Exhibit 10.5

 

BRIDGE NOTE CONVERSION AGREEMENT

 

This BRIDGE NOTE CONVERSION AGREEMENT (this “Bridge Note Conversion Agreement”),
by and between OnPoint Medical Diagnostics, Inc., a Minnesota corporation (the
“Company”), Vertical Health Solutions, Inc., a publicly traded Florida
corporation (“VHS”) and each of the holders of the promissory notes listed on
the signature page hereto (the “Holders”, together with the Company and VHS, the
“Parties”).

 

WHEREAS, the Holders own certain promissory notes (the “Notes”) issued by the
Company, which are convertible into shares of the Company’s common stock, par
value $0.01 per share (the “OnPoint Common Stock”), as set forth on Schedule A
hereto;

 

WHEREAS, the Company has entered into that certain agreement and plan of merger,
dated as of February 1, 2011 (the “Merger Agreement”), whereby a wholly-owned
subsidiary of VHS, will be merger with and into the Company (the “Merger”);

 

WHEREAS, the Merger occurred on April 15, 2011;

 

WHEREAS, the Company desires to extinguish the Notes and would like to offer the
Holders registration rights if such Holders agree to convert their Notes into
shares of common stock, par value $0.001 per share, of VHS (the “VHS Common
Stock”) at a fixed conversion price of $0.65 per share; and

 

WHEREAS, to induce the conversion by the Holders of the Notes, the Company and
the Holders now desire to amend the Notes to permit conversion into shares of
VHS Common Stock and provide registration rights to such Holders, and in
consideration therefor, the Holders have agreed to convert all of the Notes held
by the Holders.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.             Definitions.  For purposes of this Bridge Note Conversion
Agreement, the “Effective Date” shall mean the date on which the Company and VHS
acknowledge and accept this Bridge Note Conversion Agreement as set forth on the
signature page hereto.

 

2.             Note Amendment.  Effective upon the Effective Date and
immediately prior to the conversion of the Notes contemplated hereby,
Section 1.04 of each Note is hereby amended and restated to read as follows:

 

“Section 1.04.  Conversion to Common Stock. The Holder shall have the option to
convert all or a portion of the principal and accrued interest under this Note
into shares of common stock, par value $0.001 per share, of Vertical Health
Solutions, Inc. (the “Common Stock”) at any time prior to payment, at a
conversion price of $0.65 per share (the “Conversion Price”).  The Company shall
not issue fractional shares upon a conversion.  If the application of the
Conversion Price shall contemplate issuance of less than a half share, such
fractional share shall not be issued and no payment shall be made to the
converting Holder and should such application result in the issuance of a half
or greater fractional share, such fractional share shall be rounded up to the
next full share.”

 

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3.             Conversion of Notes.  On the Effective Date and immediately
following the amendment to the Notes, each Holder hereby converts the
outstanding principal amount and any accrued and unpaid interest of the related
Notes into VHS Common Stock pursuant to this Section 3.  Thereafter, such Holder
shall not have any further rights, obligations, interests, benefits or claims
under such Notes.

 

4.             Registration Rights.  If this Bridge Note Conversion Agreement is
accepted, such Holder will be a beneficiary of the Registration Rights
Agreement, the form of which is attached hereto as Exhibit A.  Accordingly,
pursuant to the terms and conditions of this Bridge Note Conversion Agreement,
it is hereby agreed that the execution by such Holder of this Bridge Note
Conversion Agreement, in the place set forth herein, shall constitute agreement
to be bound by the terms and conditions of the Registration Rights Agreement,
with the same effect as if each of such separate, but related agreement, were
separately signed.

 

5.             This Bridge Note Conversion Agreement shall be deemed to be made
under and shall be construed in accordance with the laws of the State of
Minnesota without giving effect to the principals of conflict of laws thereof
and shall be binding upon the Holders, the Holders’ heirs, estate, legal
representatives, successors and assigns and shall inure to the benefit of the
Company, its successors and assigns.

 

6.             This Bridge Note Conversion Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same instrument, and may be
executed by facsimile signatures.

 

* * * * * * *

 

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IN WITNESS WHEREOF, this Bridge Note Conversion Agreement has been duly executed
by the parties hereto.

 

 

 

 

HOLDER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

 

 

 

 

AGREED AND ACCEPTED AS OF THIS          DAY

 

 

OF                                 , 2011:

 

 

 

 

 

ONPOINT MEDICAL DIAGNOSTICS, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name: William Cavanaugh

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

 

VERTICAL HEALTH SOLUTIONS, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name: William Cavanaugh

 

 

 

Title: Chief Executive Officer

 

 

 

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SCHEDULE A

 

SCHEDULE OF BRIDGE FINANCING NOTES

 

Holder:

 

Aggregate Principal Amount of Notes:

 

Christian & Elga Lohler

 

$

25,000

 

RBC Capital Markets Corp; FBO Natalie Roberts IRA

 

$

15,000

 

Jenkins Living Trust (Scott or Barbara Jenkins)

 

$

20,000

 

Sasha C. Gentling

 

$

50,000

 

Frederick Richter

 

$

5,000

 

Daryl Skiba

 

$

20,000

 

Bruce E. Foreman

 

$

5,000

 

Marie Elizabeth Briden

 

$

150,000

 

Patricia A. Abbott

 

$

35,000

 

Radine Sally Oxley 1985 Family Trust

 

$

15,000

 

Richard L Lindstrom

 

$

200,000

 

RBC Capital Markets; FBO Gregory Rueter IRA

 

$

25,000

 

David P. Drummer

 

$

30,000

 

Bradford C Richter

 

$

15,000

 

RBC Capital Markets; FBO Mark Finley Wildgen SEP IRA

 

$

42,500

 

Husein Y. Sarameh

 

$

25,000

 

Mark Heuer

 

$

15,000

 

Dennis J. Holland

 

$

20,000

 

Morris W. Steller

 

$

25,000

 

Paul W. Schultz

 

$

25,000

 

Ronald Runck

 

$

15,000

 

RBC Capital Markets Corp; FBO Dana Anderson IRA

 

$

15,000

 

Dennis & Roberta DeVetter

 

$

30,000

 

Katherine P. White

 

$

20,000

 

William R., Jr. Priedeman

 

$

15,000

 

Charles Christopher Bercaw

 

$

15,000

 

Robert K. McKelvey

 

$

15,000

 

Dean P. Jacklitch

 

$

20,000

 

Jeffrey M. Williams

 

$

20,000

 

Craig S Stevenson

 

$

70,000

 

David L. Hintermeister

 

$

20,000

 

TOTAL:

 

$

1,017,500

 

 

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EXHIBIT A

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

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