3 Future Rights. Except as otherwise expressly agreed to in writing by Secured
Parties, if and when, during the term of this Agreement, the Company shall obtain rights to any new
patentable inventions or any new trademarks, or become entitled to the benefit of any of the
foregoing, or obtain rights or benefits with respect to any reissue, division, continuation,
renewal, extension or continuation-in-part of any patents or trademarks, or any improvement of any
patent, the provisions of Section 1 shall automatically apply thereto and the Company shall give to
Secured Parties reasonable
notice thereof. The Company shall take commercially reasonable steps to ensure the validity,
perfection, priority and enforceability of the security interests of each Secured Party in such
future acquired Intellectual Property Collateral; provided, however, that the Company shall not be
required to register any patents or trademarks with the PTO except to the extent consistent with
the Company’s past and commercially feasible practices.

SCHEDULE A - PAGE 4 

 

SECTION 4 Secured Party’s Duties. Notwithstanding any provision contained in this
Agreement, each Secured Party shall have no duty to exercise any of the rights, privileges or
powers afforded to it and shall not be responsible to the Company or any other Person for any
failure to do so or delay in doing so. Except for the accounting for moneys actually received by
such Secured Party hereunder or in connection herewith, each Secured Party shall have no duty or
liability to exercise or preserve any rights, privileges or powers pertaining to the Intellectual
Property Collateral.

SECTION 5 Representations and Warranties. The Company represents and warrants to each
Secured Party as of the date of this Agreement that:

     (a) A true and correct list of all of the existing Intellectual Property Collateral consisting
of U.S. and foreign patents and patent applications and/or registrations owned by the Company, in
whole or in part, is set forth in Schedule A.

     (b) A true and correct list of all of the existing Intellectual Property Collateral consisting
of U.S. trademarks, trademark registrations and/or applications owned by the Company, in whole or
in part, is set forth in Schedule B.

     (c) To the Company’s knowledge, all patents, trademarks, service marks and trade names of the
Company are subsisting and have not been adjudged invalid or unenforceable in whole or in part.

     (d) To the Company’s knowledge, all maintenance fees required to be paid on account of any
patents or trademarks of the Company have been timely paid for maintaining such patents and
trademarks in force, and, to the Company’s knowledge, each of the patents and trademarks
constituting part of the Intellectual Property Collateral is valid and enforceable.

     (e) No material infringement or unauthorized use presently is being made of any Intellectual
Property Collateral by any Person.

     (f) To the Company’s knowledge, the Company is the sole and exclusive owner of the
Intellectual Property Collateral and the past, present and contemplated future use of such
Intellectual Property Collateral by the Company has not, does not and will not infringe or violate
any right, privilege or license agreement of or with any other Person.

SECTION 6 Covenants. So long as any of the Obligations remain unsatisfied or until this Agreement has terminated
pursuant to Section 16 hereof:

     (a) The Company will appear in and defend any action, suit or proceeding which may affect to a
material extent its title to, or each Secured Party’s rights or interest in, the Intellectual
Property Collateral.

SCHEDULE A - PAGE 5 

 

     (b) The Company will not knowingly allow or suffer any Intellectual Property Collateral to
become abandoned, nor any registration thereof to be terminated, forfeited, expired or dedicated to
the public without the prior written consent of Secured Parties.

     (c) The Company will take commercially reasonable action to prosecute all applications for
patents and trademarks (subject to the advice of trademark counsel), and file and prosecute any and
all continuations, continuations-in-part, applications for reissue, applications for certificate of
correction and like matters as shall be reasonable and appropriate in accordance with prudent
business practice, and promptly pay any and all maintenance, license, registration and other fees,
taxes and expenses incurred in connection with any Intellectual Property Collateral.

SECTION 7 Secured Party’s Rights and Remedies.

     (a) Each Secured Party shall have all rights and remedies available to it under the New
Security Agreement and applicable law with respect to the security interests in any of the
Intellectual Property Collateral or any other collateral. Notwithstanding any other provision
herein to the contrary, each Secured Party acknowledges and agrees that it shall be subject to the
provisions of Sections 7.3 and 7.17 of the New Security Agreement for purposes for enforcing this
Agreement. The Company agrees that such rights and remedies include, but are not limited to, the
right of Secured Party as a secured party to sell or otherwise dispose of its collateral after
default pursuant to the UCC. The Company agrees that Secured Party shall at all times have such
royalty free licenses, to the extent permitted by law, for any Intellectual Property Collateral
that shall be reasonably necessary to permit the exercise of any of Secured Party’s respective
rights or remedies upon or after the occurrence of an Event of Default and shall additionally have
the right to license and/or sublicense any Intellectual Property Collateral, whether general,
special or otherwise, and whether on an exclusive or a nonexclusive basis, any of the Intellectual
Property Collateral, throughout the world for such term or terms, on such conditions, and in such
manner, as such Secured Party in its sole discretion shall determine in connection with the
exercise of any of such rights or remedies. In addition to and without limiting any of the
foregoing, upon the occurrence and during the continuance of an Event of Default, each Secured
Party shall have the right but shall in no way be obligated to bring suit, or to take such other
action as such Secured Party deems necessary or advisable, in the name of the Company or such
Secured Party, to enforce or protect any of the Intellectual Property Collateral, in which event
the Company shall, at the request of such Secured Party, do any and all lawful acts and execute any
and all documents required by such Secured Party in aid of such enforcement. To the extent that
Secured Party shall elect not to bring suit to enforce such Intellectual Property Collateral, the
Company agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement, misappropriation or violations thereof by others and for that purpose
agrees take commercially reasonable steps to maintain any action, suit or
proceeding against any Person necessary to prevent such infringement, misappropriation or
violation.

     (b) The cash proceeds actually received from the sale or other disposition or collection of
Intellectual Property Collateral, and any other amounts received in respect of the Intellectual
Property Collateral the application of which is not otherwise provided for herein, shall be applied
as provided in the New Security Agreement.

SCHEDULE A - PAGE 6 

 

SECTION 8 Notices. All notices and other communications hereunder shall be given as
provided in the Security Agreement.

SECTION 9 No Waiver; Cumulative Remedies. No failure on the part of each Secured Party to
exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not
exclusive of any rights, remedies, powers and privileges that may otherwise be available to each
Secured Party.

SECTION 10 Costs and Expenses. The Company agrees to pay on demand all reasonable costs
and expenses of each Secured Party, including reasonable attorneys’ fees, in connection with the
enforcement or attempted enforcement of, and preservation of any rights or interests under, this
Agreement, and the assignment, sale or other disposal of any of the Intellectual Property
Collateral.

SECTION 11 Binding Effect. This Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties thereto and their respective successors and assigns.

SECTION 12 Governing Law. This Agreement shall be governed by, and construed in accordance
with, the law of the State of Minnesota, except to the extent that the validity or perfection of
the security interests hereunder in respect of any Intellectual Property Collateral are governed by
federal law and except to the extent that Secured Parties shall have greater rights or remedies
under federal law, in which case such choice of Minnesota law shall not be deemed to deprive
Secured Parties of such rights and remedies as may be available under federal law.

SECTION 13 Amendment. This Agreement shall not be amended except by the written agreement
of the parties.

SECTION 14 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under all applicable laws and regulations. If, however, any provision of this
Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction,
it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of
such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective
and invalid only to the extent of such prohibition or invalidity without affecting the remaining
provisions of this Agreement, or the validity or effectiveness of such provision in any other
jurisdiction.

SECTION 15 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute but one and the same
agreement.

SECTION 16 Termination. Upon payment and performance in full of all Obligations, this
Agreement shall terminate and Secured Parties shall promptly execute and deliver to the Company
such documents and instruments reasonably requested by the Company as shall be necessary to
evidence termination of all security interests given by the Company to Secured

SCHEDULE A - PAGE 7 

 

Parties hereunder,
including cancellation of this Agreement by written notice from Secured Parties to the PTO;
provided, however, that the obligations of the Company under Section 10 hereof shall survive such
termination.

SECTION 17 New Security Agreement. The Company acknowledges that the rights and remedies
of each Secured Party with respect to the security interests in the Intellectual Property
Collateral granted hereby are more fully set forth in the New Security Agreement and all such
rights and remedies are cumulative.

SECTION 18 No Inconsistent Requirements. The Company acknowledges that this Agreement and
the New Security Agreement may contain covenants and other terms and provisions variously stated
regarding the same or similar matters, and the Company agrees that all such covenants, terms and
provisions are cumulative and all shall be performed and satisfied in accordance with their
respective terms.

SECTION 19 Conflicts. In the event of any conflict or inconsistency between this Agreement
and the New Security Agreement, the terms of the New Security Agreement shall control.

     SECTION 20 Synapse As Agent. The Company acknowledges that Synapse is executing this
Agreement as agent for certain other parties which and who are parties to a Settlement Agreement
with the Company dated as of an even date herewith. Synapse represents to the Company that it has
the authority to enter into this Agreement and that the Company may rely on any act of, or notice
by, Synapse hereunder as the act and notice of all parties for which and whom it is acting as
agent.

[Signatures Contained on Next Page]

SCHEDULE A - PAGE 8 

 

     IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures.

	 	 	 	 	 	 	 	 	 
	The Company:	 	 	 	Secured Parties:
	 
	 	 	 	 	 	 	 	 
	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

	 	 	 	 	 	By	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	David Teckman, President and	 	 	 	 	 	 
	 

	 	Chief Executive Officer
	 	 	 	Its	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Gary S. Kohler
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Scot W. Malloy
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Synapse Capital, LLC, as agent
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its	 	 
	 

	 	 	 	 	 	 	 	 

SCHEDULE A - PAGE 9 

 

SCHEDULE A

to

PATENT AND TRADEMARK SECURITY AGREEMENT

	 	1.	 	Issued U.S. Patents of the Company

	 	 	 	 	 	 	 	 	 
	 	 	PATENT #	 	ISSUE DATE	 	TITLE
	1.

	 	 	5860990	 	 	01/19/1999
	 	METHOD AND APPARATUS FOR SUTURING
	 
	 	 	 	 	 	 	 	 
	2.

	 	 	6117144	 	 	09/12/2000
	 	SUTURING DEVICE AND METHOD FOR SEALING
AN OPENING IN A BLOOD VESSEL OR OTHER
BIOLOGICAL STRUCTURE
	 
	 	 	 	 	 	 	 	 
	3.

	 	 	5820631	 	 	10/13/1998
	 	DEVICE AND METHOD FOR SUTURING TISSUE
ADJACENT TO A BLOOD VESSEL
	 
	 	 	 	 	 	 	 	 
	4.

	 	 	6733509	 	 	05/11/2004
	 	SUTURE CUTTER
	 
	 	 	 	 	 	 	 	 
	5.

	 	 	6245079	 	 	06/12/2001
	 	SUTURING DEVICE AND METHOD FOR SEALING
AN OPENING IN A BLOOD VESSEL OR OTHER
BIOLOGICAL STRUCTURE
	 
	 	 	 	 	 	 	 	 
	6.

	 	 	6551331	 	 	04/22/2003
	 	SUTURING DEVICE AND METHOD FOR SEALING
AN OPENING IN A BLOOD VESSEL OR OTHER
BIOLOGICAL STRUCTURE
	 
	 	 	 	 	 	 	 	 
	7.

	 	 	6262052	 	 	05/13/2003
	 	SUTURING DEVICE AND METHOD

	 	2.	 	Pending U.S. Patent Applications of the Company

	 	 	 
	REFERENCE	 	TITLE
	1.

	 	SUTURING DEVICE AND METHOD FOR SEALING AN OPENING IN A BLOOD
VESSEL OR OTHER BIOLOGICAL STRUCTURE
	 
	 	 
	2.

	 	SUTURING DEVICE AND METHOD
	 
	 	 
	3.

	 	SUTURE CUTTER

	 	3.	 	Issued International Patents of the Company

	 	 	 	 	 	 	 	 	 
	 	 	COUNTRY	 	NUMBER	 	DATE	 	TITLE
	1.
	 	 	 	 	 	 	 	 

SCHEDULE A - PAGE 10 

 

	 	4.	 	Pending International Patent Applications of the Company

	 	 	 	 	 
	REFERENCE	 	COUNTRY	 	TITLE
	1.

	 	CA
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL
	 
	 	 	 	 
	2.

	 	CN
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL
	 
	 	 	 	 
	3.

	 	EP
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL OR OTHER BIOLOGICAL STRUCTURE
	 
	 	 	 	 
	4.

	 	HK
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL
	 
	 	 	 	 
	5.

	 	JP
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL OR OTHER BIOLOGICAL STRUCTURE
	 
	 	 	 	 
	6.

	 	AU
	 	SUTURING DEVICE FOR SEALING AN OPENING IN A BLOOD
VESSEL
	 
	 	 	 	 
	7.

	 	JP
	 	KNOT PUSHER

SCHEDULE A - PAGE 11 

 

SCHEDULE B

To

PATENT AND TRADEMARK SECURITY AGREEMENT

	1.	 	Trademarks of the Company Registered with USPTO

	 	 	 	Sutura®
	 
	 	 	 	SuperStich®

	2.	 	Unregistered Marks

A. BECAUSE CLOSURE SHOULD BE THE SIMPLEST PART OF THE PROCEDURE —  Serial No.
76/070659

B. SIMPLIFYING CLOSURE WITH SURGICAL PRECISION — Serial No. 76/070657586739.3

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