CONVERTIBLE PROMISSORY
NOTE
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September 20, 2002
$1,000,000.00
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Fountain Valley,
California
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FOR VALUE
RECEIVED, the undersigned, SUTURA, INC., a Delaware corporation
(the “ Payor ” or the “ Company
”), having its executive office and principal place of
business at 17080 Newhope St., Fountain Valley, California 92708,
hereby promises to pay to Getz Bros. & Co., Inc.
(“Holder” or the “Distributor”), a Delaware
corporation, having its executive office and principal place of
business located at 225 West Washington Street, Suite 1900,
Chicago, IL 60606 (or at such other place Holder shall hereafter
direct by notice in writing to Payor), the sum of One Million
Dollars ($1,000,000.00) in such coin or currency of the United
States of America as at the time shall be legal tender for the
payment of public and private debts. The outstanding principal
balance of this Note shall be due and payable on the date, which is
12 months from the date of notice of election not to exercise
the Distribution Option or the termination or expiration of the
Termination Option as described in the Option and Distribution
Agreement between the parties dated September 20, 2002 (the
“Maturity Date”).
1.1
The principal amount of the Note less any amount that may have been
credited toward advance purchase of Products as described in the
Option and Distribution Agreement, shall be payable in full on the
Maturity Date.
1.2
All advances of Products as described in the Option and
Distribution Agreement to Holder constitute cash payments made by
the Payor on this Note and shall be applied to the reduction of the
unpaid principal balance of this Note.
1.3
In the event that the date for the payment of any amount payable
under this Note falls due on a Saturday, Sunday or public holiday
under the laws of the State of California, the time for payment of
such amount shall be extended to the next succeeding business
day.
In
case this Note is mutilated, destroyed, lost or stolen, Payor
shall, at its sole expense, execute, register and deliver a new
Note, in exchange and substitution for this Note, if mutilated, or
in lieu of and substitution for this Note, if destroyed, lost or
stolen. In the case of such case, Holder shall also furnish to
Payor evidence to its reasonable satisfaction of the mutilation,
destruction, loss or theft of this Note and of the ownership
thereof. Any replacement Note so issued shall be dated of this
Note, shall be in the amount of the principal amount of this Note
and in accordance with the terms of the Note.
1
3.
Prepayment . This Note may be prepaid in whole or in part
prior to the Maturity Date.
4.
Covenants of Payor. Payor covenants and agrees that, so long
as this Note remains outstanding and unpaid, in whole or in
Part:
4.1
Payor will do or cause to be done all things necessary to preserve
and keep in full force and affect its corporate existence, rights
and franchises and comply with all laws applicable to Payor as is
counsel may advise.
Subject to the
terms and conditions of the Option and Distribution Agreement, this
Note shall convert to an “Advanced Payment” for
Product, and this Note will terminate at such time. The terms of
this Note will be in full force to any unpaid portion of the
principal in the event of a cancellation of the Distribution Option
as reduced for any Products delivered and in accordance
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