newcardio_8k-ex1031.htm


    Exhibit 10.31

     

    
      


      NewCardio,
Inc.

      2350
Mission College Blvd.

      Suite
1175

      Santa
Clara, CA 95054

      


      


      December
1, 2008

      


      Vision
Capital Advantage Fund, L.P.

      c/o
Vision Capital Advisors, LLC

      20 West
55th Street, 5th Floor

      New York,
NY 10019

      


      Re:
NewCardio, Inc. (the "Company").

      


      Ladies
and Gentlemen:

      


      Vision
Opportunity Master Fund, Ltd. ("VOMF") has transferred 22% of the securities of
the Company which it purchased (the "Company Securities") pursuant to that
certain Securities Purchase Agreement (the “SPA”), dated as of December 27,
2007, between Marine Park Holdings, Inc., a Delaware corporation and the
purchasers identified on the signature pages thereto, to an affiliate, Vision
Capital Advantage Fund, L.P. ("VCAF") pursuant to an agreement (the
"Agreement"). The transfer of such portion of the Company Securities is referred
to herein as the "Transfer."

      


      The
Company acknowledges that VCAF intends that the holding of such Company
Securities by VCAF qualify as a "venture capital investment" within the meaning
of subsection (d)(3)(i) of the United States Department of Labor Regulation
published at 29 C.F.R. Section 2510.3-101 (the "Plan Asset Regulation") of VCAF,
and for purposes thereof, that for as long as VCAF continues, directly or
indirectly (together with the holdings of VOMF), to hold at least 50% of the
Company Securities (or other securities into which such Company Securities may
be exchanged or exercised), VCAF shall have the following rights:

      


      1.           The
Company shall provide or grant VCAF and/or its designated representative
with:

      


      (i)           the
right, subject to VCAF providing the Company with an executed nondisclosure
agreement reasonably satisfactory to the Company, to visit and inspect any of
the offices and properties of the Company or any of its subsidiaries and inspect
and copy the books and records of the Company or any of its subsidiaries, at
such times as VCAF or its designated representative shall reasonably request,
and to discuss its affairs, finances and accounts with its and their officers at
such times as VCAF may reasonably request;


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      (ii)           as
soon as available, after the end of each of the first three quarters of each
fiscal year of the Company, a copy of the unaudited consolidated balance sheets
of the Company and its consolidated subsidiaries as of the end of such quarter
and the related unaudited consolidated statements of income and of cash flows
for such quarter and the portion of the fiscal year ended with the last day of
such quarter, stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year, all prepared in
accordance with GAAP consistently applied, and certified by an appropriate
officer of the Company as being fairly stated in all material respects, subject
to the absence of footnotes and to year-end adjustments;

      


      (iii)         as
soon as available, after the close of each fiscal year of the Company, a copy of
the audited consolidated balance sheet of the Company and its consolidated
subsidiaries as of the end of such fiscal year together with related audited
consolidated statements of income and cash flows for such fiscal year, stating
in comparative form the respective figures for the corresponding date and period
in the prior fiscal year and all prepared in accordance with GAAP consistently
applied by the Company's independent certified public accountants;
and

      


      
        (iv)       
any
annual reports, quarterly reports and other periodic reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"), in each case actually prepared by the Company or any of its
subsidiaries, as soon as available, to the extent that Company, or any of
its  subsidiaries, is required by law or pursuant to the terms of any
outstanding securities of the Company or any of its subsidiaries to prepare such
reports;

      

      


      provided,
however, that the Company's obligations under paragraphs (a)(ii), (iii) and (iv)
shall be satisfied by filing on EDGAR its annual report or quarterly report, as
applicable, pursuant to the Exchange Act;

      


      2.           The
Company hereby agrees that, for so long as VCAF and/or VOMF continues to,
directly or indirectly, hold at least 50% of the Company Securities (or other
securities into which such Company Securities may be exchanged or exercised), it
shall permit VCAF to appoint its designee to the Company's Board of Directors
(or equivalent thereof) (the "Board of Directors"), and thereafter use its best
efforts to continue to have such designee elected as a member of the Board of
Directors. This right shall satisfy, and shall not be in addition to, any
similar right in favor of any affiliate of VCAF or VOMF).  At such
time as VCAF is not entitled to have a designee on the Board of Directors, or
such designee is not elected or resigns, then so long as VCAF owns any of the
Company Securities, upon request of VCAF and provided that VCAF has delivered to
the Company an executed nondisclosure agreement reasonably satisfactory to the
Company, the Company shall provide to VCAF a comprehensive summary of all
material documents and presentations provided to the board members (or
equivalent thereof) of the Company or any subsidiary in connection with a
meeting of the Board of Directors (and in the case of meetings of committees of
the Board of Directors copies of the subsequent minutes of such meetings of such
committees, if available); provided, however, that the Company reserves the
right to exclude from the summary and minutes any materials or portion thereof
as reasonably necessary to preserve attorney client privilege to protect highly
confidential proprietary information relating to financings or potential
financings or for other similar reasons.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      3.           The
Company hereby agrees that for so long as VCAF continues to, directly or
indirectly, hold any of the Company Securities (or other securities into which
such Company Securities may be exchanged or exercised), and provided that VCAF
has delivered to the Company an executed nondisclosure agreement reasonably
satisfactory to the Company, it shall make the appropriate officers, managers
and/or directors of the Company and its subsidiaries available periodically and
at such times as reasonably requested by VCAF for consultation with respect to
matters relating to the business and affairs of the Company and its
subsidiaries, recognizing that the ultimate discretion with respect to all such
matters shall be retained by the Company.

      


      VCAF
shall, and shall cause its employees, partners, control persons, accountants,
attorneys and other representatives to keep all information of the Company and
its subsidiaries disclosed pursuant to this letter agreement confidential in
accordance with a confidentiality agreement reasonably satisfactory to the
Company.

      


      This
letter agreement and the rights and duties of the parties hereto, is binding on
and enforceable against the Company, all of its subsidiaries and VCAF, and in
the event of a conflict between the provisions of this letter agreement and any
other agreement between such parties, the provisions of this letter agreement
shall control. The provisions of this letter agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without reference to conflicts of law principles thereof. This letter agreement
may be executed in multiple counterparts which, taken together, shall constitute
one and the same agreement.

      


      In the
event VCAF transfers all or any portion of the Company Securities to any entity
affiliated with VCAF, such transferee shall be afforded the same rights with
respect to the Company and its subsidiaries afforded to VCAF hereunder and shall
be treated, for such purposes, as a third party beneficiary
hereunder.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      IN
WITNESS WHEREOF, the parties below hereby agree to the terms of this side letter
agreement as of the date first above written.

       

       

      
         

        
          	 	

                  NEWCARDIO,
      INC.

                  


                  


                  By:
      s/s
      Richard D. Brounstein

                  Name:
      Richard D. Brounstein

                  Title:
      Executive Vice President, CFO and
Secretary

                


        

         

      

      


      


      Accepted
and Agreed as of

      the date
first above written:

      VISION
CAPITAL ADVANTAGE FUND, LP

      By: VCAF
GP, LLC, its General Partner

      


      By: s/s Adam
Benowitz

      Name:
Adam Benowitz

      Title:
Authorized Signatory