Document:

exv10w3

Exhibit 10.3

LOAN AND SECURITY AGREEMENT

     This Loan and Security Agreement (this “Agreement”) is dated as of this 6th
day of June 2008 (the “Effective Date”), by and between Innovive Pharmaceuticals, Inc., a
Delaware corporation (“Borrower”), and CytRx Corporation, a Delaware corporation
(“Lender”).

BACKGROUND

     WHEREAS, Borrower has requested that Lender enter into a financing arrangement with Borrower
pursuant to which Lender may make loans to Borrower;

     WHEREAS, Lender is willing to agree to make such loans to Borrower on the terms and conditions
set forth herein; and

     WHEREAS, this Agreement is intended to aid the completion of the transactions contemplated by
the Agreement and Plan of Merger dated as of the Effective Date by and among Borrower, Lender and
CytRx Merger Subsidiary, Inc. (the “Merger Agreement”).

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

SECTION I. DEFINITIONS AND INTERPRETATION

     1.1 Defined Terms: As used in this Agreement, the following terms have the following
respective meanings:

          Advance(s) – Any monies advanced or credit extended to Borrower by Lender under the
Loan, including, without limitation, cash advances.

          Business Day – A day other than Saturday or Sunday when banks are open for business in
Los Angeles, California.

          Collateral – All of the Property and interests in Property described in Section 3.1 of
this Agreement and all other interests in Property that now or hereafter secure payment of the
Obligations and satisfaction by Borrower of all covenants and undertakings contained in this
Agreement and the other Loan Documents.

          Closing – The making of the Initial Advance to the Borrower on the Closing Date
pursuant to the terms of this Agreement.

          Closing Date – The date upon which the conditions set forth in Section 4.1 hereof each
have been satisfied or waived, which shall in any event be no more than two (2) Business Days after
the Effective Date or at such other time as may be mutually agreed to by the parties.

          Default – Any event, act, condition or occurrence which with notice, or lapse of time
or both, would constitute an Event of Default hereunder.

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          Initial Advance – The initial Advance in the principal amount set forth on
Schedule 1.1(a) attached hereto.

          Lien – Any interest of any kind or nature in property securing an obligation owed to,
or a claim of any kind or nature in property by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute, regulation or contract, and including,
but not limited to, a security interest or lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt, a financing lease, consignment or bailment for security
purposes, a trust, or an assignment.

          Loan Documents – Collectively, this Agreement and all agreements, certificates,
instruments and documents executed and/or delivered in connection therewith, all as may be
supplemented, restated, superseded, amended or replaced from time to time. The Loan Documents
shall not include the Merger Agreement.

          Loan Maturity Date – The earliest of (i) the date of commencement of any bankruptcy,
insolvency or similar proceeding with respect to Borrower, (ii) the date on which the Merger
Agreement is terminated pursuant to its terms, and (iii) September 30, 2008 or such later date as
the parties hereto mutually agree.

          Maximum Loan Amount – The aggregate amount of Five Million Five Hundred Thousand
Dollars ($5,500,000) of principal.

          Obligations – All existing and future debts, liabilities and obligations owing by
Borrower to Lender or any other subsidiary or affiliate of Lender under the Loan Documents and the
Merger Agreement.

          Permitted Liens – (a) Liens securing taxes, assessments or governmental charges or
levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, and other like
persons not yet due; (b) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance, social security and other like laws;
and (c) Liens existing on the Closing Date and shown on Schedule 1.1(b) attached hereto and
made part hereof.

          Person – An individual, partnership, corporation, trust, limited liability company,
limited liability partnership, unincorporated association or organization, joint venture or any
other entity.

          Property – Any interest of Borrower in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

          UCC – The Uniform Commercial Code of the State of Delaware and any other applicable
law of any state that has jurisdiction with respect to all, or any portion of, the Collateral or
this Agreement, from time to time.

     1.2 Other Capitalized Terms – Any other capitalized terms used without further
definition herein shall have the meanings set forth in the UCC.

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SECTION II. THE LOAN

     2.1 Loan:

          a. Subject to the terms and conditions of this Agreement, Lender hereby establishes for the
benefit of Borrower a credit facility (the “Loan”), which shall include Advances extended
by Lender to or for the benefit of Borrower from time to time hereunder. The aggregate principal
amount of all Advances made hereunder shall not exceed the Maximum Loan Amount. To the extent any
Advance made hereunder shall cause the sum of all Advances hereunder to exceed the Maximum Loan
Amount, Borrower shall immediately return and repay to Lender the excess of such Advance over the
Maximum Loan Amount. All Advances under the Loan shall be due and payable, in full, on the Loan
Maturity Date, subject to the provisions of Section VII below.

          b. This Agreement shall evidence Borrower’s unconditional obligation to repay Lender for all
Advances made under the Loan, with interest and other charges and expenses as herein provided.
Each Advance under the Loan shall be deemed evidenced by this Agreement.

          c. The term of the Loan shall expire on the Loan Maturity Date. On such date, unless having
been sooner accelerated by Lender pursuant to the terms hereof, all sums owing under the Loan and
this Agreement shall be due and payable in full, and as of and after such date Borrower shall not
request and Lender shall not make any further Advances under the Loan.

     2.2 Advances and Payments:

          a. Except to the extent otherwise set forth in this Agreement, all payments of principal and
of interest on the Loan and all Expenses, fees, indemnification obligations and all other charges
and any other Obligations of Borrower, shall be made to Lender via wire transfer of same day funds
to such account as Lender may from time to time direct. Any payments received prior to 2:00 P.M.,
Pacific Time, on any Business Day shall be deemed received on such Business Day. Any payments
(including any payment in full of the Obligations), received after 2:00 P.M., Pacific Time, on any
Business Day shall be deemed received on the immediately following Business Day.

          b. Lender shall make the Initial Advance on the third Business Day following the Closing Date.
All additional Advances under the Loan must be requested by Borrower by 11:00 A.M., Pacific Time,
at least two Business Days prior to the date such Advance is to be made. All requests for an
Advance are to be in writing pursuant to a written request executed by Steven Kelly or J. Gregory
Jester in the form of Exhibit “A” (“Advance Request”) attached hereto and made part hereof.
Such request may be sent by facsimile transmission provided that Lender shall have the right to
require that receipt of such request not be effective unless confirmed via telephone with Lender.

          c. All Advances following the Initial Advance shall be at the sole discretion of Lender. Upon
receiving a request for an Advance in accordance with subparagraph (b) above,

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and subject to the terms and conditions set forth in this Agreement, Lender, in its
discretion, shall make the requested Advance, or any amount thereof as Lender determines in its
discretion, to Borrower by Lender’s check delivered to Borrower or, in Lender’s discretion, by wire
transfer to Borrower’s account specified on Schedule 2.2 attached hereto, on the Business
Day the requested Advance is to be made or as soon as is reasonably practicable thereafter.

     2.3 Interest: The outstanding principal under the Loan shall bear interest, subject
to the terms hereof, at the rate of 12.5% per annum. Interest shall be payable on the Loan
Maturity Date.

     2.4 Additional Interest Provisions:

          a. Interest on the Loan shall be calculated on the basis of a year of three hundred sixty
(360) days and charged for the actual number of days elapsed.

          b. After the occurrence and during the continuance of an Event of Default hereunder, the per
annum rate of interest on all outstanding principal under the Loan shall be increased by two
hundred (200) basis points. All such increases shall be applied retroactively to the date of the
occurrence of the Event of Default. Borrower agrees that the default rate payable to Lender is a
reasonable estimate of Lender’s damages and is not a penalty.

          c. Borrower shall not request any Advance while a Default exists.

          d. Interest on outstanding principal under the Loan shall continue to accrue and be paid even
after an Event of Default, maturity, acceleration, judgment, bankruptcy, insolvency proceedings of
any kind or the happening of any event or occurrence, similar or dissimilar.

          e. In no contingency or event whatsoever shall the aggregate of all amounts deemed interest
hereunder and charged or collected pursuant to the terms of this Agreement exceed the highest rate
permissible under any law which a court of competent jurisdiction shall, in a final determination,
deem applicable hereto. In the event that such court determines Lender has received interest
hereunder in excess of the highest applicable rate, Lender shall apply, in its sole discretion, and
set off such excess interest received by Lender against other Obligations due or to become due and
such rate shall automatically be reduced to the maximum rate permitted by such law.

     2.5 Prepayments: Borrower may prepay the Loan, without premium or penalty, in whole or
in part, at any time or from time to time. Any partial prepayment shall first be applied to
accrued and unpaid interest on the Loan being prepaid and then to the principal balance of the
Loan.

     2.6 Use of Proceeds:

          a. The Initial Advance shall be used by Borrower to pay the accounts payable and accrued
liabilities of Borrower set forth on Schedule 1.1(a) attached hereto.

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          b. Additional Advances may be used by Borrower for working capital and general corporate
purposes consistent with Borrower’s covenants under the Merger Agreement, including, without
limitation, for professional and other fees and expenses and other transaction costs incurred by
Borrower in connection with the negotiation, documentation, execution and consummation of the
transactions contemplated in the Merger Agreement. Each Advance Request shall state the specific
intended uses of the Advance requested, including, without limitation, the name of each payee (or
class of payees in the case of employees and other readily identifiable categories of payees) and
amount to be paid to such payee out of such Advance. Any actual use by Borrower of an Advance that
differs materially from the intended use as set forth in the Advance Request shall constitute a
material breach of this Agreement.

SECTION III. COLLATERAL

     3.1 Collateral: As security for the payment of the Obligations, and satisfaction by
Borrower of all covenants and undertakings contained in this Agreement and the other Loan
Documents, Borrower hereby assigns and grants to Lender, a continuing Lien on and security interest
in, upon and to all assets of Borrower and all subsidiaries of Borrower, including but not limited
to the following Property, all whether now owned or hereafter acquired, created or arising and
wherever located:

          a. all Accounts;

          b. all Chattel Paper;

          c. all Documents;

          d. all Instruments;

          e. all Inventory;

          f. all General Intangibles;

          g. all Equipment,

          h. all Fixtures;

          i. all Deposit Accounts;

          j. all Goods;

          k. all Investment Property; and

          l. all Proceeds (including, without limitation, insurance proceeds), whether cash or non-cash,
of all of the foregoing Property described in clauses (a) through (k).

     3.2 Lien Documents: On the Effective Date and thereafter as Lender reasonably deems
necessary, Borrower shall execute and deliver to Lender, or have executed and delivered (all in
form and substance satisfactory to Lender and its counsel):

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          a. Financing statements pursuant to the UCC, which Lender may file in the jurisdiction where
Borrower is organized and in any other jurisdiction that Lender deems appropriate; and

          b. Any other agreements, documents, instruments and writings, including, without limitation,
intellectual property security agreements, required by Lender to evidence, perfect or protect the
Liens and security interests in the Collateral or as Lender may reasonably request from time to
time.

     3.3 Other Actions:

          a. In addition to the foregoing, Borrower shall do anything further that may be reasonably
required by Lender to secure Lender and effectuate the intentions and objects of this Agreement,
including, without limitation, the execution and delivery of security agreements, contracts and any
other documents required hereunder. At Lender’s request, Borrower shall also immediately deliver
(with execution by Borrower of all necessary documents or forms to reflect, implement or enforce
the Liens described herein), or cause to be delivered to Lender all items for which Lender must
receive possession to obtain a perfected security interest, including without limitation, all
Deposit Accounts and all notes, stock powers, letters of credit, certificates and documents of
title, Chattel Paper, Warehouse Receipts, Instruments, and any other similar instruments
constituting Collateral.

          b. Lender is hereby authorized to file financing statements and amendments to financing
statements without Borrower’s signature, in accordance with the UCC. Borrower hereby authorizes
Lender to file all such financing statements and amendments to financing statements describing the
Collateral in any filing office as Lender, in its sole discretion may determine, including
financing statements listing “All Assets” in the collateral description therein. Borrower agrees
to comply with the requests of Lender in order for Lender to have and maintain a valid and
perfected security interest in the Collateral.

     3.4 Searches, Certificates:

          a. Lender may, as Lender reasonably determines from time to time, at Lender’s expense, obtain
the following searches:

               i. UCC searches with the Secretary of State and local filing office of each state where
Borrower is organized, maintains its executive office, a place of business, or assets; and

               ii. judgment, state and federal tax lien and corporate tax lien searches, in all applicable
filing offices of each state searched under subparagraph (i) above.

     3.5 Filing Security Agreement: A carbon, photographic or other reproduction or other
copy of this Agreement is sufficient, as and may be filed in lieu of, a financing statement.

     3.6 Power of Attorney: Each of Steven A. Kriegsman and Mitchell K. Fogelman, both
executive officers of Lender, is hereby irrevocably made, constituted and appointed the true and

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lawful attorney for Borrower (without requiring any of them to act as such) with full power of
substitution to do the following:

          a. during the continuance of an Event of Default, endorse the name of Borrower upon any and
all checks, drafts, money orders and other instruments for the payment of monies that are payable
to Borrower and constitute collections on Borrower’s Accounts or proceeds of other Collateral;

          b. execute and file in the name of Borrower any financing statements, schedules, assignments,
instruments, documents and statements that Borrower is obligated to give Lender hereunder or is
necessary to perfect (or continue or evidence the perfection of such security interest or Lien)
Lender’s security interest or Lien in the Collateral; and

          c. during the continuance of an Event of Default, do such other and further acts and deeds in
the name of Borrower that Lender may deem necessary or desirable to enforce any Account or preserve
or protect any other Collateral.

SECTION IV. CLOSING AND CONDITIONS PRECEDENT TO INITIAL ADVANCE

     4.1 Closing: The Closing under this Agreement is subject to the following conditions
precedent (all instruments, documents and agreements to be in form and substance reasonably
satisfactory to Lender and Lender’s counsel), unless waived by the Lender:

          a. Borrower shall have delivered, or caused to be delivered to Lender the following:

               i. the Merger Agreement and this Agreement, properly executed;

               ii. each of the other documents to be delivered by Borrower or any other Person pursuant to
this Agreement; and

               iii. such other documents reasonably required by Lender;

          b. at the Closing Date, no Default or Event of Default hereunder shall have occurred and be
continuing;

          c. the warranties and representations contained in Section 5 as well as any other Section of
this Agreement shall be true and correct on the Closing Date with the same effect as though made on
and as of that date, and Lender shall have received a certificate of the Chief Executive Officer of
Borrower to that effect; and

          d. Borrower shall have performed and complied in all material respects with all agreements,
covenants and conditions contained herein, which are required to be performed or complied with by
Borrower before or at the Closing Date.

     4.2 Waiver of Rights: By completing the Closing hereunder, or by making Advances
hereunder, Lender does not thereby waive a breach of any warranty or
representation made by Borrower hereunder or under any agreement, document, or instrument delivered to Lender or

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otherwise referred to herein, and any claims and rights of Lender resulting from any breach or
misrepresentation by Borrower are specifically reserved by Lender.

SECTION V. REPRESENTATIONS AND WARRANTIES

     To induce Lender to complete the Closing and make the Initial Advance under the Loan and
additional Advances under the Loan to Borrower, Borrower warrants and represents to Lender, that
except as disclosed in the Merger Agreement or the Company Disclosure Schedule (as defined in the
Merger Agreement):

     5.1 Validity:

          a. The making and performance of this Agreement and the other Loan Documents will not violate
any law, government rule or regulation, court or administrative order or other such order, or the
certificate of incorporation or bylaws of Borrower, or breach or result in a default (immediately
or with the passage of time) under any contract, agreement or instrument to which Borrower is a
party, or by which Borrower or any of its Property is bound. Borrower is not in violation of any
term of any agreement or instrument to which it is a party or by which it may be bound which
violation has or could reasonably be expected to have a Material Adverse Effect (as defined in the
Merger Agreement).

          b. Borrower has all requisite power and authority to enter into and perform this Agreement and
to incur the obligations herein provided for, and has taken all proper and necessary action to
authorize the execution, delivery and performance of this Agreement, and the other Loan Documents
as applicable.

          c. This Agreement and all of the other Loan Documents, when delivered, will be valid and
binding upon Borrower, and enforceable in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors’ rights generally and by general equitable
principles.

     5.2 Places of Business: The only places of business of Borrower, and the places where
Borrower keeps and intends to keep its Property, are at the addresses existing as of the date
hereof shown on Schedule 5.2 attached hereto and made part hereof.

     5.3 Names: Since its organization, Borrower has not conducted business under or used
any other name (whether corporate or assumed) except for the names shown on Schedule 5.3
attached hereto and made part hereof.

     5.4 Perfection and Priority: This Agreement and the other Loan Documents are
effective to create in favor of Lender legal, valid and enforceable Liens in all right, title and
interest of Borrower in the Collateral, and when (i) financing statements have been filed in the
offices of the jurisdictions shown on Schedule 5.4, attached hereto and made part hereof
under Borrower’s name, (ii) a control agreement has been executed among Borrower, Lender and any
financial institution in which a Deposit Account of Borrower is held, and (iii) Borrower has
delivered to Lender any certificates representing its ownership rights in Borrower’s
subsidiaries,

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Borrower will have granted to Lender, and Lender will have perfected Liens in the
Collateral, superior in right to any and all other Liens (other than Permitted Liens), existing or
future.

     5.5 Deposit Accounts: All Deposit Accounts of Borrower are shown on
Schedule 5.5, attached hereto and made part hereof.

SECTION VI. BORROWER’S COVENANTS

     6.1 Merger Agreement: Borrower covenants that, until all of the Obligations are paid
and satisfied in full and the Loan has been terminated, it will comply with the covenants
applicable to it in the Merger Agreement.

     6.2 Responsibility for Collateral: Borrower retains all liabilities and
responsibility in connection with all Collateral, and the Obligations shall in no way be affected
or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason.

SECTION VII. DEFAULT

     7.1 Events of Default: Each of the following events shall constitute an event of
default (“Event of Default”):

          a. if Borrower fails to make any payment of principal or of interest under the Loan or other
Obligations when such payment is due and payable; or

          b. if Borrower fails to perform, comply with or observe any covenant or undertaking contained
in this Agreement and such failure continues for ten (10) days after the occurrence thereof; or

          c. if any warranty, representation or other statement by or on behalf of Borrower contained in
or pursuant to this Agreement, the other Loan Documents or in any document, agreement or instrument
furnished in compliance with, relating to, or in reference to this Agreement, is false, erroneous,
or misleading in any material respect when made hereunder; or

          d. if any provision of this Agreement or any material term of the Merger Agreement shall at
any time for any reason be declared to be null and void, or the validity or enforceability thereof
shall be contested by Borrower, or a proceeding shall be commenced by Borrower, or by any
governmental authority having jurisdiction over Borrower, seeking to establish the validity or
enforceability thereof, or Borrower shall deny that Borrower has any liability or obligation
purported to be created under this Agreement or any other Loan Document or the Merger Agreement; or

          e. if there is a seizure or attachment of, or a levy on, any of the Collateral;

provided, however, that an Event of Default shall not include any of the foregoing
events that result from Lender’s failure or refusal, in the exercise of its discretion, to make an
additional Advance requested by Borrower in accordance with Section 2.2(c).

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     7.2 Cure: Nothing contained in this Agreement or the Loan Documents shall be deemed
to compel Lender to accept a cure of any Event of Default hereunder, which shall be in Lender’s
discretion (provided, that the foregoing shall not be interpreted or construed in any way or under
any circumstances to limit or contradict the express provisions hereof which provide for any cure
period that must expire before any particular Event of Default shall occur).

     7.3 Rights and Remedies on Default:

          a. In addition to all other rights, options and remedies granted or available to Lender under
this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or
otherwise available at law or in equity, upon or at any time after the occurrence and during the
continuance of a Default or an Event of Default, Lender may, in its discretion, terminate this
Agreement.

          b. In addition to all other rights, options and remedies granted or available to Lender under
this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or
otherwise available at law or in equity, upon or at any time after the occurrence and during the
continuance of an Event of Default Lender may, in its discretion, declare the principal amount of
and interest on the Loan and all other Obligations immediately due and payable, all without demand,
notice, presentment or protest or further action of any kind.

          c. In addition to all other rights, options and remedies granted or available to Lender under
this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or
otherwise available at law or in equity, upon or at any time after the acceleration of the
Obligations following the occurrence of an Event of Default, Lender may, in its discretion,
exercise all rights under any applicable law or in equity, and under all Loan Documents permitted
to be exercised after the occurrence of an Event of Default, including the following rights and
remedies (which list is given by way of example and is not intended to be an exhaustive list of all
such rights and remedies):

               i. the right to modify the terms and conditions upon which Lender may be willing to consider
making Advances under the Loan or to take reserves against the Loan;

               ii. the right to take possession of, send notices regarding and collect directly the
Collateral, with or without judicial process (including without limitation the right to notify the
United States postal authorities to redirect mail addressed to Borrower to an address designated by
Lender); and

               iii. by its own means or with judicial assistance, enter Borrower’s premises and take
possession of the Collateral, or render it unusable, or dispose of the Collateral on such premises,
without any liability for rent, storage, utilities or other sums, and Borrower shall not resist or
interfere with such action.

          d. Borrower hereby agrees that a notice received by it at least ten (10) days before the time
of any intended public sale or of the time after which any private sale or other disposition of the
Collateral is to be made, shall be deemed to be reasonable notice of such sale

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or other
disposition. If permitted by applicable law, any perishable inventory or Collateral which
threatens to speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower. Borrower covenants and agrees not to
interfere with or impose any obstacle to Lender’s exercise of its rights and remedies with respect
to the Collateral, after the occurrence of an Event of Default hereunder. Lender shall have no
obligation to clean up or prepare the Collateral for sale. If Lender sells any of the Collateral
upon credit, Borrower will only be credited with payments actually made by the purchaser thereof,
that are received by Lender. Lender may, in connection with any sale of the Collateral
specifically disclaim any warranties of title or the like.

          e. Lender shall have the right to become the purchaser at any public sale made pursuant to the
provisions of this Section, and shall have the right to credit against the amount of the bid made
therefor the amount payable to Lender out of the net proceeds of such sale. For the purpose of
determining the rights to any purchaser therein, recitals contained in any conveyance to any
purchaser at any sale made hereunder shall conclusively establish the truth and accuracy of the
matters therein stated, including, without limitation, nonpayment of the Obligations and
advertisement and conduct of such sale in the manner provided herein, Borrower hereby ratifies and
confirms all legal acts that Lender may do in carrying out the provisions of this Agreement.

     7.4 Applications of Proceeds: The proceeds of any sale, lease or other disposition of
the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing,
processing and preparing for sale, selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the Collateral, to the reasonable
attorneys’ fees and expenses incurred by Lender in enforcing its rights hereunder and in connection
with collecting, storing and disposing of the Collateral, and then to satisfaction of the
Obligations, and then to the payment of any other amounts required by applicable law, after which
Lender shall pay to Borrower any surplus proceeds. If, upon the sale, license or other disposition
of the Collateral, the proceeds thereof are insufficient to pay all amounts to which Lender is
legally entitled, Borrower will be liable for the deficiency.

     7.5 Nature of Remedies: All rights and remedies granted Lender hereunder and under
the Loan Documents, or otherwise available at law or in equity, shall be deemed concurrent and
cumulative, and not alternative remedies, and Lender may proceed with any number of remedies at the
same time until all Obligations are satisfied in full. The exercise of any one right or remedy
shall not be deemed a waiver or release of any other right or remedy, and Lender, upon or at any
time after the occurrence of an Event of Default, may proceed against Borrower, at any time, under
any agreement, with any available remedy and in any order.

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SECTION VIII. STOCK PURCHASE OPTION

     8.1 Option:

          a. As a material inducement to Lender to enter into this Agreement and make the Initial
Advance and any and all Additional Advances, Borrower hereby grants Lender the irrevocable option
(the “Option”) to purchase up to 2,000,000 shares (the “Option Shares”) of common
stock, $0.001 par value per share, of Borrower (“Borrower Common Stock”) at an initial
price per Option Share (the “Initial Exercise Price”) of $0.01.

          b. Lender may exercise the Option, in whole or in part, at any time on or after Borrower
terminates or purports to terminate the Merger Agreement pursuant to Section 8.01(e) thereof and
prior to the first anniversary (the “Expiration Date”) of the date of the consummation by
Borrower of a Superior Proposal (as defined in the Merger Agreement).

          c. In order to exercise the Option, Lender shall send to Borrower a notice specifying the
denominations of the certificate or certificates evidencing the Option Shares which Lender wishes
to receive, and shall pay Borrower the aggregate Exercise Price of such Option Shares, by, at
Lender’s option, (i) delivery of shares of common stock, $0.001 par value per share, of Lender
(“Lender Common Stock”), which shall be valued for this purpose at the Initial Merger
Consideration Price (as defined in the Merger Agreement), or (ii) wire transfer of same day funds
to Borrower’s account specified on Schedule 2.2 attached hereto, and Borrower shall
promptly cause to be issued to Lender a certificate or certificates representing the Option Shares.
Upon delivery by Lender to Borrower of the exercise notice and the payment of the Exercise Price
described in the immediately preceding sentence, Lender shall be deemed to be the holder of record
of the Option Shares issuable upon that exercise, notwithstanding that the stock transfer books of
Borrower shall then be closed or that certificates representing those Option Shares shall not then
be actually delivered to Lender.

     8.2 Adjustment of Exercise Price and Number of Option Shares:

          a. In order to prevent dilution of the rights under the Option, the Initial Exercise Price
(such price or such price as last adjusted pursuant to the terms hereof, as the case may be, is
herein called the “Exercise Price”) and the number of Option Shares purchasable upon
exercise of the Option shall be subject to adjustment from time to time as provided in this
Section 8.2.

          b. In case of any reclassification, capital reorganization, consolidation, merger, sale of all
or substantially all of Borrower’s assets or any other change in Borrower Common Stock, other than
as a result of a subdivision, combination, or stock dividend provided for in paragraph (c) below
(any of which, a “Change Event”), then, as a condition of such Change Event, lawful
provision shall be made, and duly executed documents evidencing the same from Borrower or its
successor shall be delivered to Lender, so that Lender shall have the right at any time prior to
the Expiration Date to purchase, at a total price equal to the total Exercise Price payable for the
total number of Option Shares purchasable upon exercise of the Option, the kind and amount of
shares of stock and other securities and property receivable in connection with
such Change Event by a holder of the same number of shares of Borrower

12

 

Common Stock as were
purchasable under the Option immediately prior to such Change Event. In any such case, appropriate
provisions shall be made with respect to the rights and interest of Lender so that the provisions
hereof shall thereafter be applicable with respect to any shares of stock or other securities and
property deliverable upon exercise hereof, and appropriate adjustments shall be made to the
Exercise Price per share payable hereunder, provided the aggregate Exercise Price shall remain the
same.

          c. If Borrower shall at any time prior to the Expiration Date (i) subdivide Borrower Common
Stock, by split up or otherwise, or combine Borrower Common Stock, or (ii) issue additional shares
of Borrower Common Stock or other equity securities as a dividend with respect to any shares of
Borrower Common Stock, the number of shares of Borrower Common Stock issuable on the exercise of
the Option shall forthwith be proportionately increased in the case of a subdivision or stock, or
proportionately decreased in the case of a combination. Appropriate adjustments shall also be made
to the Exercise Price per share, but the aggregate Exercise Price payable for the total number of
Option Shares purchasable upon exercise of the Option shall remain the same. Any adjustment under
this paragraph (c) shall become effective at the close of business on the date the subdivision or
combination becomes effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.

SECTION IX. MISCELLANEOUS

     9.1 Governing Law: THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, AND ALL
MATTERS RELATED HERETO OR ARISING HEREUNDER (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE),
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
DELAWARE. THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO
HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL
NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.

     9.2 Integrated Agreement: The other Loan Documents, all related agreements, and this
Agreement shall be construed as integrated and complementary of each other, and as augmenting and
not restricting Lender’s rights and remedies. If, after applying the foregoing, an inconsistency
still exists, the provisions of this Agreement shall constitute an amendment thereto and shall
control.

     9.3 Waiver: No omission or delay by Lender in exercising any right or power under
this Agreement or any related agreements and documents will impair such right or power or be
construed to be a waiver of any Default, or Event of Default or an acquiescence therein, and any
single or partial exercise of any such right or power will not preclude other or further exercise
thereof or the exercise of any other right, and as to Borrower no waiver will be valid unless in
writing and signed by Lender and then only to the extent specified.

     9.4 Expenses of Lender: Borrower will pay upon demand of Lender all reasonable costs,
fees and expenses incurred by Lender in connection with (i) the enforcement of Lender’s

13

 

rights
hereunder, or the collection of any payments owing from, Borrower under this Agreement and the
other Loan Documents or the protection, preservation or defense of the rights of Lender hereunder
and under the other Loan Documents, and (ii) any refinancing or restructuring of the credit
arrangements provided under this Agreement and other Loan Documents in the nature of a “work-out”
or of any insolvency or bankruptcy proceedings, or otherwise (including the reasonable fees and
disbursements of counsel for Lender) (collectively, the “Expenses”).

     9.5 Notices:

          a. All notices and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly delivered (i) four (4) Business Days after being sent by
registered or certified mail (postage prepaid, return receipt requested), (ii) one (1) Business Day
after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight
courier service, or (iii) on the date of confirmation of receipt (or the first Business Day
following such receipt if the date of such receipt is not a Business Day) of transmission by
facsimile, in each case to the intended recipient at the following addresses (or at such other
address for a party as shall be specified by like changes of address). A party electing to provide
notice by electronic transmission as provided herein shall also provide mailed copies of any such
notice.

	 	 	 	 	 
	 

	 	     i.
	 	If to Lender:
	 
	 	 	 	 
	 

	 	 	 	CytRx Corporation

11726 San Vicente Blvd., Suite 650

Los Angeles, California 90049

Telecopier No.: (310) 826-6139

Attention: Steven A. Kriegsman, President and Chief Executive Officer

     with a copy (which shall not constitute notice) to:

	 	 	 	 	 
	 

	 	 	 	TroyGould PC

1801 Century Park East, 16th Floor

Los Angeles, California 90067

Telecopier No.: (310) 201-4746

Attention: Sanford J. Hillsberg, Esq. and Dale E. Short, Esq.

	 
	 	 	 	 
	 

	 	     ii.
	 	 If to Innovive:
	 
	 	 	 	 
	 

	 	 	 	Innovive Pharmaceuticals, Inc.

555 Madison Avenue, 25th Floor

New York, New York 10022

Telecopier No.: (212) 716-1811

Attention: Steven Kelly, President and Chief Executive Officer

     with a copy (which shall not constitute notice) to:

14

 

	 	 	 	 	 
	 

	 	 	 	Wyrick Robbins Yates & Ponton LLP

4101 Lake Boone Trail

Suite 300

Raleigh, North Carolina 27607

Telecopier No.: (919) 781-4865

Attention: W. David Mannheim, Esq.

     9.6 Headings: The headings of any paragraph or Section of this Agreement are for
convenience only and shall not be used to interpret any provision of this Agreement.

     9.7 Survival: All warranties, representations, and covenants made by Borrower herein,
or in any agreement referred to herein or on any certificate, document or other instrument
delivered by it or on its behalf under this Agreement, shall be considered to have been relied upon
by Lender, regardless of any investigation made by Lender or on its behalf. All statements in any
such certificate or other instrument prepared and/or delivered for the benefit of Lender shall
constitute warranties and representations by Borrower hereunder. Except as otherwise expressly
provided herein, all covenants made by Borrower hereunder or under any other agreement or
instrument shall be deemed continuing until all Obligations are satisfied in full.

     9.8 Successors and Assigns: This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties. Neither party may transfer, assign
or delegate any of its duties or obligations hereunder.

     9.9 Duplicate Originals: Two or more duplicate originals of this Agreement may be
signed by the parties, each of which shall be an original but all of which together shall
constitute one and the same instrument.

     9.10 Modification: No modification hereof or any agreement referred to herein shall
be binding or enforceable unless in writing and signed by Borrower and Lender.

     9.11 Third Parties: No rights are intended to be created hereunder, or under any
related agreements or documents for the benefit of any third party donee, creditor or incidental
beneficiary of Borrower. Nothing contained in this Agreement shall be construed as a delegation to
Lender of Borrower’s duty of performance, including, without limitation, Borrower’s duties under
any account or contract with any other Person.

     9.12 Discharge of Taxes, Borrower’s Obligations, Etc.: Lender, in its sole
discretion, shall have the right at any time, and from time to time, with at least ten (10) days
prior notice to Borrower if Borrower fail to do so, to pay for the performance of any of Borrower’s
obligations hereunder and discharge taxes or Liens (other than Permitted Liens), at any time levied
or placed on Borrower’s Property in violation of this Agreement, unless Borrower is in good faith
with due diligence by appropriate proceedings contesting such taxes or Liens and maintaining proper
reserves therefor. Expenses and advances shall be added to the Loan, and bear interest at the rate
applicable to the Loan, until reimbursed to Lender. Such payments and advances made by Lender
shall not be construed as a waiver by Lender of a Default or Event of Default under this Agreement.

15

 

     9.13 Consent to Jurisdiction: Borrower and Lender each hereby irrevocably consent to
the non-exclusive jurisdiction of the Courts of the State of Delaware or any Federal Court located
in the State of Delaware in any and all actions and proceedings whether arising hereunder or under
any other agreement or undertaking. Borrower waives any objection which Borrower may have based
upon lack of personal jurisdiction, improper venue or forum non conveniens. Borrower irrevocably
agrees to service of process by certified mail, return receipt requested to the address of the
appropriate party set forth herein.

     9.14 Waiver of Jury Trial: BORROWER AND LENDER EACH HEREBY WAIVE ANY AND ALL RIGHTS
IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING
WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH
RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR
RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE,
WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

[Remainder of Page Left Intentionally Blank]

16

 

     WITNESS the due execution of this Loan and Security Agreement as a document under seal as of
the date first written above.

	 	 	 	 	 	 	 
	 

	 	INNOVIVE PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Steven Kelly
 

Steven Kelly
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	CYTRX CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Steven A. Kriegsman
 

Steven A. Kriegsman
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

17

 

EXHIBIT “A”

FORM OF LOAN ADVANCE REQUEST

(Letterhead of Innovive Pharmaceuticals, Inc.)

CytRx Corporation

11726 San Vicente Blvd., Suite 650

Los Angeles, California 90049

Telecopier No.: (310) 826-6139

(“Lender”)

Attention: Steven A. Kriegsman, Chief Executive Officer

     Borrower
hereby requests an Advance in the amount of $                     pursuant to Section 2.1 of
that certain Loan and Security Agreement by and among Borrower and Lender dated as of June                     , 2008
(as it may hereafter be amended, modified, restated or replaced, the “Loan Agreement”).
Capitalized terms used herein but not otherwise defined shall have the meanings given to them in
the Loan Agreement.

     Borrower hereby represents and warrants to Lender as follows:

a. No Default or Event of Default under the Loan Agreement now exists or would exist immediately
after giving effect to the making of the requested Advance.

b. All representations and warranties made by the Borrower in the Loan Agreement and/or in any
other Loan Document as in effect on the date hereof (as heretofore amended from time to time) are
true and correct in all material respects as of the date hereof as if made on and as of the date
hereof (except to the extent such representations and warranties are made only as of a specific
earlier date).

c. The aggregate principal amount of all Advances outstanding under the Loan prior to giving effect
to the requested Advance is $                    .

d. To the best of my knowledge, Borrower is currently in compliance with all obligations under the
Loan Agreement, the Loan Documents and the Merger Agreement.

	 	 	 	 	 	 	 
	 	 	INNOVIVE PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	Date:                    , 2008

	 	Title:exv10w1

Exhibit 10.1

CONFIDENTIAL

CONFIDENTIAL SEPARATION AGREEMENT BETWEEN 

SUTURA, INC. AND DAVID TECKMAN

      This Separation Agreement is entered into this 15 day of May, 2008, between David R.
Teckman (“Executive”) and Sutura, Inc. (the “Company”).

I.      RECITALS

     A. Executive was employed by the Company as its President and Chief Executive Officer until
his employment ended on or about February 26, 2008 (the “Separation Date”).

     B. In connection with his employment by the Company, Executive was granted 750,000 shares of
the Company’s common stock pursuant to the Written Consent of the Board of Directors of Sutura,
Inc., dated October 3, 2006 (the “2006 Written Consent”).

     C. Executive and the Company desire to resolve all of Executive’s potential claims on the
terms set out in this Separation Agreement.

II.      AGREEMENT

     Therefore, in consideration of the mutual promises and provisions contained in this
Separation Agreement and the Release of Sutura referred to below, the parties, intending to be
legally bound, agree as follows:

     1. Separation. By signing this Agreement, Executive confirms the termination of his
employment as an employee and his resignation as an officer of the Company, effective at the close
of business on the Separation Date. Executive will sign such other documents as deemed reasonably
necessary to accurately reflect such termination in the Company’s corporate records.

     2. Release by Executive. At the same time that he executes this Separation Agreement,
Executive shall also execute the release that is attached to this Separation Agreement as Exhibit A
(the “Release of Sutura”).

     3. Release by Company. Provided Executive signs and does not rescind this Separation
Agreement, the Release of Sutura, the Whitebox Separation Agreement, and the Release of Whitebox
within the applicable rescission periods, the Company agrees to release Executive from all claims
it may have against Executive as of the date of this Agreement, provided, however, the Company does
not agree to release any claims that the law does not allow to be waived, or any claims that may
arise after the date of this Agreement.

     4. Consideration. If Executive executes the Release of Whitebox and the Release of
Sutura and delivers them to the Company within the times specified in the Release of Whitebox and
the Release of Sutura and the applicable rescission periods expire without a
rescission by Executive, the Executive will receive from the Company the following severance
benefits:

 

 

          a. The Company will pay Executive a lump sum payment of $520,699.24, less applicable
withholdings, within 15 days after the expiration of the applicable rescission periods. Such lump
sum payment represents an amount equal to a bonus for the 2007 calendar year ($255,000.00), twelve
months severance in the amount of Executive’s annual base salary ($250,000.00), and additional
severance in an amount equal to the Company’s share of twelve months worth of medical benefit
premiums for Executive ($15,699.24).

          b. The Company will vest all of Executive’s options to purchase shares of common stock of the
Company, effective the date of the expiration of the rescission periods, and Executive will have 30
days from the expiration of the rescission periods to exercise such options before such options
will expire and cease to be outstanding. Executive acknowledges and agrees that the options
listed in this paragraph below are Executive’s only options to purchase shares of the common stock
of the Company.

	 	 	 	 	 	 	 
	Plan	 	Date of Grant	 	Exercise Price	 	Number of Shares
	 	 	 	 	 	 	 
	2006 Written Consent
	 	10/03/06
	 	$.06
	 	750,000

          c. At the same time as the above payments to Executive, the Company will pay Executive’s
legal counsel, Lindquist & Vennum, $40,000.00 for legal fees incurred by Executive in the matter of
David R. Teckman v. Sutura, Inc. and Anthony A. Nobles.

     5. Right to Consult with an Attorney. Executive understands and acknowledges that he
is hereby being advised by the Company to consult with an attorney prior to signing this Separation
Agreement and the Release of Sutura.

     6. Consideration and Rescission. The periods described in the Release of Sutura
during which Executive may consider whether to sign or rescind the Release of Sutura and the
procedures stated in the Release of Sutura for accepting or rescinding the Release of Sutura also
apply to this Separation Agreement. This Separation Agreement, the Release of Sutura, the Whitebox
Separation Agreement, and the Release of Whitebox must be accepted or rescinded together.
Rescission of one of these documents will be deemed a rescission of all of these documents.

     7. Non-Disparagement. Executive will not at any time disparage, defame or besmirch
the reputation, character, image, products or services of the Company, any of its affiliates, or
the reputation or character of any of their current or former directors, officers, employees or
agents. The Company will cause the current members of the Board of Directors of the Company and
the current officers of the Company to not at any time disparage, defame or besmirch the reputation
or character of Executive.

2

 

     8. Confidentiality.

          a. General Standard. The provisions of this Separation Agreement and the Release of
Sutura (collectively “Confidential Separation Information”) will be forever treated as
confidential. Accordingly, Executive and the Company will not disclose Confidential Separation
Information to anyone at any time, except as provided in paragraph 8.b below.

          b. Exceptions.

	 	(i)	 	It will not be a violation of this Separation
Agreement for Executive to disclose Confidential Separation
Information to his immediate family, his attorneys or tax advisors, or
as required by law.
	 
	 	(ii)	 	It will not be a violation of this Separation
Agreement for the Company representatives to disclose Confidential
Separation Information to its officers, directors, attorneys, auditors,
employees and agents who have a need to know such information in the
course of performing their duties or responsibilities for the Company.

     9. Non-Admission. Nothing in this Separation Agreement or the Release of Sutura is
intended to be, nor will be deemed to be, an admission by the Company that it has violated any law
or that it has engaged in any wrongdoing.

     10. Entire Agreement. This Separation Agreement and the Release of Sutura supersede
all prior oral and written agreements, representations, and promises between the parties relating
to Executive’s employment with the Company. This Separation Agreement and the Release constitute
the entire agreement between the parties with respect to Executive’s employment with the Company
and the termination of that employment. Executive acknowledges that there were no inducements or
representations leading to the execution of this Separation Agreement or the Release of Sutura,
except as stated in this Separation Agreement.

     11. Voluntary and Knowing Action. The parties acknowledge that they understand the
terms of this Separation Agreement and that they are voluntarily entering into this Separation
Agreement. The parties intend to be legally bound. Executive represents that he is legally able
and entitled to enter into this Separation Agreement and the Release of Sutura and to receive the
consideration described in paragraph 4 above.

     12. Governing Law. All matters relating to the interpretation, construction,
application, validity and enforcement of this Separation Agreement shall be governed by the laws of
the State of Minnesota without giving effect to any choice or conflict of law provision or rule,
whether of the State of Minnesota or any other jurisdiction, that would cause the application of
laws of any jurisdiction other than the State of Minnesota.

     13. Jurisdiction and Venue. Executive and the Company consent to the jurisdiction of
the courts of the State of Minnesota and the United States District Court for the District of
Minnesota for the purpose of resolving all issues of law, equity, or fact, arising out of or in

3

 

connection with this Separation Agreement. Any action involving claims of a breach of this
Separation Agreement shall be brought in such courts. Each party consents to personal jurisdiction
over such party and venue in the state and federal courts identified above.

     14. Tax Matters. In connection with any payment due to Executive under this
Agreement, the Company shall withhold such amounts as are required by any applicable income tax
laws or regulations. Executive acknowledges and agrees that neither the Company nor anyone
acting on its behalf has made any representations to him concerning the tax consequences of
entering into this Separation Agreement and receiving the consideration specified in it, and that
he has not relied on any tax advice from the Company or anyone acting on its behalf.

	 	 	 	 	 	 
	 

	 	SUTURA, INC.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	David R. Teckman
	 	 	 	 
	 

	 	Its	 	 
	 

	 	 	 	 

4

 

CONFIDENTIAL

RELEASE OF SUTURA, INC.

BY DAVID R. TECKMAN

Definitions. I intend all words used in this Release to have their plain meanings in
ordinary English. Specific terms that I use in this Release have the following meanings:

	 	A.	 	I, me, and my include both me and anyone who has or
obtains any legal rights or claims through me.
	 
	 	B.	 	Sutura means Sutura, Inc., any company related to Sutura, Inc. in the
present or past (including without limitation, its predecessors, parents, subsidiaries,
affiliates, joint venture partners, and divisions), and any successors of Sutura, Inc.
	 
	 	C.	 	Company means Sutura; the present and past officers, directors,
committees, shareholders, partners, and employees of Sutura; any company providing
insurance to Sutura in the present or past; the present and past employee benefit plans
sponsored or maintained by Sutura (other than multiemployer plans) and the present and
past fiduciaries of such plans; and anyone who acted on behalf of Sutura or on
instructions from Sutura.
	 
	 	D.	 	Agreement means the Separation Agreement between Sutura and me that I
am executing on the same date on which I execute this Release.
	 
	 	E.	 	My Claims means all of my rights that I now have to any relief of any
kind from the Company, including without limitation:

	 	1.	 	all claims arising out of or relating to my employment with
Sutura or the termination of that employment;
	 
	 	2.	 	all claims arising out of or relating to the statements,
actions, or omissions of the Company;
	 
	 	3.	 	all claims for any alleged unlawful discrimination, harassment,
retaliation or reprisal, or other alleged unlawful practices arising under the
laws of the United States or any other country or of any state, province,
municipality, or other unit of government, including without limitation, claims
under Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the Family and Medical
Leave Act, 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the
Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the
Sarbanes-Oxley Act, the Minnesota Human Rights Act, the Fair Credit Reporting
Act, the California Fair Employment and Housing Act, the Unruh Civil Rights
Act, the California Law on Equal Pay, and workers’ compensation
non-interference or non-retaliation statutes (such as Minn. Stat. § 176.82);

1

EXHIBIT A

 

	 	4.	 	all claims for alleged wrongful discharge; breach of contract;
breach of implied contract; failure to keep any promise; breach of a covenant
of good faith and fair dealing; breach of fiduciary duty; estoppel; my
activities, if any, as a “whistleblower”; defamation; infliction of emotional
distress; fraud; misrepresentation; negligence; harassment; retaliation or
reprisal; constructive discharge; assault; battery; false imprisonment;
invasion of privacy; interference with contractual or business relationships;
any other wrongful employment practices; and violation of any other principle
of common law;
	 
	 	5.	 	all claims for compensation of any kind, including without
limitation, bonuses, commissions, stock-based compensation or stock options,
vacation pay, perquisites, relocation expenses, and expense reimbursements;
	 
	 	6.	 	all claims for back pay, front pay, reinstatement, other
equitable relief, compensatory damages, damages for alleged personal injury,
liquidated damages, and punitive damages;
	 
	 	7.	 	all claims and rights I have under California Civil Code
section 1542, which states that: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have materially affected
his settlement with the debtor”; and
	 
	 	8.	 	all claims for attorneys’ fees, costs, and interest.
	 
	 	However, My Claims do not include any claims that the law does not allow to be
waived, any claims that may arise after the date on which I sign this Release, any
claims related to the enforcement of the $100,000 Note executed by Sutura in favor
of Executive, or any claims for breach of the Agreement.

Agreement to Release My Claims. I will receive consideration from Sutura as set forth in
the Agreement if I sign and do not rescind this Release as provided below. I understand and
acknowledge that that consideration is in addition to anything of value that I would be entitled to
receive from Sutura if I did not sign this Release or if I rescinded this Release. In exchange for
that consideration I give up and release all of My Claims. I will not make any demands or claims
against the Company for compensation or damages relating to My Claims. The consideration that I am
receiving is a fair compromise for the release of My Claims.

Additional Agreements and Understandings. Even though Sutura will provide consideration
for me to settle and release My Claims, the Company does not admit that it is responsible or
legally obligated to me. In fact, the Company denies that it is responsible or legally obligated
to me for My Claims, denies that it engaged in any unlawful or improper conduct toward me, and
denies that it treated me unfairly.

2

 

Confidentiality. I understand that the terms of this Release are confidential and that I
may not disclose those terms to any person except under the circumstances described in the
Agreement.

Advice to Consult with an Attorney. I understand and acknowledge that I am hereby being
advised by the Company to consult with an attorney prior to signing this Release. My decision
whether to sign this Release is my own voluntary decision made with full knowledge that the Company
has advised me to consult with an attorney.

Period to Consider the Release. I understand that I have 21 days from the day that I
receive this Release, not counting the day upon which I receive it, to consider whether I wish to
sign this Release. If I sign this Release before the end of the 21-day period, it will be my
voluntary decision to do so because I have decided that I do not need any additional time to decide
whether to sign this Release. I also agree that any changes made to this Release or to the
Agreement before I sign it, whether material or immaterial, will not restart the 21—day period.

My Right to Rescind this Release. I understand that I may rescind this Release at any time
within 15 days after I sign it, not counting the day upon which I sign it. This Release will not
become effective or enforceable unless and until the 15-day rescission period has expired without
my rescinding it.

Procedure for Accepting or Rescinding the Release. To accept the terms of this Release, I
must deliver the Release, after I have signed and dated it, to Sutura by hand or by mail within the
21-day period that I have to consider this Release. To rescind my acceptance, I must deliver a
written, signed statement that I rescind my acceptance to Sutura by hand or by mail within the
15-day rescission period. All deliveries must be made to Sutura at the following address:

Mark Strefling

Chief Legal Officer

Whitebox Advisors, LLC

3033 Excelsior Blvd, Suite 300

Minneapolis, MN 55416

If I choose to deliver my acceptance or the rescission of my acceptance by mail, it must be: (1)
postmarked within the period stated above; and (2) properly addressed to Sutura at the address
stated above.

Interpretation of the Release. This Release should be interpreted as broadly as possible
to achieve my intention to resolve all of My Claims against the Company. If this Release is held
by a court to be inadequate to release a particular claim encompassed within My Claims, this
Release will remain in full force and effect with respect to all the rest of My Claims.

Governing Law. All matters relating to the interpretation, construction, application,
validity and enforcement of this Release shall be governed by the laws of the State of Minnesota
without giving effect to any choice or conflict of law provision or rule, whether of the State of
Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction
other than the State of Minnesota.

3

 

My Representations. I am legally able and entitled to receive the consideration being
provided to me in settlement of My Claims. I have not been involved in any personal bankruptcy or
other insolvency proceedings at any time since I began my employment with Sutura. No child support
orders, garnishment orders, or other orders requiring that money owed to me by Sutura be paid to
any other person are now in effect.

I have read this Release carefully. I understand all of its terms. In signing this Release, I
have not relied on any statements or explanations made by the Company except as specifically set
forth in the Agreement. I am voluntarily releasing My Claims against the Company. I intend this
Release and the Agreement to be legally binding.

	 	 	 	 	 	 
	 
	Dated:
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 	 	David R. Teckman

4

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