Document:

Unassociated Document

    CONVERTIBLE
      DEBENTURE PURCHASE AGREEMENT

     

    THIS
      CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (the "Agreement")
      is
      made as of February 15, 2008, by and between Vycor
      Medical, Inc., a
      Delaware corporation (the "Company")
      and
Fountainhead
      Capital Partners Limited, an
      entity
      registered in Jersey, Channel Islands ("FCP").

     

    1. Funding
      Through Convertible Debentures.

     

    1.1 Issuance
      of Debentures.

     

    (a) The
      Company has authorized the issuance of two essentially identical Convertible
      Debentures each in the original principal amount of $150,000 in the form of
      Exhibit
      A
      hereto
      (the "Debentures"),
      the
      first of which will be issued concurrently with the funding of a Convertible
      Debenture with Regent Private Capital, LLC ("Regent")
      in the
      face amount of $500,000 (the "Closing"),
      and
      the second of which will be issued concurrent with the funding of a second
      Convertible Debenture with Regent in the face amount of $500,000 (collectively,
      the "Regent
      Debentures").
      FCP
      shall have the right to secure another investor for up to $100,000 of FCP's
      $300,000 aggregate investment in the Debentures. The Regent Debentures are
      being
      issued pursuant to a Convertible Debenture Purchase Agreement with Regent of
      even date herewith. The Debentures will be secured pursuant to the terms of
      a
      security agreement in the form of Exhibit
      B
      hereto
      (the "Security
      Agreement").

     

    (b) Subject
      to the terms and conditions of this Agreement, and relying on the
      representations and warranties contained herein, FCP agrees to provide the
      funding to the Company pursuant to the Debentures.

     

    1.2 Use
      of
      Proceeds.
      In
      accordance with the directions of the Company's board of directors, the Company
      will use the proceeds from the issuance of the Debentures for (i) general
      working capital, (ii) repayment of certain obligations that are listed on
      Section 1.2 of the Disclosure Schedule (defined below), each of which obligation
      has been specifically reviewed and approved by Regent prior to repayment
      thereof, and (iii) payment of the legal and other expenses incurred by Regent
      in
      connection with the issuance of the Debentures ("Regent
      Expenses")
      as set
      forth in Section 7.7 below. The Company shall not use the proceeds from the
      issuance of the Debentures for the purchase, repurchase or cancellation of
      any
      securities of the Company, or the payment of any prior obligations of the
      Company or its directors, officers, shareholders or employees.

     

    2. Representations,
      Warranties and Covenants of the Company.
      The
      Company hereby represents, warrants and covenant to FCP that, except as set
      forth on the Disclosure Schedule (the "Disclosure
      Schedule")
      attached hereto as Exhibit
      C
      hereto,
      the statements in the following subsections in this Section 2 are all true
      and
      complete. The section numbers in the Disclosure Schedule will correspond to
      the
      section numbers in this Agreement. Whenever a representation or warranty herein
      is limited to the "knowledge" of the Company, knowledge shall mean the actual
      conscious knowledge of the executive officers of the Company, or what such
      executive officers should have known had such executive officers conducted
      due
      inquiry or investigation relating thereto, to the extent such inquiry or
      investigation would have been conducted by a reasonably prudent person in their
      capacity as an executive of the Company.

     

    2.1
      Organization,
      Good Standing, Power and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware and has all requisite corporate power
      and authority to carry on its business as presently conducted and as proposed
      to
      be conducted. The Company is in good standing and is duly qualified to transact
      business in each jurisdiction in which it does business, or in which the failure
      to so qualify would have a material adverse effect on the Company's business,
      financial condition or properties.

     

    
      
        
        

      

      
        (1)

        
          

        

      

      
        
        

      

    

     

    2.2 Power.
      The
      Company has all requisite corporate power and authority (i) to own and operate
      its properties and assets and to cany on its business as presently conducted
      and
      as proposed to be conducted; (ii) to execute and deliver this Agreement, the
      Debentures, the Security Agreement and any other ancillary agreement required
      hereunder (collectively, the "Ancillary
      Agreements");
      (iii)
      to issue the Debentures (and the common stock issuable upon conversion thereof);
      and (iv) to carry out and perform the provisions of this Agreement and the
      Ancillary Agreements.

     

    2.3 Authorization.
      All
      actions on the part of the Company, its officers, directors and shareholders
      necessary for the authorization, execution, delivery of this Agreement and
      the
      Security Agreement, the performance of all obligations of the Company hereunder
      and thereunder, and the authorization, issuance (or reservation of issuance),
      sale and delivery of the Debentures (and the common stock issuable upon
      conversion thereof) have been taken or will be taken prior to the Closing.
      This
      Agreement and the Ancillary Agreements, when executed and delivered by the
      Company, will constitute valid and binding obligations of the Company,
      enforceable in accordance with their respective terms, except (i) as limited
      by
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      of
      general application affecting enforcement of creditors' rights generally; (ii)
      as limited by the laws related to the availability of specific performance,
      injunctive relief or other equitable remedies; and (iii) to the extent the
      indemnification provisions contained in this Agreement may be limited by
      applicable laws and principles of public policy.

     

    2.4 Valid
      Issuance of Debentures.
      The
      Debentures (including the common stock issuable upon conversion thereof), when
      issued, sold and delivered in accordance with the terms of this Agreement for
      the consideration expressed herein, will be duly authorized, validly issued,
      fully paid and nonassessable, and will be free of restrictions on transfer
      other
      than restrictions on transfer under this Agreement and the Ancillary Agreements
      and under applicable state and federal securities laws.

     

    2.5 Capitalization
      and Voting Rights.

     

    (a) The
      authorized capital of the Company consists, or will consist immediately prior
      to
      the Closing, of 100,000,000 shares of common stock, par value $.001 per share,
      18,551,284 shares of which have been issued and are outstanding, and 10,000,000
      shares of preferred stock, par value $.001 per share, none of which are issued
      and outstanding. The relative rights, privileges and preferences of capital
      stock are as stated in the Company's Certificate of Incorporation, a true and
      correct copy of which has been provided to FCP. The common stock issuable upon
      conversion of the Debentures on the date of issuance represents approximately
      three and 33/100ths percent (3.33%) of the outstanding common stock of the
      Company on an as-converted, fully-diluted basis, calculated on a pre-money
      valuation of the Company at the date of issuance of $3,500,000.

     

    (b) The
      outstanding shares of common stock have been duly authorized and validly issued,
      are fully paid and nonassessable, and were issued in accordance with the
      registration provisions of the Securities Act of 1933, as amended (the
      "Securities
      Act"),
      and
      any applicable state securities laws or pursuant to valid exemptions
      therefrom.

     

    (c) Except
      as
      otherwise provided for in the Disclosure Schedule, there are no outstanding
      options, warrants, rights (including conversion or preemptive rights) or
      agreements for the purchase or acquisition from the Company of its securities.
      Except as identified above, the Company has no equity purchase plan, option,
      warrant or other agreement or understanding granting rights to purchase the
      Company's securities with any other person or entity. The Company is not a
      party
      or subject to any agreement or understanding, and there is no agreement or
      understanding between any persons that affects or relates to the voting or
      giving of written consents with respect to any security or the voting by any
      shareholder or director of the Company.

     

    
      
        
        

      

      
        (2)

        
          

        

      

      
        
        

      

    

     

    (d)
      To
      the Company's knowledge, the Company has not violated any applicable federal
      or
      state securities laws or regulations in connection with the offer, sale or
      issuance of any of its equity securities or the offer, sale or issuance of
      any
      of its debt securities. There are no voting trusts, proxies or other agreements
      or understandings among the Company's shareholders or equity owners or any
      other
      person with respect to the voting, transfer or registration of the Company's
      equity securities or with respect to any other aspect of the Company's
      affairs.

     

    2.6
      Subsidiaries.
      The
      Company does not currently own or control, directly or indirectly, any interest
      in any other corporation, partnership, trust, joint venture, limited liability
      company, association, or other business entity. The Company is not a participant
      in any joint venture, partnership or similar arrangement.

     

    2.7 Compliance
      with Other Instruments.
      The
      Company is not in violation or default of any provision of its Certificate
      of
      Incorporation, Bylaws or its other charter documents or in any material respect
      of any provision of any mortgage, indenture, agreement, instrument, regulation
      or contract to which it is a party or by which it is bound or of any federal
      or
      state judgment, order, writ, decree, statute, rule or regulation applicable
      to
      the Company. The execution, delivery and performance by the Company of this
      Agreement and the Ancillary Agreements, and the consummation of the transactions
      contemplated hereby and thereby, will not result in any material violation
      or be
      in conflict with or constitute, with or without passage of time or giving of
      notice, either a default under any such provision or an event that results
      in
      the creation of any lien, charge or encumbrance upon any assets of the Company
      or the suspension, revocation, impairment, forfeiture or renewal of any material
      permit, license, authorization or approval applicable to the Company, its
      businesses or operations or any of its assets or properties.

     

    2.8 Governmental
      Consents, etc.
      No
      consent, approval, qualification, order or authorization of, or filing with,
      any
      federal, state or local governmental authority on the part of the Company is
      required in connection with the Company's execution, delivery or performance
      of
      this Agreement, the Ancillary Agreements or the offer, sale or issuance of
      the
      Debentures (or the issuance of the common stock issuable upon conversion
      thereof), except such filings as have been made prior to the Closing, or except
      any notices of sale required to be filed with the Securities and Exchange
      Commission under Regulation D of the Securities Act, or such post-Closing
      filings as may be required under applicable state securities laws, which will
      be
      timely filed within the applicable periods therefor.

     

    2.9 Agreements;
      Action.
      Except
      with respect to (i) the outstanding Bridge Loan Debenture dated December 14,
      2006 (as amended), in the original principal amount of $172,500 ("FCP
      Debenture")
      with
      Fountainhead Capital Partners ("FCP"), (ii) the Warrant to Purchase 50.22
      Membership Units of the Company (now 805,931 shares of the Company's common
      stock) dated December 15, 2006 (the "FCP
      Warrant"),
      (iii)
      the investment opportunity granted under the Option Agreement with FCP dated
      December 14,2006 ("FCP
      Option"),
      or as
      specifically disclosed in the Disclosure Schedule:

     

    (a)
      There
      are no agreements, understandings or proposed transactions between the Company
      and any of its officers, directors, shareholders, affiliates or any affiliate
      thereof.

     

    
      
        
        

      

      
        (3)

        
          

        

      

      
        
        

      

    

     

    (b) There
      are
      no contracts, agreements, instruments, leases, commitments, understandings,
      proposed transactions, judgments, orders, writs or decree to which the Company
      is a party or by which it is bound that may involve (i) obligations (contingent
      or otherwise) of, or payments to, the Company in excess of $25,000; (ii) the
      granting of any rights affecting the development, manufacture, licensing,
      marketing, sale or distribution of the Company's products and services; (iii)
      the guarantee or indemnity of any indebtedness of any other person, firm or
      entity; (iv) the license of any patent, copyright, trade secret or other
      proprietary right to or from the Company; or (v) the indemnification by the
      Company with respect to infringements of proprietary rights.

     

    (c) The
      Company has not (i) declared or paid any dividend or distribution upon or with
      respect to any class or series of its equity securities, (ii) incurred any
      indebtedness from money borrowed or any other liabilities individually in excess
      of $10,000 or, in the case of indebtedness and/or liabilities individually
      less
      than $10,000, in excess of $25,000 in the aggregate, (iii) made any loans or
      advances to any person, other than ordinary advances for travel expenses, or
      (iv) sold, exchanged or otherwise disposed of any of its assets or rights except
      in the ordinary course of its business.

     

    (d) For
      the
      purposes of subsections (b) and (c) above, all indebtedness, liabilities,
      agreements, understandings, instruments, contracts and proposed transactions
      involving the same person or entity (including persons or entities the Company
      has reason to believe are affiliated therewith) shall be aggregated for the
      purpose of meeting the minimum dollar amounts for each
      subsection.

     

    2.10 Obligations
      to Related Parties.
      Except
      as identified on the Disclosure Schedule, no employee, officer, director,
      shareholder or other equity owner of the Company or member of his, her or its
      immediate family is indebted to the Company, nor is the Company indebted (or
      committed to make loans or extend or guarantee credit) to any of them other
      than
      (i) for payment of salary for bona fide services rendered; (ii) reimbursement
      for reasonable expenses incurred on behalf of the Company; and (iii) for other
      standard employee benefits generally made available to all employees. No
      employee, officer or director of the Company and, to the Company's a knowledge,
      no shareholder of the Company or any of such shareholder's immediate family,
      has
      any direct or indirect ownership in any entity with which the Company is
      affiliated or with which the Company has a business relationship, or any entity
      that competes with the Company, except that employees, officers, directors
      or
      shareholders of the Company and members of their immediate family may own stock
      in publicly traded companies that may compete with the Company. No employee,
      officer, director or shareholder of the Company, or any member of their
      immediate families, is, directly or indirectly, interested in any contract
      with
      the Company (other than contracts that relate to any such person's ownership
      of
      an equity interest in the Company). The Company has not granted rights or
      licenses to any other entity or person to sell its products or services to
      any
      other person or entity and is not bound by any agreement that affects the
      Company's exclusive rights to market or sell its products or
      services.

     

    2.11 Title
      to Properties and Assets.
      The
      Company owns its assets free and clear of all mortgages, liens, claims, and
      encumbrances other than (i) liens securing the FCP Debenture, (ii) liens for
      current taxes not yet delinquent, (iii) for liens imposed by law and incurred
      in
      the ordinary course of business for obligations not past due to carriers,
      warehousemen, laborers, materialmen and the like, (iv) for liens in respect
      of
      pledges or deposits under workers' compensation laws or similar legislation
      or
      (v) for minor defects in title, none of which, individually or in the aggregate,
      materially interferes with the use of such property. With respect to the
      property and assets it leases, the Company is in compliance with such leases,
      each lease is in full force and effect and is enforceable in accordance with
      its
      terms, holds a valid leasehold interest free of any liens, claims, or
      encumbrances, subject to clauses (i) – (v) above, and there exists no
      default or other condition which, with the giving of notice, the passage of
      time, or both, could
      become a default under any lease. There are no outstanding options or rights
      of
      first refusal with respect to the purchase or use of any of the Company's real
      property, any portion thereof or interest thereon.

     

    
      
        
        

      

      
        (4)

        
          

        

      

      
        
        

      

    

     

    2.12 Intellectual
      Property.
      The
      Company owns or possesses sufficient legal rights to all patents, trademarks,
      service marks, trade names, copyrights, trade secrets, licenses, information,
      and proprietary rights and processes (collectively, "Intellectual
      Property")
      necessary for its business as now conducted and as proposed to be conducted
      without any infringement of the rights of others. The Disclosure Schedule
      contains a complete list of the Company's patents, trademarks, copyrights and
      domain names and pending patent, trademark and copyright applications. There
      are
      no outstanding options, licenses, or agreements of any kind relating to the
      Company's Intellectual Property with the exception of agreements for the sale
      or
      license of the Company's products or services in the ordinary course of
      business, nor is the Company bound by or a party to any options licenses or
      agreements of any kind with respect to the Intellectual Property of any other
      person or entity with the exception of shrink-wrap, click-wrap or similar widely
      available commercial end-user licenses. The Company has not received any
      communications alleging that the Company has violated or, by conducting its
      business as presently proposed, would violate any of the Intellectual Property
      of any other person or entity. The Company is not aware that any of its
      employees is obligated under any contract (including licenses, covenants or
      commitments of any nature) or other agreement, or subject to any judgment,
      decree or order of any court or administrative agency, that would interfere
      with
      the Company's business as presently proposed to be conducted. It is not or
      will
      not be necessary for the Company to utilize any inventions of any of its
      employees (or people they currently intend to hire) made prior to their
      employment with the Company. The Company is not aware of any violation or
      infringement by a third party of any of the Company's Intellectual
      Property.

     

    2.13 Employees;
      Employee Benefit Plans.
      The
      Company has complied in all material respects with all applicable state and
      federal equal opportunity and other laws related to employment. To the Company's
      knowledge, no employee of the Company is or will be in violation of any
      judgment, decree, or order; or term of any employment contract, patent
      disclosure agreement, or other contract or agreement relating to the
      relationship of any such employee with the Company, or any other party because
      of the nature of the business presently conducted or presently proposed to
      be
      conducted by the Company. The Company has no "Employee Benefit Plan" as defined
      in the Employment Retirement Income Security Act of 1974, as amended. The
      Company is not aware of any officer or key employee, or any group of key
      employees, that intends to terminate their employment with the Company, nor
      does
      the Company have a present intention to terminate the employment of any of
      them.

     

    2.14 Litigation.
      There
      is no claim, action, suit, proceeding, arbitration, complaint, charge or
      investigation pending or currently threatened against the Company or any
      officer, director or key employee of the Company, nor is there any reasonable
      basis therefore. Neither the Company nor any of its officers or directors,
      is a
      party or is named as subject to the provisions of any order, writ, injunction,
      judgment or decree of any court or government agency or instrumentality (in
      the
      case of officers or directors, such as would affect the Company). There is
      no
      action, suit, proceeding or investigation by the Company pending or which the
      Company intends to initiate. The foregoing includes, without limitation, any
      action, suit, proceeding or investigation pending or threatened involving the
      prior employment of any of the Company's employees, their services provided
      in
      connection with the Company's business, or any information or techniques
      allegedly proprietary to any of their former employers, or their obligations
      under any agreements with prior employers.

     

    2.15 Rights
      of Registration.
      Other
      than as described in Section 6.1 herein, the Company has not obligated itself
      to, is not under any current obligation to, and will not obligate itself to
      register under the Securities Act any of its currently outstanding securities
      or
      any securities issuable upon exercise or conversion of its currently outstanding
      securities.

     

    
      
        
        

      

      
        (5)

        
          

        

      

      
        
        

      

    

     

    2.16 Financial
      Statements.
      The
      Company has delivered to FCP its audited financial statements as of December
      31,
      2006 and its unaudited financial statements as of September 30, 2007,
      respectively (collectively, the "Financial
      Statements").
      The
      Financial Statements have been prepared in accordance with generally accepted
      accounting principles applied on a consistent basis throughout the periods
      indicated. The Financial Statements fairly present in all material respects
      the
      financial condition and operating results of the Company as of the dates, and
      for the periods, indicated therein, subject in the case of the unaudited
      Financial Statements to normal year-end audit adjustments, which are not
      individually or in the aggregate expected to be material. Except as set forth
      in
      the Financial Statements, the Company has no liabilities or obligations,
      contingent or otherwise, other than (i) liabilities incurred in the ordinary
      course of business subsequent to September 30, 2007 (ii) obligations under
      contracts and commitments incurred in the ordinary course of business and (iii)
      liabilities and obligations of a type or nature not required under generally
      accepted accounting principles to be reflected in the Financial Statements,
      which, in all such cases, individually and in the aggregate are not material
      to
      the financial condition or operating results of the Company. The Company is
      not
      a guarantor or indemnitor of any indebtedness of any other person, firm or
      entity. The Company maintains and will continue to maintain a standard system
      of
      accounting established and administered in accordance with generally accepted
      accounting principles. The Company has no liability to any of its equity owners
      or to affiliates of such equity owners.

     

    2.17 Brokers
      or Finders.
      Except
      as otherwise provided in the Disclosure Schedule, the Company has not incurred,
      and will not incur, directly or indirectly, as a result of any action taken
      by
      the Company, any liability for brokerage or finders' fees or agents' commissions
      or any charges in connection with this Agreement, the Ancillary Agreements
      or
      the transactions contemplated hereby and thereby.

     

    2.18 Changes.
      Since
      September 30, 2007 there has not been:

     

    (a) any
      change in the assets, liabilities, financial condition or operating results
      of
      the Company from that reflected in the unaudited Financial Statements dated
      September 30, 2007, except changes in the ordinary course of business that
      have
      not been, in the aggregate, material adverse;

     

    (b) any
      damage, destruction or loss, whether or not covered by insurance;

     

    (c) any
      waiver or compromise by the Company of a valuable right or of a material
      debt owed to it;

     

    (d) any
      satisfaction or discharge of any lien, claim, or encumbrance or payment of
      any
      obligation by the Company, except in the ordinary course of business that is
      not
      material to the Company's business, financial condition or
      properties;

     

    (e) any
      material change to a material contract or agreement by which the Company or
      any
      of its assets is bound or subject;

     

    (f) any
      material change in any compensation arrangement or agreement with any employee,
      officer, director or shareholder of the Company;

     

    
      
        
        

      

      
        (6)

        
          

        

      

      
        
        

      

    

     

    (g) any
      resignation or termination of employment of any officer or key employee of
      the
      Company, and the Company, to its knowledge, does not know of the impending
      resignation or termination of employment of any such officer or key
      employee;

     

    (h) any
      mortgage, pledge, transfer of a security interest in, or lien, created by the
      Company, with respect to any of its properties or assets, except liens for
      taxes
      not yet due or payable;

     

    (i) any
      loans
      or guarantees made by the Company to or for the benefit of its employees,
      officers, directors or equity owners, or any shareholders of their immediate
      families, other man travel advances and other advances made in the ordinary
      course of business;

     

    (j)
      any
      declaration, setting aside or payment or other distribution in respect of any
      of
      the Company's securities, or any direct or indirect redemption, purchase, or
      other acquisition of any of such securities by the Company; 

     

    (k)
      any
      sale, assignment or transfer of any of the Company's Intellectual Property;

     

    (1)
      receipt of notice that there has been a loss of, or order cancellation by,
      any
      customer of the Company;

     

    (m)
      any
      other event or condition of any character that would result in a material
      adverse effect on the Company's business, financial condition or properties;
      or

     

    (n)
      any
      agreement or commitment by the Company to do any of the things described in
      this
      Section 2.18.

     

    2.19 Tax
      Returns, Payments and Elections.
      The
      Company has filed all tax returns and reports as required by law (including,
      but
      not limited to all Federal and state income tax returns, and all state sales
      and
      use tax returns). These returns and reports are true and correct in all material
      respects. The Company has paid all taxes and other assessments due, except
      those
      contested by it in good faith and listed in the Disclosure Schedule. The
      provision for taxes of the Company as shown in the Financial Statements is
      adequate for taxes dues or accrued as of the date thereof. The Company has
      not
      made any elections pursuant to the Code (or other elections that related solely
      to methods of accounting, depreciation or amortization) that would have a
      material adverse effect on the Company's business, financial condition or
      properties.

     

    2.20 Insurance.
      The
      Disclosure Schedule in Section 2.20 lists all of the insurance policies and
      fidelity bonds covering the assets, business, equipment, properties, operations,
      employees, officers and directors of the Company, all of which policies are
      currently in effect. The Company has furnished to FCP true and complete copies
      of all insurance policies and fidelity bonds listed in the applicable disclosure
      on the Schedule. There is no claim by the Company pending under any of such
      policies or bonds as to which coverage has been questioned, denied or disputed
      by the underwriters of such policies or bonds. The current and historical limits
      of liability under such policies or bonds have not been exhausted and/or are
      not
      impaired. There is no threatened termination of, or premium increase with
      respect to, any of such policies or bonds, or any notice that such policies
      or
      bonds are no longer in full force and effect or that the issuer thereof is
      no
      longer willing or able to perform its obligations thereunder. None of the
      insurance policies or bonds listed in the Disclosure Schedule will terminate
      or
      lapse by reason of the consummation of the transactions contemplated by this
      Agreement.

     

    
      
        
        

      

      
        (7)

        
          

        

      

      
        
        

      

    

     

    2.21 Proprietary
      Information and Invention Assignment Agreements.
      Each
      current and former employee, consultant and officer of the Company has executed
      a proprietary information and inventions assignment agreement in the form or
      forms provided to FCP. No current or former employee has excluded works or
      inventions from his or her assignment of inventions pursuant to such employee's
      agreement. The Company is not aware that any of its employees is in violation
      thereof.

     

    2.22 Permits.
      The
      Company has all franchises, permits, licenses and any similar authority
      necessary for the conduct of its business as presently conducted by it, the
      lack
      of which would have a material adverse effect on the Company's business,
      properties or financial condition, and the Company believes it can obtain,
      without undue expense or burden, any similar authority for the expanded conduct
      of its business as presently proposed to be expanded. The Company is not in
      default in any respect under any of such franchises, permits, licenses or other
      similar authority.

     

    2.23 Environmental
      and Safety Laws.
      The
      Company has complied in all material respects with all Environmental Laws.
      The
      Company has no Environmental Liabilities. No notice, notification, demand,
      request for information, citation, summons or order has been issued, no
      complaint has been filed, no penalty has been assessed and no investigation
      or
      review is pending or, to the Company's knowledge, threatened, by any
      governmental or other entity with respect to any alleged violation by the
      Company of any Environmental Law. There have been no environmental
      investigations, studies, audits, tests, reviews or other analyses conducted
      by
      or for the Company, or to the Company's knowledge, relating to any property
      or
      facility now or previously owned or leased by the Company that have not been
      delivered to FCP.

     

    The
      following terms, as used in this Section 2.23 have the following meanings:
      "Environmental
      Law"
      means
      any and all federal, state, local and foreign statutes, laws (including common
      or case law), regulations, ordinances, rules, judgments, judicial decisions,
      orders, decrees, codes, plans, injunctions, or governmental restrictions
      relating to the protection of human health or safety or the environment or
      to
      emissions, discharges or releases of any Hazardous Substance into the
      environment, or otherwise relating to the manufacture, processing, distribution,
      use, treatment, storage, disposal, transport or handling of any Hazardous
      Substance or the containment, removal or remediation thereof. Environmental
      Liabilities"
      means
      any and all liabilities arising in connection with or in any way relating to
      the
      past or present business of the Company, whether contingent or fixed, actual
      or
      potential, known or unknown, which (i) arise under or relate to matters governed
      by Environmental Law or arise in connection with or relate to any matter
      disclosed or required to be disclosed in the Disclosure Schedule as applicable
      and (ii) arise from or relate in any way to actions occurring or conditions
      existing before the Closing. "Hazardous
      Substance"
      means
      any and all pollutants and contaminants, and any and all toxic, caustic,
      radioactive or otherwise hazardous materials, substances or wastes that are
      regulated under any Environmental Law, and includes, without limitation,
      petroleum and its derivatives and by-products, and any other
      hydrocarbons.

     

    2.24
      Product
      Liability.
      The
      Company has no liability, whether known or unknown, asserted or unasserted,
      absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or
      due
      or to become due (collectively, a "Liability")
      (and
      there is no basis for any present or future action, suit, proceeding, hearing,
      investigation, charge, complaint, claim or demand against it giving rise to
      any
      Liability) arising out of any injury to individuals or property as a result
      of
      the ownership, possession or use of any product sold, leased or delivered by
      the
      Company.

     

    2.25
      Disclosure.
      The
      Company has provided to FCP all the information reasonably available to it
      without undue expense that FCP has requested for deciding whether to provide
      the
      funds related to the Debentures and all information that the Company reasonably
      believes necessary to enable FCP to make such decision. Neither this Agreement,
      the Ancillary Agreements, nor any other written statements or certificates
      made
      or delivered in connection herewith, when taken as a whole, contain any untrue
      statement of material fact or omits to state a material fact necessary to make
      the statements contained herein or therein not misleading in light of the
      circumstances under which they were made.

     

    
      
        
        

      

      
        (8)

        
          

        

      

      
        
        

      

    

     

    3.
      Representations,
      Warranties and Covenants of FCP.
      FCP
      hereby represents, warrants and covenants to the Company as
      follows:

     

    3.1 Power;
      Authorization.
      FCP has
      all requisite power and authority to execute and deliver this Agreement and
      the
      Ancillary Agreements to which it is a party. This Agreement and the Ancillary
      Agreements to which it is a party, when executed and delivered by FCP, will
      constitute valid and legally binding obligations of FCP, enforceable in
      accordance with their respective terms, except (i) as limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
      and
      any other laws of general application affecting enforcement of creditors' rights
      generally, and as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable remedies, or (ii) to the
      extent the indemnification provisions contained in this Agreement may be limited
      by applicable laws and principles of public policy.

     

    3.2 Purchase
      Entirely for Own Account.
      This
      Agreement is made with FCP in reliance upon FCP's representation to the Company,
      which by FCP's execution of this Agreement, FCP hereby confirms, that the
      Debentures (and the common stock issuable upon conversion thereof), will be
      acquired for investment for FCP's own account, not as a nominee or agent, and
      not with a view to the resale or distribution of any part thereof, and that
      FCP
      has no present intention of selling, granting any participation in, or otherwise
      distributing the same.

     

    3.3 Reliance
      upon FCP's Representations.
      FCP
      understands that the Debentures and the common stock acquired upon conversion
      thereof not be registered under the Securities Act on the ground that the sale
      provided for in this Agreement and the issuance of the common stock is exempt
      from registration under the Securities Act pursuant to valid exemptions thereof,
      and that the Company's reliance upon such exemption is predicated on FCP's
      representations set forth herein.

     

    3.4 Disclosure
      of Information.
      FCP has
      had an opportunity to ask questions of the Company regarding the terms and
      conditions of the issuance of the Debentures and the Company's business,
      financial condition, properties and prospects and to obtain additional
      information (to the extent the Company possessed such information or acquire
      it
      without unreasonable effort or expense) necessary to verify the accuracy of
      any
      information furnished to FCP or to which FCP had access. The foregoing, however,
      does not limit or modify the representations, warranties and covenants of the
      Company in Section 2 of this Agreement or the right by FCP to rely
      thereon.

     

    3.5 Accredited
      Investor.
      FCP is
      an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated
      under the Securities Act.

     

    3.6 Restricted
      Securities.
      FCP
      understands that the Debentures and the common stock issuable upon conversion
      of
      the Debentures, are characterized as "restricted securities" under the federal
      securities laws inasmuch as they are being acquired from the Company in a
      transaction not involving a public offering and that under such federal
      securities laws and applicable regulations the Debentures and the common stock
      issuable upon conversion thereof may be resold without registration only in
      certain circumstances. In this regard, FCP represents that it is aware of the
      provisions of Rule 144 promulgated under the Securities Act which permit limited
      resale of securities purchased in a private placement subject to the
      satisfaction of certain conditions, including, among other things, the existence
      of a public market for the Debentures and the common stock issuable upon
      conversion thereof to availability of
      certain public information about the Company, the resale occurring not less
      than
      one year after a party has purchased and paid for the security to be sold,
      the
      sale being effected through a "broker's transaction" or in transactions with
      a
      "market maker" and the number of shares being sold during any three-month period
      not exceeding specified limitations.

     

    
      
        
        

      

      
        (9)

        
          

        

      

      
        
        

      

    

     

    3.7 Brokers
      or Finders.
      The
      Company has not, and will not, incur, directly or indirectly, as a result of
      any
      action taken by FCP, any liability for brokerage or finders' fees or agents'
      commissions or similar charges in connection with this Agreement or the
      transactions contemplated hereby, other than the commitment and related fees
      payable to FCP under this Agreement.

     

    3.8 Legends.
      FCP
      understands that the Debentures and the common stock issued upon conversion
      thereof, may bear one or all of the following legends:

     

    (a) THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH
      A
      VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
      TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
      THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT
      SUCH
      REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

     

    (b) Any
      legend required by the securities laws of any state to the extent such laws
      are
      applicable to shares represented by the certificate so legended.

     

    4.
      Conditions
      to Closing of FCP.
      The
      obligations of FCP under Section 1 of this Agreement are subject to the
      fulfillment on or before the Closing of each of the following conditions, the
      waiver of which shall not be effective against FCP if it does not consent
      thereto:

     

    4.1 Representations
      and Warranties Correct.
      The
      representations and warranties of the Company contained in Section 2 shall
      be
      true and correct on and as of the Closing with the same effect as though such
      representations and warranties had been made on and as of the date of the
      Closing.

     

    4.2 Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to the Closing shall have been performed or complied
      with in all material respects.

     

    4.3 Debt.
      At
      Closing, total liabilities of the Company shall not exceed $753,278 and shall
      be
      of the type satisfactory to FCP, in its sole discretion. Other than disclosed
      in
      the Disclosure Schedule, the Company shall have no liabilities to the Company's
      shareholders or equity owners or affiliates of such shareholders, except as
      contemplated by this Agreement or the FCP Debenture.

     

    4.4
      Assignment
      of FCP Warrant and Option Rights.
      FCP
      shall have executed an Assignment of Rights in the Form of Exhibit
      D
      hereto,
      pursuant to which FCP shall assign to Regent an undivided fifty percent (50%)
      interest in (i) the FCP Warrant, and (ii) the FCP Option. If requested by Regent
      (including a request made subsequent to Closing), the Company will re-execute
      substitute and separate warrants and option agreements, pursuant to which each
      of Regent and FCP will have stand-alone agreements with terms identical to
      the
      existing FCP Warrant and FCP Option (with the exception that each such
      substitute agreement will cover 50% of the aggregate original
      interests).

     

    
      
        
        

      

      
        (10)

        
          

        

      

      
        
        

      

    

     

    4.5
      Investment
      by Regent – Intracreditor Agreement.
      Regent
      shall concurrently invest in the Company a minimum of $500,000 at the time
      of
      issuance of each Debenture to FCP, for a total
      additional investment of at least $1,000,000. Such investment by Regent shall
      be
      made on terms identical to the Debentures (other than as to amount) pursuant
      to
      documentation substantially identical to the documentation being executed in
      connection with the Debentures. Regent and FCP shall have also executed the
      Intracreditor Confirmation and Agreement in the form of Exhibit
      E
      hereto.

     

    4.6 Stock
      Option Plan.
      The
      Company, with the approval of Regent, will establish a Stock Option Plan,
      pursuant to which an amount not exceeding 10% of the Company's issued and
      outstanding common stock (on a fully diluted basis) will be reserved for
      issuance pursuant to either qualified or nonqualified options that may be
      granted to employees, officers, directors and consultants of the
      Company.

     

    4.7 Satisfaction
      of Due Diligence.
      Regent
      and FCP shall have been satisfied, in their sole discretion, with the results
      of
      its due diligence investigation related to the Company. Without limiting the
      generality of the foregoing, Regent and FCP shall be satisfied that the
      Company's legal counsel, accounting firm and other necessary experts can
      accomplish the filing of the Registration Statement in accordance with Section
      6
      1 hereof.

     

    4.8 Debentures
      and Security Agreement.
      The
      Debentures shall have been issued by the Company and the Company shall have
      executed and delivered the Security Agreement and all other documents
      contemplated by this Agreement.

     

    4.9 Lock-Up
      Agreement.
      Each of
      Kenneth Coviello, Heather Jensen and Sawmill Trust shall have entered into
      a
      Lock-Up Agreement in the form of Exhibit
      F
      hereto,
      pursuant to which such individuals shall have agreed to not sell or otherwise
      transfer any shares of common stock in the Company held by them for a period
      of
      one year following Closing, and thereafter such individuals can sell up to
      twenty-five percent (25%) of their common stock in the Company in each of the
      succeeding two years following Closing, after which time the Lock-Up Agreement
      will expire.

     

    4.10 Material
      Adverse Effect.
      There
      has occurred no fact, event or circumstance which has had, or would reasonably
      be expected to have, a material adverse effect on the assets, liabilities,
      financial condition or operating results of the Company, except changes in
      the
      ordinary course of business that have not been, in the aggregate, materially
      adverse on the Company's business, financial condition or
      properties.

     

    5. Conditions
      to Closing of the Company.
      The
      obligations of the Company to FCP at the Closing are subject to the fulfillment
      on or before the Closing of each of the following conditions by FCP, unless
      otherwise waived:

     

    5.1 Representations
      and Warranties Correct.
      The
      representations and warranties of FCP contained in Section 3 shall be true
      on
      and as of the Closing with the same effect as though such representations and
      warranties had been made on and as of the date of Closing.

     

    5.2 Qualifications.
      All
      authorizations, approvals or permits, if any, of any governmental authority
      or
      regulatory body of the United States or of any state that are required in
      connection with the lawful issuance and sale of the Debentures and underlying
      shares of common stock pursuant to this Agreement shall be obtained and
      effective as of the Closing.

     

    
      
        
        

      

      
        (11)

        
          

        

      

      
        
        

      

    

     

    6. Post-Closing
      Covenants of the Company.

     

    6.1
      Registration
      Statement.
      Within
      sixty (60) days from the date of this Agreement, the Company shall file a
      registration statement on Form S-l, SB-2, or other applicable form ("Registration
      Statement"), with the Securities and Exchange Commission ("SEC"), which
      Registration Statement shall register for sale all common stock which may be
      issuable upon conversion of the Debentures. The Company will thereafter use
      its
      commercially reasonable efforts to have such registration statement declared
      effective by the SEC within one hundred eighty (180) days from the date hereof.
      For purposes hereof, the Company will be deemed to be using its "commercially
      reasonable efforts", provided it fully and appropriately responds to all
      comments from the SEC within ten (10) business days of receipt thereof without
      any undue hardship or unreasonable expenses, and diligently continues to seek
      effectiveness of such registration statement. The Company shall take such action
      to have the Registration Statement declared effective by the SEC within three
      (3) business days following written confirmation from the SEC that it either
      will not review the Registration Statement or that it has no further comment
      on
      the Registration Statement. For the avoidance of any doubt, that the Company
      shall not be in breach of this Section 6.1 for any delay arising from (i) issues
      raised by the SEC relating to Rule 415 of the Securities Act, as amended, or
      to
      the structure of the sale and resale of the shares, (ii) information required
      from person or entities other than the Company, or (iii) issues resulting from
      or relating to acts or omissions of persons or entities other than the
      Company.

     

    6.2 Protection
      of Minority Rights.
      So long
      as either Debenture is outstanding or Regent or its affiliates shall continue
      to
      own at least 10% of the outstanding voting equity securities of the Company,
      then without the prior approval of Regent or its affiliates, as applicable,
      such
      approval not to be unreasonably withheld, the Company will not undertake any
      of
      the actions listed on Schedule
      6.2
      hereto.

     

    6.3 Financial
      Statements.
      The
      Company will deliver to FCP the following financial information: (i) audited
      annual financial statements within 90 days of the close of each fiscal year
      of
      the Company; (ii) unaudited monthly cash flow statements within 30 days after
      the end of each month; (iii) quarterly financial statements within 45 days
      of
      the end of each fiscal quarter of the Company; (iv) a proposed budget for each
      fiscal year within 30 days prior to the beginning of each fiscal year of the
      Company; and (v) such other financial information as FCP may reasonably
      request.

     

    7.
      Miscellaneous.

     

    7.1 Survival
      of Warranties.
      The
      representations, warranties and covenants of the Company and FCP contained
      herein or made pursuant to this Agreement (i) shall survive the execution and
      delivery of this Agreement and the Closing and shall not terminate and (ii)
      shall in no way be affected by any investigation of the subject matter thereof
      made by or on behalf of FCP.

     

    7.2 Successors
      and Assigns.
      Except
      as otherwise provided herein, the terms and conditions of this Agreement shall
      inure to the benefit of and be binding upon the respective successors and
      assigns of the parties. Nothing in this Agreement, express or implied, is
      intended to confer upon any party other than the parties hereto or their
      respective successors and assigns any rights, remedies, obligations, or
      liabilities under or by reason of this Agreement, except as expressly provided
      in this Agreement.

     

    7.3 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York, without regard to conflict of laws
      rules.

     

    7.4 Counterparts;
      Facsimile.
      This
      Agreement may be executed and delivered by facsimile signature and 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.

     

    
      
        
        

      

      
        (12)

        
          

        

      

      
        
        

      

    

     

    7.5 Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    7.6 Notices.
      All
      notices and other communications given or made pursuant to this Agreement shall
      be in writing and shall be deemed effectively given: (i) upon personal delivery
      to the party to be notified, (ii) when sent by confirmed electronic mail or
      facsimile if sent during normal business hours of the recipient, and if not
      so
      confirmed, then on the next business day, (iii) five (5) days after having
      been
      sent by registered or certified mail, return receipt requested, postage prepaid,
      or (iv) one (1) day after deposit with a nationally recognized overnight
      courier, specifying next day delivery, with written verification of receipt.
      All
      communications shall be sent to the respective parties at their address as
      set
      forth on the signature page, or to such e-mail address, facsimile number or
      address as subsequently modified by written notice given in accordance with
      this
      Section 6.6. If notice is given to FCP, a copy shall also be sent to Robert
      Diener, Esq., Law Offices of Robert Diener, 122 Ocean Park Blvd., Suite 307,
      Santa Monica, CA 90405 and if notice is given to the Company, a copy shall
      also
      be given to Benjamin A. Tan Esq., Sichenzia Ross Friedman Ference LLP, 61
      Broadway, 32nd Floor, New York, NY 10006.

     

    7.7 Fees
      and Expenses.
      At the
      Closing, the Company shall pay up to $20,000 of the Regent Expenses, which
      shall
      consist of the reasonable fees and expenses of incurred by Regent in connection
      with this transaction, including the reasonable fees and expenses of Johnson,
      Jones, Domblaser, Coffman & Shorb, P.C., the counsel for
      Regent.

     

    7.8 Attorney's
      Fees.
      If any
      action at law or in equity (including arbitration) is necessary to enforce
      or
      interpret the terms of any of this Agreement or the Ancillary Agreements, the
      prevailing party shall be entitled to reasonable attorney's fees, costs and
      necessary disbursements in addition to any other relief to which such party
      may
      be entitled.

     

    7.9 Amendment.
      Except
      as expressly provided herein, neither this Agreement nor a term of this
      Agreement may be amended, waived discharged or terminated other than by a
      written instrument signed by the party against whom enforcement of any such
      amendment, waiver, discharge or termination is sought. Any such amendment,
      waiver, discharge or termination effected in accordance with this Section 7.9
      shall be binding upon each holder of any securities purchased under this
      Agreement at the time outstanding (including securities into which such
      securities have been converted or exchanged or for which such securities have
      been exercised), each future holder of all such securities and the
      Company.

     

    7.10 Severability.
      If any
      provision of this Agreement becomes or is declared by a court of competent
      jurisdiction (or arbitrator) to be illegal, unenforceable or void, the portions
      of such provision, or such provision in its entirety, to the extent necessary,
      shall be severed from this Agreement, and such court (arbitrator) will replace
      such illegal, void or unenforceable provision with a valid and enforceable
      provision that will achieve, to the extent possible, the same economic, business
      and other purposes of the illegal, void, or unenforceable provision. The balance
      of this Agreement shall be enforceable in accordance with its
      terms.

     

    
      
        
        

      

      
        (13)

        
          

        

      

      
        
        

      

    

     

    7.11 Indemnification.

     

    (a)
      The
      Company, without limitation as to time, assumes liability for and agrees to
      indemnify, defend and hold harmless FCP and its officers, managers/directors,
      members, employees, agents and affiliates (collectively, "Indemnified
      Persons")
      from
      and against, all losses, claims, damages, liabilities, obligations, fines,
      penalties, judgments, settlements, costs, expenses and disbursements (including
      reasonable attorneys' fees and expenses) (collectively, "Losses")
      (i)
      arising out of or related to any breach or inaccuracy of any representation
      or
      warranty of the Company contained in this Agreement, the Debentures, the
      Security Agreement or any other agreement executed in connection herewith or
      therewith (ii) any non-fulfillment or breach of any covenant or agreement of
      the
      Company contained in this Agreement, the Debentures, the Security Agreement
      or
      any other agreement executed in connection herewith or therewith, or (iii)
      incurred in connection with any suit, action, proceeding, claim, investigation,
      liability or obligation (an "Action
      or Proceeding")
      against the Company or any Indemnified Person arising out of or in connection
      with this Agreement and Ancillary Agreements, any other document or instrument
      executed pursuant hereto, or the transactions contemplated herein or therein,
      other than Losses resulting that are finally determined in such Action or
      Proceeding to be primarily and directly a result of (1) the gross negligence
      of
      such Indemnified Person, (2) the intentional misconduct or knowing violation
      of
      applicable law by such Indemnified Person, or (3) a transaction from which
      such
      Indemnified Person received an improper personal benefit. The Company agrees
      to
      reimburse each Indemnified Person promptly for all such Losses as they are
      incurred by such Indemnified Person. The obligations of the Company to each
      Indemnified Person under this Section 7.11 will be separate and distinct
      obligations and will survive any transfer of securities by FCP and the
      expiration or termination of this Agreement. The Company and FCP intend that
      the
      Indemnified Persons be indemnified from liability for their own negligence
      pursuant to this Section 7.11.

     

    (b) If
      and to
      the extent any portion of this Section 7.11 is unenforceable for any reason,
      the
      Company agrees to make the maximum contribution to the payment and satisfaction
      of any Loss for which indemnification is not provided for in this Section
      7.11.

     

    (c) Any
      indemnification obligations pursuant to this Section 7.11 shall be paid by
      wire
      transfer, in immediately available funds, to an account designated in writing
      by
      the Indemnified Person within fifteen (15) days after the determination thereof.
      Any such indemnification payments shall include interest at ten percent (10%)
      per annum calculated on the basis of the actual number of days elapsed over
      360,
      from the date any such Loss is suffered or sustained to the date of payment.
      The
      amount of any Loss for which indemnification is provided for in this Section
      6.13 shall be net of any amounts actually recovered by the indemnifying party
      under insurance policies with respect to such Loss.

     

    7.12 Entire
      Agreement.
      This
      Agreement, the exhibits attached hereto and the Disclosure Schedule, and the
      other documents delivered pursuant to this Agreement, including but not limited
      to the Debentures constitute the full and entire understanding and agreement
      between the parties with respect to the subject matter hereof, and supersede
      all
      prior agreements and understandings, whether written or oral, relating to such
      subject written in any way, including that certain Term Sheet among the parties
      hereto, and no party shall be liable or bound to any other party in any manner
      by any warranties, representations or covenants except as specifically set
      forth
      herein or therein.

     

    7.13 Dispute
      Resolution.
      Any
      unresolved controversy or claim arising out of or relating to this Agreement,
      except as (i) otherwise provided in this Agreement, or (ii) any such
      controversies or claims arising out of either party's intellectual property
      rights for which a provisional remedy or equitable relief is sought, shall
      be
      submitted to arbitration by one arbitrator mutually agreed upon by the parties,
      and if no agreement can be reached within thirty (30) days after names of
      potential arbitrators have been proposed by the American Arbitration Association
      (the "AAA"), then by one arbitrator having reasonable experience in
      corporate finance transactions of the type provided for in this Agreement and
      who is chosen by the AAA. The arbitration shall take place in New York City,
      in
      accordance with the AAA rules then in effect, and judgment upon any award
      rendered in such arbitration will be binding and may be entered in any court
      having jurisdiction thereof. There shall be limited discovery prior to the
      arbitration hearing as follows: (a) exchange of witness lists and copies of
      documentary evidence and documents relating to or arising out of the issues
      to
      be arbitrated, (b) depositions of all party witnesses and (c) such other
      depositions as may be allowed by the arbitrators upon a showing of good cause.
      Depositions shall be conducted in accordance with applicable New York law,
      the
      arbitrator shall be required to provide in writing to the parties the basis
      for
      the award or order of such arbitrator, and a court reporter shall record all
      hearings, with such record constituting the official transcript of such
      proceedings. The prevailing party shall be entitled to reasonable attorney's
      fees, costs, and necessary disbursements in addition to any other relief to
      which such party may be entitled. Each of the parties to this Agreement consents
      to personal jurisdiction for any equitable action sought in the U.S. District
      Court for the Southern District of New York.

     

    
      
        
        

      

      
        (14)

        
          

        

      

      
        
        

      

    

     

    7.14
      No
      Commitment for Additional Financing.
      The
      Company acknowledges and agrees that other than as contemplated by this
      Agreement, the Debentures or the Security Agreement, FCP has not made any
      representation, undertaking, commitment or agreement to provide or assist the
      Company in obtaining any financing, investment or other assistance, other than
      the purchase of the Debentures and the provision of funds pursuant to the
      Debentures subject to the conditions set forth herein. In addition, the Company
      acknowledges and agrees that (i) no statements, whether written or oral, made
      by
      FCP or its representatives on or after the date of this Agreement shall create
      an obligation, commitment or agreement to provide or assist the Company in
      obtaining any financing or investment, (ii) the Company shall not rely on any
      such statement by FCP or its representatives and (iii) an obligation, commitment
      or agreement to provide or assist the Company in obtaining any financing or
      investment may only be created by a written agreement, signed by FCP and the
      Company, setting forth the terms and conditions of such financing or investment
      and stating that the parties intend for such writing to be a binding obligation
      or agreement. FCP shall have the right, in its sole and absolute discretion,
      to
      refuse or decline to participate in any other financing of or investment in
      the
      Company, and shall have no obligation to assist or cooperate with the Company
      in
      obtaining any financing, investment or other assistance.

     

    IN
      WITNESS WHEREOF, the parties have executed this Convertible Debenture Purchase
      Agreement as of the date first written above.

     

    Signatures
      appear on following page

     

    
      
        
        

      

      
        (15)

        
          

        

      

      
        
        

      

    

     

    
      
        	
                COMPANY

              
	 
	
                VYCOR
                  MEDICAL, INC.

              
	 	 
	
                By:

              	
                /s/
                  Kenneth
                  T. Coviello

              
	
                Name: 

              	
                Kenneth
                  T. Coviello

              
	
                Title:
                  

              	
                CEO

              

      

       

      
        	
                Address:

              
	 
	
                80
                  Orville Drive, Suite 100

              
	
                Bohemia,
                  New York 11716

              
	 
	
                FCP

                 

              
	
                FOUNTAINHEAD
                  CAPITAL PARTNERS

                LIMITED

              

      

      

      
        	
                By: 

              	
                /s/
                  Gisele Le Miere

              
	 	
                Director

              
	 	 
	
                By:

              	
                /s/
                  Carole Dodge

              
	 	
                Director

              

      

       

      
        
          	
                  Address:

                   

                
	
                  Portman
                    House
Hue Street, St. Helier
Jersey JE4
                    5RP

                

        

         

        
          
            
            

          

          
            (16)

            
              

            

          

          
            
            

          

           

        

      

    

    EXHIBIT
      A

     

    FORM
      OF DEBENTURE

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND IS BEING
      OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
      OF
      THE SECURITIES ACT AND SUCH LAWS. THIS SECURITY MAY NOT BE SOLD OR TRANSFERRED
      EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
      ACT
      OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT OR SUCH OTHER LAWS.

     

    6%
      CONVERTIBLE DEBENTURE

    

    
      
        	No.
                2	
                US$150,000

              

      

    

     

    VYCOR
      MEDICAL, INC.

     

    SENIOR
      CONVERTIBLE DEBENTURE

     

    DUE
      FEBRUARY 15, 2008

    

    FOR
      VALUE
      RECEIVED, Vycor
      Medical, Inc. (the
      "Company") promises to pay to Fountainhead
      Capital Partners Limited, or
      any
      other registered holder(s) hereof and its or their authorized successors and
      permitted assigns (" Holder"), the aggregate principal face amount of US$150,000
      on or before February 15, 2009 ("Maturity Date"), together with interest thereon
      at six percent (6%) per annum. The Holder shall have the sole option to extend
      the Maturity Date for a period of six months. Accrued interest shall be paid
      to
      the person in whose name this Debenture is registered on the records of the
      Company regarding registration and transfers of the Debenture ("Debenture
      Register"); provided, however, that the Company's obligation to a transferee
      of
      this Debenture arises only if such transfer, sale or other disposition is made
      in accordance with the terms hereof and duly entered in the Debenture Register.
      The principal amount of this Debenture is payable at the address last appearing
      on the Debenture Register of the Company as designated in writing by the Holder
      hereof from time to time. The Holder's address initially provided to the Company
      is as set forth in Section 16(b) below. The Company may, at its option, elect
      to
      pay accrued interest under this Debenture, by issuing to the Holder shares
      of
      common stock in the Company with a value equal to such accrued interest. In
      such
      event, the value of the common stock issued in lieu of payment of accrued
      interest will be mutually agreed upon by the Company and the Holder prior to
      the
      Company having the right to make payment in such fashion. The Company will
      pay
      the outstanding principal and accrued interest due upon this Debenture before
      or
      on the Maturity Date, less any amounts required by law to be deducted or
      withheld, to the Holder of this Debenture by check if paid more than 10 days
      prior to the Maturity Date or by wire transfer and addressed to such Holder
      at
      the last address appearing on the Debenture Register. The forwarding of such
      check or wire transfer shall constitute a payment of outstanding principal
      hereunder and shall satisfy and discharge the liability for principal on this
      Debenture to the extent of the sum represented by such check or wire
      transfer.

    

    
      
        
        

      

      
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    This
      Debenture is one of a series of two Convertible Debentures, each in the original
      principal amount of $150,000, to be issued pursuant to the Convertible Debenture
      Purchase Agreement dated February 15, 2008 ("Purchase Agreement"), and secured
      pursuant to the terms of a Security Agreement of even date with the Purchase
      Agreement ("Security Agreement").

     

    This
      Debenture is subject to the following additional provisions:

     

    1. Issuance. The
      Debenture may be exchanged for an equal aggregate principal amount of Debentures
      of different authorized denominations, as requested by the Holders surrendering
      the same, but not less than U.S. $50,000 each. No service charge will be made
      for such registration or transfer or exchange, except that Holder shall pay
      any
      tax or other governmental charges payable in connection therewith. The Company
      shall be entitled to withhold from all payments any amounts required to be
      withheld under the applicable laws.

     

    2. Loss,
      Theft, Destruction of Debenture.
      Upon
      receipt of evidence satisfactory to the Company of the loss, theft, destruction
      or mutilation of this Debenture and, in the case of any such loss, theft or
      destruction, upon receipt of indemnity or security reasonably satisfactory
      to
      the Company, or, in the case of any such mutilation, upon surrender and
      cancellation of this Debenture, the Company shall make, issue and deliver,
      in
      lieu of such lost, stolen, destroyed or mutilated Debenture, a new Debenture
      of
      like tenor and unpaid principal amount dated as of the date hereof (which shall
      accrue interest from the most recent interest payment date on which an interest
      payment was made in full).

     

    3. Transfer. This
      Debenture may be transferred or exchanged only in compliance with the Securities
      Act of 1933, as amended (the "Act") and applicable state securities laws. Prior
      to due presentment for transfer of this Debenture, the Company and any agent
      of
      the Company may treat the person in whose name this Debenture is duly registered
      on the Company's Debenture Register as the Holder hereof for all other purposes,
      whether or not this Debenture be overdue, and neither the Company nor any such
      agent shall be affected or bound by notice to the contrary. Any Holder of this
      Debenture, electing to exercise the right of conversion set forth in Section
      4(a) hereof, in addition to the requirements set forth in Section 4(a), and
      any
      prospective transferee of this Debenture, are also required to give the Company
      written confirmation that the Debenture is being converted ("Notice of
      Conversion") in the form annexed hereto as Exhibit I. The date of receipt
      (including receipt by telecopy) of such Notice of Conversion shall be the
      Conversion Date.

     

    
      
        
        

      

      
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    4. Conversion The
      Holder is entitled, at its option, to convert all or any amount of the principal
      face amount of this Debenture then outstanding into shares of common stock
      of
      the Company at a Conversion Price of $.01230 per share, subject to adjustment
      as
      provided herein. If the number of resultant Conversion Shares would as a matter
      of law or pursuant to regulatory authority require the Company to seek member
      approval of such issuance, the Company has, prior to the issuance hereof, taken
      the necessary steps to obtain such approval. Such conversion shall be
      effectuated, by the Company delivering the Conversion
      Shares to the Holder within 30 days of receipt by the Company of the Notice
      of
      Conversion. Once the Holder has received such Conversion Shares, the Holder
      shall surrender the Debenture (or portion thereof) to be converted to the
      Company, executed by the Holder of this Debenture evidencing such Holder's
      intention to convert this Debenture or a specified portion hereof, and
      accompanied by proper assignment hereof in blank. If the Company shall fail
      to
      deliver the Conversion Shares to the Holder within such 30 day period, the
      Conversion Price shall be automatically reduced by twenty-five percent (25%),
      and shall be reduced an additional ten percent (10%) for each additional 30
      day
      period (or portion thereof) thereafter. In the event of a partial conversion
      of
      the Debenture, the Company will immediately issue a replacement Debenture
      covering the unconverted portion.

     

    To
      the
      fullest extent permitted by law, the Holder shall be entitled to exercise its
      conversion privilege notwithstanding the commencement of any case under the
      Bankruptcy Code. In the event the Company is a debtor under the Bankruptcy
      Code,
      the Company hereby waives to the fullest extent permitted any rights to relief
      it may have under 11 U.S.C. § 362 in respect of the Holder's conversion
      privilege. The Company hereby waives to the fullest extent permitted any rights
      to relief it may have under 11 U.S.C. § 362 in respect of the conversion of this
      Debenture. The Company agrees, without cost or expense to the Holder, to take
      or
      consent to any and all action necessary to effectuate relief under 11 U.S.C.
§
362.

     

    No
      fractional shares or scrip representing fractional shares shall be delivered
      upon conversion of this Debenture. Instead of any fractional Conversion Shares
      which otherwise would be delivered upon conversion of this Debenture, the
      Company shall pay a cash adjustment in respect of such fraction in an amount
      equal to the same fraction multiplied by the Conversion Price on the date of
      Conversion. No cash payment of less than $1.00 shall be required to be given
      unless specifically requested by the Holder.

     

    5. Priority;
      Security. The
      obligation evidenced by this Debenture shall be senior to all other obligations
      of the Company other than obligations specifically approved by the Holder;
      provided that the obligation evidenced by this Debenture shall be of equal
      priority for all purposes with that certain Bridge Loan Debenture dated June
      21,
      2007, in the original principal amount of $172,500 held by Fountainhead Capital
      Partners Limited (the "FCP Debenture"). The obligation evidenced by this
      Debenture is secured by a first priority security interest (and equal in
      priority to the first priority security interest securing the FCP Debenture),
      in
      all of the assets of the Company other than liens specifically approved by
      the
      Holder. As a condition to funding this Debenture, the Holder has the right
      to
      require the holder of the FCP Debenture to execute an intracreditor or similar
      written agreement pursuant to which such holder acknowledges that the security
      interests of such holder and the Holder hereunder shall be equal, and in the
      event of a default under either the FCP Debenture or this Debenture, such
      debenture holders, as secured parties, will share, pari passu, with respect
      to
      the proceeds from any foreclosure of collateral securing such
      indebtedness.

     

    6. Anti-dilution
      Adjustments.
      The
      number of shares issuable upon conversion of this Debenture and the Conversion
      Price shall be subject to adjustment as follows:

     

    
      
        
        

      

      
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    (a) In
      case
      the Company shall (i) pay a dividend or make a distribution on its common stock
      in additional shares or other securities, (ii) subdivide its outstanding common
      stock into a greater number of shares, (iii) combine its outstanding shares
      into
      a smaller number of shares or (iv) issue, by reclassification of its shares,
      any
      other securities of the Company (including any such reclassification in
      connection with a consolidation or merger in which the Company is the continuing
      entity), the number of share issuable upon conversion of this Debenture
      immediately prior thereto shall be adjusted so that the Holder shall be entitled
      to receive the kind and number of Conversion Shares, and other securities of
      the
      Company which such Holder would have owned or would have been entitled to
      receive immediately after the happening of any of the events described above,
      had the Debenture been converted immediately prior to the happening of such
      event or any record date with respect thereto. Any adjustment made pursuant
      to
      this subsection 6(a) shall become effective immediately after the effective
      date
      of such event.

     

    (b) In
      case
      the Company shall issue rights, options, warrants or convertible securities
      to
      holders of its shares, for no
      consideration, containing
      the right to subscribe for or purchase shares of common stock, the number of
      Conversion Shares thereafter issuable upon the conversion of this Debenture
      shall be determined by multiplying the number of Conversion Shares theretofore
      issuable upon conversion of this Debenture by a fraction, of which the numerator
      shall be the number of shares outstanding immediately prior to the issuance
      of
      such rights, options, warrants or convertible securities plus the number of
      additional shares offered for subscription or purchase, and of which the
      denominator shall be the number of shares outstanding immediately prior to
      the
      issuance of such rights, options, warrants or convertible securities. Such
      adjustment shall be made whenever such rights, options, warrants or convertible
      securities are issued, and shall become effective immediately upon issuance
      of
      such rights, options, warrants or convertible securities. In the event of such
      adjustment, corresponding adjustments shall be made to the Conversion
      Price.

     

    (c) In
      case
      the Company shall distribute to holders of its common shares evidences of its
      indebtedness or assets (excluding cash dividends or distributions out of current
      earnings made in the ordinary course of business consistent with past
      practices), then in each case the number of Conversion Shares thereafter
      issuable upon the conversion of this Debenture shall be determined by
      multiplying the number of Conversion Shares theretofore issuable upon conversion
      of this Debenture by a fraction, of which the numerator shall be the then Market
      Price (as defined below) on the date of such distribution, and of which the
      denominator shall be such Market Price on such date minus the then fair value
      (determined as provided in subsection 6(f) below) of the portion of the assets
      or evidences of indebtedness so distributed applicable to one share. Such
      adjustment shall be made whenever any such distribution is made and shall become
      effective on the date of distribution. In the event of any such adjustment,
      the
      number of Conversion Shares shall also be adjusted and shall be that number
      determined by multiplying the number of shares issuable upon exercise before
      the
      adjustment by a fraction, the numerator of which shall be the Conversion Price
      in effect immediately before the adjustment and the denominator of which shall
      be the Conversion Price as so adjusted.

     

    
      
        
        

      

      
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    (d)
      If
      the Company shall at any time while this Debenture is outstanding issue shares
      (including additional shares deemed to be issued upon conversion of any
      convertible security, but excluding shares issued as a dividend or distribution
      or upon a stock split or combination which is otherwise provided for in Section
      6(a) above, or upon the issuance of options or warrants for no
      consideration which
      is
      otherwise provided for in Section 6(b) above) either without consideration,
      or
      for a consideration per share less than the Conversion Price in effect on the
      date of and immediately prior to such issue, then and in such event, the
      Conversion Price shall be reduced by a full ratchet anti-dilution adjustment
      to
      such lesser price (calculated to the nearest cent).

     

    For
      purposes of this Section 6(d), the consideration received by the Company for
      the
      issue of any additional shares shall be computed as follows:

     

    (A) Cash
      and
      Property. Such consideration shall:

     

    (1) insofar
      as it consists of cash, be computed at the aggregate of cash received by the
      Company, excluding amounts paid or payable for accrued interest or accrued
      dividends;

     

    (2) insofar
      as it consists of property other than cash, be computed at the fair market
      value
      thereof at the time of such issue, as determined in good faith by the Company's
      managers or governing board; and

     

    (3) in
      the
      event additional shares are issued together with other securities or other
      assets of the Company for consideration which covers both, be the proportion
      of
      such consideration so received, computed as provided in clauses (1) and (2)
      above, as determined in good faith by the Company's board of
      directors.

     

    (B) Options,
      Rights and Convertible Securities. The consideration per unit received by the
      Company for additional shares deemed to have been issued pursuant to options,
      warrants, rights or other convertible securities (other than when issued for
      no
      consideration as provided for in Section 6(a) above), shall be determined by
      dividing

     

    (1) the
      total
      amount, if any, received or receivable by the Company as consideration for
      the
      issue of such options, rights, warrants or other convertible securities, plus
      the minimum aggregate amount of additional consideration (as set forth in the
      instruments relating thereto, without regard to any provision contained therein
      for a subsequent adjustment of such consideration) payable to the Company upon
      the exercise of such options, rights, warrants or the conversion or exchange
      of
      such convertible securities, by

     

    (2) the
      maximum number of shares (as set forth in the instruments relating thereto,
      without regard to any provision contained therein for a subsequent adjustment
      of
      such number) issuable upon the exercise of such options, rights, warrants or
      the
      conversion or exchange of such convertible securities.

     

    
      
        
        

      

      
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    (e) Whenever
      the number of Conversion Shares issuable upon the conversion of this Debenture
      is adjusted as provided in this Section 6, the Conversion Price shall be
      adjusted by multiplying such Conversion Price immediately prior to such
      adjustment by a fraction, the numerator of which shall be the number of
      Conversion Shares issuable upon the conversion of this Debenture immediately
      prior to such adjustment, and the denominator of which shall be the number
      of
      Conversion Shares issuable immediately thereafter.

     

    (f) For
      the
      purpose of this Section 6, the term "shares"
      shall
      mean (i) the common stock of the Company at the time of conversion, on a fully
      diluted basis. In the event that at any time, as a result of an adjustment
      made
      pursuant to this Section 6, a Debenture holder shall be entitled to convert
      such
      Debenture into any securities of the Company other than common stock, (i) if
      the
      Debenture holder's right to convert is on any other basis than that available
      to
      all holders of the Company's common stock, the Company shall obtain an opinion
      of a reputable investment banking firm valuing such other securities and (ii)
      thereafter the number of such other securities so purchasable upon conversion
      of
      a Debenture and the Conversion Price of such securities shall be subject to
      adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the shares contained in this
      Section 6.

     

    (g) Upon
      the
      expiration of any rights, options, warrants or conversion privileges, if such
      shall not have been exercised, the number of Conversion Shares issuable upon
      conversion of the Debenture and the Conversion Price, to the extent the
      Debenture has not then been converted, shall, upon such expiration, be
      readjusted and shall thereafter be such number and such price as they would
      have
      been had they been originally adjusted (or had the original adjustment not
      been
      required, as the case may be) on the basis of (A) the fact that the only shares
      issued in respect of such rights, options, warrants or conversion privileges
      were the shares, if any, actually issued or sold upon the exercise of such
      rights, options, warrants or conversion privileges, and (B) the fact that such
      shares, if any, were issued or sold for the consideration actually received
      by
      the Company upon such exercise plus the consideration, if any, actually received
      by the Company for the issuance, sale or grant of all such rights, options,
      warrants or conversion privileges whether or not exercised; provided, however,
      that no such readjustment shall have the effect of decreasing the numbers of
      Conversion Shares issuable upon conversion of the Debenture or increasing the
      Conversion Price by an amount in excess of the amount of the adjustment made
      in
      respect of the issuance, sale or grant of such rights, options, warrants or
      conversion privileges.

     

    (h) Upon
      any
      adjustment of the Conversion Price and the number of Conversion Shares issuable
      upon conversion of the Debenture, then and in each such case, the Company shall
      give written notice thereof, by first-class mail, postage prepaid, addressed
      to
      the Holder as shown on the books of the Company, which notice shall state the
      Conversion Price resulting from such adjustment and the increase or decrease,
      if
      any, in the number of shares issuable at such price upon the conversion of
      the
      Debenture, setting forth in reasonable detail the method of calculation and
      the
      facts upon which such calculation is based.

     

    
      
        
        

      

      
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    7. Merger,
      Reorganization or Consolidation.
      In
      any
      case in which a transaction would result in a complete liquidation of the
      Company or a merger, reorganization, or consolidation of the Company with any
      other unrelated corporation or other entity in which the Company is not the
      surviving corporation or the Company becomes a wholly-owned subsidiary of
      another unrelated corporation or other entity (all such transactions being
      referred to herein as a "Reorganization"), the surviving corporation or other
      entity shall be required to assume the Debenture or to issue a substitute
      Debenture in place thereof which substitute Debenture shall provide for terms
      at
      least as favorable to the Holder as contained in this Debenture and shall
      provide the Holder the right to acquire the kind and amount of common stock
      and
      other securities and property which the Holder would have owned or been entitled
      to receive had the Debenture been converted immediately prior to such
      Reorganization.

     

    8. No
      Impairment. No
      provision of this Debenture shall alter or impair the obligation of the Company,
      which is absolute and unconditional, to pay the principal of this Debenture
      at
      the time, place, and rate, and in the form, herein prescribed.

     

    9. Waiver
      of Demand/Presentment. The
      Company hereby expressly waives demand and presentment for payment, notice
      of
      non-payment, protest, notice of protest, notice of dishonor, notice of
      acceleration or intent to accelerate, and diligence in taking any action to
      collect amounts called for hereunder and shall be directly and primarily liable
      for the payment of all sums owing and to be owing hereto.

     

    10. Cost
      and Fees. The
      Company agrees to pay all costs and expenses, including reasonable attorneys'
      fees, which may be incurred by the Holder in collecting any amount due under
      this Debenture.

     

    11. Events
      of Default. If
      one or
      more of the following described "Events of Default" shall occur and continue
      for
      30 days, unless a different time frame is noted below:

     

    (a) The
      Company shall default in the payment of principal or interest on this Debenture,
      and such failure shall continue for a period of five (5) days; or

     

    (b) The
      Company shall fail to perform or observe, in any material respect, any other
      covenant, term, provision, condition, agreement or obligation of the Company
      under this Debenture and such failure shall continue uncured for a period of
      thirty (30) days after notice from the Holder of such failure; or

     

    (c) The
      Company shall (1) become insolvent; (2) admit in writing its inability to pay
      its debts generally as they mature; (3) make an assignment for the benefit
      of
      creditors or commence proceedings for its dissolution; (4) apply for or consent
      to the appointment of a trustee, liquidator or receiver for its or for a
      substantial part of its property or business; (5) file a petition for bankruptcy
      relief, consent to the filing of such petition or have filed against it an
      involuntary petition for bankruptcy relief, all under federal or state laws
      as
      applicable; or

     

    
      
        
        

      

      
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    (d) A
      trustee, liquidator or receiver shall be appointed for the Company or for a
      substantial part of its property or business without its consent and shall
      not
      be discharged within thirty (30) days after such appointment; or

     

    (e) Any
      governmental agency or any court of competent jurisdiction at the instance
      of
      any governmental agency shall assume custody or control of the whole or any
      substantial portion of the properties or assets of the Company; or

     

    (f) Any
      money
      judgment, writ or warrant of attachment, or similar process, in excess of One
      Hundred Thousand ($100,000) Dollars in the aggregate shall be entered or filed
      against the Company or any of its properties or other assets and shall remain
      unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or
      in
      any event later than five (5) days prior to the date of any proposed sale
      thereunder; or

     

    (g) Bankruptcy,
      reorganization, insolvency or liquidation proceedings, or other proceedings
      for
      relief under any bankruptcy law or any law for the relief of debtors shall
      be
      instituted voluntarily by or involuntarily against the Company;
      or

     

    (h) The
      Company shall not deliver to the Holder the shares pursuant to paragraph 4
      herein within 30 days of receipt of Notice of Conversion; or

     

    (i) any
      of
      the representations or warranties made by the Company herein, in the Purchase
      Agreement or the Security Agreement or in any certificate or financial or other
      written statements heretofore or hereafter furnished by or on behalf of the
      Company in connection with the execution and delivery of this Debenture, the
      Purchase Agreement or the Security Agreement shall be false or misleading in
      a
      material respect on the Closing Date; or

     

    (j)
      the
      Company shall fail in any one of the following respects: (A) to file, within
      sixty (60) days from the date hereof, a registration statement on Form S-l
      or
      SB-2, (or other applicable form ("Registration Statement"), with the Securities
      and Exchange Commission ("SEC"), which Registration Statement shall register
      for
      sale all Conversion Shares which may be issuable upon conversion of this
      Debenture; (B) to use its commercially reasonable efforts to have such
      Registration Statement declared effective by the SEC within one hundred eighty
      (180) days from the date hereof (and for purposes hereof, the Company will
      be
      deemed to be using its "commercially reasonable efforts" without any undue
      hardship or unreasonable expenses, provided it fully and appropriately responds
      to all comments from the SEC within ten (10) business days of receipt thereof,
      and diligently continues to seek effectiveness of such registration statement);
      or (C) to take such action to have the Registration Statement declared effective
      by the SEC within three (3) business days following written confirmation from
      the SEC that it either will not review the Registration Statement or that it
      has
      no further comment on the Registration Statement; or

     

    (k)
      If
      the Company is then a "reporting company" it shall fail to make the required
      filings or statements with the Securities Exchange Commission by the appropriate
      deadlines.

     

    
      
        
        

      

      
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    Then,
      or
      at any time thereafter, unless cured, and in each and every such case, unless
      such Event of Default shall have been waived in writing by the Holder (which
      waiver shall not be deemed to be a waiver of any subsequent default) at the
      option of the Holder and in the Holder's sole discretion, the Holder may
      consider this Debenture immediately due and payable, without presentment,
      demand, protest or (further) notice of any kind (other than notice of
      acceleration), all of which are hereby expressly waived, anything herein or
      in
      any note or other instruments contained to the contrary notwithstanding, and
      the
      Holder may immediately, and without expiration of any period of grace, enforce
      any and all of the Holder's rights and remedies provided herein or any other
      rights or remedies afforded by law. Upon an Event of Default, interest shall
      accrue on all amounts outstanding under this Debenture at the rate of 12% per
      annum, until such Event of Default is cured or the principal and all accrued
      interest under this Debenture is paid in full.

     

    12. Priority.
      This
      Debenture represents a prioritized obligation of the Company. However, no
      recourse shall be had for the payment of the principal of this Debenture, or
      for
      any claim based hereon, or otherwise in respect hereof, against any
      incorporator, unitholder, officer or director, as such, past, present or future,
      of the Company or any successor corporation, whether by virtue of any
      constitution, statute or rule of law, or by the enforcement of any assessment
      or
      penalty or otherwise, all such liability being by the acceptance hereof and
      as
      part of the consideration for the issue hereof, expressly waived and
      released.

     

    13. Severability. In
      case
      any provision of this Debenture is held by a court of competent jurisdiction
      to
      be excessive in scope or otherwise invalid or unenforceable, such provision
      shall be adjusted rather than voided, if possible, so that it is enforceable
      to
      the maximum extent possible, and the validity and enforceability of the
      remaining provisions of this Debenture will not in any way be affected or
      impaired thereby.

     

    14. Entire
      Agreement.
      This
      Debenture, the Purchase Agreement, the Security Agreement and the agreements
      referred to in this Debenture constitute the full and entire understanding
      and
      agreement between the Company and the Holder with respect to the subject hereof.
      Neither this Debenture nor any term hereof may be amended, waived, discharged
      or
      terminated other than by a written instrument signed by the Company and the
      Holder.

     

    15. Governing
      Law. This
      Debenture shall be governed by and construed in accordance with the laws of
      New
      York applicable to contracts made and wholly to be performed within the State
      of
      New York and shall be binding upon the successors and assigns of each party
      hereto. The Holder and the Company hereby mutually waive trial by jury and
      consent to exclusive jurisdiction and venue in the courts of the State of New
      York. At Holder's election, any dispute between the parties may be arbitrated
      rather than litigated in the courts, before the American Arbitration Association
      in New York City and pursuant to its rules. Upon demand made by the Holder
      to
      the Company, the Company agrees to submit to and participate in such
      arbitration. This Agreement may be executed in counterparts, and the facsimile
      transmission of an executed counterpart to this Agreement shall be effective
      as
      an original.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    16.
      Miscellaneous.

     

    (a) Notice
      of Certain Events.
      In the
      case of the occurrence of a Reorganization described in Section 7 of this
      Debenture, the Company shall cause to be mailed to the Holder of this Debenture
      at its last address as it appears in the Company's security registry, at least
      twenty (20) days prior to the applicable record, effective or expiration date
      hereinafter specified (or, if such twenty (20) days' notice is not possible,
      at
      the earliest possible date prior to any such record, effective or expiration
      date), a notice thereof, including, if applicable, a statement of the date
      on
      which such Reorganization is expected to become effective, and the date as
      of
      which it is expected that holders of record of the shares will be entitled
      to
      exchange their shares for securities, cash or other property deliverable upon
      such Reorganization.

     

    (b) Transmittal
      of Notices.
      Except
      as may be otherwise provided herein, any notice or other communication or
      delivery required or permitted hereunder shall be in writing and shall be
      delivered personally, or sent by telecopier machine or by a nationally
      recognized overnight courier service, and shall be deemed given when so
      delivered personally, or by telecopier machine or overnight courier service
      as
      follows:

     

    (1)      If
      to the Holder, to:

     

    Fountainhead
      Capital Partners Limited

    Portman
      House

    Hue
      Street

    St.
      Helier

    Jersey,
      Channel Islands JE4 5RP

     

    With
      a
      copy to:

     

    Robert
      Diener, Esq.

    Law
      Offices of Robert Diener

    122
      Ocean
      Park Blvd., Suite 307

    Santa
      Monica, CA 90405

    Telephone:
      310-396-1691

    Facsimile:
      310-362-8887

     

    (2)      If
      to the Holder, to:

     

    Vycor
      Medical, Inc.

    80
      Orville Drive, Suite 100

    Bohemia,
      New York 11716

    Telephone:
      631-244-1435

    Facsimile:
      631-244-1436

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    With
      a
      copy to:

     

    Benjamin
      A. Tan Esq.

    Sichenzia
      Ross Friedman Ference LLP

    61
      Broadway, 32nd Floor

    New
      York,
      NY 10006

    Phone
      212-930-9700

    Fax
      212-930-9725

    

    Each
      of
      the Holder or the Company may change the foregoing address by notice given
      pursuant to this Section 16(b).

     

    (c)
      Attorneys'
      Fees.
      Should
      any party hereto employ an attorney for the purpose of enforcing or construing
      this Debenture, or any judgment based on this Debenture, in any legal proceeding
      whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief
      or
      other litigation, the prevailing party shall be entitled to receive from the
      other party or parties thereto reimbursement for all reasonable attorneys'
      fees
      and all reasonable costs, including but not limited to service of process,
      filing fees, court and court reporter costs, investigative costs, expert witness
      fees, and the cost of any bonds, whether taxable or not, and that such
      reimbursement shall be included in any judgment or final order issued in that
      proceeding. The "prevailing party" means the party determined by the court
      to
      most nearly prevail and not necessarily the one in whose favor a judgment is
      rendered.

     

    IN
      WITNESS WHEREOF, the Company has caused this instrument to be duly executed
      by
      an officer thereunto duly authorized.

    

    Dated:
      ______________,
      2008

    
       

      
        
          	
                  VYCOR
                    MEDICAL, INC.

                
	 	 
	
                  By:

                	
                   

                
	
                  Name: 

                	
                   

                
	
                  Title:
                    

                	
                   

                

        

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

    

     

    EXHIBIT
      I

    NOTICE
      OF CONVERSION

     

    (To
      be
      executed by the Registered Holder in order to Convert the
      Debenture)

     

    The
      undersigned hereby irrevocably elects to convert $_________ of
      the
      above Debenture No.
      _________ into
      shares of common stock of Vycor Medical, Inc. according to the conditions
set
      forth
      in such Debenture, as of the date written below. If shares are to be issued
      in
      the name of a person other than the undersigned, the undersigned will pay all
      transfer and other taxes and charges payable with respect thereto.

    

    Date
      of
      Conversion

     

    
      
        

      

Applicable
      Conversion Price

    

    
      
        

      

    Signature

     

      
        

      

    

    [Print
      Name of Holder and Title of Signer]

     

    Address:

     

    
      
 

      
 

    SSN
      or
      EIN:

     

    Shares
      are to be registered in the following name:

    

    Name:

    Address:

    Tel:

    Fax:

    SSN
      or
      EIN:

    

    Shares
      are to be sent or delivered to the following account:

    

    Account
      Name:

    Address:

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF SECURITY AGREEMENT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SECURITY
      AGREEMENT

     

    For
      valuable consideration, the receipt and sufficiency of which are acknowledged,
      VYCOR
      MEDICAL, INC., ("Pledgor"),
      enters into this Security Agreement ("Agreement") and grants to FOUNTAINTHEAD
      CAPITAL PARTNERS LIMITED ("Secured
      Party") a security interest in the Collateral to secure the Obligations of
      Pledgor to Secured Party. Pledgor agrees with Secured Party as
      follows:

     

    ARTICLE
      I - SECURITY
      INTEREST

     

    1.01 Pledge
      of Collateral.
      Pledgor
      grants to Secured Party a security interest in, and agrees and acknowledges
      that
      Secured Party has and shall continue to have a security interest in, the
      following described property, to-wit:

     

    All
      inventory of Pledgor, now owned, and all accessories, parts and equipment now
      or
      hereafter attached thereto or used in connection therewith;

     

    All
      accounts of Pledgor, including contract rights and accounts receivable, now
      existing or hereafter arising;

     

    All
      general intangibles of Pledgor, now existing or hereafter
      arising;

     

    All
      instruments, documents of title, policies and certificates of insurance,
      securities, chattel paper, deposits, cash or other property owned by Pledgor
      or
      in which Pledgor has an interest which are now or may hereafter be in possession
      of Secured Party;

     

    All
      equipment of Pledgor, now owned;

     

    All
      proceeds and products of the foregoing; and

     

    All
      inventory, accounts, general intangibles, equipment, chattel paper, securities
      and instruments acquired with the proceeds of the foregoing and products of
      the
      foregoing.

     

    (collectively
      the "Collateral"). Pledgor agrees to execute all stock powers, endorse
      instruments, or execute additional pledge agreements or other documents required
      by the Secured Party in order to effectively grant to Secured Party the security
      interest in the Collateral.

     

    1.02 Obligations
      Secured.
      The
      Collateral secures the payment of all debts, obligations and liabilities of
      every kind and character of Pledgor now or hereafter existing in favor of
      Secured Party ("Obligations"), including, but not limited to, all amounts that
      may be outstanding with respect to two essentially identical Convertible
      Debentures, each in the original principal amount of $150,000 issued or to
      be
      issued by Pledgor to Secured Party (the "Debentures"), and all Pledgor's
      representations, warranties, covenants and obligations set forth in that certain
      Debenture Purchase Agreement of even date herewith between Pledgor and Secured
      Party ("Purchase Agreement").

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II - WARRANTIES
      AND COVENANTS OF PLEDGOR

     

    Pledgor
      warrants, covenants and agrees that:

     

    2.01 Title
      to Collateral.
      Pledgor
      is the owner of the Collateral, free of any adverse claim, security interest,
      restriction or encumbrance, except for the security interest granted hereby
      and
      as set forth in Section 2.02 below. Pledgor will defend the Collateral against
      all claims and demands of all persons at any time claiming the same or any
      interest therein.

     

    2.02 Priority;
      Security.
      The
      security interest in the Collateral shall be senior to all other obligations
      of
      the Pledgor other than obligations specifically approved by Secured Party;
      provided that the security interest in the Collateral evidenced by this
      Agreement shall be of equal priority for all purposes with that certain Bridge
      Loan Debenture dated December 14, 2006 (as amended, to extend the maturity
      date
      thereof), in the original principal amount of $172,500 held by Fountainhead
      Capital Partners Limited.

     

    2.03 Filings.
      Pledgor
      authorizes the Secured Party to file, in jurisdictions where this authorization
      will be given effect, a Financing Statement signed only by the Secured Party
      covering the Collateral; and at the request of Secured Party, Pledgor will
      join
      the Secured Party in executing one or more Financing Statements pursuant to
      the
      Uniform Commercial Code, in form satisfactory to the Secured Patty, and will
      pay
      the cost of filing the same or filing or recording this Agreement in all public
      offices wherever filing or recording is reasonably necessary or
      desirable.

     

    2.04 Conveyance
      of Collateral.
      Pledgor
      will not sell or offer to sell or otherwise transfer or encumber the Collateral
      or any interest therein without the prior written consent of the Secured
      Party.

     

    2.05 Encumbrances.
      Pledgor
      will keep the Collateral free from any and all adverse liens, security interest
      and encumbrances.

     

    2.06 Expenses.
      Pledgor
      will pay to Secured Party all reasonable expenses including attorneys' fees
      and
      legal expenses, incurred or paid by Secured Party in exercising or protecting
      its interest in the Collateral, and its rights and remedies under this
      Agreement. Pledgor agrees to pay interest on preservation and collection
      expenses incurred by Secured Party at the maximum rate permitted by applicable
      law from the date of incurrence by Secured Party until the date paid by
      Pledgor.

     

    2.07 Representations
      as to Pledgor.
      The
      execution, delivery and performance of this Agreement and the consummation
      of
      the transactions contemplated herein will not conflict with or cause a material
      breach of any agreement, indebtedness, indenture or other instrument to which
      Pledgor is a party. There are no actions, suits or proceedings pending or
      threatened against Pledgor which, if adversely decided, would have a material
      adverse effect upon Pledgor.

     

    ARTICLE
      III - GENERAL
      COVENANTS

     

    3.01
      Effect
      of Other Action.
      The
      security interest granted in this Agreement shall in no way be affected by
      any
      indulgence(s), extension(s), change(s) in the form, evidence, maturity, rate,
      amount or interest or otherwise of any of the Obligations secured hereby, nor
      shall any release of, or failure to perfect the security interest or lien in,
      any security for or of any of the parties liable for the payment of any of
      the
      Obligations, in any manner affect or impair this pledge, and the same shall
      continue in full force and effect in accordance with the terms until all of
      the
      Obligations have been paid to Secured Party.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3.02
      Other
      Properties.
      Any and
      all securities and other properties of Pledgor heretofore, now or hereafter
      delivered to Secured Party, or in Secured Patty's possession, shall also secure
      all of the Obligations and shall be held and construed to be a part of the
      Collateral to the same extent as if fully described in this
      Agreement.

     

    ARTICLE
      IV - EVENTS
      OF DEFAULT

     

    It
      shall
      constitute an Event of Default under this Agreement upon the happening of any
      of
      the following events or conditions:

     

    4.01 Payment
      of Obligations.
      Default
      in the payment or performance of any liability or obligation of Pledgor to
      Secured Party, including not by way of limitation default in the payment of
      any
      of the Obligations when due, a default under the Debentures, or a default under
      the Purchase Agreement.

     

    4.02 Execution.
      The
      levy of any attachment, execution, garnishment or other process against Pledgor
      or any of the Collateral in connection with any tax lien, debt, judgment,
      assessment or obligation of Pledgor.

     

    4.03 Termination;
      Insolvency.
      Dissolution, termination of existence, insolvency or business failure of Pledgor
      or the initiation of any bankruptcy proceeding by, or the appointment of a
      receiver or other legal representative for any part of the property of Pledgor,
      or assignment for the benefit of creditors by Pledgor.

     

    4.04 Other
      Covenants.
      Default
      in the performance of any covenant or agreement of Pledgor to Secured Party
      whether under this Agreement or otherwise, or if any warranty or covenant in
      Article II or Article III of this Agreement is or shall become untrue in any
      material respect, or Pledgor fails to comply therewith in any material
      manner.

     

    4.05 Other
      Obligations.
      The
      occurrence of any event which under the terms of any evidence of indebtedness,
      indenture, loan agreement, security agreement or similar instrument permits
      the
      acceleration of maturity of any Obligations of Pledgor to Secured
      Party.

     

    ARTICLE
      V - REMEDIES

     

    5.01
      Sale.
      In the
      event of the default in the payment or performance of any of the Obligations
      when due, or upon the happening of any of the Events of Default specified in
      this Agreement, and at any time thereafter, at the option of the Secured Party,
      any and all of the Obligations shall become due and payable and the Secured
      Party shall have and may exercise with reference to the Collateral any and
      all
      of the rights and remedies of a Secured Party under the Uniform Commercial
      Code
      then in effect in the State of New York and as otherwise granted in this
      Agreement or under any other applicable law or under any other loan document
      or
      agreement executed by Pledgor, (all of which rights and remedies shall be
      cumulative), including without limitation the right and power to sell, at public
      or private sale(s), or otherwise dispose of or utilize the Collateral and any
      part(s) of the Collateral in any manner authorized or permitted under this
      Agreement or under the Uniform Commercial Code after default under this
      Agreement, and to apply the proceeds thereof toward payment of any costs,
      attorneys' fees and legal expenses incurred by the Secured Party and toward
      payment of the Obligations. Except as expressly provided herein, and to the
      extent permitted by law, Pledgor waives any notice of sale or other disposition
      of the Collateral and any other rights or remedies of Pledgor or formalities
      prescribed by law relative to sale
      or
      disposition of the Collateral or exercise of any other right or remedy of
      Secured Party existing after default under this Agreement; and to the extent
      any
      notice is required and cannot be waived, Pledgor agrees that if such notice
      is
      mailed, postage prepaid, to Pledgor at the address of Pledgor according to
      the
      records of Secured Party at least 5 days before the time of the sale or
      disposition, the notice shall be deemed reasonable and shall fully satisfy
      any
      requirement for giving of notice.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    5.02
      Pledgor's
      Compliance with Laws.
      Pledgor
      agrees to cooperate fully with Secured Party in order to permit Secured Party
      to
      sell, at foreclosure or other private sale, the Collateral.

     

    ARTICLE
      VI - MISCELLANEOUS

     

    6.01 Demand,
      Compromise.
      Secured
      Party may, at its option, when the Obligations become due, demand, sue for,
      collect or make any compromise or settlement it deems desirable with reference
      to the Collateral. The Secured Party shall not be obligated to take any steps
      necessary to preserve any rights in the Collateral against prior parties, which
      Pledgor hereby is assumed to do.

     

    6.02 No
      Implied Waiver.
      No
      delay or omission on the part of Secured Party in exercising any rights shall
      operate as a waiver of any right. A waiver on any one or more occasions shall
      not be construed as a bar to or waiver of any right or remedy on any future
      occasion.

     

    6.03 Usury.
      It is
      the intention of the Pledgor and Secured Party to comply with applicable usury
      law. It is agreed that notwithstanding any provision to the contrary in this
      Agreement, or in any of the documents evidencing the Obligations or otherwise
      relating thereto, no provision shall require the payment or permit the
      collection of interest in excess of the maximum amount permitted by controlling
      usury laws.

     

    6.04 Successors
      and Assigns.
      All
      rights of Secured Party hereunder shall inure to the benefit of its successors
      and assigns; and all obligations of Pledgor shall bind its successors and
      assigns.

     

    6.05 Remedies
      Cumulative.
      The
      rights and remedies of Secured Party hereunder are cumulative, and the exercise
      of any one or more of the remedies provided in this Agreement shall not be
      construed as a waiver of any of the other remedies of Secured
      Party.

     

    6.06 Termination.
      The
      security interest granted to Secured Party by this Agreement and all the terms
      and provisions of this Agreement shall be deemed a continuing security interest
      and shall continue in full force and effect, and all the terms and provisions
      of
      this Agreement shall remain effective among the parties, until (i) complete
      payment and satisfaction by Pledgor of all of the Obligations and (ii) the
      written release of the security interest created by this Agreement by Secured
      Party.

     

    6.07 Other
      Agreements.
      This
      Security Agreement and the security interest granted in this Agreement are
      in
      addition to, and not in substitution, novation or discharge of, any and all
      prior or contemporaneous security agreements and security interests in favor
      of
      Secured Party or assigned to Secured Party by others. All rights, powers and
      remedies of Secured Party in all security agreements are
      cumulative.

     

    6.08 Interpretation.
      Any
      provision of this Agreement found to be invalid under the laws of the State
      of
      Oklahoma, or any other state having jurisdiction or other applicable law, shall
      be invalid only with respect to the offending provision.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    6.09 Governing
      Law; Terms.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York. Unless otherwise defined herein, terms defined in Article
      9
      of the Uniform Commercial Code in the State of New York are used herein as
      therein defined.

     

    6.10 General
      Rules of Construction.
      The
      parties have participated jointly in negotiating and drafting this Agreement.
      If
      a question concerning intent or interpretations arises, no presumption or burden
      of proof shall arise favoring or disfavoring any party by virtue of
      authorship.

     

    6.11 Captions.
      Captions in this Agreement are solely for the purposes of identification and
      shall not in any manner alter or vary the interpretation or construction of
      this
      Agreement.

     

    AGREED
      AND EXECUTED effective February 15, 2008.

    
       

      
        
          	
                  PLEDGOR:

                
	 	 
	VYCOR
                  MEDICAL, INC.
	 	 
	
                  By:

                	
                   

                
	
                  Name: 

                	
                   

                
	
                  Title:
                    

                	
                   

                

           

          
            
              	
                      SECURED
                        PARTY:

                    
	 	 
	FOUNTAINHEAD
                      CAPITAL PARTNERS
LIMITED

            

             

            
              	
                      By: 

                    	
                       

                    
	 	       Director
	
                      
                        By:

                      

                    	
                       

                    
	
                       

                    	
                             Director

                    

            

          

        

      

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    DISCLOSURE
      SCHEDULE

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    DISCLOSURE
      SCHEDULE

    

    Section
      1.2

     

    Below
      is
      a list of outstanding loans (applicable interest) that is authorized and
      scheduled for repayment out of proceeds from the issuance the
      Debentures

    

      
        	
                Lender/Payee

              	   	
                Principal Payable (excluding
interest)

              	  	
                Date of Payment

              	 
	
                Fountainhead
                  Capital Partners

              	 	
                $

              	
                172,000

              	 	 	
                February,
                  2009

              	 
	
                Optimus
                  Services

              	 	
                $

              	
                50,000

              	 	 	
                April 30, 2008 (proposed date)

              	
                 

              
	
                Optimus
                  Services

              	 	
                $

              	
                50,00

              	 	 	
                June
                  30, 2008 (proposed date)

              	
                 

              
	
                GC
                  Advisors

              	 	
                $

              	
                17,000

              	 	 	
                June
                  30, 2008

              	 

      

    

     

    Attached
      is a list of accounts payable, all of which are reflected in the attached
      budgets for 2008 and 2009, which will be paid during the period of
      February-June, 2008 as approved for payment as and when they come
      due.

     

    
      	 	 	
              Payee

            	 	
              Amount

            	 
	
              February,
                2008

            	 	 	
              CT
                Corp.

            	 	
              $

            	
              1,122.00

            	 
	
               

            	 	 	
              Hunton

            	 	
              $

            	
              9,697.90

            	 
	
               

            	 	 	
              MediMark 

            	 	
              $

            	
              1,750.00

            	 
	
               

            	 	 	
              Online
                Ontime 

            	 	
              $

            	
              848.45

            	 
	
               

            	 	 	
              Robinson
                Brog 

            	 	
              $

            	
              5,000.00

            	 
	
               

            	 	 	
              Lacey 

            	 	
              $

            	
              35,000.00

            	 
	
            	 	 	
              TUV 

            	 	
              $

            	
              700.00

            	 
	
               

            	 	 	
              Lazer Aptheker    

            	 	
              $

            	
              800.00

            	 
	 	 	 	 	 	 	 	 
	
              March,
                2008

            	 	 	
              Lacey

            	 	
              $

            	
              39,000,00

            	 
	
               

            	 	 	
              Robinson
                Brog 

            	 	
              $

            	
              5,000.00

            	 
	
               

            	 	 	
              TUV 

            	 	
              $

            	
              5,000.00

            	 
	
               

            	 	 	
              Intertek

            	 	
              $

            	
              1,019.08

            	 
	 	 	 	 	 	 	 	 
	
              April,
                2008

            	 	 	
              Lacey

            	 	
              $

            	
              43,000.00

            	 
	
               

            	 	 	
              Robinson
                Brog 

            	 	
              $

            	
              5,000.00

            	 
	
               

            	 	 	
              TUV 

            	 	
              $

            	
              1,011.91

            	 
	
               

            	 	 	
              Lazer
                Aptheker 

            	 	
              $

            	
              167.32

            	 
	 	 	 	 	 	 	 	 
	
              May,
                2008

            	 	 	
              Lacey

            	 	
              $

            	
              41,500.00

            	 
	
               

            	 	 	
              Robinson
                Brog 

            	 	
              $

            	
              3,500.00

            	 
	 	 	 	 	 	 	 	 
	June,
              2008	 	 	
              Lacey

            	 	
              $

            	41,500.00	 
	 	 	 	
              Robinson
                Brog

            	 	
              $

            	2,500.00	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    The
      attached 2008 and 2009 monthly budget forecasts (which are identical to the
      2008
      and 2009 budgets previously provided and approved by Regent) are also hereby
      approved and any payments thereunder authorized.

     

    Section
      2.5(c)/Section 2.9

     

    Below
      is
      a
      list of
      outstanding options, warrants, rights (including conversion or preemptive
      rights) or agreements for the purchase or acquisition from the Company of its
      securities, none of which has
      any
      anti-dilution rights or if there were, such rights have been waived in writing,
      and all obligations arising under such agreements will be subordinate to the
      obligations owed to Regent under this Agreement, in the event of a default
      hereunder or under the Debenture or Security Agreement:

     

    
      	 	
              (i)

            	
              The
                outstanding Bridge Loan Debenture dated December 14, 2006 in the
                original
                principal amount of $172,500 with Fountainhead Capital Partners ("FCP"),
                may be converted into approximately 1,876,300 shares of common
                stock.

            

    

    

    
      	
            	(ii)	
              The
                Warrant to Purchase 50.22 Membership Units of the Company (now
                805,931
                shares of the Company's common stock) dated December 15, 2006 at
                $.0975
                per share.

            

    

     

    
      	 	
              (iii)

            	
              The
                investment opportunity granted under the Option Agreement with FCP
                dated
                December 14, 2006 granting an option to invest up to $1,850,000 within
                3
                years from December 14, 2006 in exchange for up to 5,182,012 shares
                of
                common stock and warrants to convert to 2,870,315 shares of common
                stock.

            

    

     

    
      	 	
              (iv)

            	
              Dr.
                Ezriel E. Kornel entered into a consulting agreement with
                Company
                on January 10, 2006. Pursuant to the consulting agreement, in
                consideration for acting as
                our
                consultant, Dr. Kornel received options to acquire 240,720 shares
                of the
                Company's common stock at a price of $.25 per share. The term of
                the
                agreement is for three
                years.

            

    

     

    
      	
            	(v)	
              Dr.
                David Langer entered into an amended and restated consulting agreement
                with the Company on December 11, 2006. Pursuant to the agreement,
                Dr.
                Langer agreed to provide us certain consulting services, which include
                the
                role of our Chief Medical Advisor, assistance in the analysis,
                preparation, submission, publication and presentation of scientific
                data
                in relation to our research efforts ands ales and marketing efforts.
                In
                consideration of such consulting services, Dr. Langer received options
                to
                acquire 320,960 shares of the Company's common stock at a price of
                $.25
                per share. The agreement will • terminate April 15,
                2009.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vi)

            	
              Dr.
                Donald O'Rourke entered into a consulting agreement with the Company
                on
                January 18, 2008. Pursuant to the consulting agreement, Dr. O'Rourke
                shall
                provide consulting or advisory services on an as needed basis, to
                guide us
                in making important strategic decisions and to evaluate our strategic
                plans and decisions, research and/or development activities and results,
                competitive positions and/or other scientific and/or technical issues.
                In
                consideration for providing such services, Dr. Or'Rourke was granted
                an
                option to purchase 50,000 shares of the Company's common stock at
                $.50 per
                share.

            

    

     

    
      	 	
              (vii)

            	
              GC
                Advisors LLC is the holder of two warrants to purchase 192,576 shares
                of
                common stock of the Company each for an purchase price of $.135 per
                share.
                One warrant expires on January 9, 2009 and the other on January 9,
                210.

            

    

     

    
      	 	
              (viii)

            	
              George
                Kivotidis is a holder of a warrant to purchase up to 4,000 shares
                of the
                Company's common stock at $.50 per share. The warrant is valid from
                November 6, 2007 for a period of three
                years.

            

    

     

    
      	 	
              (ix)

            	
              Martin
                Magida is a holder of a warrant to purchase up to 160,480 shares
                of the
                Company's common stock at $.24
                per
                share. The warrant is valid from September 1, 2007 for a period of
                five
                years.

            

    

     

    
      	 	
              (x)

            	
              Bob
                Guinta is a holder of a warrant to purchase up to 160,480 shares
                of the
                Company's common stock at $.24 per share. The warrant is valid from
                September 1, 2007 for a period of five
                years.

            

    

     

    
      	 	
              (xi)

            	
              Each
                of Kenneth Coviello and Heather Jensen entered into a stock option
                agreement with the Company dated February 15, 2008. Pursuant to the
                said
                stock option agreements, each of Kenneth Coviello and Heather Jensen
                was
                granted an option to purchase 500,000 shares of common stock of the
                Company at an exercise price of $.135 per share. The option shall
                vest 33
                1/3% on each of the first, second and third anniversary of the grant
                and
                shall expire February 12, 2018.

            

    

     

    
      	 	
              (xii)

            	
              Guaranty
                dated November 17, 2005 between The Sawmill Trust and Heather Jensen
                as
                Guarantors and Kenneth Coviello, as Beneficiary, guaranteeing an
                advance
                of $30,000.

            

    

     

    
      	 	
              (xiii)

            	
              Guaranty
                dated November 17, 2005 between the Sawmill Trust and Heather Jensen
                as
                Guarantors and Kenneth Coviello, as Beneficiary, guaranteeing an
                advance
                of $14,000.

            

    

    

    Section
      2.10

     

    Please
      refer to the disclosures for Section 1.2, which is incorporated in its entirety
      herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
      2.12

    

    Below
      is
      a list of the Company's patents, trademarks, copyrights and domain names and
      pending patent, trademark and copyright applications.

    

    Patent
      Applications

    

      
        	
                Filing
                  date

              	 	
                Application
                  No.

              	 	
                Country

              	 	
                Title

              	 	
                Status

              
	
                22-Jun-2005

              	 	
                60/692,959

              	 	
                US-provisional

              	 	
                Surgical
                  Access Instruments For Use With Spinal Or Orthopedic Surgery
                  (Cervical)

              	 	
                Converted
                  to PCT

              
	
                22-Jun-2006

              	 	
                PCT/US06/
                  24243

              	 	
                PCT

              	 	
                Surgical
                  Access Instruments For Use With Spinal Or Orthopedic Surgery
                  (Cervical)

              	 	
                Entered
                  National
                  Phase

              
	
                22-Jun-2005

              	 	
                11/155,175

              	 	
                US
                  - utility

              	 	
                Surgical
                  Access Instruments for use with Delicate Tissues (Brain)

              	 	
                Pending

              
	
                27-Nov-2006

              	 	
                PCT/US06/
                  61246

              	 	
                PCT

              	 	
                Surgical
                  Access Instruments for use with Delicate Tissues (Brain)

              	 	
                Pending
                  -National Phase Entry on May 27, 2009

              
	
                22-Jun-2006

              	 	 	 	
                Canada

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              
	
                22-Jun-2006

              	 	
                06785312.7

              	 	
                Europe

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              
	
                22-Jun-2006

              	 	 	 	
                India

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              
	
                22-Jun-2006

              	 	 	 	
                Israel

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              
	
                22-Jun-2006

              	 	 	 	
                Japan

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              
	
                20-Dec-2007

              	 	
                11/993,280

              	 	
                US

              	 	
                Surgical
                  Access Instruments for use with spinal or orthopedic
                  surgery

              	 	
                Pending

              

      

    

     

    Trademarks

     

    VYCOR
      MEDICAL and VYCOR SAFESITE are both pending with the USPTO. Before they are
      registered a Statement of Use needs to be filed.

     

    Section
      2.17

     

    The
      Company has entered into the broker agreements listed below. All potential
      payments due under the listed broker agreements have been included in the 2008
      and/or 2009 budgets attached hereto:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    GC
      Advisors, LLC dated July 6, 2006, as amended and restated on September 20,
      2006
      and on November 27, 2006, which was terminated by email correspondence dated
      January 25, 2008.

    

    Fee
      Agreement with GC Advisors, LLC (d/b/a Oak Street Advisors and RES Holding
      dated
      November 16, 2006.

    

    Engagement
      Letter with Murphy and Durieu dated September 11, 2007, which has been settled
      and released pursuant to a Settlement and Release of Claims dated November
      12,
      2007.

    

    Financial
      Advisory Agreement with the Concordia Financial Group dated January 18,
      2008.

    

    Section
      2.20

    

    D&O
      Policy for Company with Philadelphia Insurance Companies, with a policy period
      from 6/5/07 to 6/5/08, policy no. PHS246271.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      EXHIBIT
        D

       

      FORM
        OF
        ASSIGNMENT
        OF RIGHTS

       

    

    
      
         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

          Assignment
            of Rights

          Under
            Warrant and

          Under
            Option Agreement

        

      

       

      This
        Assignment ("Assignment") is made and entered into by and among Fountainhead
        Capital Partners Limited ("Assignor")
        and Regent
        Private Capital, LLC ("Assignee"),
        and, solely for the purpose of evidencing its consent to the assignments
        provided below, Vycor
        Medical, Inc. ("Vycor")

       

      WHEREAS,
        Assignor is a party to (i) an Option Agreement with Vycor Medical, LLC, the
        predecessor in interest to Vycor, dated December 14, 2006 ("Option Agreement"),
        and (ii) a Warrant to Purchase Membership Units of Vycor Medical, LLC dated
        December 15, 2006 ("Warrant"), and

       

      WHEREAS,
        in accordance with the agreement of Assignee to provide certain additional
        funds
        to Vycor pursuant to a Convertible Debenture Purchase Agreement ("Purchase
        Agreement") dated of even date herewith by and between Assignee and Vycor,
        one
        of the conditions to the closing of the funding contemplated thereby is the
        assignment by Assignor to Assignee of the contractual rights more fully
        described herein, and

       

      WHEREAS,
        as a current investor in Vycor, Assignor will receive substantial benefit
        from
        the provision of additional funds by Assignee pursuant to the Purchase
        Agreement, and Assignor desires to convey to Assignee the contractual rights
        described herein;

       

      NOW,
        THEREFORE, for and in consideration of the mutual covenants contained herein,
        and other valuable consideration, the receipt and sufficiency of which is
        hereby
        acknowledged and confessed, Assignor and Assignee hereby agree as
        follows:

       

      1.
        Assignment.
        Effective as of the date hereof, Assignor hereby assigns and transfers to
        Assignee, and Assignee hereby acquires from Assignor, an undivided fifty
        percent
        (50%) interest in Assignor's right, title and interest in and to the Option
        Agreement and the Warrant.

       

      By
        reason
        of this Assignment, Assignor is assigning to Assignee the rights under the
        Warrant to acquire fifty-percent (50%) of the underlying securities issuable
        upon exercise of the Warrant (originally, 50.22 units of limited liability
        company interest, now adjusted to reflect 805,931 shares of common stock
        as a
        result of the conversion of Vycor from a limited liability company to a
        corporation).

       

      By
        reason
        of this Assignment, Assignor is assigning to Assignee an undivided fifty
        percent
        (50%) interest in its rights under the Option Agreement, pursuant to which
        Vycor
        has granted Assignor the rights to make future investments in Vycor in
        accordance with the terms thereof.

       

      Assignor
        represents and warrants to Assignee that, apart from Assignor's rights under
        the
        Bridge Loan Debenture dated December 14, 2006 (as amended, to extend the
        maturity date thereof) in the original principal amount of $172,500, Assignor
        and the Security Agreement between Vycor and Assignor dated December 14,
        2006,
        has no other rights to acquire any rights or interests in Vycor other than
        as
        contemplated in the Option Agreement and Warrant.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      

      2. Consent
        of Vycor.
        By its
        execution of this Agreement in the space indicated below, Vycor hereby consents
        to the assignment evidenced hereby.

       

      3. Substitute
        Documents.
        To
        avoid confusion in the future regarding the specific rights of Assignor and
        Assignee, Vycor further agrees to provide to each of Assignor and Assignee,
        upon
        proper transmittal by Assignor of the original Warrant and Option Agreement
        to
        Vycor, with separate Warrants and Option Agreements, containing the same
        terms
        and conditions, but otherwise reflecting the reduced (i.e. half) interest
        of
        each of Assignor and Assignee with respect to the rights that will be held
        by
        each subsequent to this Assignment.

       

      4. Further
        Actions.
        Assignor covenants and agrees to warrant and defend the sale, transfer,
        assignment, conveyance, grant and delivery of the portion of its interest
        in the
        Warrant and the Option Agreement evidenced hereby against all persons
        whomsoever, to take all steps reasonably necessary to establish the record
        of
        Assignee's interest therein and, at the request of Assignee or Vycor, to
        execute
        and deliver further instruments of transfer and assignment and take such
        other
        action as Assignee or Vycor may reasonably request to more effectively transfer
        and assign to and vest in Assignee the interests intended to be conveyed
        hereby.

       

      EXECUTED
        on this 15th day of February, 2008.

      

      Signatures
        and Consent Appear on Following Page

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

        
          
            	
                    ASSIGNOR

                  
	 
	
                    Fountainhead
                      Capital Partners Limited

                  
	 
	
                    By:

                  	 
	
                    Name: 

                  	 
	
                    Title:

                  	
                    Director

                  
	 	 
	
                    By:

                  	 
	
                    Name:

                  	 
	
                    Title:

                  	
                    Director

                  
	 	 
	
                    ASSIGNEE:

                  
	 
	Regent
                    Private Capital LLC
	 
	
                    By:

                  	 
	
                    Name:

                  	
                    Lawrence
                      Field

                  
	
                    Title:

                  	
                    Managing
                      Director

                  

          

        

         

      

       Any
        and
        all necessary consents to the assignment evidenced hereby are given as of
        the
        date set forth above. The undersigned officer has full authority and power
        to
        execute this Assignment on behalf of Vycor Medical, Inc.

       

      
        
          	
                  VYCOR:

                
	 
	Vycor
                  Medical, Inc.
	 
	
                  By:

                	 
	
                  Name:

                	 
	
                  Title:

                	 

        

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

        EXHIBIT
          E

         

        FORM
          OF INTRACREDITOR CONFIRMATION AND AGREEMENT

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      INTRACREDITOR
        CONFIRMATION AND AGREEMENT

       

      THIS
        INTRACREDITOR CONFIRMATION AND AGREEMENT ("Confirmation") is made and effective
        this 15th day of February, 2008, by and between Fountainhead
        Capital Partners Limited ("Fountainhead")
        and Regent
        Private Capital, LLC ("Regent")

       

      WHEREAS,
        Fountainhead has previously made a certain investment of funds in Vycor Medical
        Inc. ("Vycor") as evidenced by (i) that certain Bridge Loan Debenture dated
        December 14, 2006 (as amended, to extend the maturity date thereof), in the
        original principal amount of $172,500 ("FCP
        Debenture");
        (ii)
        that certain Warrant to Purchase 50.22 Membership Units of the Company (now
        805,931 shares of the Company's common stock) dated December 15, 2006 (the
        "FCP
        Warrant");
        and
        (iii) that certain Option Agreement with FCP dated December 14, 2006
        ("FCP
        Option");
        and,

       

      WHEREAS,
        the FCP Debenture is secured by a security interest in certain collateral,
        in
        favor of Fountainhead created and granted by a Security Agreement between
        Vycor
        and Fountainhead dated December 14, 2006 ("Security Agreement"), and certain
        financing statements that may have been filed in connection therewith
        (collectively, with the Security Agreement, the "Security Documents");
        and

       

      WHEREAS,
        Fountainhead has agreed to make available to Vycor up to an additional $300,000,
        which amount will also be secured by the Security Agreement and the Security
        Documents; and,

       

      WHEREAS,
        Regent has now agreed, pursuant to the terms of a certain Convertible Debenture
        Purchase Agreement dated of even date herewith ("Purchase Agreement") to
        provide
        an additional $1,000,000 of funding to Vycor, to be evidenced by two essentially
        identical Convertible Debentures each in the original principal amount of
        $500,000 ("Regent Debentures"); and

       

      WHEREAS,
        to satisfy Regent's requirement that the Regent Debentures be secured by
        a first
        priority security interest in Vycor's assets, Fountainhead desires to confirm
        and evidence its agreement to subordinate the security interest in Vycor's
        assets from its existing first priority security interest, to a security
        interest equal to and pari passu with the security interest granted to Regent
        as
        a part of the transactions contemplated by the Purchase Agreement;
        and

       

      NOW,
        THEREFORE, in consideration of the premises, the parties hereby agree, confirm
        and certifies as follows:

       

      1. Liens
        of Fountainhead of Equal Priority with Regent Security Interest.
        Fountainhead hereby confirms that Fountainhead's security interests and liens
        in
        and upon the assets of Vycor granted pursuant to the Security Agreement or
        otherwise, are and shall hereafter be and remain of equal seniority and
        priority, and be treated for all purposes on a pari passu basis, with the
        security interests and liens in and upon the assets of Vycor granted to Regent
        pursuant to the transactions contemplated by the Purchase
        Agreement.

       

      2. Liens
        of Regent of Equal Priority with Fountainhead's Security
        Interest.
        Regent
        hereby confirms that Regent's security interests and liens in and upon the
        assets of Vycor granted pursuant to the Purchase Agreement, the Regent
        Debentures and the Security Agreement between Regent
        and Vycor dated of even date with the first issued Regent Debenture or
        otherwise, are and shall hereafter be and remain of equal seniority and
        priority, and be treated for all purposes on a pari passu basis, with the
        security interests and liens in and upon the assets of Vycor granted to
        Fountainhead pursuant to the Security Agreement and the transactions
        contemplated by the FCP Debenture.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      3. Remedies.
        Notwithstanding the confirmation regarding the priorities provided herein,
        nothing herein shall be deemed to affect the rights of either Fountainhead
        or
        Regent under their respective agreements with Vycor as such rights may relate
        to
        their abilities to declare a default by Vycor or seek remedies against Vycor
        for
        such default; provided that in such event, either Fountainhead or Regent,
        as the
        case may be, shall notify the other, at the address indicated next to their
        respective signatures, and in the event either such party forecloses on any
        collateral of Vycor and/or sells, leases, transfers, or otherwise disposes
        of
        any such collateral, all proceeds thereof (net of all reasonable expenses
        incurred in connection with the marshalling and sale of such collateral)
        shall
        be shared equally between Fountainhead and Regent.

       

      4. Extent
        of Priorities.
        The
        priorities specified herein shall remain in full force and effect, regardless
        of
        whether either Fountainhead or Regent rescinds, amends, waives any provision
        of,
        terminates or reforms, by litigation or otherwise, any of the documents
        evidencing the respective advance of funds to Vycor. No delay or waiver on
        the
        part of either Fountainhead or Regent in exercising any right, power or
        privilege granted under any of their agreements with Vycor shall have any effect
        on the equal priorities specified herein.

       

      5. Amendment
        of Financing Statements.
        If
        requested by Regent, Fountainhead agrees to file amended financing statements
        in
        each jurisdiction where a current financing statement perfecting its security
        interest in Vycor's assets is currently filed, to reflect the equal priorities
        of this Agreement.

       

      6. Term.
        This
        Confirmation will be for a term beginning on the effective date hereof and
        continuing through the payment and performance in full of all of Vycor's
        obligations to each of Regent and Fountainhead.

       

      7. Amendment.
        This
        Confirmation shall not be amended except in writing by Fountainhead and
        Regent.

       

      8. Successors
        and Assigns.
        This
        Confirmation shall be binding the parties hereto and their respective successors
        and assigns.

       

      IN
        WITNESS WHEREOF, this Confirmation has been duly authorized and executed
        by each
        party as of the date first above written.

       

      Signatures
        on following page

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        
          
            	
                    REGENT

                  
	 
	
                    REGENT
                      PRIVATE CAPITAL, LLC

                  
	 
	
                    By:

                  	 
	 	Lawrence
                    Field, Managing Director

          

          
          

           

          
            	
                    Address:

                     

                  
	152
                    West 57th Street, 9th Floor
New York, New York
                    10019

          

           

        

      

      
        
          
            	
                    FOUNTAINHEAD

                  
	 
	FOUNTAINHEAD
                    CAPITAL PARTNERS LIMITED
	 
	
                    By:

                  	 
	
                    Name:

                  	 
	
                    Title:

                  	   Director

          

           

          
            
              	
                      By:

                    	 
	
                      Name:

                    	 
	
                      Title:

                    	   Director

            

             

          

        

      

      
        	
                Address: 

              	
                Portman
                  House
Hue
                  Street, St. Helier

                Jersey
                  JE4 5RP

              

      

    

    
       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
        F

       

      FORM
        OF
        LOCKUP
        AGREEMENT

       

      
         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

LOCK-UP
        AGREEMENT

       

      February
        ______,
        2008

      

      Regent
        Private Capital, LLC

      152
        West
        57th Street, 9th Floor

      New
        York,
        New York 10019

      

      Ladies
        and Gentlemen:

       

      The
        undersigned understands that Regent Private Capital, LLC ("Regent") proposes
        to
        enter into a Convertible Debenture Purchase Agreement ("Purchase Agreement")
        with Vycor Medical, Inc. (the "Company") providing for the investment by
        Regent
        of $1,000,000 pursuant to two essentially identical $500,000 principal amount
        Convertible Debentures (the "Debentures").

       

      In
        consideration of the agreement by Regent to make the investment in the Company
        evidenced by the Debentures, and other good and valuable consideration, the
        receipt and sufficiency of which are hereby acknowledged, the undersigned
        agrees
        that he, she or it will not, directly or indirectly, sell, offer to sell,
        contract to sell, grant any option for the sale of, grant any security interest
        in, pledge, hypothecate, or otherwise sell or dispose of any of the common
        stock, or any options or warrants to purchase any common stock, or any
        securities convertible into or exchangeable for common stock, or any interest
        in
        such securities or rights, owned directly by the undersigned or with respect
        to
        which the undersigned has the power of disposition, in any such case whether
        now
        owned or hereafter acquired, other than (i) as a bona fide gift or gifts,
        provided that the undersigned provides prior written notice of such gift
        or
        gifts to Regent and the donee or donees thereof agree to be bound by the
        restrictions set forth herein, (ii) intra-family transfers or transfers for
        estate planning purposes, provided that the undersigned provides prior written
        notice of such transfer or bequest, and such transferee or beneficiary agrees
        to
        be bound by the terms hereof, (iii) in the sale or exchange of the undersigned's
        stock in connection with a merger of the Company with a third party, the
        sale of
        all or substantially all of the Company's assets to a third party or the
        sale or
        exchange of the undersigned's shares pursuant to a bona fide third party
        tender
        offer, any of which has been approved by Regent, (iv) with the prior written
        consent of Regent (which consent can be withheld in Regent's sole discretion),
        or (v) as otherwise allowed in accordance with the following
        schedule:

    

     

    

      
        	
                Period

              	     	
                Percent of Securities That May be Transferred

              	 
	 	 	 	 
	
                From
                  Closing through the first anniversary of Closing

              	 	 	
                0%

              	
                 

              
	 	 	 	 	 
	
                First
                  anniversary of Closing to second anniversary of Closing

              	 	 	
                25%

              	
                 

              
	 	 	 	 	 
	
                Second
                  anniversary of Closing to third anniversary of Closing

              	 	 	
                25%

              	
                 

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      Regent
        Private Capital, LLC

    

    February
      ______,
      2008

    Page
      2

     

    After
      the
      third anniversary of the Closing, this Lock-Up Agreement and all restrictions
      on
      transfer imposed hereby shall terminate.

     

    The
      undersigned also agrees and consents to the entry of stop transfer instructions
      with the Company's transfer agent and registrar against the transfer of any
      of
      the common stock held by the undersigned except in compliance with the foregoing
      restrictions. Regent may in its sole discretion without notice, release all
      or
      any portion of the securities subject to this Lock-Up Agreement or any similar
      agreement executed by any other security holder, and if Regent releases any
      securities of any other security holder, securities of the undersigned shall
      not
      by virtue thereof be entitled to a release from this Lock-Up
      Agreement.

     

    In
      the
      event that the undersigned owns no common stock of the Company at the date
      hereof but prior to the termination of this Lock-Up Agreement has the right
      to
      acquire common stock of the Company pursuant to options or warrants, and if
      the
      undersigned exercises such options or warrants while this Lock-Up Agreement
      is
      effective, he, she or it agrees that the common stock purchased on such exercise
      of options or warrants will be subject to the terms of this Lock-Up Agreement
      for the remaining portion thereof, as if commenced on the date of
      Closing.

     

    The
      undersigned understands that the Company and Regent will undertake the
      transactions contemplated by the Purchase Agreement in reliance upon this
      Lock-Up Agreement.

    
       

      
        
          	
                  Very
                    truly yours,

                
	 	 
	
                  By: 

                	 

        

         

        
          	Print Name: 	 

        

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

          SCHEDULE
            6.2

           

          ACTIONS
            PROHIBITED WITHOUT MINORITY APPROVAL

        

      

    

     

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

        SCHEDULE
          6.2

         

        ACTIONS
          PROHIBITED WITHOUT MINORITY APPROVAL

      

    

     

    (a) Sell,
      exchange or otherwise transfer all or substantially all of the Company's
      assets.

     

    (b) Cause
      the
      Company to merge or consolidate with or into another limited liability company,
      corporation, partnership, limited partnership or other entity.

     

    (c) Issue
      any
      additional equity interests in the Company, except for equity issued pursuant
      to
      the conversion of the Debentures, the FCP Debenture, the FCP Option or the
      FCP
      Warrants, or otherwise cause an exchange, reclassification or cancellation
      of
      any equity securities of the Company, or change any rights, preferences or
      privileges or restructuring thereof, or the creation of a new class of
      securities which ranks senior to the existing common stock.

     

    (d) Borrow
      money or otherwise obligate the Company on any form of indebtedness or guaranty
      in excess of $10,000 not in the ordinary course of business;

     

    (e) Adopt,
      execute or accept any agreement on behalf of the Company which is not terminable
      at will and which over its normal course, would obligate the Company to make
      payments of cash and/or property having an aggregate value in excess of $100,000
      other
      than
      in
      accordance with a budget approved by Regent.

     

    (f) Enter
      into any transaction with an affiliate of any stockholder, member of the Board
      of Directors, or officer of the Company;

     

    (g) As
      soon
      as reasonably practical the Company shall cause its Board of Directors to
      appoint a compensation committee which shall consist of a majority of
      independent directors (as defined in Rule 303A.02 of he New York Stock Exchange
      rules applicable to listed companies).Unassociated Document

    

    VYCOR
      MEDICAL, INC.

    NOTICE
      OF GRANT OF

    NON-QUALIFIED
      STOCK OPTION

    

    Notice
      is
      hereby given of the following option grant (the "Option") to purchase shares
      of
      the Common Stock of Vycor Medical, Inc. (the "Company"):

    

    
      	
              Participant:

            	
              Heather
                N. Jensen

            
	 	 
	
              Grant
                Date:

            	
              February
                13, 2008

            
	 	 
	
              Vesting
                Commencement Date:

            	
              February
                13, 2009

            
	 	 
	
              Exercise
                Price:

            	
              $0.135
                per share

            
	 	 
	
              Number
                of Option Shares:

            	
              500,000

            
	 	 
	
              Expiration
                Date:

            	
              February
                12, 2018

            
	 	 
	
              Type
                of Option:

            	
              Non-Qualified
                Stock Option

            
	 	 
	
              Date
                Exercisable:

            	
              According
                to Vesting Schedule

            

    

    

    Vesting
      Schedule:
      The
      Option Shares shall vest and become exercisable with respect to, 33 1/1% of
      the
      Option Shares on the first, second and third anniversaries of the Grant Date
      until fully vested and exercisable.

    

    Participant
      agrees to be bound by the terms of the Option as set forth in the Non-Qualified
      Stock Option Agreement attached hereto as Exhibit
      A.

    

    No
      Employment or Service Contract.
      Nothing
      in this Notice or in the attached Non-Qualified Stock Option Agreement shall
      confer upon Participant any right to continue in Service for any period of
      specific duration or interfere with or otherwise restrict in any way the rights
      of the Company (or any Parent or Subsidiary employing or retaining Participant)
      or of Participant, which rights are hereby expressly reserved by each, to
      terminate Participant's Service at any time for any reason, with or without
      cause.

    

    Definitions.
      All
      capitalized terms in this Notice shall have the meaning assigned to them in
      this
      Notice or in the attached Employment Commencement Non-Qualified Stock Option
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    February
      13, 2008

    
      	VYCOR
              MEDICAL, INC.
	 	 
	
              By:

            	
              /s/
                Kenneth Coviello

            
	
              Title: 

            	
              CEO

            

    

    

    
      	
              PARTICIPANT

            
	 
	
              Address: 

            	
              88
                The Helm

            
	
              E.
                Islip, NY 11730

            

    

    

    ATTACHMENT

    Exhibit
      A
–Non-Qualified Stock Option Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    VYCOR
      MEDICAL, INC.

    

    NON-QUALIFIED
      STOCK OPTION AGREEMENT

    

    RECITALS

    

    THIS
      NON-QUALIFIED STOCK OPTION AGREEMENT,
      is made
      by and between Vycor Medical, Inc., a Delaware corporation (the "Company"),
      and
      Heather N. Jensen (the "Participant").

    

    WHEREAS,
      the
      Board has determined that it would be to the advantage and best interest of
      the
      Company and its stockholders to grant the Non-Qualified Stock Option provided
      for herein to Participant in connection with his initial commencement of
      employment with the Company and that such grant is an essential inducement
      to
      Participant's commencing employment with the Company.

    

    WHEREAS,
      all
      capitalized terms in this Agreement shall have the meaning assigned to them
      as
      defined herein or in the attached Appendix.

    

    NOW,
      THEREFORE,
      it is
      hereby agreed as follows:

    

    1.
      Grant
      of Option
      The
      Company hereby grants to Participant, as of the Grant Date, an option to
      purchase up to the number of Option Shares specified in the Grant Notice. The
      Option Shares shall be purchasable from time to time during the option term
      specified in Paragraph 2 at the Exercise Price.

    

    2.
      Option
      Term
      This
      option shall have a term of ten (10) years measured from the Grant Date and
      shall accordingly expire at the close of business on the Expiration Date, unless
      sooner terminated in accordance with Paragraph 5 or 6.

    

    3.
      Limited
      Transferability
      This
      option shall be neither transferable nor assignable by Participant other than
      by
      will or by the laws of descent and distribution following Participant's death
      and may be exercised, during Participant's lifetime, only by Participant. This
      option may, in connection with the Participant's estate plan, be assigned in
      whole or in part during Participant's lifetime to one or more members of the
      Participant's family or to a trust established for the exclusive benefit of
      one
      or more such family members. The assigned portion shall be exercisable only
      by
      the person or persons who acquire a proprietary interest in the option pursuant
      to such assignment. The term applicable to the assigned portion shall be the
      same as those in effect for this option immediately prior to such assignment
      and
      shall be set forth in such documents issued to the assignee as the Committee
      may
      deem appropriate.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.
      Dates
      of Exercise
      This
      option shall become exercisable for the Option Shares in one or more
      installments as specified in the Grant Notice. As the option becomes exercisable
      for such installments, those installments shall accumulate and the option shall
      remain exercisable for the accumulated installments until the Expiration
      Date.

    

    5.
      Special
      Acceleration of Option.

    

    (a)
      In
      the event of any Corporate Transaction or Change in Control, each outstanding
      option, which is not otherwise vested or remains subject to forfeiture shall
      automatically accelerate so that each such option shall, immediately prior
      to
      the Corporate Transaction or Change in Control become vested and exercisable
      with regard to one hundred percent (100%) of the shares of Common Stock which
      are at the time subject to such option and unvested and may be exercised for
      all
      or any portion of such shares as fully-vested shares of Common Stock, if
      applicable. Any options so accelerated shall remain exercisable for fully-vested
      shares, if applicable, until the expiration of their term.

     

    (b)
      Immediately following the Corporate Transaction, this option, to the extent
      not
      previously exercised, shall terminate and cease to be outstanding, except to
      the
      extent assumed by the successor corporation (or parent thereof) in connection
      with the Corporate Transaction.

     

    (c)
      If
      this option is assumed in connection with a Corporate Transaction, then this
      option shall be appropriately adjusted, immediately after such Corporate
      Transaction, to apply to the number and class of securities which would have
      been issuable to Participant in consummation of such Corporate Transaction
      had
      the option been exercised immediately prior to such Corporate Transaction,
      and
      appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.

     

    (d)
      This
      Agreement shall not in any way affect the right of the Company to adjust,
      reclassify, reorganize or otherwise change its capital or business structure
      or
      to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
      of its business or assets.

    

    6.
      Adjustment
      in Option Shares
      Should
      any change be made to the Common Stock by reason of any stock split, stock
      dividend, recapitalization, combination of shares, exchange of shares or other
      change affecting the outstanding Common Stock as a class without the Company's
      receipt of consideration, appropriate adjustments shall be made to (i) the
      total
      number and/or class of securities subject to this option and (ii) the Exercise
      Price in order to reflect such change and thereby preclude a dilution or
      enlargement of benefits hereunder.

    

    7.
      Stockholder
      Rights
      The
      holder of this option shall not have any stockholder rights with respect to
      the
      Option Shares until such person shall have exercised the option, paid the
      Exercise Price and become a holder of record of the purchased
      shares.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.
      Manner
      of Exercising Option

    

    (a)
      In
      order to exercise this option with respect to all or any part of the Option
      Shares for which this option is at the time exercisable, Participant (or any
      other person or persons exercising the option) must take the following
      actions:

    

    (i)
      Execute and deliver to the Company a Notice of Exercise for the Option Shares
      for which the option is exercised.

    

    (ii)
      Pay
      the aggregate Exercise Price for the purchased shares in one or more of the
      following forms:

    

    (A)
      cash
      or check made payable to the Company;

    

    (B)
      a
      promissory note payable to the Company, but only to the extent authorized by
      the
      Committee in accordance with Paragraph 12;

    

    (C)
      shares of Common Stock held by Participant (or any other person or persons
      exercising the option) for the requisite period necessary to avoid a charge
      to
      the Company's earnings for financial reporting purposes and valued at Fair
      Market Value on the Exercise Date; or

    

    (D)
      through a special sale and remittance procedure pursuant to which Participant
      (or any other person or persons exercising the option) shall concurrently
      provide irrevocable written instructions (a) to a Company-designated brokerage
      firm to effect the immediate sale of the purchased shares and remit to the
      Company, out of the sale proceeds available on the settlement date, sufficient
      funds to cover the aggregate Exercise Price payable for the purchased shares
      plus all applicable Federal, state and local income and employment taxes
      required to be withheld by the Company by reason of such exercise and (b) to
      the
      Company to deliver the certificates for the purchased shares directly to such
      brokerage firm in order to complete the sale transaction. Except to the extent
      the sale and remittance procedure is utilized in connection with the option
      exercise, payment of the Exercise Price must accompany the Notice of Exercise
      delivered to the Company in connection with the option exercise.

    

    (iii)
      Furnish to the Company appropriate documentation that the person or persons
      exercising the option (if other than Participant) have the right to exercise
      this option.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (iv)
      Make
      appropriate arrangements with the Company (or Subsidiary employing or retaining
      Participant) for the satisfaction of all Federal, state and local income and
      employment tax withholding requirements applicable to the option
      exercise.

    

    (b)
      As
      soon as practical after the Exercise Date, the Company shall issue to or on
      behalf of Participant (or any other person or persons exercising this option)
      a
      certificate for the purchased Option Shares, with the appropriate legends
      affixed thereto.

    

    (c)
      In no
      event may this option be exercised for any fractional shares.

    

    9.
      Compliance
      with Laws and Regulations

    

    (a)
      The
      exercise of this option and the issuance of the Option Shares upon such exercise
      shall be subject to compliance by the Company and Participant with all
      applicable requirements of law relating thereto and with all applicable
      regulations of any stock exchange (or the Nasdaq National Market, if applicable)
      on which the Common Stock may be listed for trading at the time of such exercise
      and issuance.

    

    (b)
      The
      inability of the Company to obtain approval from any regulatory body having
      authority deemed by the Company to be necessary to the lawful issuance and
      sale
      of any Common Stock pursuant to this option shall relieve the Company of any
      liability with respect to the non-issuance or sale of the Common Stock as to
      which such approval shall not have been obtained. The Company, however, shall
      use its best efforts to obtain all such approvals.

    

    10.
      Successors
      and Assigns
      Except
      to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this
      Agreement shall inure to the benefit of, and be binding upon, the Company and
      its successors and assigns and Participant, Participant's assigns and the legal
      representatives, heirs and legatees of Participant's estate.

    

    11.
      Notices
      Any
      notice required to be given or delivered to the Company under the terms of
      this
      Agreement shall be in writing and addressed to the Company at its principal
      corporate offices. Any notice required to be given or delivered to Participant
      shall be in writing and addressed to Participant at the address indicated below
      Participant's signature line on the Grant Notice. All notices shall be deemed
      effective upon personal delivery or upon deposit in the U.S. mail, postage
      prepaid and properly addressed to the party to be notified

    

    12.
      Financing
      The
      Committee may, in its absolute discretion and without any obligation to do
      so,
      permit Participant to pay the Exercise Price for the purchased Option Shares
      by
      delivering a promissory note. The terms of any such promissory note (including
      the interest rate, the requirements for collateral and the terms of repayment)
      shall be established by the Committee in its sole discretion.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    13
      Construction
      This
      Agreement and the option evidenced hereby are made and granted pursuant to
      this
      Agreement and are in all respects limited by and subject to the terms of such
      Agreement. All decisions of the Committee with respect to any question or issue
      arising under this Agreement shall be conclusive and binding on all persons
      having an interest in this option.

    

    14.
      Governing
      Law
      The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of New York without resort to that State's
      conflict-of-laws rules.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      I

    

    NOTICE
      OF EXERCISE

    

    I
      hereby
      notify Vycor Medical, Inc. (the "Company") that I elect to purchase _____ shares
      of the Company's Common Stock (the "Purchased Shares") at the option exercise
      price of $_____ per share (the "Exercise Price") pursuant to that certain option
      (the "Option") granted to me on February 13, 2008.

    

    Concurrently
      with the delivery of this Exercise Notice to the Company, I shall hereby pay
      to
      the Company the Exercise Price for the Purchased Shares in accordance with
      the
      provisions of my agreement with the Company (or other documents) evidencing
      the
      Option and shall deliver whatever additional documents may be required by such
      agreement as a condition for exercise. Alternatively, I may utilize the special
      broker-dealer sale and remittance procedure specified in my agreement to effect
      payment of the Exercise Price.

     

    
      	 	 
	 	Date

    

     

    
      	 	 	 	 
	 	 	Participant
	 	 	 
	 	 	Address: 	 
	 	 	
               

               

            	 
	Print
              name in exact manner it is to appear on the stock
certificate:	 	 	 
	 	 	 	 
	Address
              to which certificate is to be sent, if different
from
              address above:	 	 	 
	 	 	
               

               

            	 
	
               

              Social
                Security Number:

            	 	 	 

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      APPENDIX

      

      The
        following definitions shall be in effect under the Agreement:

      

      A.
        Agreement
        shall
        mean this Non-Qualified Stock Option Agreement.

      

      B.
        Board
        shall
        mean the Board of Directors of the Company.

      

      C.
        Change
        in Control
        shall
        mean a change in ownership or control of the Company effected through either
        of
        the following transactions:

      

      (i)
        the
        acquisition, directly or indirectly, by any person or related group of persons
        (other than the Company or a person that directly or indirectly controls,
        is
        controlled by, or is under common control with, the Company), of beneficial
        ownership (within the meaning of Rule 13d-3 of the Securities Exchange Act
        of
        1934, as amended) of securities possessing more than fifty percent (50%)
        of the
        total combined voting power of the Company's outstanding securities pursuant
        to
        a tender or exchange offer made directly to the Company's stockholders which
        the
        Board does not recommend such stockholders to accept, or

      

      (ii)
        a
        change in the composition of the Board over a period of thirty-six (36)
        consecutive months or less such that a majority of the Board members ceases,
        by
        reason of one or more contested elections for Board membership, to be comprised
        of individuals who either (1) have been Board members continuously since
        the
        beginning of such period or (2) have been elected or nominated for election
        as
        Board members described in clause (1) who were still in office at the time
        the
        Board approved such election or nomination.

      

      D.
        Code
        shall
        mean the Internal Revenue Code of 1986, as amended.

      

      E.
        Committee
        shall
        mean the Compensation Committee of the Board. Reference to the Committee
        shall
        refer to the Board if the Compensation Committee ceases to exist and the
        Board
        does not appoint a successor Committee.

      

      F.
        Common
        Stock
        shall
        mean the Company's common stock.

      

      G.
        Company
        shall
        mean Vycor Medical, Inc., a Delaware corporation.

      

      H.
        Consultant
        shall
        mean any consultant or adviser if:

      

      (i) The
        consultant or adviser renders bona fide services to the Company;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (ii)
        The
        services rendered by the consultant or adviser are not in connection with
        the
        offer or sale of securities in a capital-raising transaction and do not directly
        or indirectly promote or maintain a market for the Company's securities;
        and

      

      (iii)
        The
        consultant or adviser is a natural person who has contracted directly with
        the
        Company to render such services.

      

      I.
        Corporate
        Transaction
        shall
        mean either of the following stockholder-approved transactions to which the
        Company is a party:

      

      (i)
        a
        merger or consolidation in which securities possessing more than fifty percent
        (50%) of the total combined voting power of the Company's outstanding securities
        are transferred to a person or persons different from the persons holding
        those
        securities immediately prior to such transaction, or

      

      (ii)
        the
        sale, transfer or other disposition of all or substantially all of the Company's
        assets in complete liquidation or dissolution of the Company.

      

      J.
        Disability
        shall
        mean that the Participant is no longer able to carry out his duties as a
        Director of the Company.

      

      K.
        Exercise
        Date
        shall
        mean the date on which the option shall have been exercised in accordance
        with
        Paragraph 8 of the Agreement.

      

      L.
        Exercise
        Price
        shall
        mean the exercise price per share as specified in the Grant Notice.

      

      M.
        Expiration
        Date
        shall
        mean the date on which the option expires as specified in the Grant
        Notice.

      

      N.
        Fair
        Market Value
        means,
        as of any given date, the fair market value of a share of Stock on such date
        determined by such methods or procedures as may be established from time
        to time
        by the Committee.

      

      O.
        Grant
        Date
        shall
        mean the date of grant of the option as specified in the Grant
        Notice.

      

      P.
        Grant
        Notice
        shall
        mean the Notice of Grant of Non-Qualified Stock Option accompanying the
        Agreement, pursuant to which Participant has been informed of the basic terms
        of
        the option evidenced hereby.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Q.
        Notice
        of Exercise
        shall
        mean the notice of exercise in the form attached hereto as Exhibit
        I.

      

      R.
        Option
        shall
        mean a right granted to a Participant pursuant to this Agreement to purchase
        a
        specified number of shares of Stock at a specified price during specified
        time
        periods.

      

      S.
        Option
        Shares
        shall
        mean the number of shares of Common Stock subject to the option as specified
        in
        the Grant Notice.

      

      T.
        Stock
        shall
        mean the common stock of the Company, par value $0.001 per share.

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