SECOND AMENDED REGISTRATION RIGHTS AGREEMENT
EXHIBIT 10.10
SECOND AMENDED REGISTRATION RIGHTS AGREEMENT
THIS SECOND AMENDED REGISTRATION RIGHTS AGREEMENT (the “Agreement") 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 ▇▇▇▇
▇. ▇▇▇▇▇▇ (“▇▇▇▇▇▇”) and ▇▇▇▇ ▇. ▇▇▇▇▇▇ (“▇▇▇▇▇▇”), each residents of the State of Minnesota.
Pandora, WHHY, WCAP, WIP, Kohler and ▇▇▇▇▇▇ are individually referred to herein as an “Investor”
and together as the “Investors.”
RECITALS:
WHEREAS, the Company, Pandora, WHHY, WCAP, WIP, Kohler and ▇▇▇▇▇▇ entered into 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, as a condition to the Original Loan, the Company granted certain registration rights
with respect to the shares of the Company’s Common Stock issuable upon conversion of the Original
Notes and exercise of the Original Warrants pursuant to the terms of a Registration Rights
Agreement dated September 17, 2004 (the “Original Registration Rights Agreement”);
WHEREAS, 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 (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 Company and the Investors entered into an Amended Registration Rights Agreement
dated March 24, 2005 (the “March 2005 Registration Rights Agreement”);
WHEREAS, the Company, Pandora, WHHY and WIP have entered into a third Purchase Agreement dated
as of this date (the “Third Purchase Agreement”), pursuant to which Pandora, WHHY and WIP are each
purchasing an additional convertible promissory note (each, a “New Note” and together, the “New
Notes”) and an additional warrant to purchase the Company’s Common Stock (each, a “New Warrant” and
together, the “New Warrants”) in consideration of a collective $7,000,000 new loan (the “August
2005 Loan”);
WHEREAS, effective on August 19, 2005 (the “Effective Date”), Sutura, Inc., a Delaware
corporation (“Premerger Sutura") merged (the “Merger") with and into Technology Visions Group,
Inc., a Delaware corporation (the “TVG”), pursuant to which the separate existence of Premerger
Sutura ceased and TVG continued as the surviving corporation. As part of the Merger, the name of
TVG was changed to Sutura, Inc. (the “Company");
WHEREAS, the Investors desire to enter into this Agreement to supercede and replace the March
2005 Registration Rights Agreement; and
WHEREAS, the execution of this Agreement is a condition precedent to the obligation of each of
Pandora, WHHY and WIP to perform its obligations under the Third Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and 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:
ARTICLE 1.
DEFINITIONS
As used herein, the following terms shall have the following respective meanings:
1.1 “Commission” shall mean the U.S. Securities and Exchange Commission or any other successor
federal agency at the time administering the Securities Act.
1.2 “Common Stock” shall mean the Company’s common stock, $0.00025 par value per share.
1.3 “Exchange Act” shall mean the Securities and Exchange Act of 1934, as amended, or any
similar federal statute and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
1.4 “Holders” shall mean and include each Investor and any transferee thereof to whom the
registration rights conferred by this Agreement have been transferred in accordance with Article 10
hereof.
1.5 “Register,” “registered” and “registration” refer to a registration effected by preparing
and filing with the Commission a registration statement in compliance with the Securities Act, and
the declaration or ordering by the Commission of the effectiveness of such registration statement.
1.6 “Registrable Securities” means: (i) all shares of Common Stock issued or issuable upon
exercise of the Original Warrants, the March 2005 Warrants and the New Warrants being purchased
pursuant to the Third Purchase Agreement or hereafter acquired by the Investor or (ii) all shares
of Common Stock issued or issuable upon conversion of the Original Notes, the March 2005 Notes and
the New Notes being purchased pursuant to the Third Purchase Agreement or hereafter acquired by the
Investor or upon payment on the New Notes or (iii) any
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and all shares of Common Stock issuable upon any stock split, stock dividend,
recapitalization, reclassification, merger, consolidation or other similar event with respect to
the Common Stock issued or issuable pursuant to subsections (i) and (ii) of this Section 1.6;
excluding in all cases, however, Registrable Securities sold by a Holder to the public pursuant to
a registered offering or pursuant to Rule 144 promulgated by the Commission under the Securities
Act or sold in a private transaction in which the Holder’s registration rights under this Agreement
are not assigned.
1.7 “Registration Expenses” shall mean all expenses incurred by the Company in complying with
Articles 2, 3, 4 and 5 hereof, including, without limitation, all registration, qualification and
Commission, National Association of Securities Dealers, Inc., stock exchange and other filing fees,
printing expenses, escrow fees, fees and disbursements of legal counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company, which shall be
paid in any event by the Company).
1.8 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
1.9 “Selling Expenses” shall mean all underwriting fees, discounts, selling commissions and
stock transfer taxes applicable to the Registrable Securities registered by the Holders and the
fees and expenses of any special counsel engaged by the Holders.
1.10 “Underwriter” shall mean (whether or not the term is capitalized) a broker-dealer engaged
by the Company to distribute Registrable Securities as principal or agent.
1.11 “Underwriting” or “Underwritten” shall mean (whether or not the term is capitalized) a
method of publicly distributing securities through an Underwriter.
ARTICLE 2.
REQUIRED REGISTRATION
2.1 Required Registration. The Company will (a) prepare and file with the Commission within
150 days after the Effective Date of the Merger a registration statement under the Securities Act
(currently expected to be on Form S-2 or SB-2) covering all of the Registrable Securities and (b)
use its best efforts to obtain the effectiveness of such registration statement (with respect to
the Registrable Securities) as soon as practicable but not later than seven (7) months after the
Effective Date of the Merger as would permit or facilitate the resale and distribution of all such
Registrable Securities.
2.2 Underwriting.
(a) The resale distribution of the Registrable Securities covered by the registration
statement referred to in Section 2.1 above shall be effected by means of the method of
distribution selected by the Holders holding a majority of the Registrable Securities
covered by such registration. The Holders holding a majority of the Registrable Securities
may also change the resale distribution method from time to time (subject to
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amendment of the registration statement as required to describe such changes). If such
distribution is effected by means of an underwriting, the right of any Holder to
registration pursuant to this Article 2 shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s Registrable Securities
in the underwriting to the extent provided herein.
(b) If such distribution is effected by means of an underwriting, the Company (together
with all Holders proposing to distribute their securities through such underwriting) shall
enter into an underwriting agreement in customary form with a managing underwriter of
nationally recognized standing selected for such underwriting by a majority in interest of
the Holders and approved by the Company, which approval shall not be unreasonably withheld.
(c) If any Holder disapproves of the terms of the underwriting, such person may elect
to withdraw therefrom by written notice to the Company, the managing underwriter and the
other Holders. The Registrable Securities and/or other securities so withdrawn shall also
be withdrawn from registration.
2.3 Inclusion of Shares by the Company. If the resale distribution of Registrable Securities
is being effected by means of an underwriting and if the managing underwriter will not limit the
number of Registrable Securities to be underwritten, the Company may include securities for its own
account or for the account of others in such registration if the managing underwriter so agrees.
The inclusion of such shares shall be on the same terms as the registration of shares held by the
Holders. In the event that the underwriters exclude some of the securities to be registered, the
securities to be sold for the account of the Company and any other holders shall be excluded in
their entirety prior to the exclusion of any Registrable Securities.
ARTICLE 3.
COMPANY REGISTRATION
3.1 Notice of Registration to Holders. If the Company determines to register any of its
securities, either for its own account or the account of a security holder or holders, other than
(i) a registration relating solely to employee benefit plans on Form S-8 (or any successor form) or
(ii) a registration relating solely to a Commission Rule 145 transaction on Form S-4 (or any
successor form), the Company will:
(a) promptly give to each Holder written notice thereof and
(b) include in such registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within 30 days after receipt of such
written notice from the Company described in Section 3.1(a), by any Holder or Holders,
subject to any reductions in the Registrable Securities to be registered made in the manner
set forth in Section 3.2(a).
3.2 Underwriting. If the registration of which the Company gives notice is for an offering
involving an underwriting, the Company shall so advise the Holders as a part of the written notice
given pursuant to Section 3.1(a). In such event, the right of any Holder to
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registration pursuant to this Article 3 shall be conditioned upon such Holder’s participation
in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting
to the extent provided herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company.
(a) Notwithstanding any other provision of this Article 3, if the managing underwriter
determines that marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may exclude some or all Registrable Securities from such
registration and underwriting. The Company shall so advise all Holders of Registrable
Securities, and the number of shares of Common Stock to be included in such registration
shall be allocated as follows: first, for the account of the Company, all shares of Common
Stock proposed to be sold by the Company; and second, for the account of the Holders and
any other shareholders of the Company participating in such registration, the number of
shares of Common Stock requested to be included in the registration by the Holders and such
other shareholders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities that are proposed to be offered and sold by the Holders and such
other shareholders of Registrable Securities at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting in this Article 3 by
reason of the underwriters’ marketing limitation shall be included in such registration.
(b) The Company shall so advise all Holders and the other holders distributing their
securities through such underwriting of any such limitation, and the number of shares of
Registrable Securities held by Holders that may be included in the registration. If any
Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. Any securities
excluded or withdrawn from such underwriting shall be withdrawn from such registration, but
the Holder shall continue to be bound by the terms hereof.
(c) The Company shall have the right to terminate or withdraw any registration
initiated by it under this Article 3 prior to the effectiveness of such registration,
whether or not a Holder has elected to include Registrable Securities in such registration.
ARTICLE 4.
REQUESTED REGISTRATION
4.1 Request for Registration.
(a) If the Company shall at any time, not earlier than one year after the effective
date of the first registration statement filed by the Company covering an underwritten
offering of any of its securities to the general public, receive from the Holders of 10% or
more of the Registrable Securities then outstanding a written request that the Company
effect any registration with respect to all or a part of the Registrable Securities, the
Company will:
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(i) promptly give written notice of the proposed registration to all other
Holders; and
(ii) as soon as practicable, use its best efforts to effect such registration
(including, without limitation, filing post-effective amendments, related
qualification under blue sky laws or other compliance) of all the Registrable
Securities specified in a written request or requests made within 30 days after
receipt of such written notice from the Company by any Holder or Holders.
(b) The Company shall not be obligated to effect, or to take any action to effect, any
such registration pursuant to Section 4.1(a) hereof:
(i) after the Company has initiated two such registrations pursuant to
Section 4.1(a) (counting for these purposes only registrations that have
been declared effective and pursuant to which securities have been sold);
(ii) if the Holders propose to dispose of Registrable Securities which may
be immediately registered on Form S-3 pursuant to a request made under
Section 5.1 hereof; or
(iii) if less than 15% of the Registrable Securities would be included in such
registration.
(c) If the registration is for an underwritten offering, the provisions of Sections
2.2(a), (b) and (c) and Section 2.3 hereof shall apply to such registration.
ARTICLE 5.
REGISTRATION ON FORM S-3
5.1 Request for Registration. After it becomes subject to the periodic reporting requirements
under the Exchange Act, the Company shall use its best efforts to qualify for registration on Form
S-3 or any comparable or successor form. After the Company has qualified for the use of Form S-3,
in addition to the rights contained above in Articles 2, 3 and 4, the Holders of 10% or more of the
Registrable Securities then outstanding shall have the right to request registrations on Form S-3.
Such requests shall be in writing and shall state the number of shares of Registrable Securities to
be disposed of and the intended methods of disposition of such shares. Company shall not be
obligated to effect any such registration if in a given 6-month period, the Company has effected a
registration of Registrable Securities within the preceding 6-month period.
5.2 Underwriting. If the registration is for an underwritten offering, the provisions of
Sections 2.2(a), (b) and (c) and Section 2.3 hereof shall apply to such registration.
ARTICLE 6.
EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration, qualification or
compliance pursuant to Articles 2, 3, 4 and 5 hereof, and the reasonable fees of one counsel for
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the Holders of Registrable Securities in the case of registration pursuant to Article 2 hereof
shall be borne by the Company; provided, however, that any expenses incurred as a result of any
amendment described in Section 2.2(a) shall be borne by the Holders of the Registrable Securities
being registered in such registration. All Selling Expenses relating to Registrable Securities
registered by the Holders shall be borne by the Holders of such Registrable Securities pro rata on
the basis of the number of shares so registered.
ARTICLE 7.
REGISTRATION PROCEDURES
7.1 In the case of each registration effected by the Company pursuant to this Agreement, the
Company will keep each Holder advised in writing as to the initiation of each registration and as
to the completion thereof. The Company agrees to use its best efforts to effect or cause such
registration to permit the sale of the Registrable Securities covered thereby by the Holders
thereof in accordance with the intended method or methods of distribution thereof described in such
registration statement. In connection with any registration of any Registrable Securities, and
except as otherwise provided in Article 6 hereof, the Company shall, at its expense:
(a) prepare and file with the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration statement filed
to become effective;
(b) maintain the effectiveness of such registration statement until the earlier of (A)
five years after the date that the registration statement filed pursuant to Section 2.1 is
first declared effective by the Commission, (B) the date on which all of the Registrable
Securities covered by a registration statement may be sold by the Holders pursuant to Rule
144(k) or (C) such time as all of the Registrable Securities have been publicly sold
pursuant to a registration statement;
(c) prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary to effect and
maintain the effectiveness of such registration statement as may be required by the
applicable rules and regulations of the Commission and the instructions applicable to the
form of such registration statement and furnish to the Holders of the Registrable Securities
covered thereby copies of any such supplement or amendment prior to this being used and
filed with the Commission;
(d) promptly notify the Holders of Registrable Securities to be included in a
registration statement hereunder, the sales or placement agent, if any, therefor and the
managing underwriter of the securities being sold, and confirm such advice in writing, (A)
when such registration statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same has become
effective, (B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to the
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suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such purpose or (D) if,
to the Company’s knowledge, it shall be the case, at any time when a prospectus is required
to be delivered under the Securities Act, that such registration statement or prospectus, or
any document incorporated by reference in any of the foregoing, contains an untrue statement
of a material fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the circumstances then
existing;
(e) use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of such registration statement or any post-effective amendment thereto or of
any order suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration statement for sale
in any jurisdiction at the earliest practicable date;
(f) furnish to each Holder of Registrable Securities to be included in such
registration statement hereunder, each placement or sales agent, if any, therefor and each
underwriter, if any, thereof a conformed copy of such registration statement, each such
amendment and supplement thereto (in each case excluding all exhibits and documents
incorporated by reference) and such number of copies of the registration statement
(excluding exhibits thereto and documents incorporated by reference therein unless
specifically so requested by such holder, agent or underwriter, as the case may be) of the
prospectus included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the requirements of the Securities Act, as
such Holder, agent, if any, and underwriter, if any, may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Holder sold by such
agent or underwritten by such underwriter and to permit such Holder, agent and underwriter
to satisfy the prospectus delivery requirements of the Securities Act;
(g) use its best efforts to (A) register or qualify the Registrable Securities to be
included in such registration statement under such other securities laws or blue sky laws of
such states of the United States or the District of Columbia to be designated by the Holders
of a majority of such Registrable Securities participating in such registration and each
placement or sales agent, if any, therefor and underwriter, if any, thereof, as any Holder
and each underwriter, if any, of the securities being sold shall reasonably request
(provided, that the Company shall not be required to use its best efforts to register or
qualify the Registrable Securities in more than 15 such jurisdictions unless the expenses
thereof are borne by the Holders requesting such efforts), (B) keep such registrations or
qualifications in effect and comply with such laws at all times during the period described
in Section 7.1(b) above and (C) take any and all such actions as may be reasonably necessary
or advisable to enable such Holder, agent, if any, and underwriter to consummate the
disposition in such jurisdictions of such Registrable Securities; provided, however, that
in order to fulfill the foregoing obligations under this Section 7.1(g), the Company shall
not (unless otherwise required to do so in any jurisdiction) be required to (1) qualify
generally to do business as a foreign company or a broker-dealer, (2) execute a general
consent to service of process or (3) subject itself to taxation; and
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(h) furnish, at the request of a majority of the Holders participating in the
registration, on the date that such Registrable Securities are delivered to the underwriters
for sale, if such securities are being sold through underwriters, or, if such securities are
not being sold through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting registration,
addressed to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities and (ii) a letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the Holders requesting registration of Registrable Securities.
7.2 The Company may require each Holder of Registrable Securities as to which any registration
is being effected to furnish to the Company such information regarding such Holder and such
Holder’s method of distribution of such Registrable Securities as the Company may from time to time
reasonably request in writing. Each such Holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished by such Holder to the
Company or of the occurrence of any event in either case as a result of which any prospectus
relating to such registration contains or would contain an untrue statement of a material fact
regarding such Holder or the distribution of such Registrable Securities or omits to state any
material fact regarding such Holder or the distribution of such Registrable Securities required to
be stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing, and promptly to furnish to the Company any additional information
required to correct and update any previously furnished information or required so that such
prospectus shall not contain, with respect to such Holder or the distribution of such Registrable
Securities, an untrue statement or a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in light of the
circumstances then existing.
7.3 Each of the Holders will comply with the provisions of the Securities Act with respect to
disposition of the Registrable Securities to be included in any registration statement filed by the
Company.
ARTICLE 8.
INDEMNIFICATION
8.1 The Company will indemnify each Holder, each of its officers, directors and partners, and
such Holder’s legal counsel and independent accountants, if any, and each person controlling any
such persons within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this Agreement, and each
underwriter, if any, and each person who controls any underwriter within the meaning of Section 15
of the Securities Act, against all expenses, claims, losses, damages and liabilities
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(or actions in respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of any rule or regulation promulgated under the
Securities Act or any state securities laws applicable to the Company and relating to action or
inaction by the Company in connection with any such registration, qualification or compliance, and
will reimburse each such Holder, each of its officers, directors and partners and such Holder’s
legal counsel and independent accountants, and each person controlling any such persons, each such
underwriter and each person who controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating, preparing or defending any such claim, loss,
damage, liability or action; provided, however, that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such Holder, officers,
directors, partners, legal counsel, accountants, underwriter or controlling persons, and expressly
intended for use in such registration statement, prospectus, offering circular or other document,
or any amendment or supplement thereof.
8.2 Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being effected, indemnify
the Company, each of its directors and officers and its legal counsel and independent accountants,
each underwriter, if any, of the Company’s securities covered by such a registration statement,
each person who controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers, directors, partners, legal
counsel and independent accountants, if any, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement
of any litigation, commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any amendment or supplement thereto, incident
to any such registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holders, such directors,
officers, partners, legal counsel, independent accountants, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular, other document or
amendment or supplement in reliance upon and in conformity with written information furnished to
the Company by such Holder and expressly intended for use in such registration statement,
prospectus, offering circular or other document, or any amendment or supplement thereof; provided,
however, that the obligations of each Holder hereunder shall be
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limited to an amount equal to the proceeds to such Holder of Registrable Securities sold as
contemplated herein.
8.3 Each party entitled to indemnification under this Section 8 (the “Indemnified Party")
shall give notice to the party required to provide indemnification (the “Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld). The Indemnified Party may participate in such defense at such
party’s expense; provided, however, that the Indemnifying Party shall bear the expense of such
defense of the Indemnified Party if representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations
under this Agreement, unless such failure is prejudicial to the ability of the Indemnifying Party
to defend the action. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such
claim or litigation.
8.4 If the indemnification provided for in Section 8.1 or 8.2 is unavailable or insufficient
to hold harmless an Indemnified Party, then each Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in Section 8.1 or 8.2, in
such proportion as is appropriate to reflect the relative fault of the Company on the one hand and
the sellers of Registrable Securities on the other hand in connection with statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) or expenses, as well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the sellers of Registrable Securities and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Holders agree that it would not be just and equitable
if contributions pursuant to this Section 8.4 were to be determined by pro rata allocation (even if
all Sellers of Registrable Securities were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to in the
first sentence of this Section 8.4. The amount paid by an Indemnified Party as a result of the
expenses, claims, losses, damages or liabilities (or actions or proceedings in respect thereof)
referred to in the first sentence of this Section 8.4 shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with investigating or
defending any claim, action or proceeding which is the subject of this Section 8.4. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of sellers of Registrable Securities to contribute pursuant to
this Section 8.4 shall be several in proportion to the respective amount of Registrable Securities
sold by them pursuant to a registration statement.
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ARTICLE 9.
RULE 144 REPORTING
With a view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of securities of the Company to the public without
registration, the Company agrees to use its best efforts to:
9.1 Make and keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act; and
9.2 File with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act after the date hereof.
ARTICLE 10.
TRANSFER OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities under this Agreement may be
assigned by a Holder to Whitebox Advisors, LLC (“Whitebox Advisors") or to a transferee or assignee
of Registrable Securities that (i) is a subsidiary, parent or affiliated entity, general partner or
limited partner, member or retired partner or member of a Holder or of Whitebox Advisors, (ii) is
an affiliated fund, a follow-on fund or predecessor fund of a Holder or a related fund or of
Whitebox Advisors, (iii) is a Holder’s family member or trust for the benefit of an individual
Holder or (iv) acquires at least 50,000 shares of Registrable Securities (as adjusted for stock
splits, stock dividends, stock combinations, reclassifications, recapitalizations, mergers,
consolidations or other similar events); provided, however, (A) the transferor shall, within ten
days before such transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such registration rights are being
assigned and (B) such transferee shall agree in writing to be subject to all restrictions set forth
in this Agreement. In each case, such rights may only be transferred together with the underlying
Registrable Securities in a transfer permitted by the Securities Act and applicable state
securities laws. Any such transferee or assignee shall be deemed a Holder hereunder.
ARTICLE 11.
LIMITATIONS ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES
From and after the date of this Agreement, the Company shall not without the prior written
consent of the holders of a majority of the Registrable Securities then outstanding, enter into any
agreement with any holder or prospective holder of any securities of the Company providing for the
grant to such holder of registration rights superior to those granted herein.
ARTICLE 12.
MARKET “STAND-OFF” AGREEMENT
In connection with any underwritten offering, each Holder hereby agrees that it will not,
without the prior written consent of the managing underwriter, during the period commencing on the
date of the final prospectus relating to such offering and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred eighty (180)
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days) (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock held immediately prior
to the effectiveness of the registration statement for such offering, or (b) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in clause (a) or (b) above
is to be settled by delivery of Common Stock or other securities, in cash or otherwise. The
foregoing provisions of this Article 12 shall only apply to the first registration statement of the
Company filed under the Securities Act involving an underwritten offering and if all officers,
directors and greater than five percent (5%) stockholders of the Company are subject to similar
agreements. The underwriters in connection with such public offering are intended third party
beneficiaries of this Article 12 and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto. Each Holder further agrees to execute such
agreements as may be reasonably requested by the underwriters of such public offering that are
consistent with this Article 12 or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop transfer instructions with respect to
the Registrable Securities of each Holder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this Article 12 shall not apply to
a registration relating solely to employee benefit plans on Form S-8 or similar forms which may be
promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction
on Form S-4 or similar forms which may be promulgated in the future.
ARTICLE 13.
MISCELLANEOUS
13.1 Governing Law. The laws of the state of Minnesota shall govern the interpretation,
validity and performance of the terms of this agreement, regardless of the law that might be
applied under principles of conflicts of law.
13.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
13.3 Entire Agreement. This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.
13.4 Termination. The obligations of the Company to register Registrable Securities under
this Agreement shall terminate on the tenth anniversary of the date of this Agreement. In
addition, the right of any Holder to request inclusion in any registration under Article 3, 4 or 5
shall terminate on the date hereafter when (i) such Holder (together with its affiliates, partners,
members and former partners and members) holds less than 1% of the Company’s outstanding Common
Stock and (ii) all Registrable Securities held by or issuable to such Holder (and its affiliates,
partners, members and former partners and members) upon conversion of the Note or upon exercise of
the Warrant may be sold under Rule 144 during any 90 day period.
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13.5 Notices. All notices, requests, consents, and other communications hereunder shall be in
writing and shall be deemed effectively given and received when delivered in person or by national
overnight courier service or by certified or registered mail, return receipt requested, or by
telecopier, addressed as follows:
| (a) | if to the Company, at |
Sutura, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & Associates
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
| (b) | if to the Investors, in care of: |
Whitebox Advisors, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇, Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇, Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any other Holder, to the address reflected on the records of the Company, or
such other address or addresses as shall have been furnished in writing by such party to the
Company and to the other parties to this Agreement.
13.6 Severability. The invalidity, illegality or unenforceability of one or more of the
provisions of this Agreement in any jurisdiction shall not affect the validity, legality or
enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or
enforceability of this Agreement, including any such provision, in any other jurisdiction, it being
intended that all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
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13.7 Titles and Subtitles. The titles of the sections and subsections of this Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.
13.8 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together constitute one instrument.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amended Registration Rights
Agreement to be executed and delivered as of the date first written above.
| SUTURA, INC. | ||||||
| By | ||||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| President and Chief Executive Officer | ||||||
| PANDORA SELECT PARTNERS L.P. | ||||||
| By | ||||||
| Name | ||||||
| Its | ||||||
| WHITEBOX HEDGED HIGH YIELD PARTNERS L.P. | ||||||
| By | ||||||
| Name | ||||||
| Its | ||||||
| WHITEBOX CONVERTIBLE ARBITRAGE PARTNERS L.P. | ||||||
| By | ||||||
| Name | ||||||
| Its | ||||||
| WHITEBOX INTERMARKET PARTNERS L.P. | ||||||
| By | ||||||
| Name | ||||||
| Its | ||||||
| ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| ▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
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