Document:

Exhibit 4.10

 

IRREVOCABLE
PROXY

 

WHEREAS,  the
undersigned is executing this Irrevocable Proxy in connection with the private
placement by Hypertension Diagnostics, Inc. (the “Company”) of it securities
pursuant to a Confidential Private Placement Memorandum dated August 4, 2003
(the “Memorandum”).

 

The undersigned hereby irrevocably constitutes and appoints Kenneth W.
Brimmer or Greg H. Guettler, or either of them, with full power of substitution
and revocation, the undersigned’s true and lawful agent, attorney and proxy,
for the undersigned and in the undersigned’s name, place and stead, giving and
granting to each of said attorney all the powers the undersigned would possess
if personally present, to vote all securities of the Company entitling the
holder thereof to vote all voting securities held by the undersigned for: (a)
the approval an amendment to the Company’s Articles of Incorporation to
increase the number of authorized shares of common stock, $.01 par value, to at
least 150,000,000 shares (or such other number as may be sufficient to allow
for the reservation for issuance of all shares of common stock underlying each
outstanding security convertible or exercisable for, or exchangeable into,
common stock) (the “Proposal”); (b) to cause and maintain a board of directors
(the “Board”) composed of seven (7) members; and (c) at the meeting at which
the Proposal is voted upon, approval of the election to the Board of Directors
of the four (4) persons nominated by Mark N. Schwartz and, once elected, the presence
on the Board of Directors of such nominee during such nominee’s respective
initial full term as a director, presented at any and all meetings, regular or
special, of holders of voting securities of Hypertension Diagnostics, Inc., or
any adjournments thereof.

 

Notwithstanding the foregoing, the obligation
of the undersigned to vote the undersigned’s voting securities as aforesaid
shall terminate with respect to any nominee of Mark N. Schwartz, if such
nominee is convicted of any felony, any violation of any federal or state
securities law, engages in intentional or grossly negligent conduct in the
performance of his duties, or breaches his fiduciary duty to the Company as
determined by seventy-five percent (75%) of the Board.

 

By executing
this proxy, the undersigned hereby revoke all proxies heretofore made by the
undersigned.  The undersigned
acknowledge that this proxy is coupled with an interest in the common stock of
Hypertension Diagnostics, Inc. and is irrevocable by the undersigned until the
earlier of: (a) approval of the Proposal; (b) the date of a meeting at which
four (4) persons are nominated by Mark N. Schwartz for election to the Board of
Directors; or (c) termination of the Offering without obtaining the Minimum, as
such terms are defined in, and as described in, the Memorandum.

 

Dated:  August 4, 2003.

 

	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print NameExhibit 4.11

 

 

CONVERSION AND VOTING AGREEMENT

 

 

THIS CONVERSION AND VOTING
AGREEMENT (this “Agreement”), made effective as of the 1st day of August, 2003,
is between Hypertension Diagnostics, Inc., a Minnesota corporation (the
“Company”), and Alpha Capital Aktiengesellschaft, Stonestreet Limited
Partnership and Ellis Enterprises Ltd., being the holders (each a “Holder” and
collectively, the “Holders”) of (i) the Company’s 8% Convertible Notes due
March 27, 2005, (the “Notes”) and (ii) warrants (the “Warrants”) to purchase
shares of the Company’s common stock, $.01 par value per share (the “Common
Stock”) issued on March 27, 2002 in connection with the Company’s sale of the
Notes pursuant to that certain Subscription Agreement dated March 27, 2002
between the Company and the subscribers named therein (including all exhibits,
schedules and ancillary agreements relating thereto, the “Subscription
Agreement”).

 

W I T N E S S E T H

 

WHEREAS, as of the date hereof, the Company
has outstanding $518,023.50 aggregate principal amount and as of July 10, 2003,
$11,956.57 in accrued but unpaid interest on the Notes held by the Holders, and
the Company has issued to the Holders Warrants to purchase 175,000 shares of
Common Stock; and

 

WHEREAS, the Company and the Holders desire
to provide for conversion of the aggregate principal and accrued but unpaid
interest relating to the Notes as of the Closing Date, as defined in Section
3(a), at specified rates under the terms and conditions set forth in this
Agreement, subject to certain restrictions on voting and disposition with
respect to the shares received upon such conversion in full satisfaction of any
and all obligations relating to the Notes, except as otherwise set forth
herein.

 

NOW, THEREFORE, in consideration of the mutual
promises contained herein, and other good and valuable consideration, the
parties hereto agree as follows:

 

1.             Conversion Privilege.

 

a.             Notwithstanding anything in the
Notes or the Subscription Agreement to the contrary, on the Closing Date, each
Holder shall irrevocably convert (the “Conversion”), without delivery of any
notice of or demand for conversion: (a) such portion of the outstanding
principal and accrued but unpaid interest relating to the Notes as set forth on
Exhibit A under the heading the “First Conversion Amount” into shares of
the Company’s Common Stock at a rate of one (1) share of Common Stock for each
$.12 of First Conversion Amount for a total of 1,472,168 shares of Common
Stock, allocated among the Holders as set forth on Exhibit A (the “First
Satisfaction Shares”) and (b) after reducing the Notes by the First Conversion
Amount, such remaining portion of the outstanding principal and accrued but
unpaid interest relating to the Notes as set forth on Exhibit A under
the heading the “Second Conversion Amount” into shares of the Company’s Common
Stock at a rate of one (1) share of Common Stock for each $.20 of Second
Conversion Amount for a total of 1,766,599 shares of Common Stock, allocated
among the Holders as set forth on Exhibit A (the “Second Satisfaction
Shares”).  The First

 

1

 

Conversion Amount and Second Conversion Amount shall be referred to
collectively as the “Conversion Amounts” and the First Satisfaction Shares and
the Second Satisfaction Shares shall be referred to collectively as the
“Satisfaction Shares.”

 

b.             Effect Conversion.  The Holders acknowledge and agree that upon
the Conversion of the Conversion Amounts, the Holders shall have no further
rights with respect to the Conversion Amounts or the portion of the Notes
reduced thereby, other than a right to the Satisfaction Shares and those rights
of Section 4 of the Subscription Agreement, including no right to adjustment in
the rate or time of conversion or securities issuable upon conversion.

 

2.             Restriction
on Transfer of Satisfaction Shares. 
Each Holder hereby agrees that it will not offer, sell, assign, pledge,
hypothecate or otherwise transfer the Satisfaction Shares from the Closing Date
and to the earlier to occur of: (a) one (1) business day following the date the
Company declares a record date for determination of shareholders entitled to
receive notice of, and vote at, a meeting of shareholders with respect to the
Proposal, as defined below; or (b) one hundred twenty (120) calendar days
following the date of the Series A Closing, as defined in Section 3(a).  Each Holder agrees that each certificate
representing the Satisfaction Shares shall be endorsed by the Company with a legend
(in addition to the legend set forth in Section 9) reading as follows:

 

THE SHARES
EVIDENCED HEREBY ARE SUBJECT TO A CONVERSION AND VOTING AGREEMENT BY AND
BETWEEN THE COMPANY AND THE HOLDER HEREOF (A COPY OF WHICH MAY BE OBTAINED FROM
THE COMPANY), AND NO TRANSFER OF THE SHARES EVIDENCED HEREBY SHALL BE EFFECTIVE
EXCEPT IN COMPLIANCE WITH THE TERMS THEREOF.

 

The Company agrees to cause the certificates
representing the Satisfaction Shares to be reissued without the legend set
forth above at such time as the restriction on transfer of this Section 2 shall
lapse.  The Company acknowledges and
agrees that the rights of the Holder described in Section 4 of the Subscription
Agreement shall apply to the Satisfaction Shares with respect to the above
legend.

 

3.             Closing of the Conversion.

 

a.             Closings and Closing Dates.  The closing of the Conversion (the
“Closing”) shall take place at the offices of Lindquist & Vennum,
P.L.L.P., 80 South Eighth Street, Suite 4200, Minneapolis, Minnesota
55402, upon two (2) business days’ notice. 
The Closing shall occur concurrently with the final closing (the “Series
A Closing”) of a private placement of at least one million three hundred
thousand dollars ($1,300,000) of the Company’s Common Stock and the Series A
Convertible Preferred Stock (the “Series A Preferred Stock”) or at such other
place or different time or day as may be mutually acceptable to the Holders,
the purchasers of the Series A Preferred Stock and the Company (the “Closing
Date”).

 

2

 

b.             Closing Procedures.  At the Closing, the Holder shall deliver to
the Company such Holder’s original Notes and an originally executed Proxy and
upon receipt thereof, the Company will deliver to the Holders the Satisfaction
Shares.  The Holder further acknowledges
and agrees that the Holder’s delivery and surrender of the Notes is not
effective until receipt thereof by the Company, properly completed and duly
executed, together with all accompanying evidences of authority and any other
required documents in form satisfactory to the Company.

 

c.             Closing Contingency.  Notwithstanding any provision of this
Agreement to the contrary, no party shall be obligated to proceed with the
Conversion and the Conversion shall be deemed abandoned, if the Series A
Closing does not occur on or prior to August 30, 2003.  In the event of the termination of the
Conversion pursuant to this paragraph, each and every representation, warranty
or agreement made as of the Closing Date shall be deemed not made and shall
have no binding effect on any party. 
The parties hereby agree that the termination of the Conversion pursuant
to this paragraph shall be without liability of any party (or any stockholder,
director, officer, employee, agent, consultant or representative of such party)
to any other party to this Agreement. 
In the event of termination of the Conversion, nothing contained in this
Agreement shall relieve any party from any liability or impair the rights of
any party under the Subscription Agreement, Notes or Warrants.

 

d.             Forbearance Pending Closing.  From and after the date of this Agreement
until the Closing Date, no Holder shall have the right to demand, and each
Holder shall forbear from any demand for: (a) the conversion into Common Stock
of the Company of any principal or interest relating to such Holder’s Note; (b)
the exercise of the Warrant held by such Holder; or (c) payment by the Company
of any principal, interest, penalties, assessments, fees or other amounts
related to the Notes, Warrants or the Subscription Agreement, however described
or denominated.

 

4.             Release as of the Closing Date.  Each Holder acknowledges and agrees that,
upon the Closing: (a) the Company will have no further obligations under the
Notes, including, but not limited to, the obligation to pay any principal,
interest, penalties, assessments, fees or other amounts related to the Notes,
however described or denominated; and (b) except for Warrant Rights, the Holder
releases the Company, its employees, officers and directors of any and all
losses, claims, damages, liabilities, demands, actions and causes of action
that the Holder may have against the Company relating to the Notes, the
Warrants or the Subscription Agreement as of and through the Closing Date.  The term “Warrant Rights” shall mean all
rights of the Holder under the Warrants and, except as otherwise set forth
herein, under the Subscription Agreement as such rights relate to the Warrants,
but shall not include any registration rights made or granted to or for the
benefit of the Holder.

 

5.             Voting
of Common Stock.  Each Holder hereby
covenants and agrees to vote: (a) all of the Satisfaction Shares acquired by it
in favor of, and (b) any and all voting securities held by it as of the record
date with respect to a meeting of the Company’s voting securities relating to
the Proposal, as described below, in favor of the Proposal. The term “Proposal”
shall mean a proposal presented to the holders of the Company’s voting
securities to approve an amendment to the Company’s Articles of Incorporation
to increase the number of shares of common stock,

 

3

 

$.01 par value, authorized (the “Proposal”).  On the Closing Date, each Holder shall deliver to the Company an
original of the Irrevocable Proxy with respect to the Satisfaction Shares
attached hereto as Exhibit B and will grant and deliver to the Company or its
designee, at the expense of the Company, any and all proxies necessary to give
effect to the obligations of the Holder set forth in this Section.  The obligations of this Section shall
terminate upon the earlier to occur of: (a) one (1) business day following the
date the Company declares a record date for determination of shareholders
entitled to receive notice of, and vote at, a meeting of shareholders with
respect to the Proposal, as defined above or (b) one hundred twenty (120)
calendar days following the date of the Series A Closing.

 

6.             Representations
and Warranties of the Holder.  In
consideration of the Company’s obligations in the Conversion, each Holder, for
itself, hereby represents and warrants, as of the date hereof and through the
Closing Date, to the Company as follows:

 

a.             Information About the Notes.  Such Holder is the registered holder of the
Notes tendered for conversion, and the information described on Exhibit A
hereto is true, accurate and complete. 
The Notes described on Exhibit A hereto constitute all of the
Notes held by such Holder.  Such Holder
has good and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances and adverse claims.  Such Holder will, upon request, execute and
deliver any additional documents reasonably requested by the Company as
necessary or desirable to complete and give effect to the transactions
contemplated hereby.

 

b.             Organization, Standing, etc.  Such Holder is an entity duly organized,
validly existing and in good standing under the laws of its place of
organization.  Such Holder has the
requisite corporate power and authority to tender and convert the Notes and to
otherwise perform its obligations under this Agreement.

 

c.             Corporate Acts and Proceedings.  This Agreement has been duly authorized by
all necessary corporate action on behalf of such Holder, and has been duly
executed and delivered by authorized officers of such Holder.  Each Holder is authorized to consummate the
Conversion and accept in satisfaction of the Notes, the Satisfaction
Shares.  This Agreement is a valid and
binding obligation of such Holder, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors’ rights generally, and except for judicial limitations on the
enforcement of the remedy of specific enforcement and other equitable remedies.

 

d.             Information about Holders;
Accredited Investor. Such Holder is an “accredited investor”, as such term
is defined in Regulation D of the Act, is experienced in investments and
business matters, has made investments of a speculative nature and has
purchased securities of United States publicly-owned companies in private
placements in the past and, with its representatives, has such knowledge and
experience in financial, tax and other business matters as to enable such Holder
to utilize the information about the Company made available by the Company or
by the U.S. Securities and Exchange Commission (the “Commission”) EDGAR system
to evaluate the merits and risks of and to make an informed investment decision
with respect to the Conversion.

 

4

 

e.             Information About Satisfaction
Shares; No Market; Restrictions on Transfer.   Such Holder acknowledges and agrees that: (i) there are
substantial restrictions on the transfer of the Satisfaction Shares; (ii) the
Company’s Common Stock is traded on the OTC Bulletin Board and subject to rules
under the Securities Exchange Act of 1934 relating to “penny stocks”; and (iii)
accordingly, for the above and other reasons, such Holder may not be able to
liquidate an investment in the Satisfaction Shares, and may be required to bear
the economic risk of such Holder’s investment in the Satisfaction Shares for an
indefinite period.  Such Holder
acknowledges and agrees that the Satisfaction Shares have not been registered
for sale under the Act or applicable state securities laws (the “State Laws”),
and may be sold only pursuant to registration under the Act and State Laws, or
pursuant to an opinion of counsel acceptable to the Company that such registration
is not required.  Such Holder
acknowledges and agrees that the Company is not required to register the
Satisfaction Shares or to make any exemption from registration available other
than an exemption under Rule 144. Such Holder acknowledges that the
Satisfaction Shares are being issued pursuant to exemptions from such laws and
that the Company’s reliance upon such exemptions is predicated in part on such
Holder’s representations to the Company as contained herein.

 

Such Holder understands such Holder may not
sell any of the Satisfaction Shares pursuant to Rule l44 prior to the
expiration of a one-year period after such Holder has acquired such securities
which the Company acknowledges began on March 27, 2002 with the Acquisition of
the Notes by virtue of the provisions of Rule 144(d)(3)(ii).  Such Holder understands that any sales of
the Satisfaction Shares pursuant to Rule l44 can be made only in full
compliance with the provisions of Rule l44.

 

f.              High Degree of Risk.  Such Holder realizes that an investment in
shares of the Satisfaction Shares is highly speculative, illiquid and involves
a high degree of risk, including the risks of receiving no return on the
investment and of losing such Holder’s entire investment in the Company.  Such Holder has evaluated all of the risks
of an investment in shares of the Satisfaction Shares.  Such Holder is able to bear the economic
risk of an investment in shares of the Satisfaction Shares, including the total
loss of such investment.

 

g.             Suitability.  Such Holder believes that the investment in
shares of the Satisfaction Shares is suitable for the undersigned based upon
such Holder’s investment objectives and financial needs, and such Holder has
adequate means for providing for its current financial needs and personal
contingencies and has no need for liquidity of investment with respect to the
Satisfaction Shares.  Such Holder has
obtained, to the extent such Holder deems necessary, its own professional
advice with respect to the risks inherent in the investment in the Satisfaction
Shares, and the suitability of the investment in the Satisfaction Shares in
light of such Holder’s financial condition and investment needs.

 

h.             Investment Intent.  Such Holder represents and warrants that the
Satisfaction Shares are being purchased for such Holder’s own account and for
such Holder’s investment and without the present intention of reselling or
redistributing the same, that such Holder has made no agreement with others
regarding the Satisfaction Shares and that such Holder’s financial condition is
such that it is not likely that it will be necessary to dispose of any

 

5

 

of the Satisfaction Shares in the foreseeable future.  Such Holder is aware that, in the view of
the Commission, an acquisition of the Satisfaction Shares with an intent to
resell by reason of any foreseeable specific contingency or anticipated change
in market values, or any change in the condition of the Company, or in
connection with a contemplated liquidation or settlement of any loan obtained
for the acquisition of the Satisfaction Shares and for which the Satisfaction
Shares were pledged as security, would represent an intent inconsistent with
the representations set forth above.

 

i.              Information About the Company.  Such Holder has had access to publicly
available financial and other information on the business of the Company.  No material non-public information has been
made available to Holder in connection with this Agreement.  Such Holder has had an opportunity to ask
questions of, and receive answers from, the Company concerning the business,
management and financial affairs of the Company and the terms and conditions of
the Conversion and the Satisfaction Shares. 
Such Holder has had an opportunity to obtain, and has received, any and
all additional information deemed necessary by such Holder to verify such
information in order to form a decision concerning whether or not to consummate
the Conversion.

 

j.              Tax Liability.  Such Holder has reviewed with such Holder’s
own tax advisors the federal, state, local and foreign tax consequences of the
Conversion and the transactions contemplated by this Agreement, and has and
will rely solely on such advisors and not on any statements or representations
of the Company or any of its agents. 
Such Holder understands that such Holder (and not the Company) shall be
responsible for such Holder’s own tax liability that may arise as a result of
the Conversion and the transactions contemplated by this Agreement.

 

7.             Representations
of the Company.  In consideration of
the Holders’ obligations in the Conversion, the Company hereby represents and
warrants as of the date hereof and through the Closing Date to each of the
Holders as follows:

 

a.             Organization, Standing, etc.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota,
and has the requisite corporate power and authority to own its properties and
to carry on its business in all material respects as it is now being
conducted.  The Company has the
requisite corporate power and authority to perform the Conversion, to issue the
Satisfaction Shares and to otherwise perform its obligations under this
Agreement.

 

b.             Corporate Acts and Proceedings.  This Agreement has been duly authorized by
all necessary corporate action on behalf of the Company, and has been duly
executed and delivered by authorized officers of the Company. This Agreement is
a valid and binding obligation of the Company, enforceable in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally, and except for judicial limitations
on the enforcement of the remedy of specific enforcement and other equitable
remedies.

 

6

 

c.             Issuance of Satisfaction Shares.  All corporate action necessary to the
authorization, issuance and delivery of the Satisfaction Shares has been taken
on the part of the Company, or will be taken by the Company on or prior to the
issuance of the Satisfaction Shares. 
Upon issuance in accordance with the terms of this Agreement, the Satisfaction
Shares will be validly issued, fully paid and non-assessable, and free from all
taxes, liens, claims and encumbrances with respect to the issue thereof, except
as specifically set forth in Sections 2 and 5 of this Agreement.

 

d.             No Conflicts; Governmental
Consents.  The execution, delivery
and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby will not: (i) conflict with or
result in a violation of any provision of the Articles of Incorporation or
By-laws of the Company; (ii) violate or conflict with, or result in a breach of
any provision of, or constitute a default (or an event which with notice or
lapse of time or both could become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement or instrument to which the Company is a party; (iii) result in a
material violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to the
Company.  Except for defaults under the
Notes, the Company is not in default (and no event has occurred which with
notice or lapse of time or both could put the Company in default) under, and
the Company has not taken any action or failed to take any action that would
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company is
a party or by which any property or assets of the Company is bound or affected.  Except as required under the Act and any
applicable state securities laws, the Company is not required to obtain any
consent, approval, qualification, authorization or order of, or make any filing
or registration with, any court, governmental agency or any third party in
order for it to execute, deliver or perform any of its obligations under this
Agreement, or to issue the Satisfaction Shares in accordance with the terms of
this Agreement.

 

8.             Restrictive
Legend.  The Holder agrees that the
Company shall place a restrictive legend on the Satisfaction Shares containing
substantially the following language:

 

The securities
represented by this certificate have not been registered under the Securities
Act of 1933, as amended (the “Act”), and have not been registered under any
state securities laws.  These securities
may not be sold, offered for sale or transferred without first obtaining (i) an
opinion of counsel reasonably satisfactory to the Company that such sale or
transfer lawfully is exempt from registration under the Act and under the
applicable state securities laws or (ii) such registration.

 

The Company acknowledges and agrees that the
rights of the Holder described in Section 4 of the Subscription Agreement shall
apply to the Satisfaction Shares with respect to the above legend.

 

7

 

9.             Miscellaneous.

 

a.             Fees of Counsel.  Concurrently with the execution of this
Agreement, the Company shall pay for counsel to the Holders its fees of $5,000
for services rendered to the Holders in connection with this Agreement.

 

b.             Survival of Representations and
Warranties; Indemnification.  Each
Holder and the Company agree that the agreements, representations and
warranties contained in this Agreement shall survive and remain in full force
and effect after the execution hereof and after the Conversion.  Each Holder further agrees to indemnify and
hold harmless the Company and each current and future officer, director,
employee, agent and shareholder of the Company from and against any and all
loss, damage or liability due to, or arising out of a breach of any agreement,
representation or warranty of such Holder contained herein.  The Company further agrees to indemnify and
hold harmless each Holder and each respective current and future officer,
director, employee, agent and shareholder of such Holder from and against any
and all loss, damage or liability due to, or arising out of, a breach of any
agreement, representation or warranty of the Company contained herein.

 

c.             No Assignment; Binding Effect.  Neither this Agreement, nor any interest
herein, shall be assignable by the Holders without prior written consent of the
Company.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and assigns.

 

d.             Entire Agreement.  This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement of the parties relative to
the subject matter hereof and supersedes any and all other agreements and understandings,
whether written or oral, relative to the matters discussed herein.

 

e.             Governing Law.  This Agreement shall be governed by the
internal laws of the State of New York without giving application to the choice
of law provisions of that jurisdiction. 
Any action brought by any party against the other concerning this
Agreement shall be brought only in the state courts of New York or in the
federal courts located in the state of New York.  Each of the Company and the Holders hereby waives, and agrees not
to assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. 
Nothing in this paragraph shall affect or limit any right to serve
process in any other manner permitted by law.

 

f.              Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of: (i) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
4:30 p.m. (Central Time) on a Business Day; (ii) the Business Day after the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in Exhibit A later than
4:30 p.m. (Central Time) on any date and earlier than 11:59 p.m.

 

8

 

(Central Time) on such date or if such notice or transmission is
delivered via facsimile on a day that is not a Business Day; (iii) the Business
Day following the date of mailing, if sent by nationally recognized overnight
courier service; or (iv) upon actual receipt by the party to whom such notice
is required to be given.

 

	
  If to the
  Company:

  	
  Hypertension
  Diagnostics, Inc.

  
	
   

  	
  2915 Waters
  Road, Suite 108

  
	
   

  	
  Eagan, MN
  55121-1562

  
	
   

  	
  Attn:

  	
  President

  
	
   

  	
  Fax:

  	
  (651)
  687-0485

  
	
   

  	
   

  
	
  With copies
  to:

  	
  Lindquist
  & Vennum P.L.L.P.

  
	
   

  	
  4200 IDS
  Center

  
	
   

  	
  80 South
  Eighth Street

  
	
   

  	
  Minneapolis,
  MN 55402

  
	
   

  	
  Attn:

  	
  Girard P.
  Miller

  
	
   

  	
  Fax:

  	
  (612)
  371-3207

  
	
   

  	
   

  
	
  If to the
  Holders:

  	
  To the
  address of set forth on Exhibit A

  with respect to each.

  
	
   

  	
   

  
	
  With copies
  to:

  	
  Grushko and
  Mittman, P.C.

  
	
   

  	
  551 Fifth
  Avenue, Suite 1601

  
	
   

  	
  New York, NY
  10176

  
	
   

  	
  Attn:

  	
  Barbara
  Mittman

  
	
   

  	
  Fax:

  	
  (212)
  697-3575

  

 

“Business Day” means a day other than a
Saturday, Sunday or day on which banking institutions in New York are
authorized or required to remain closed.

 

g.             Counterparts.  This Agreement may be executed concurrently
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.  In the event that any signature is delivered
by facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature page were an original thereof.

 

[signatures next page]

 

9

 

IN WITNESS WHEREOF, the parties hereto have
entered into this CONVERSION AND VOTING AGREEMENT as of the date first above
written.

 

	
   

  	
  The Holders:

  
	
   

  	
   

  
	
   

  	
  ALPHA
  CAPITAL AKTIENGESELLSCHAFT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STONESTREET
  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ELLIS
  ENTERPRISES LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  The Company:

  
	
   

  	
   

  
	
   

  	
  HYPERTENSION
  DIAGNOSTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Greg H.
  Guettler

  
	
   

  	
  Its:

  	
  President

  
						

 

10

 

EXHIBIT A

 

INFORMATION REGARDING HOLDERS AND CONVERSION

 

	
  Description of 8% Convertible Notes and the Holders

  	
   

  	
  First

  Conversion

  Amount

  	
   

  	
  First

  Satisfaction Shares

  	
   

  	
  Second

  Conversion

  Amount

  	
   

  	
  Second

  Satisfaction

  Shares

  	
   

  
	
  Names and Address

  of Registered Holder

  	
   

  	
  Original
  Principal

  Amount

  
	
  Alpha Capital
  Aktiengesellschaft

  Pradafant 7

  9490 Furstentums

  Vaduz, Lichtenstein

  Fax: 011-42-32323196

  	
   

  	
  $

  	
  700,000

  	
   

  	
  $

  	
  105,620.82

  	
   

  	
  880,174

  	
   

  	
  $

  	
  211,241.65

  	
   

  	
  1,056,208

  	
   

  
	
  Stonestreet Limited
  Partnership

  320 Bay Street, Suite 1300

  Toronto, ON M5H 4A6, Canada

  Fax:  416-956-8989

  	
   

  	
  $

  	
  550,000

  	
   

  	
  $

  	
  57,683.23

  	
   

  	
  480,694

  	
   

  	
  $

  	
  115,366.48

  	
   

  	
  576,832

  	
   

  
	
  Ellis Enterprises Ltd.

  42A Waterloo Road

  London, England NW2 7UF

  Fax:  011-441-014809004

  	
   

  	
  $

  	
  150,000

  	
   

  	
  $

  	
  13,355.96

  	
   

  	
  111,300

  	
   

  	
  $

  	
  26,711.93

  	
   

  	
  133,559

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  1,400,000

  	
   

  	
  $

  	
  176,660.01

  	
   

  	
  1,472,168

  	
   

  	
  $

  	
  353,320.06

  	
   

  	
  1,766,599

  	
   

  

 

11

 

EXHIBIT B

 

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