FIFTH AMENDED REGISTRATION RIGHTS AGREEMENT
Exhibit
10.49
FIFTH AMENDED REGISTRATION RIGHTS AGREEMENT
THIS FIFTH AMENDED REGISTRATION RIGHTS AGREEMENT (the “Agreement”) is entered into as of June
1, 2007, by and among Sutura, Inc., a Delaware corporation (the “Company”), Pandora Select Partners
L.P., a British Virgin Islands limited partnership (“Pandora”), Whitebox Hedged High Yield Partners
L.P., a British Virgin Islands limited partnership (“WHHY”), Whitebox Convertible Arbitrage
Partners L.P., a British Virgin Islands limited partnership (“WCAP”), Whitebox Intermarket Partners
L.P., a British Virgin Islands limited partnership (“WIP”), Xxxx X. Xxxxxx (“Xxxxxx”), and Xxxx X.
Xxxxxx (“Xxxxxx”), each residents of the State of Minnesota, and Synapse Capital, LLC, a
California limited liability company, as agent (“Synapse”). Pandora, WHHY, WCAP, WIP are
collectively referred to herein as “Whitebox.” Whitebox, Kohler and Xxxxxx are individually
referred to herein as an “Investor” and together as the “Investors.”
RECITALS
A. The Company and Investors 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”).
B. 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”).
C. The Company and Whitebox entered into a second Purchase Agreement dated March 24, 2005 (the
“Second Purchase Agreement”), pursuant to which Whitebox additional convertible promissory notes
(each, a “March 2005 Note” and together, the “March 2005 Notes”) and an additional warrants 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”).
D. The Company and the Investors entered into an Amended Registration Rights Agreement dated
March 24, 2005 (the “March 2005 Registration Rights Agreement”).
E. The Company and Whitebox entered into a third Purchase Agreement dated as of September 7,
2005 (the “Third Purchase Agreement”), pursuant to which Whitebox is purchasing additional
convertible promissory notes (each, a “September 2005 Note” and together, the “September 2005
Notes”) and additional warrants to purchase the Company’s Common Stock (each, a “September 2005
Warrant” and together, the “September 2005 Warrants”) in consideration of a collective $7,000,000
new loan (the “August 2005 Loan”)
F. 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").
G. The Company and Investors entered into a Second Amended Registration Rights Agreement dated
September 7, 2005 (the “September 2005 Registration Rights Agreement”).
H. The Company and Whitebox entered into a Fourth Purchase Agreement dated as of August 25,
2006 (the “Fourth Purchase Agreement") pursuant to which Whitebox purchased an aggregate
62,180,556 shares of the Company’s Common Stock and warrants to purchase shares of the Company’s
Common Stock for an aggregate consideration of $4,974,444.44 (the “August Warrants”).
I. The Company and Investors entered into a Third Amended Registration Rights Agreement dated
August 25, 2006 (the “August 2006 Registration Rights Agreement”).
I. The Company and Whitebox entered into a Fifth Purchase Agreement dated as of December 13,
2006 (the “Fifth Purchase Agreement") pursuant to which Whitebox purchased secured convertible
promissory notes in consideration of a collective loan of $3,000,000 (collectively, the “New
Loan”).
J. The Company and Investors entered into a Fourth Amended Registration Rights Agreement dated
December 13, 2006 (the “December 2006 Registration Rights Agreement”) which superseded and replaced
the August 2006 Registration Rights Agreement..
K. On the date hereof Sutura and Synapse have entered into a Settlement Agreement of even date
herewith with certain other parties signatory thereto pursuant to which Sutura has issued to
Synapse (as agent for certain other parties to the Settlement Agreement) a convertible promissory
note (the “Synapse Note”) in the principal amount of $400,000.
L. The Company, the Investors and Synapse desire to enter this Agreement relating to the
registration rights to be granted to the Investors and Synapse and desire that this Agreement
supersede and replace the December 2006 Registration Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and covenants
contained in this Agreement, 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
DEFINITIONS
As used in this Agreement, the following terms shall have the following respective meanings:
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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, $0.001 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 Synapse 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, the September 2005 Warrants and the
August Warrants or hereafter acquired by the Investor; (ii) all shares of Common Stock issued or
issuable upon conversion of or payment on the Original Notes, the March 2005 Notes, the September
2005 Notes and the notes issued or issuable as part of the New Loan or hereafter acquired by the
Investor; (iii) any and all shares of Common Stock issued pursuant to the Fourth Purchase Agreement
or hereafter acquired by Investor; (iv) all shares of Common Stock issued or issuable upon
conversion of or payment on the Synapse Note and (v) any 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), (ii), (iii) and (iv) 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 and 4 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.
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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.
COMPANY REGISTRATION
COMPANY REGISTRATION
2.1 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 (including
under Articles 3 and 4 hereof), 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).
2.2 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 2.1(a). In such event, 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. 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 2, 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
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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 2 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 2 prior to the effectiveness of such registration, whether or not a Holder has
elected to include Registrable Securities in such 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.
REQUIRED REGISTRATION
REQUIRED REGISTRATION
3.1 Request for Registration.
(a) If the Company shall receive at any time after the earlier of (i) January 1, 2007 or (ii)
six (6) months after the effective date of the first registration statement for a public offering
of the Company’s securities (other than a registration statement relating to the sale of securities
to employees of the Company pursuant to a stock option plan, stock purchase plan or other similar
plan or a SEC Rule 145 transaction), a written request from Investors which/who are also Holders
of ten percent (10%) or more of the Registrable Securities then outstanding (the “Initiating
Investors”) that the Company file a registration statement under the Act, then the Company shall:
(i) within twenty (20) days of the receipt thereof, give written notice of such request
to all Investors; and
(ii) use its best efforts to effect as soon as practicable, and in any event within one
hundred fifty (150) days of the receipt of such request, the registration under the Act of
all Registrable Securities which the Investors request to be
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registered, subject to the limitations of Sections 3.1(b) and (c), as specified by the
Holders in a written request received by the Company within twenty (20) days after receipt
of the Company’s notice required pursuant to clause (i) above.
(b) Notwithstanding the foregoing, if the Company shall furnish to Investors requesting a
registration statement pursuant to this Section 3.1, a certificate signed by the Chief Executive
Officer or President of the Company stating that, in the good faith judgment of the Company’s Board
of Directors (the “Board”), it would be seriously detrimental to the Company and its stockholders
for such registration statement to be filed and it is therefore essential to defer the filing of
such registration statement, the Company shall have the right to defer taking action with respect
to such filing for a period of not more than 90 days after receipt of the request of the Initiating
Investors; provided, however, that the Company may not utilize this right more than once in any
twelve-month period.
(c) Notwithstanding anything else set forth in this Section 3.1, the Company shall not be
obligated to effect, or to take any action to effect, any registration pursuant to this Section
3.1:
(i) After the Company has effected two registrations pursuant to this Section 3.1 and
such registrations have been declared or ordered effective;
(ii) During the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of filing of, and ending on a date one hundred eighty (180)
days after the effective date of, a registration subject to Section 2.1 hereof; provided
that the Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(iii) within twelve (12) months of the effective date of another registration effected
pursuant to this Section 3.1; or
(d) The Company may include in any registration under this Section 3.1 any other shares of
Common Stock (including, without limitation, issued and outstanding shares of Common Stock as to
which the holders thereof have contracted with the Company for “piggyback” registration rights), so
long as the inclusion in such registration of such shares (i) will not, in the opinion of the
managing underwriter, if such offering is an underwritten offering, of such registration, interfere
with the successful marketing in accordance with the intended method of sale or other disposition
of all the shares of Registrable Securities sought to be registered by the Holder or Holders of
Registrable Securities pursuant to this Section 3.1 and (ii) will not result in the exclusion from
such registration of any Registrable Securities. If it is determined as provided above that there
will be such interference, the other shares of Common Stock sought to be included by the Company or
holders of capital stock which are not Registrable Securities shall be excluded to the extent
deemed appropriate by the managing underwriter of such registration.
3.2 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.
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ARTICLE 4.
REGISTRATION ON FORM S-3
REGISTRATION ON FORM S-3
4.1 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 and 3, the Investors which/who are also
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.
4.2 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 5.
EXPENSES OF REGISTRATION
EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration, qualification or
compliance pursuant to Articles 2, 3 and 4 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 6.
REGISTRATION PROCEDURES
REGISTRATION PROCEDURES
6.1 In the case of each registration effected by the Company pursuant to this Agreementthe
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 5 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 3.1 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;
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(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 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;
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(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 6.1(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 6.1(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
(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.
6.2 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.
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6.3 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 7.
INDEMNIFICATION
INDEMNIFICATION
7.1 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 (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.
7.2 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
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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
limited to an amount equal to the proceeds to such Holder of Registrable Securities sold as
contemplated herein.
7.3 Each party entitled to indemnification under this Section 7 (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.
7.4 If the indemnification provided for in Section 7.1 or 7.2 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 7.1 or 7.2, 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
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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 7.4 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 7.4. 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
7.4 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 7.4. 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 7.4 shall be several in proportion to the
respective amount of Registrable Securities sold by them pursuant to a registration statement.
ARTICLE 8.
RULE 144 REPORTING
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:
8.1 Make and keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act; and
8.2 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 9.
TRANSFER OF REGISTRATION RIGHTS
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.
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ARTICLE 10.
LIMITATIONS ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES
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 11.
MARKET “STAND-OFF” AGREEMENT
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) 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 11 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 11
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 11 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 11 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.
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ARTICLE 12.
MISCELLANEOUS
MISCELLANEOUS
12.1 Governing Law. The internal 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.
12.2 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.
12.3 Entire Agreement. This Agreement constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof.
12.4 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 2 or 4
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.
12.5 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.
00000 Xxx Xxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, President and Chief Executive Officer
Facsimile: (000) 000-0000
00000 Xxx Xxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, President and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx & Associates
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
000 Xxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
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(b) if to the Investors, in care of:
Whitebox Advisors, LLC
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx Xxxx, Chief Financial Officer
Facsimile: (000) 000-0000
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxxx Xxxx, Chief Financial Officer
Facsimile: (000) 000-0000
(c) if to Synapse Secured Party in care of:
Synapse Capital, LLC
00000-X Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
00000-X Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Bainbridge Law Group, P.C.
0 Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
0 Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
and to:
Go Industries, Inc.
0000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: 305.669.8232
0000 XX 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: 305.669.8232
with a copy to:
Torys LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
(d) 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.
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12.6 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.
12.7 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.
12.8 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.
12.8 Synapse as Agent. The Company and the Investors acknowledge that Synapse is executing
this Agreement as agent for certain other parties which and who are parties to a Settlement
Agreement with the Company dated as of an even date herewith. Synapse represents to the Company
and each of the Investors that it has the authority to enter into this Agreement and that the
Company and the Investors may rely on any act of, or notice by, Synapse hereunder as the act and
notice of all parties for which and whom it is acting as agent.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amended Registration Rights
Agreement to be executed and delivered as of the date first written above.
| Company: | ||
| Sutura, Inc. | ||
By |
||
| Xxxxx Xxxxxxx, President and Chief Executive Officer |
||
Investors:
Pandora Select Partners, L.P.,
Whitebox Hedged High Yield Partners, L.P.,
Whitebox Convertible Arbitrage Partners, L.P.,
and Whitebox Intermarket Partners, L.P.
Pandora Select Partners, L.P.,
Whitebox Hedged High Yield Partners, L.P.,
Whitebox Convertible Arbitrage Partners, L.P.,
and Whitebox Intermarket Partners, L.P.
By |
||
Its |
||
| Xxxx X. Xxxxxx | ||
| Xxxx X. Xxxxxx | ||
| Synapse: | ||
| Synapse Capital, LLC, as agent | ||
By |
||
Its |
||
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