Unassociated Document

0001144204-10-034393.txt : 20100621 0001144204-10-034393.hdr.sgml : 20100621 20100621171210 ACCESSION NUMBER: 0001144204-10-034393 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20100621 DATE AS OF CHANGE: 20100621 GROUP MEMBERS: ADAM BENOWITZ GROUP MEMBERS: VCAF GP, LLC GROUP MEMBERS: VISION CAPITAL ADVANTAGE FUND, L.P. GROUP MEMBERS: VISION OPPORTUNITY MASTER FUND, LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NovaRay Medical, Inc. CENTRAL INDEX KEY: 0001383529 STANDARD INDUSTRIAL CLASSIFICATION: X-RAY APPARATUS & TUBES & RELATED IRRADIATION APPARATUS [3844] IRS NUMBER: 161778998 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-83140 FILM NUMBER: 10908580 BUSINESS ADDRESS: STREET 1: 1850 EMBARCADERO ROAD CITY: PALO ALTO STATE: CA ZIP: 94303 BUSINESS PHONE: 4089665738 MAIL ADDRESS: STREET 1: 1850 EMBARCADERO ROAD CITY: PALO ALTO STATE: CA ZIP: 94303 FORMER COMPANY: FORMER CONFORMED NAME: Vision Acquisition I, Inc DATE OF NAME CHANGE: 20061213 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: VISION CAPITAL ADVISORS, LLC CENTRAL INDEX KEY: 0001411962 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 20 WEST 55TH STREET STREET 2: 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 212-849-8242 MAIL ADDRESS: STREET 1: 20 WEST 55TH STREET STREET 2: 5TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 v188726_sc13da.htm Unassociated Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

(Amendment No. 3)*

NOVARAY MEDICAL, INC.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

N/A

(CUSIP Number)

Vision Capital Advisors, LLC

20 West 55th Street, 5th Floor

New York, NY 10019

Attention: James Murray

Tel: 212.849.8237

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

June 16, 2010

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ].

Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes.)

CUSIP No.: N/A

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
	Adam Benowitz

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [ ]
	(b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS
	AF

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION
	United States

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

7 SOLE VOTING POWER - 0

8 SHARED VOTING POWER - 29,460,053

9 SOLE DISPOSITIVE POWER - 0

10 SHARED DISPOSITIVE POWER - 29,460,053

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	29,460,053

12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	75.7%

14	TYPE OF REPORTING PERSON
	IN

CUSIP No.: N/A

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
	Vision Capital Advisors, LLC

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [ ]
	(b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS
	AF

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

7 SOLE VOTING POWER - 0

8 SHARED VOTING POWER - 29,460,053

9 SOLE DISPOSITIVE POWER - 0

10 SHARED DISPOSITIVE POWER - 29,460,053

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	29,460,053

12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	75.7%

14	TYPE OF REPORTING PERSON
	IA

CUSIP No.: N/A

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
	Vision Opportunity Master Fund, Ltd.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [ ]
	(b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS
	WC

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Cayman Islands

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

7 SOLE VOTING POWER - 0

8 SHARED VOTING POWER - See Item 5

9 SOLE DISPOSITIVE POWER - 0

10 SHARED DISPOSITIVE POWER - See Item 5

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	See Item 5

12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	See Item 5

14	TYPE OF REPORTING PERSON
	CO

CUSIP No.: N/A

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
	Vision Capital Advantage Fund, L.P.

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [ ]
	(b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS
	WC

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

7 SOLE VOTING POWER - 0

8 SHARED VOTING POWER - See Item 5

9 SOLE DISPOSITIVE POWER - 0

10 SHARED DISPOSITIVE POWER - See Item 5

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	See Item 5

12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	See Item 5

14	TYPE OF REPORTING PERSON
	PN

CUSIP No.: N/A

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
	VCAF GP, LLC

2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
	(a) [ ]
	(b) [ ]

3	SEC USE ONLY

4	SOURCE OF FUNDS
	AF

5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]

6	CITIZENSHIP OR PLACE OF ORGANIZATION
	Delaware

NUMBER OF

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON WITH

7 SOLE VOTING POWER - 0

8 SHARED VOTING POWER - See Item 5

9 SOLE DISPOSITIVE POWER - 0

10 SHARED DISPOSITIVE POWER - See Item 5

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
	See Item 5

12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]

13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
	See Item 5

14	TYPE OF REPORTING PERSON
	OO

Explanatory Note

This Amendment No. 3 to Schedule 13D (this “Amendment No. 3”) is being filed with respect to the beneficial ownership of common stock, par value $0.0001 per share (the “Common Stock”), of NovaRay Medical, Inc., a Delaware corporation (the “Issuer” or the “Company”). This Amendment No. 3 supplements Items 3, 4 and 7 and amends and restates in its entirety Item 5, of the Schedule 13D (as amended) previously filed on March 29, 2010 (“Original Schedule 13D”). Additionally, all prior references to the initial exercise price of the Common Stock Warrant in each of the Original Schedule 13D, Amendment No. 1 to the Original Schedule 13D (filed on April 23, 2010) and Amendment No. 2 to the Original Schedule 13D (filed on May 10, 2010) are hereby corrected to read $1.50 per share (such amount had been incorrectly reported as $0.15 per share).

ITEM 3.

Source and Amount of Funds or Other Consideration

The funds used to acquire the securities described in Item 4 of this Amendment No. 3 were from working capital of the Master Fund, and the amount of funds totaled $400,000.

ITEM 4.

Purpose of Transaction.

Amendment to Note and Warrant Purchase Agreement; June 16, 2010 Draw Down

On June 16, 2010, the Issuer and the Master Fund entered into Amendment No. 3 (the “Amendment”) to the Note and Warrant Purchase Agreement, dated as of March 11, 2010 (as amended, the “Purchase Agreement”), which increased the size of the line of credit offered by the Master Fund to the Issuer by $1,000,000 and changed the Maturity Date of any newly issued Notes from June 30, 2010 to August 31, 2010. Pursuant to the terms of the Purchase Agreement, on June 16, 2010, the Issuer drew down $400,000 (of the additional $1,000,000) from the line of credit. In connection with this draw down, the Issuer executed and delivered to the Master Fund (a) a Series A-1 10% Senior Secured Convertible Note in the aggregate principal amount of $400,000 (the “Note”) (secured by all of the assets of the Issuer), and (b) a Common Stock Warrant to purchase an aggregate of 266,666 shares of Common Stock (“Common Stock Warrant”). The Note is mandatorily convertible into the same type or package of securities of the Issuer issued or issuable by the Issuer in a “Qualified Financing” upon the occurrence of such Qualified Financing. A “Qualified Financing” shall occur when a sale by the Issuer of shares of equity to one or more purchasers generates not less than gross proceeds to the Issuer of $5,000,000. The Common Stock Warrant expires on March 31, 2015 and is exercisable into shares of Common Stock at any time at the option of the Master Fund at an initial exercise price of $1.50 per share; provided that the Common Stock Warrant cannot be exercised to the extent that after giving effect thereto the beneficial ownership of the Master Fund, VCAF and their affiliates would exceed the Beneficial Ownership Limitation of the then issued and outstanding shares of Common Stock (which restriction can be lifted upon 61 days notice).

Amendment No. 1 and Amendment No. 2 to the Purchase Agreement pertained to the Series A-2 Note, which is not held by the Reporting Persons. Amendment No. 1 dated March 29, 2010 increased the size of the A-2 Line of Credit from $208,000 to $350,000. Amendment No. 2 dated April 20, 2010 changed the schedule of draw down dates and amounts related to the Series A-2 Note.

Omnibus Amendment to Notes

On June 16, 2010, pursuant to the terms of the Omnibus Amendment to the Series A-1 Senior Secured 10% Convertible Notes and the Series A-2 Senior Secured 10% Note, the Issuer, the Master Fund and the other holders of Notes issued pursuant to the Purchase Agreement agreed to extend the expiration date of all of the Notes previously issued from June 30, 2010 to August 31, 2010.

ITEM 5.

Interest in Securities of the Issuer.

(a) As of June 16, 2010, the Master Fund and VCAF, collectively, had the ability to acquire 29,460,053 shares of Common Stock through the exercise or conversion of derivative securities and thus beneficially owned 29,460,053 shares of Common Stock, representing 75.7% of all of the Issuer’s outstanding Common Stock. The Investment Manager and Mr. Benowitz (and the General Partner with respect to the shares of Common Stock owned by VCAF) may each be deemed to beneficially own the shares of Common Stock beneficially owned by the Master Fund and VCAF. Each disclaims beneficial ownership of such shares. The foregoing is based on 9,445,613 shares of Common Stock outstanding as of March 20, 2010, as reported on the Issuer’s Form 10-K filed on March 31, 2010.

(b) As of June 16, 2010, the Reporting Persons had shared power (with each other and not with any third party), to vote or direct the vote of and to dispose or direct the disposition of the 29,460,053 shares of Common Stock reported herein.

(c) Except as provided in Item 4, no transactions in the Common Stock have been effected by the Reporting Persons or, to the knowledge of the Reporting Persons, the Directors and Officers, since the filing of Amendment No. 2 to the Original Schedule 13D.

(d) Not applicable.

(e) Not applicable.

ITEM 7.	Material to be Filed as Exhibits.

Exhibit No.	Document

9.	Amendment No. 3 to the Note and Warrant Purchase Agreement by and among NovaRay Medical, Inc. and the Purchasers (as defined therein), dated as of June 16, 2010

10.	Omnibus Amendment to the Series A-1 Senior Secured 10% Convertible Notes and the Series A-2 Senior Secured 10% Note, dated as of June 16, 2010

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: June 21, 2010

	ADAM BENOWITZ VISION CAPITAL ADVISORS, LLC VISION OPPORTUNITY MASTER FUND, LTD. VISION CAPITAL ADVANTAGE FUND, L.P. VCAF GP, LLC


	By:	/s/ Adam Benowitz
	Adam Benowitz, for himself, as Managing Member of the Investment Manager, as a Director of the Master Fund, and as authorized signatory of the General Partner (for itself and VCAF)

EXHIBIT INDEX

Exhibit No.	Document

9.	Amendment No. 3 to the Note and Warrant Purchase Agreement by and among NovaRay Medical, Inc. and the Purchasers (as defined therein), dated as of June 16, 2010

10.	Omnibus Amendment to the Series A-1 Senior Secured 10% Convertible Notes and the Series A-2 Senior Secured 10% Note, dated as of June 16, 2010

EX-9 2 v188726_ex-9.htm Unassociated Document

AMENDMENT NO. 3

NOTE AND WARRANT PURCHASE AGREEMENT

AMENDMENT NO. 3, dated as of June 16, 2010 (this “Amendment”), by and among NovaRay Medical, Inc., a Delaware corporation (the “Company”), and Vision Opportunity Master Fund, Ltd., a Cayman Islands exempted company (“Lead Series A-1 Purchaser”).

WHEREAS, the Company, the Lead Series A-1 Purchaser, BIOBRIDGE LLC and Triple Ring Technologies Inc. entered into the Note and Warrant Purchase Agreement dated as of March 11, 2010, as amended by Amendment No. 1 to the Note and Warrant Purchase Agreement, dated as of March 29, 2010, and Amendment No. 2 to the Note and Warrant Purchase Agreement, dated as of April 20, 2010 (collectively, the “Agreement”). Except as otherwise provided herein, capitalized terms used in this Amendment have the meanings assigned to them in the Agreement; and

WHEREAS, the Company and the Lead Series A-1 Purchaser desire to amend the Agreement as contained herein.

NOW, THEREFORE, in consideration for the mutual promises herein contained, the parties agree as follows:

1. Amendments to Agreement. Effective as of the date hereof, the Agreement is hereby amended as follows:

A. Sections 1.1(a), 1.3(a) and 1.3(b) of the Agreement shall be amended so that each reference to “two million five hundred thousand dollars ($2,500,000)” shall be replaced with “three million five hundred thousand dollars ($3,500,000)”.

B. Section 1.3(b) of the Agreement shall be amended so that the reference to “one million two hundred thousand dollars ($1,200,000)” shall be replaced with “two million two hundred thousand dollars ($2,200,000)”.

C. Section 1.4(b) of the Agreement shall be amended so that the reference to “$1,200,000” in the last parenthetical of the penultimate sentence shall be replaced with “$2,200,000”.

D. Exhibit B-1 to the Agreement (Form of Series A-1 Note) is hereby amended by changing the definition of “Maturity Date” from “June 30, 2010” to “August 31, 2010”. For the avoidance of doubt, any and all Series A-1 Notes issued on or after the date hereof shall be issued with a Maturity Date of August 31, 2010 (and all Series A-1 Notes issued prior to the date hereof are being amended concurrently herewith to change the Maturity Date to August 31, 2010).

2. Ancillary Documents. All ancillary documents to the Agreement which contain any provision that refers to $2,500,000 as the maximum aggregate principal amount of the Company’s Series A-1 Notes shall be deemed to be amended so that such provision shall refer to the new maximum aggregate principal amount of $3,500,000.

3. Consent to Amendment. The Company and the Lead Series A-1 Purchaser hereby consent to and approve the amendments to the Agreement as set forth in this Amendment.

4. Governing Law. All matters relating to the Agreement or this Amendment shall be governed by the laws of the State of New York, without giving effect to the principles of conflicts of laws.

5. Entire Agreement and Amendment. This Amendment represents the entire agreement between the parties with respect to the subject matter of this Amendment, and may not be changed, modified or terminated except as provided in Section 7.3 of the Agreement. Except as specifically set forth in this Amendment, the Agreement shall remain unmodified and in full force and effect.

6. Binding Effect. This Amendment shall inure to the benefit of and be binding

upon the Company and the Purchasers and their respective successors and permitted assigns.

7. Counterparts. This Amendment may be signed in counterparts (including by facsimile or electronic transmission), each of which shall constitute an original and all of which together shall constitute one and the same instrument. It shall not be necessary that any single counterpart be signed by all of the parties so long as each party hereto shall have executed and delivered at least one counterpart hereof.

[signatures follow]

IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 as of the date first above written.


		NovaRay Medical, Inc. By: /s/ Marc C. Whyte Name: Marc C. Whyte Title: Chief Executive Office Vision Opportunity Master Fund, Ltd. By: /s/ Adam Benowitz Name: Adam Benowitz Title: Director

EX-10 3 v188726_ex-10.htm Unassociated Document

OMNIBUS AMENDMENT

TO THE

SERIES A-1 SENIOR SECURED 10% CONVERTIBLE NOTES

AND THE

SERIES A-2 SENIOR SECURED 10% NOTE

NOVARAY MEDICAL, INC.

THIS OMNIBUS AMENDMENT TO THE SERIES A-1 SENIOR SECURED 10% CONVERTIBLE NOTES AND THE SERIES A-2 SENIOR SECURED 10% NOTE OF NOVARAY MEDICAL, INC. (this “Amendment”), dated as of June 16, 2010, is made by and between NovaRay Medical, Inc., a Delaware corporation (the “Company”), Vision Opportunity Master Fund, Ltd. (“VOMF”), BIOBRIDGE LLC (“Biobridge”) and Triple Ring Technologies, Inc. (“Triple Ring,” and collectively with VOMF and Biobridge, the “Holders”).

Preliminary Statement

WHEREAS, the Company is the issuer and the Holders are the holders of certain Series A-1 Senior Secured 10% Convertible Notes and Series A-2 Senior Secured 10% Note of the Company issued pursuant to that certain Note and Warrant Purchase Agreement dated as of March 11, 2010 as amended by Amendment No. 1 to the Note and Warrant Purchase Agreement dated as of March 29, 2010, Amendment No. 2 to the Note and Warrant Purchase Agreement dated as of April 20, 2010 and Amendment No. 3 to the Note and Warrant Purchase Agreement dated as of June 16, 2010, each as listed on Exhibit A attached hereto (collectively, the “Notes”); and

WHEREAS, the Company and the Holders desire to amend the maturity date of the Notes as described herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

1. Capitalized Terms. Capitalized terms used, but not defined, herein, shall have the meanings ascribed to such terms in the respective Notes.

2. Amendments to Notes. The second paragraph of each of the Notes is hereby deleted in its entirety and replaced with the following:

“All payments under or pursuant to this Note shall be made in United States Dollars in immediately available funds to the Holder at the address of the Holder as set forth in the Purchase Agreement or at such other place as the Holder may designate from time to time in writing to the Company or by wire transfer of funds to the Holder’s account, instructions for which are attached hereto as Exhibit A. Unless otherwise converted in accordance with the terms of this Note, the outstanding principal balance and all accrued Interest (as defined herein) of this Note shall be due and payable on August 31, 2010 (the “Maturity Date”) or at such earlier time as provided herein.”

3. Consent to Amendment. The Company and the Holders hereby consent to and approve the amendment to the Notes as set forth in this Amendment.

4. Further Assurances. From and after the date of this Amendment, upon the request of either Holder or the Company, each of the Company and the Holders shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Amendment.

5. Entire Agreement. This Amendment and the Notes constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect thereto.

6. Amendments. No amendment, supplement, modification or waiver of this Amendment shall be binding unless executed in writing by all parties hereto.

7. Counterparts. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. Each party shall be entitled to rely on a facsimile signature of any other party hereunder as if it were an original.

8. Governing Law. This Amendment 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.

9. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

[remainder of page intentionally left blank]

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


		NOVARAY MEDICAL, INC. By: /s/ Marc Whyte Name: Marc Whyte Title: Chief Executive Officer VISION OPPORTUNITY MASTER FUND, LTD. By: /s/ Adam Benowitz Name: Adam Benowitz Title: Portfolio Manager BIOBRIDGE LLC By: /s/ Lynda Wijcik Name: Lynda Wijcik Title: TRIPLE RING TECHNOLOGIES, INC. By: /s/ Josephy Heanue Name: Joseph Heanue Title: President

EXHIBIT A

	Series of Note	Holder	Principal Amount	Issue Date
1.	Series A-1	Vision Opportunity Master Fund, Ltd.	$1,075,000.00	March 11, 2010
2.	Series A-1	Vision Opportunity Master Fund, Ltd.	$600,000.00	April 13, 2010
3.	Series A-1	Vision Opportunity Master Fund, Ltd.	$600,000.00	May 5, 2010
4.	Series A-1	BIOBRIDGE LLC	$225,000.00	March 11, 2010
5.	Series A-2	Triple Ring Technologies, Inc.	$350,000.00	March 11, 2010, amended