Document:

EXHIBIT 10.6

SHAREHOLDER’S AGREEMENT

               THIS
SHAREHOLDER’S AGREEMENT, dated as of December 29, 2009 (this “Agreement”), is
made by and among Fountainhead Capital Management Limited, an entity registered
in Jersey, C.I. (“FHCM”) and Vycor Medical, Inc., a Delaware corporation
(“Vycor”) (individually referred to as a “Party” and collectively, the
“Parties”). 

RECITALS

                    WHEREAS,
Vycor is indebted to FHCM pursuant to the terms of several debentures in the
aggregate amount including accrued interest of $671,362 (the “FHCM
Debentures”); 

                    WHEREAS,
pursuant to the terms of a debt restructuring agreement dated as of December
29, 2009 by and between FHCM, Regent Private Capital, LLC and Vycor (the “Debt
Restructuring Agreement’), the Parties agreed to certain actions, including but
not limited to (i) the conversion by FHCM of a certain face amount (including
accrued interest) of the FHCM Debentures into eighty-five percent (85%) of the
pro-forma fully diluted share capital of Vycor at Closing and (ii) undertaking
certain defined commitments for continued funding of Vycor in accordance with
the terms thereof; 

                    WHEREAS,
in partial consideration of FHCM’s agreements pursuant to the Debt
Restructuring Agreement, Vycor has agreed to certain undertakings on its part
with respect to its ongoing actions as further detailed in this Agreement;

                    NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements and
understandings set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

	
  

 	
  

 	
  

 
	
  

 	
 1.

 	
 Actions Outside Ordinary Course of Business.
 As long as FHCM holds more than thirty percent (30%) of the issued and
 outstanding common shares of Vycor, Vycor may not, without the consent of
 FHCM (which shall not be unreasonably withheld), authorize, issue or enter
 into any agreement providing for the issuance (contingent or otherwise) of:

 

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 any
 additional Common Stock valued over $5,000;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any notes or
 debt securities containing equity features; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 any class of
 equity or convertible security senior or pari passu with FHCM’s shares or
 debentures (including any shares issuable on the conversion of any
 debentures).

 

          During
such period, Vycor shall not:

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 make any
 expenditure which exceeds by more $5,000 which is not reflected in Vycor’s
 then-effective operating budget as approved by FHCM;

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 amend its
 Certificate of Incorporation or By-Laws;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 cause Vycor
 to merge or consolidate with or into another limited liability company,
 corporation, limited partnership or other entitiy;

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 sell or
 lease any of its assets, except in the ordinary course of business;

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 borrow money
 or otherwise obligate Vycor on any form of indebtedness or guaranty in excess
 of $5,000, other than in the ordinary course of business;

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 adopt,
 execute or accept any agreement on behalf of Vycor which is not terminable at
 will or which, over its normal course, would obligate the Company to make
 payments of cash and/or property having an aggregate value in excess of
 $20,000;

 
	
  

 	
  

 	
  

 
	
  

 	
 (g)

 	
 modify any
 executive salaries or benefits by more than 10%; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (h)

 	
 appoint any
 new members of senior management or the board of directors; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 enter into
 any transactions (including loans) with any officer or director of the
 company.

 

 

	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 Board Observer. Effective the date of
 this Agreement, Vycor shall grant board observer status to two designated
 representatives of FHCM (“Designated Representatives”). So long as FHCM holds
 more than 10% of Vycor’s common shares, Vycor shall give the Designated
 Representatives notice of each meeting of its board of directors and each
 committee thereof at least three days prior to the date of such meeting, and
 Vycor shall permit the Designated Representatives to attend such meeting as
 an observer, either in person or telephonically. In addition, the Designated
 Representatives shall be given the opportunity to listen to all telephonic
 meetings and shall be entitled to receive all written materials and other
 information (including, without limitation, copies of meeting minutes) given
 to directors in connection with such meetings at the same time such materials
 and information are given to the directors. If the Vycor board of directors
 proposes to take any action by written consent in lieu of a meeting of its
 board of directors or of any committee thereof, Vycor shall give written
 notice thereof to the Designated Representatives prior to the effective date
 of such consent describing in reasonable detail the nature and substance of
 such action. Notwithstanding the fact that the Designated Representatives are
 not sitting directors, the Designated Representatives shall possess an
 absolute right to veto any actions of Vycor’s board of directors which are
 directed at approving any actions which are proscribed pursuant to this
 Agreement. The Company shall pay the reasonable out-of-pocket expenses the
 Designated Representatives incurred in connection with attending such board
 and committee meetings, to the extent the Company pays same for the members
 of its board of directors. 

 

2

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 As soon as
 practicable following the date hereof, FHCM will take steps to work with the
 Company to identify and recruit additional outside directors for potential
 appointment to Vycor’s board of directors.

 

 

	
  

 	
  

 	
  

 
	
  

 	
 3.

 	
 Management Employment Contracts. The
 board hereby acknowledges that it will carry out any actions formally
 requested by FHCM as regards the Management Employment Contracts.

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Operating Budgets; Outside Financial Review; Audits.
 The Company shall cause to be prepared and delivered to FHCM annual operating
 budgets not later than 90 days prior to the commencement of each fiscal year.
 On a monthly basis, Vycor’s senior management shall provide FHCM with an
 actual to budgeted comparison with respect to all revenues and expenditures
 in the prior month.

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Other Provisions.

 

 

	
 ;

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Severability.
 If any provision of this Agreement or the application of any provision of
 this Agreement to any party or circumstance is, to any extent, adjudged
 invalid or unenforceable, the application of the remainder of such provision
 to such party or circumstance, the application of such provision to other
 parties or circumstances, and the application of the remainder of this
 Agreement will not be affected thereby.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Notices. All
 notices and other communications required or permitted under this Agreement
 must be in writing and will be deemed to have been duly given (a) when
 delivered in person, (b) when dispatched by electronic facsimile transfer (if
 confirmed in writing by mail simultaneously dispatched), (c) one Business Day
 after having been dispatched by a nationally recognized overnight courier
 service or (d) five Business Days after being sent by registered or certified
 mail, return receipt requested, postage prepaid, to the appropriate party at
 the address or facsimile number specified below:

 

 

	
  

 	
  

 	
  

 
	
  

 	
 If to FHCM:

 	
 Fountainhead
 Capital Management Limited

 
	
  

 	
  

 	
 Portman
 House

 
	
  

 	
  

 	
 Hue Street,
 St. Helier

 
	
  

 	
  

 	
 Jersey JE4
 5RP

 
	
  

 	
  

 	
  

 
	
  

 	
 If to Vycor:

 	
 Vycor
 Medical, Inc.

 
	
  

 	
  

 	
 80 Orville
 Drive, Suite 100

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Bohemia, New
 York 11716

 
	
  

 	
  

 	
  

 
	
  

 	
 Any party
 may change its address or facsimile number for the purposes of this Section
 4(b) by giving notice as provided in this Agreement.

 

3

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Governing
 Law. This Agreement will be governed by and construed and enforced in
 accordance with the laws of the State of New York, without regard to
 principles of conflicts of law that would cause the laws of another
 jurisdiction to apply.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Counterparts.
 This Agreement may be executed in two or more counterparts, each of which
 will be deemed an original, but all of which together will constitute one and
 the same instrument.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Successors
 and Assigns; Transferees. Except as expressly provided herein, this Agreement
 shall be binding upon and inure to the benefit of the successors and assigns
 of the parties hereto. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (f)

 	
 Entire
 Agreement; Amendment. This Agreement constitutes the full and entire
 understanding and agreement among the parties with regard to the subjects
 hereof. Neither this Agreement nor any term hereof may be amended, waived,
 discharged or terminated orally, except by a written instrument signed by all
 Parties. No waiver of any term, provision or condition of this Agreement, in
 any one or more instances, shall be deemed to be or construed as a further
 waiver of any such term, provision or condition or as a waiver of any other
 term, provision or condition 

 

                    IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed on the date first above written.

	
  

 	
  

 	
  

 
	
  

 	
 FOUNTAINHEAD
 CAPITAL MANAGEMENT LIMITED

 
	
  

 	
  

 
	
  

 	
  

 	
 /s/ Gisele Le Miere

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Name: Gisele
 Le Miere

 
	
  

 	
  

 	
 Title:
 Director

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 /s/ Carol Dodge

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Name: Carol
 Dodge

 
	
  

 	
  

 	
 Title:
 Director

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 VYCOR
 MEDICAL, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 /s/ Heather Vinas

 
	
  

 	
  

 	
  

 
	
  

 	
 By

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Name:
 Heather Vinas

 
	
  

 	
  

 	
 Title:
 President

 

4EXHIBIT 10.7

LOCK-UP AGREEMENT

December 29, 2009

Fountainhead
Capital Management Limited

Ladies and
Gentlemen:

          The
undersigned understands that Fountainhead Capital Management Limited (“FCM”)
proposes to enter into a restructuring and funding commitment (“Restructuring”)
with Vycor Medical, Inc. (the “Company”) in accordance with the terms of a
letter agreement of even date herewith (“Restructuring Agreement”).

          In
consideration of the agreement by FCM to enter into the Restructuring Agreement
and perform the acts detailed therein 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 interest in such common stock, 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 FCM 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 FCM or (iv) with the prior written consent of FCM (which consent
can be withheld in FCM’s sole discretion), for a period of twelve months from
the date hereof.

          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. FCM 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 FCM 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.

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

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
  

 
	
  

 	
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