Document:

Exchange Agreement with Vision Capital Advantage Fund, L.P.

 Exhibit 10.7 
 NOVARAY MEDICAL, INC. 
 EXCHANGE AGREEMENT

 This Exchange Agreement (the “Agreement”) is entered into as of March 11, 2010 by and
between NovaRay Medical, Inc., a Delaware corporation (the “Company”), and VISION CAPITAL ADVANTAGE FUND, L.P.. (the “Series B Preferred Stockholder”). 
 R E C I T A L S 
 A. The Company, through its Board of Directors, has decided to authorize and issue a new series of stock to be designated Series B-1 Preferred Stock of the Company (“Series B-1 Preferred Stock”). 
 B. The Company, through its Board of Directors, has decided to offer the Series B Preferred Stockholder the right to exchange each whole
share of Series B Preferred Stock of the Company (“Series B Preferred Stock”) for one (1) whole share of Series B-1 Preferred Stock. 
 C. The rights of the Series B-1 Preferred Stock shall be as set forth in the Certificate of Designation of the Relative Rights and Preferences of the Series B-1 Convertible Preferred Stock of the Company.

 NOW THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the parties agree as follows:

 A G R E E M E N T 
 1. Exchange of Series B Preferred Stock for Series B-1 Preferred Stock. Upon the terms and subject to the conditions hereof, the Series B Preferred Stockholder and the Company hereby exchange each
share of Series B Preferred Stock held by such Series B Preferred Stockholder for one (1) share of Series B-1 Preferred Stock. No fractional shares of Series B-1 Preferred Stock shall be issued. To the extent the Series B Preferred Stockholder
has any rights under the Series B Convertible Participating Preferred Stock and Warrant Purchase Agreement dated as of October 27, 2009 with respect to the Series B Preferred Stock, such rights shall hereafter apply mutatis mutandis
with respect to the Series B-1 Preferred Stock. 
 2. Representations and Warranties of the Company. The Company
represents and warrants to the Series B Preferred Stockholder that (a) the shares of Series B-1 Preferred Stock have been duly authorized and validly issued and are fully paid and non-assessable, and (b) this Agreement has been duly
authorized, executed and delivered by the Company, and this Agreement constitutes the valid and legally binding obligation of the Company. 
 3. Investment Representations. 
 3.1 This Agreement is made in reliance upon
the Series B Preferred Stockholder’s representation to the Company, which by acceptance hereof the Series B Preferred

 
Stockholder hereby confirms, that the shares of Series B-1 Preferred Stock to be received by the Series B Preferred Stockholder will be acquired for investment for the own account of the Series B
Preferred Stockholder, not as a nominee or agent, and not with a view to the sale or distribution of any part thereof, and that the Series B Preferred Stockholder has no present intention of selling, granting participation in, or otherwise
distributing the same, but subject nevertheless to any requirement of law that the disposition of the property of the Series B Preferred Stockholder shall at all times be within the control of the Series B Preferred Stockholder. 
 3.2 The Series B Preferred Stockholder understands that the Series B-1 Preferred Stock is not registered under the Securities Act of 1933,
as amended (the “1933 Act”), on the basis that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from registration under the 1933 Act pursuant to Section 4(2) and 3(a)(9) thereof, and
that the Company’s reliance on such exemption is predicated on the Series B Preferred Stockholder’s representations set forth herein. The Series B Preferred Stockholder realizes that the basis for the exemption may not be present if,
notwithstanding such representations, the Series B Preferred Stockholder has in mind merely acquiring shares of the Series B-1 Preferred Stock for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not
rise. The Series B Preferred Stockholder does not have any such intention. 
 3.3 The Series B Preferred Stockholder understands
that the Series B-1 Preferred Stock may not be sold, transferred, or otherwise disposed of without registration under the 1933 Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Series B-1
Preferred Stock or an available exemption from registration under the 1933 Act, the Series B-1 Preferred Stock must be held indefinitely. In particular, the Series B Preferred Stockholder is aware that the Stock may not be sold pursuant to
Rule 144 (“Rule 144”) or Rule 701 (collectively, the “Rules”) promulgated under the 1933 Act unless all of the conditions of the applicable Rules are met. Among the conditions for use of Rule 144 is
the availability of current information to the public about the Company. The Series B Preferred Stockholder represents that, in the absence of an effective registration statement covering the Series B-1 Preferred Stock, the Series B Preferred
Stockholder will sell, transfer, or otherwise dispose of the Series B-1 Preferred Stock only in a manner consistent with the representations set forth herein and then only in accordance with the provisions of Section 3.4. 
 3.4 The Series B Preferred Stockholder agrees that in no event will the Series B Preferred Stockholder make a transfer or disposition of any
of the Series B-1 Preferred Stock (other than pursuant to an effective registration statement under the 1933 Act), unless and until (i) the Series B Preferred Stockholder shall have notified the Company of the proposed disposition and shall
have furnished the Company with a statement of the circumstances surrounding the disposition, and (ii) if requested by the Company, at the expense of the Series B Preferred Stockholder or transferee, the Series B Preferred Stockholder shall
have furnished to the Company either (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such transfer may be made without registration under the 1933 Act or (B) a “no action” letter from the
Securities and Exchange Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Securities and Exchange Commission that action be taken with respect thereto. The
Company will not require such a legal opinion or “no action” letter in any transaction in compliance with Rule 144. 
  

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 3.5 The Series B Preferred Stockholder either (A) is an “accredited investor”
within the meaning of Securities and Exchange Commission (“SEC”) Rule 501 of Regulation D, as presently in effect, or (B) (i) certifies that such Series B Preferred Stockholder is not a “U.S. person”
within the meaning of SEC Rule 902 of Regulation S, as presently in effect, and that such Series B Preferred Stockholder is not acquiring the Series B-1 Preferred Stock for the account or benefit of any such U.S. person, (ii) agrees to resell
the Series B-1 Preferred Stock only in accordance with the provisions of such Regulation S, pursuant to registration under the 1933 Act, or pursuant to an available exemption from registration and agrees not to engage in hedging transactions with
regard to the Series B-1 Preferred Stock unless in compliance with the 1933 Act, (iii) agrees that any certificates for any securities issued to such Series B Preferred Stockholder shall contain a legend to the effect that transfer is
prohibited except in accordance with the provisions of such Regulation S, pursuant to registration under the 1933 Act or pursuant to an available exemption from registration and that hedging transactions involving such Series B-1 Preferred Stock may
not be conducted unless in compliance with the 1933 Act, (iv) agrees that the Company is hereby required to refuse to register any transfer of any securities issued to such Series B Preferred Stockholder not made in accordance with the
provisions of such Regulation S, pursuant to registration under the 1933 Act, or pursuant to an available exemption from registration. 
 4. Miscellaneous 
 4.1 Counterparts Signature; Facsimile Delivery. This Agreement may be executed in any
number of counterparts and delivered by facsimile, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
 4.2 Additional Documents. Each party hereto agrees to execute any and all further documents and writings and to perform such other actions which may be or become necessary or expedient to
effectuate and carry out this Agreement. 
 4.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be drafted. 
 4.4 Severability. In case
any provision in this Agreement shall be held invalid, illegal or unenforceable, in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and the remaining provisions shall not in any way
be affected or impaired thereby. 
 4.5 Notice. Any notice required to be given under the terms of this Agreement shall
be addressed to the Company in care of its Secretary at the office of the Company at 39655 Eureka Drive, Newark, California 94560, and any notice to be given to the Series B Preferred Stockholder shall be addressed to the Series B Preferred
Stockholder at the address given by Series B Preferred Stockholder beneath the signature to this Agreement, or such other address as either party to this Agreement may hereafter designate in writing to the other. Any such notice shall be deemed to
have been duly given when enclosed in a properly sealed

  

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envelope or wrapper addressed as aforesaid, registered or certified and deposited (postage or registration or certification fee prepaid) in a post office or branch post office regularly
maintained by the United States. 
 4.6 Successors. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company. Where the context permits, “Series B Preferred Stockholder” as used in this Agreement shall include Series B Preferred Stockholder’s executor, administrator or other legal
representative or the person or persons to whom Series B Preferred Stockholder’s rights pass by will or the applicable laws of descent and distribution. 
 4.7 California Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT. 
 [Remainder of Page Intentionally Left Blank] 
  

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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date
first above written. 
  

			
	 NOVARAY MEDICAL, INC.
 a Delaware corporation

		
	By:	 	 /s/ Marc C. Whyte

	Title:	 	 Chief Executive Officer

  

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date
first above written. 
 SERIES B PREFERRED STOCKHOLDER: 
  

			
	VISION CAPITAL ADVANTAGE FUND, L.P.
		
	By:	 	 /s/ Adam Benowitz

	Title:	 	 Portfolio Manager

		
	Address:Amendment to Professional Services Agreement

 Exhibit 10.8 
 AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT 
 This
Amendment to Professional Services Agreement dated as of December 19, 2007 (the “Amendment”) is entered into as of March 11, 2010, by and between NovaRay Medical, Inc., a Delaware corporation (the “Client”) and Triple
Ring Technologies, Inc. (the “Company”). All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in that certain Professional Services Agreement dated as of December 19, 2007 by and between the
Client and the Company (the “Agreement”). 
 RECITALS 
 WHEREAS, the Company and Client entered into the Agreement; 
 WHEREAS, the Company and Client desire to amend the Agreement to modify the term of the Agreement as set forth herein. 
 NOW, THEREFORE, in compliance with Section 26 of the Agreement and in consideration of the mutual promises and covenants set forth herein and in the Agreement, the Client and the Company hereby agree
as follows: 
 Section 4 of the Agreement entitled “Term” is hereby amended to read in its entirety: 

“Term. The term of this Agreement shall commence on the Effective Date, and shall continue in full force and effect through
April 30, 2010, unless terminated earlier by operation of and in accordance with this Agreement. The Agreement may only be extended thereafter by mutual written agreement.” 
 The Client and the Company agree that the Agreement shall be deemed to be in full force and effect through the date hereof and until the
earlier of i) termination of the Agreement in accordance with the Agreement or ii) expiration of the Agreement pursuant to Section 4 of the Agreement as amended by this Amendment. 
 The second paragraph of Section 13 of the Agreement entitled “Protection of Confidential Information” is hereby amended to
read in its entirety: 

 “The parties acknowledge and agree that project(s) (i) that Company performs for
NRCT LLC, to the extent each such project is within the scope of the Exclusive License Field of Use as such is term defined under the agreement between Client and NRCT LLC dated October 2006, (ii) related to low-dose imaging for pediatrics
including without limitation Project Number 1RC1HL100436-01 funded by the National Institute for Health, (iii) related to kilovoltage delivery of radiation therapy and (iv) related to baggage inspection systems shall be deemed an Approved
Project hereunder and the Company hereby waives notice for such project(s) and shall be deemed to have received notice and reasonable opportunity to determine the degree of any such risk of unauthorized use or disclosure hereunder. Company shall
have the right to perform services for such project to the extent the services are within the scope of the Exclusive License Field of Use without obtaining Client’s prior written approval. Company shall not perform services for NRCT LLC outside
of the Exclusive License Field of Use that would constitute Competitive Business hereunder without first obtaining Client’s prior written approval as provided in this Section 13.” 
 The Client and the Company hereby acknowledge and consent to the foregoing amendment to the Agreement as set forth herein. 
 Except as amended herein, all other terms and provisions of the Agreement shall remain in full force and effect. 
 This Amendment shall be effective upon its execution by the Client and the Company. 
 This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile or electronic transmission, such signature shall create a valid 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 or electronic signature were the original thereof. 

 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by the proper
and duly authorized officers as of the day and year first written above. 
  

					
		 	CLIENT:
		
		 	NOVARAY MEDICAL, INC.
			
		 	By:	 	 /s/ Lynda Wijcik

		 	Name:	 	Lynda Wijcik
		 	Title:	 	Chairman of the Board of Directors
		
		 	COMPANY:
		
		 	TRIPLE RING TECHNOLOGIES, INC.
			
		 	By:	 	  

		 	Name:	 	Joseph Heanue
		 	Title:	 	President

 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by the proper
and duly authorized officers as of the day and year first written above. 
  

					
		 	CLIENT:
		
		 	NOVARAY MEDICAL, INC.
			
		 	By:	 	  

		 	Name:	 	Lynda Wijcik
		 	Title:	 	Chairman of the Board of Directors
		
		 	COMPANY:
		
		 	TRIPLE RING TECHNOLOGIES, INC.
			
		 	By:	 	 /s/ Joseph Heanue

		 	Name:	 	Joseph Heanue
		 	Title:	 	President

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