AMENDMENT TO SECURED
CONVERTIBLE
PROMISSORY NOTES AND WARRANTS
THIS AMENDMENT
TO SECURED CONVERTIBLE PROMISSORY NOTES AND WARRANTS (the
“Amendment” ) is entered into as of
September 7, 2005, 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.
WHEREAS,
the Company, Pandora, WHHY, WCAP, WIP, Kohler and Malloy are
parties to a Purchase Agreement dated September 17, 2004 (the
“ Original Purchase Agreement” ), pursuant to
which the Investors each purchased a convertible promissory note
(each, an “ Original Note ” and together, the
“ Original Notes ”) and a warrant to purchase
shares of the Company’s Common Stock (each, an “
Original Warrant” and together, the “
Original Warrants ”) from the Company in consideration
of a collective $6,550,000 loan (the “ Original Loan
”).
WHEREAS,
the Company, Pandora, WHHY and WIP are parties to a second Purchase
Agreement dated March 24, 2005 (the “ Second Purchase
Agreement ”), pursuant to which Pandora, WHHY and WIP
each purchased an additional convertible promissory note (each, a
“ March 2005 Note ” and together, the
“ March 2005 Notes ”) and an additional
warrant to purchase the Company’s Common Stock (each, a
“ March 2005 Warrant ” and together, the
“ March 2005 Warrants ”) in consideration
of a collective $3,000,000 new loan (the “ March 2005
Loan ”).
WHEREAS,
the parties desire to amend certain provisions of the Original
Notes, Original Warrants, March 2005 Notes and March 2005
Warrants.
NOW,
THEREFORE , in consideration of the mutual promises and
covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby
agree as follows:
SECTION 1.
Amendment to Original Notes . Each of the Original Notes
is amended as follows:
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(a)
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The
following new subsection (g) is added to
Section 3:
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“(g)
Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock that may be acquired by the Payee
upon any conversion of this Note (or otherwise in respect hereof)
shall be limited to the extent necessary to insure that, following
such conversion (or other issuance), the total number of shares of
Common Stock then beneficially owed by Payee and its affiliates and
any other persons whose beneficial ownership of Common Stock would
be aggregated with the
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