Exhibit 10.1
 
Execution Copy
 
SECURITIES PURCHASE AGREEMENT
 
THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of the 1st day
of October, 2015 by and between Bioheart, Inc., a Florida corporation (the
“Company”), and Magna Equities II, LLC, a New York limited liability company
(the “Investor”).
 
WHEREAS, the Investor is willing to lend the Company $100,000, which loan is
evidenced by a promissory note, in substantially the form attached hereto as
Exhibit A (the “Note”), which is convertible into shares of the Company’s common
stock, $0.001 par value (the “Common Stock”), in accordance with the terms of
this Agreement and such Note;
 
WHEREAS, upon the terms and condition stated in the Agreement and pursuant to
Section 4(a)(2) of the 1933 Act (as defined below) and Rule 506 of Regulation D
promulgated thereunder, the Investor wishes to purchase, and the Company wishes
to sell, the Note with the principal amount equal to $160,000 (the shares of
Common Stock issuable upon conversion of the Note, collectively, the “Conversion
Shares”).  The Note, together with the Conversion Shares, are referred to herein
as the “Securities” and the offering contemplated hereby is referred to herein
as the “Offering”;
 
WHEREAS, the parties have agreed that the obligation to repay the Note shall be
an unsecured obligation of the Company; and
 
WHEREAS, at the Closing (as defined below), the parties hereto shall execute and
deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
B (the “Registration Rights Agreement”), pursuant to which the Company has
agreed to provide certain registration rights with respect to the Registrable
Securities (as defined in the Registration Rights Agreement), under the 1933 Act
(as defined below) and the rules and regulations promulgated thereunder, and
applicable state securities laws.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in consideration of the premises and the
mutual agreements, representations and warranties, provisions and covenants
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
 
1. Purchase and Sale of Note.  On the Closing Date (as hereinafter defined),
subject to the terms and conditions of this Agreement, the Investor hereby
agrees to purchase, and the Company hereby agrees to sell and issue, a Note in
the principal amount of $160,000 (the “Principal Amount”).
 
2. Purchase Price. The purchase price for the Note to be purchased by the
Investor at the Closing shall be $100,000 (the “Purchase Price”).  The Note will
be issued with an original issue discount of 37.5%.  The Investor shall pay
$0.625 for each $1.00 of principal amount of the Note to be purchased at the
Closing.  At the Closing, the Investor shall fund the Purchase Price by wire
transfer of immediately available funds to the account specified in writing by
the Company prior to the date hereof.
 
 
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3. The Closing.  Subject to the conditions set forth below, the purchase and
sale of the Note shall take place at the offices of Greenberg Traurig, LLP, The
MetLife Building, 200 Park Avenue, New York, New York 10166, on the date hereof
(the “Closing” and the “Closing Date”).  At the Closing, the Company shall
deliver to the Investor:  (i) this Agreement duly executed by the Company, (ii)
the Note in the Principal Amount duly executed by the Company and registered in
the name of the Investor and (iii) the Registration Rights Agreement duly
executed by the Company.  At the Closing, the Investor shall deliver to the
Company (i) this Agreement duly executed by the Investor and (ii) the
Registration Rights Agreement duly executed by the Investor.
 
4. Closing Conditions; Certain Covenants.
 
4.1 Conditions to the Investor’s Obligations.  The obligation of the Investor to
purchase the Note to be issued to the Investor at the Closing is subject to the
fulfillment, to the Investor’s reasonable satisfaction, prior to or at the
Closing, of each of the following conditions:
 
(a) Representations and Warranties.  The representations and warranties of the
Company contained in this Agreement shall be true and correct in all material
respects on the date hereof.
 
(b) Note.  At the Closing, the Company shall have tendered to the Investor the
Note.
 
(c) Registration Rights Agreement.  The Company shall have duly executed and
delivered the Registration Rights Agreement to the Investor.
 
(d) No Actions.  No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or authority or legislative body to enjoin, restrain,
prohibit or obtain substantial damages in respect of, this Agreement or the
consummation of the transactions contemplated by this Agreement.
 
(e) Proceedings and Documents.  All proceedings in connection with the
transactions contemplated hereby and all documents and instruments incident to
such transactions shall be reasonably satisfactory in substance and form to the
Investor, and the Investor shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
 
4.2 Conditions to the Company’s Obligations.  The obligation of the Company to
sell and issue the Note to the Investor at the Closing is subject to the
fulfillment, to the Company’s reasonable satisfaction, prior to or at the
Closing, of each of the following conditions:
 
(a) Representations and Warranties.  The representations and warranties of the
Investor contained in this Agreement shall be true and correct in all material
respects on the date hereof.
 
(b) Purchase Price.  At the Closing, the Investor shall have tendered to the
Company the Purchase Price (less the amounts to be withheld pursuant to Section
10.12) by wire transfer of immediately available funds to the account specified
in writing by the Company prior to the date hereof.
 
 
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(c) Registration Rights Agreement.  The Investor shall have duly executed and
delivered the Registration Rights Agreement to the Company.
 
(d) No Actions.  No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or authority or legislative body to enjoin, restrain,
prohibit, or obtain substantial damages in respect of, this Agreement or the
consummation of the transactions contemplated by this Agreement.
 
(e) Proceedings and Documents.  All proceedings in connection with the
transactions contemplated hereby and all documents and instruments incident to
such transactions shall be satisfactory in substance and form to the Company and
the Company shall have received all such counterpart originals or certified or
other copies of such documents as the Company may reasonably request.
 
4.3 Securities Law Disclosure; Publicity.  The Company shall not later than 9:00
a.m. (New York City time) on the fourth (4th) business day immediately following
the date hereof, (a) issue a press release disclosing the material terms of the
transactions contemplated hereby and (b) issue a Current Report on Form 8-K
disclosing the material terms of the transactions contemplated hereby, and
including the Transaction Documents as exhibits thereto, within the time
required by the 1934 Act.  From and after the issuance of such press release,
the Company represents to the Investor that the Company shall have publicly
disclosed all material, non-public information delivered to the Investor by the
Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents.  The Company shall afford the Investor and its
counsel with a reasonable opportunity to review and comment upon, shall consult
with the Investor and its counsel on the form and substance of, and shall give
due consideration to all such comments from the Investor or its counsel on, any
press release, Commission filing or any other public disclosure made by or on
behalf of the Company relating to the Investor, its purchases hereunder or any
aspect of the Transaction Documents or the transactions contemplated thereby,
prior to the issuance, filing or public disclosure thereof, and the Company
shall not issue, file or publicly disclose any such information to which the
Investor shall object. For the avoidance of doubt, the Company shall not be
required to submit for review any such disclosure contained in periodic reports
filed with the Commission under the Exchange Act if it shall have previously
provided the same disclosure for review in connection with a previous filing.
 
4.4 Legends.  The Securities may only be disposed of in compliance with state
and federal securities laws.  In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144 under the
1933 Act (“Rule 144”), to the Company or to an affiliate of the Investor or in
connection with a pledge, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Securities under the
1933 Act.  The Investor understands that the certificate or other instrument
representing the Note and, the stock certificates representing the Conversion
Shares, except as set forth below, shall bear any legends as required by
applicable state securities or “Blue Sky” laws in addition to a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):
 
 
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NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE] HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY
ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER
SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
 
The Company shall use its reasonable best efforts to cause its transfer agent to
remove the legend set forth above and to issue a certificate without such legend
to the holder of the Securities upon which it is stamped, or to issue to such
holder by electronic delivery at the applicable balance account at the
Depository Trust Company (“DTC”), unless otherwise required by state securities
or “blue sky” laws, at such time as (i) such Securities are registered for
resale under the 1933 Act, (ii) in connection with a sale, assignment or other
transfer, such holder provides the Company with an opinion of counsel, in a form
generally acceptable to the Company’s legal counsel, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the 1933 Act, or (iii) such holder provides the Company and its legal
counsel with reasonable assurance in writing that the Securities can be sold,
assigned or transferred pursuant to Rule 144 or Rule 144A.  In furtherance of
the foregoing, the Company agrees that, following the Effective Date or at such
time as such legend is not required pursuant to this Section 4.4, the Company
shall, no later than three Trading Days following the delivery by the Investor
to the Company or the Company’s transfer agent of a certificate representing
Conversion Shares issued with a restrictive legend (such third Trading Day, the
“Legend Removal Date”), either: (A) issue and deliver (or cause to be issued and
delivered) to the Investor a certificate representing such Conversion Shares
that is free from all restrictive and other legends or (B) cause the Company’s
transfer agent to credit the Investor’s or its designee’s account at DTC through
its Deposit/Withdrawal at Custodian (DWAC) system with a number of shares of
Common Stock equal to the number of Conversion Shares represented by the
certificate so delivered by the Investor. If the Company fails on or prior to
the Legend Removal Date to either (i) issue and deliver (or cause to be issued
and delivered) to the Investor a certificate representing the Conversion Shares
that is free from all restrictive and other legends or (ii) cause the Company’s
transfer agent to credit the balance account of the Investor or its designee at
DTC through its Deposit/Withdrawal at Custodian (DWAC) system with a number of
shares of Common Stock equal to the number of Conversion Shares represented by
the certificate delivered by the Investor pursuant hereto, then, in addition to
all other remedies available to the Investor, the Company shall pay in cash to
the Investor on each day after the Legend Removal Date that the issuance or
credit of such shares is not timely effected an amount equal to 2.0% of the
product of (A) the sum of the number of Conversion Shares not issued to the
Investor on a timely basis and to which the Investor is entitled and (B) the
VWAP for the five Trading Day period immediately preceding the Legend Removal
Date. In addition to the foregoing, if the Company fails to so properly deliver
such unlegended certificates or so properly credit the account of the Investor
or its designee at DTC by the Legend Removal Date, and if on or after the Legend
Removal Date the Investor purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Investor of
shares of Common Stock that the Investor anticipated receiving from the Company
without any restrictive legend, then the Company shall, within three Trading
Days after the Investor’s request, pay cash to the Investor in an amount equal
to the Investor’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased, at which point the Company’s
obligation to deliver a certificate or credit the Investor’s or its designee’s
account at DTC for such shares of Common Stock shall terminate and such shares
shall be cancelled.
 
 
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5. Representations and Warranties of the Company.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules, the Company hereby makes the following representations and warranties
to the Investors:
 
5.1 Organization, Good Standing and Qualification.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida.  The Company is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure to so qualify would have
a Material Adverse Effect.
 
5.2 Capitalization and Voting Rights.  The authorized capital stock of the
Company and the shares thereof issued and outstanding were as set forth in the
Public Reports as of the dates reflected therein. All of the outstanding shares
of Common Stock have been duly authorized and validly issued, and are fully paid
and nonassessable. Except as set forth in the Public Reports, this Agreement and
the Registration Rights Agreement, there are no agreements or arrangements under
which the Company is obligated to register the sale of any securities under the
Securities Act. Except as set forth in the Public Reports, no shares of Common
Stock are entitled to preemptive rights and there are no outstanding debt
securities and no contracts, commitments, understandings, or arrangements by
which the Company is or may become bound to issue additional shares of the
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, any shares of capital stock of
the Company other than those issued or granted in the ordinary course of
business pursuant to the Company’s equity incentive and/or compensatory plans or
arrangements. Except for customary transfer restrictions contained in agreements
entered into by the Company to sell restricted securities or as set forth in the
Public Reports, the Company is not a party to, and it has no knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of the Company. Except as set forth in the Public Reports, the offer and sale of
all capital stock, convertible or exchangeable securities, rights, warrants or
options of the Company issued prior to the Closing Date complied with all
applicable federal and state securities laws, and no stockholder has any right
of rescission or damages or any “put” or similar right with respect thereto that
would have a Material Adverse Effect. Except as set forth in the Public Reports,
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the Note, this Agreement or the
Registration Rights Agreement or the consummation of the transactions described
herein or therein.
 
 
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5.3 Authorization; Enforcement.  All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the Note, the
Registration Rights Agreement (the “Transaction Documents”) and the performance
of all obligations of the Company hereunder and thereunder, and the
authorization (or reservation for issuance), sale and issuance of the Note, and
the Common Stock into which the Note is convertible or exercisable, have been
taken on or prior to the date hereof.  Each of the Transaction Documents has
been duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
 
5.4 Valid Issuance of the Conversion Shares; Reservation of Shares.  The Note is
duly authorized and, when issued and paid for in accordance with this Agreement,
will be duly and validly issued, fully paid and nonassessable, and free and
clear of all Liens imposed by the Company other than restrictions on transfer
under this Agreement and under applicable state and federal securities
laws.  The Conversion Shares when issued and delivered in accordance with the
terms of this Agreement and the Note for the consideration expressed herein and
therein, will be duly and validly issued, fully paid and non-assessable and free
and clear of all Liens imposed by the Company other than restrictions on
transfer under this Agreement and under applicable state and federal securities
laws.  The Company has reserved from its duly authorized capital stock a
sufficient number of shares of Common Stock for issuance of the Conversion
Shares.
 
5.5 Offering.  Subject to the truth and accuracy of the Investor’s
representations set forth in Section 6 of this Agreement, the offer and issuance
of the Note, together with the Conversion Shares, as contemplated by this
Agreement are exempt from the registration requirements of the Securities Act of
1933, as amended (the “1933 Act”), and the qualification or registration
requirements of state securities laws or other applicable blue sky
laws.  Neither the Company nor any authorized agent acting on its behalf will
take any action hereafter that would cause the loss of such exemptions.
 
5.6 Public Reports.  The Company is current in its filing obligations under the
1934 Act, including without limitation as to its filings of Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
(collectively, the “Public Reports”).  The Public Reports do not contain any
untrue statement of a material fact or omit to state any fact necessary to make
any statement therein not misleading.  The financial statements included within
the Public Reports for the fiscal year ended December 31, 2013 and for each
quarterly period thereafter (the “Financial Statements”) have been prepared in
accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods indicated and with each other, except
that unaudited Financial Statements may not contain all footnote required by
generally accepted accounting principles.  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 unaudited Financial Statements to normal year-end audit
adjustments.
 
 
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5.7 Compliance With Laws.  The Company has not violated any law or any
governmental regulation or requirement which violation has had or would
reasonably be expected to have a Material Adverse Effect on its business and the
Company has not received written notice of any such violation.
 
5.8 Violations.  The consummation of the transactions contemplated by the
Transaction Documents and all other documents and instruments required to be
delivered in connection therewith will not result in or constitute any of the
following:  (a) a violation of any provision of the certificate of
incorporation, bylaws or other governing documents of the Company; (b) a
violation of any provisions of any applicable law or of any writ or decree of
any court or governmental instrumentality; (c) a default or an event that, with
notice or lapse of time or both, would be a default, breach, or violation of a
lease, license, promissory note, conditional sales contract, commitment,
indenture, mortgage, deed of trust, or other agreement, instrument, or
arrangement to which the Company is a party or by which the Company or its
property is bound; (d) an event that would permit any party to terminate any
agreement or to accelerate the maturity of any indebtedness or other obligation
of the Company; or (e) the creation or imposition of any lien, pledge, option,
security agreement, equity, claim, charge, encumbrance or other restriction or
limitation on the capital stock or on any of the properties or assets of the
Company.
 
5.9 Consents; Waivers.  No consent, waiver, approval or authority of any nature,
or other formal action, by any Person, firm or corporation, or any agency,
bureau or department of any government or any subdivision thereof, not already
obtained, is required in connection with the execution and delivery of the
Transaction Documents by the Company or the consummation by the Company of the
transactions provided for herein and therein.
 
5.10 Sarbanes-Oxley Act. The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof.
 
5.11 Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the
Company, threatened against or affecting the Company, the Common Stock or any of
the Company’s officers or directors in their capacities as such.
 
5.12 Material Changes; Undisclosed Events, Liabilities or Developments.  Since
the date of the latest audited financial statements included within the Public
Reports, except as specifically disclosed in a subsequent Public Report filed
prior to the date hereof: (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or affiliate, except pursuant to existing Company stock
option plans. The Company does not have pending before the Commission any
request for confidential treatment of information.  Except for the issuance of
the Securities contemplated by this Agreement, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably
expected to occur or exist with respect to the Company or its Subsidiaries or
their respective businesses, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one Trading Day prior to the
date that this representation is made.
 
 
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5.13 Intellectual Property.  The Company has, or has rights to use, all patents,
patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the Public Reports as
necessary or required for use in connection with their respective businesses and
which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”).  The Company has not received a notice
(written or otherwise) that any of, the Intellectual Property Rights has
expired, terminated or been abandoned, or is expected to expire or terminate or
be abandoned, within two (2) years from the date of this Agreement.  The Company
has not received, since the date of the latest audited financial statements
included within the Public Reports, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be expected to not
have a Material Adverse Effect.  To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights.  The
Company has taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties, except where
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
 
5.14 Registration Rights.  Other than the Investor or as set forth in the Public
Reports, no Person has any right to cause the Company to effect the registration
under the 1933 Act of any securities of the Company.
 
5.15 Disclosure.  Except with respect to the material terms and conditions of
the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided the
Investor or its agents or counsel with any information that it believes
constitutes or might constitute material, non-public information.  The Company
understands and confirms that the Investor will rely on the foregoing
representation in effecting transactions in securities of the Company.  All of
the disclosure furnished by or on behalf of the Company to the Investor
regarding the Company and its Subsidiaries, their respective businesses and the
transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.   The press releases disseminated by the Company during
the twelve months preceding the date of this Agreement taken as a whole do not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made and when made,
not misleading.  The Company acknowledges and agrees that the Investor does not
make nor has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 6 hereof.
 
 
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5.16 No Integrated Offering. Assuming the accuracy of the Investor’s
representations and warranties set forth in Section 6, neither the Company, nor
any of its affiliates, nor any Person acting on its or their behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause this
offering of the Securities to be integrated with prior offerings by the Company
for purposes of (i) the 1933 Act which would require the registration of any
such securities under the 1933 Act, or (ii) any applicable shareholder approval
provisions of any Trading Market on which any of the securities of the Company
are listed or designated.
 
5.17 Seniority.  As of the Closing Date, no Indebtedness or other claim against
the Company is senior to the Note in right of payment, whether with respect to
interest or upon liquidation or dissolution, or otherwise, other than
indebtedness secured by purchase money security interests (which is senior only
as to underlying assets covered thereby) and capital lease obligations (which is
senior only as to the property covered thereby).
 
5.18 Bankruptcy Status; Indebtedness.  The Company has no current intention or
expectation to file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing
Date.  Schedule 5.18 sets forth as of the date hereof all outstanding secured
and unsecured Indebtedness (as defined below) of the Company or any Subsidiary,
or for which the Company or any Subsidiary has commitments.  For the purposes of
this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or
amounts owed in excess of $25,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements and other
contingent obligations in respect of indebtedness of others, whether or not the
same are or should be reflected in the Company’s consolidated balance sheet (or
the notes thereto), except guaranties by endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess of $25,000
due under leases required to be capitalized in accordance with GAAP.  The
Company is not in default with respect to any Indebtedness.
 
5.19 Regulation M Compliance.  The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.
 
 
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5.20 Acknowledgment Regarding Investor’s Purchase of Securities. The Company
acknowledges and agrees that the Investor is acting solely in the capacity of an
arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby and that the Investor is not (i) an officer or director of
the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in Rule
144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a
“beneficial owner” of more than 10% of the shares of Common Stock (as defined
for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the
Company or any of its Subsidiaries (or in any similar capacity) with respect to
this Agreement and the transactions contemplated hereby, and any advice given by
the Investor or any of its representatives or agents in connection with this
Agreement and the transactions contemplated hereby is merely incidental to the
Investor’s purchase of the Securities. The Company further represents to the
Investor that the Company’s decision to enter into this Agreement, the
Registration Rights Agreement, the Note and the other transaction documents to
which it is a party has been based solely on the independent evaluation by the
Company and its representatives.
 
5.21 No General Solicitation. Neither the Company, nor any of its Subsidiaries
or affiliates, nor any Person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities.
 
5.22 Application of Takeover Protections; Rights Agreement. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, interested stockholder, business
combination, poison pill (including, without limitation, any distribution under
a rights agreement), stockholder rights plan or other similar anti-takeover
provision under its articles of incorporation, bylaws or other organizational
documents, as amended to date, or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to the Investor
as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and the Investor’s
ownership of the Securities. The Company and its board of directors have taken
all necessary action, if any, in order to render inapplicable any stockholder
rights plan or similar arrangement relating to accumulations of beneficial
ownership of shares of Common Stock or a change in control of the Company or any
of its Subsidiaries.
 
5.23 Foreign Corrupt Practices. Neither the Company nor any of its Subsidiaries
nor any director, officer, agent, employee or other Person acting on behalf of
the Company or any of its Subsidiaries has, in the course of its actions for, or
on behalf of, the Company or any of its Subsidiaries (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.
 
 
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5.24 Off Balance Sheet Arrangements. There is no transaction, arrangement, or
other relationship between the Company or any of its Subsidiaries and an
unconsolidated or other off balance sheet entity that is required to be
disclosed by the Company in its Public Reports and is not so disclosed or that
otherwise could be reasonably likely to have a Material Adverse Effect.
 
5.25 Investment Company Status. The Company is not, and upon consummation of the
sale of the Securities will not be, an “investment company,” an affiliate of an
“investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company” as such terms are defined in the Investment Company Act of
1940, as amended.
 
5.26 U.S. Real Property Holding Corporation. Neither the Company nor any of its
Subsidiaries is, or has ever been, and so long as any of the Securities are held
by the Investor, shall become, a U.S. real property holding corporation within
the meaning of Section 897 of the Code, and the Company and each Subsidiary
shall so certify upon the Investor’s request.
 
5.27 Bank Holding Company Act
 
5.28 . Neither the Company nor any of its Subsidiaries is subject to the Bank
Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the
Board of Governors of the Federal Reserve System (the “Federal Reserve”).
Neither the Company nor any of its Subsidiaries or affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of
any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any equity that is subject to the BHCA and to regulation by
the Federal Reserve. Neither the Company nor any of its Subsidiaries or
affiliates exercises a controlling influence over the management or policies of
a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve.
 
5.29 Shell Company Status. The Company is not, and has never been, an issuer
identified in, or subject to, paragraph (i) of Rule 144.
 
5.30 Public Utility Holding Act. Neither the Company nor any of its Subsidiaries
is a “holding company,” or an “affiliate” of a “holding company,” as such terms
are defined in the Public Utility Holding Act of 2005.
 
5.31 Federal Power Act. Neither the Company nor any of its Subsidiaries is
subject to regulation as a “public utility” under the Federal Power Act, as
amended.
 
5.32 Illegal or Unauthorized Payments; Political Contributions. Neither the
Company nor any of its Subsidiaries nor, to the best of the Company’s knowledge
(after reasonable inquiry of its officers and directors), any of the officers,
directors, employees, agents or other representatives of the Company or any of
its Subsidiaries or any other business entity or enterprise with which the
Company or any Subsidiary is or has been affiliated or associated, has, directly
or indirectly, made or authorized any payment, contribution or gift of money,
property, or services, whether or not in contravention of applicable law, (a) as
a kickback or bribe to any Person or (b) to any political organization, or the
holder of or any aspirant to any elective or appointive public office except for
personal political contributions not involving the direct or indirect use of
funds of the Company or any of its Subsidiaries.
 
 
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5.33 Money Laundering. The Company and its Subsidiaries are in compliance with,
and have not previously violated, the USA Patriot Act of 2001 and all other
applicable U.S. and non-U.S. anti-money laundering laws and regulations,
including, without limitation, the laws, regulations and Executive Orders and
sanctions programs administered by the U.S. Office of Foreign Assets Control,
including, without limitation, (i) Executive Order 13224 of September 23, 2001
entitled, “Blocking Property and Prohibiting Transactions With Persons Who
Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001));
and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.
 
5.34 No Disqualification Events. None of the Company, any of its predecessors,
any affiliated issuer, any director, executive officer, other officer of the
Company participating in the offering contemplated hereby, any beneficial owner
of 20% or more of the Company's outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time
of sale (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule
506(d)(2) or (d)(3) under the 1933 Act. The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a
Disqualification Event.
 
6. Representations and Warranties of the Investor.  The Investor hereby
represents, warrants and covenants that:
 
6.1 Authorization.  The Investor has full power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby and has taken all action necessary to authorize
the execution and delivery of this Agreement and the Registration Rights
Agreement, the performance of its obligations hereunder and thereunder and the
consummation of the transactions contemplated hereby and thereby.
 
6.2 No Public Sale or Distribution. The Investor is (i) acquiring the Note and
(ii) upon conversion of the Note will acquire the Conversion Shares for its own
account, not as a nominee or agent, and not with a view towards, or for resale
in connection with, the public sale or distribution of any part thereof, except
pursuant to sales registered or exempted under the 1933 Act. The Investor is
acquiring the Securities hereunder in the ordinary course of its business. The
Investor does not presently have any contract, agreement, undertaking,
arrangement or understanding, directly or indirectly, with any individual, a
limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof (a “Person”) to sell, transfer, pledge, assign or otherwise
distribute any of the Securities.
 
6.3 Accredited Investor Status; Investment Experience. The Investor is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D.
The Investor can bear the economic risk of its investment in the Securities, and
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in the Securities.
 
 
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6.4 Reliance on Exemptions.  The Investor understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and the
Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Investor to acquire the Securities.
 
6.5 Information. The Investor and its advisors, if any, have been furnished with
all materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Securities which have been
requested by the Investor. The Investor and its advisors, if any, have been
afforded the opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by the Investor or its
advisors, if any, or its representatives shall modify, amend or affect the
Investor’s right to rely on the Company’s representations and warranties
contained herein. The Investor understands that its investment in the Securities
involves a high degree of risk. The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities. The Investor is
relying solely on its own accounting, legal and tax advisors, and not on any
statements of the Company or any of its agents or representatives, for such
accounting, legal and tax advice with respect to its acquisition of the
Securities and the transactions contemplated by this Agreement.
 
6.6 No Governmental Review. The Investor understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
 
6.7 Validity; Enforcement; No Conflicts. This Agreement and each Transaction
Document to which the Investor is a party have been duly and validly authorized,
executed and delivered on behalf of the Investor and shall constitute the legal,
valid and binding obligations of the Investor enforceable against the Investor
in accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies. The execution, delivery and performance by the Investor of this
Agreement and each Transaction Document to which the Investor is a party and the
consummation by the Investor of the transactions contemplated hereby and thereby
will not (i) result in a violation of the organizational documents of the
Investor or (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Investor is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities or “Blue Sky” laws) applicable to the
Investor, except in the case of clause (ii) above, for such conflicts, defaults
or rights which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Investor to
perform its obligations hereunder.
 
 
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6.8 Organization and Standing. The Investor is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
New York.
 
7. Use of Proceeds. The Investor acknowledges that the Company will use the
proceeds received from the purchase of the Note for, among other things, (i)
costs and expenses relating to the sale of the Note to the Investor and (ii)
general working capital purposes.
 
8. Rule 144 Availability; Public Information.  At all times during the period
commencing on the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities can be sold without the requirement to be
in compliance with Rule 144(c)(1) under the 1933 Act and otherwise without
restriction or limitation pursuant to Rule 144, the Company shall use its
reasonable best efforts to ensure the availability of Rule 144 to the Investor
with regard to the Conversion Shares, including compliance with Rule 144(c)(1)
under the 1933 Act.  If, (i) at any time during the period commencing from the
six (6) month anniversary of the Closing Date and ending on the first
anniversary of the Closing Date, the Company shall fail for any reason to
satisfy the current public information requirement under Rule 144(c) under the
1933 Act (a “Public Information Failure”), or (ii) the Company shall fail to
take such action as is reasonably requested by the Investor to enable the
Investor to sell the Conversion Shares pursuant to Rule 144 (including, without
limitation, delivering all such legal opinions, consents, certificates,
resolutions and instructions to the Company’s transfer agent as may be
reasonably requested from time to time by the Investor and otherwise fully
cooperate with Investor and Investor’s broker to effect such sale of securities
pursuant to Rule 144), then, in either case, in addition to the Investor’s other
available remedies, the Company shall pay to a Investor, in cash, as liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its
ability to sell the Securities, an amount in cash equal to two percent (2.0%) of
the aggregate Purchase Price of the Investor’s Securities on the day of a Public
Information Failure and on every thirtieth (30th) day (pro rated for periods
totaling less than thirty days) thereafter until the earlier of (a) the date
such Public Information Failure is cured and (b) such time that such public
information is no longer required for the Investor to transfer the Shares or the
Warrant Shares pursuant to Rule 144.  The payments to which the Investor shall
be entitled pursuant to this Section 8 are referred to herein as “Rule
144 Failure Payments.” Rule 144 Failure Payments shall be paid on the earlier of
(i) the last day of the calendar month during which such Rule 144 Failure
Payments are incurred and (ii) the third (3rd) Trading Day after the event or
failure giving rise to the Rule 144 Failure Payments is cured.
 
9. Indemnification. In consideration of the Investor’s execution and delivery of
this Agreement and acquiring the Securities hereunder and in addition to all of
the Company’s other obligations under this Agreement, the Registration Rights
Agreement and the Note, the Company shall defend, protect, indemnify and hold
harmless the Investor and each holder of any Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or
indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Registration Rights Agreement, (b) any breach
of any covenant, agreement or obligation of the Company contained in this
Agreement or the Registration Rights Agreement or (c) any cause of action, suit
or claim brought or made against such Indemnitee by a third party (including for
these purposes a derivative action brought on behalf of the Company or any
Subsidiary) and arising out of or resulting from (i) the execution, delivery,
performance or enforcement of any of this Agreement, the Registration Rights
Agreement or the Note, (ii) any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the issuance of the
Securities, or (iii) the status of the Investor or holder of the Securities as
an investor in the Company pursuant to the transactions contemplated by this
Agreement. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this
Section 9 shall be the same as those set forth in Section 6 of the Registration
Rights Agreement. Notwithstanding anything to the contrary in this Section 9,
the Company shall not be obligated to pay an Indemnitee any sums otherwise due
under this Section 9 if the Company has already paid the Indemnitee such sums
for the same Indemnified Liabilities under Section 6 of the Registration Rights
Agreement.
 
 
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10. Miscellaneous
 
10.1 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 (including transferees of
the Securities).  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.
 
10.2 Governing Law; Jurisdiction; Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
 
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10.3 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.
 
10.4 Notices.  All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given:  (a) upon personal delivery to the party
to be notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient; if not, then on the next business day,
(c) five (5) business days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (d) 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 (a) in the case of the Company, to Bioheart, Inc., 13794 NW 4th Street,
Suite 212, Sunrise, Florida 33325, Telephone Number: (954) 835-1500, Fax: (954)
845-9976, Attention: Mike Tomas, with a copy (which shall not constitute notice)
to Joseph I. Emas, 525 93 Street, Sufside, Florida 33154, Telephone: (305)
531-1174, or (b) in the case of the Investor, to Magna Equities II, LLC, a New
York limited liability company, c/o Magna, 5 Hanover Square, New York, NY 10004,
Telephone Number: (347) 491-4240, Fax: (646) 737-9948, Attention:  Marc Manuel,
with a copy (which shall not constitute notice) to Greenberg Traurig, LLP, The
MetLife Building, 200 Park Avenue, New York, New York 10166, Telephone Number
(212) 801-9200, Fax: (212) 801-6400, Attention: Anthony J. Marsico, Esq.
 
10.5 Finder’s Fees.  Each party represents that it neither is nor will be
obligated for any finders’ fee or commission in connection with this
transaction.  The Company shall indemnify and hold harmless each Investor from
any liability for any commission or compensation in the nature of a finders’ fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
 
10.6 Amendments and Waivers.  No provision of this Agreement may be amended
other than by a written instrument signed by both parties hereto. No provision
of this Agreement may be waived other than in a written instrument signed by the
party against whom enforcement of such waiver is sought. No failure or delay in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercises thereof or of any other
right, power or privilege.
 
10.7 Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
 
10.8 Entire Agreement.  This Agreement and the documents referred to herein
constitute the entire agreement among the parties 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.
 
 
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10.9 Counterparts.  This Agreement may be executed 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.
 
10.10 Interpretation.  Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) “including” has the inclusive meaning frequently identified with the phrase
“but not limited to” and (d) references to “hereunder” or “herein” relate to
this Agreement.
 
10.11 Remedies.  In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the Investor and the
Company will be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to
assert in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
 
10.12 Fees and Expenses.  Each party shall bear its own fees and expenses
related to the transactions contemplated by this Agreement; provided, however,
that $10,000 (less $7,500 heretofore paid by the Company to the Investor) shall
be withheld by the Investor from the Purchase Price at the Closing as a
non-accountable and non-refundable document preparation fee (the “Document
Preparation Fee”) in connection with the preparation, negotiation, execution and
delivery of this Agreement, the Registration Rights Agreement and the Note and
legal due diligence of the Company, and shall be paid directly to the Investor’s
counsel on the Closing Date by wire transfer of immediately available funds. For
the avoidance of doubt, the Document Preparation Fee shall be non-refundable
when paid. The Company shall pay all transfer agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter
delivered by the Company and any conversion or exercise notice delivered by the
Investor), stamp taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Investor.
 
10.13 No Short Sales. So long as the Investor or its affiliates holds any
Securities, neither the Investor nor any of its affiliates nor any entity
managed or controlled by the Investor (collectively, the “Restricted Persons”
and each of the foregoing is referred to herein as a “Restricted Person”) shall,
directly or indirectly, engage in any Short Sales involving the Company’s
securities; provided, that it is expressly understood and agreed that, for
purposes of determining whether a Short Sale shall be deemed to exist hereunder,
a sale by a Restricted Person of Common Stock shall not be deemed to be a “Short
Sale” if executed at a time when such Restricted Person has an equivalent
offsetting long position in the Common Stock (or is deemed to have a long
position hereunder or otherwise in accordance with Regulation SHO under the 1934
Act); provided, further that no “Short Sale” shall be deemed to exist as a
result of any failure by the Company (or its agents) to deliver Conversion
Shares upon conversion of the Note to any Restricted Person exercising the Note.
For purposes of determining whether a Restricted Person has an equivalent
offsetting long position in the Common Stock, such Restricted Person shall be
deemed to hold “long” all Common Stock that is either (i) then owned by such
Restricted Person, if any, or (ii) then issuable to such Restricted Person as
Conversion Shares pursuant to the terms of the Note held by such Restricted
Person, if any, (without regard to any limitations on conversion set forth in
the Note and giving effect to any conversion price adjustments that would take
effect given only the passage of time). Notwithstanding the foregoing, nothing
contained herein shall (without implication that the contrary would otherwise be
true) prohibit any Restricted Person from selling “long” (as defined under Rule
200 promulgated under Regulation SHO under the 1934 Act) the Securities or any
other Common Stock then owned by such Restricted Person.
 
 
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10.14 No Frustration. So long as the Investor or its affiliates hold any
Securities, neither the Company nor any of its affiliates or Subsidiaries, nor
any of its or their respective officers, employees, directors, agents or other
representatives, will, without the prior written consent of the Investor (which
consent may be withheld, delayed or conditioned in the Investor’s sole
discretion), effect, enter into, announce or recommend to its stockholders any
agreement, plan, arrangement or transaction (or issue, amend or waive any
security) that would or would reasonably be expected to restrict, delay,
conflict with or impair the ability or right of the Company to timely perform
its obligations under this Agreement, the Registration Rights Agreement or the
Note, including, without limitation, the obligation of the Company to timely
deliver Conversion Shares upon conversion of the Note.
 
11. Additional Defined Terms.  In addition to the terms defined elsewhere in
this Agreement, the Registration Rights Agreement or the Note, the following
terms have the meanings set forth in this Section 11:
 
11.1 “1934 Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
 
11.2 “Commission” means the United States Securities and Exchange Commission.
 
11.3 “Effective Date” means the earliest of the date that (a) the initial
Registration Statement has been declared effective by the Commission, (b) all of
the Registrable Securities have been sold pursuant to Rule 144 or may be sold
pursuant to Rule 144 without the requirement for the Company to be in compliance
with the current public information required under Rule 144 and without volume
or manner-of-sale restrictions or (c) following the one year anniversary of the
Closing Date provided that a holder of Registrable Securities is not an
affiliate of the Company, all of the Registrable Securities may be sold pursuant
to an exemption from registration under Section 4(1) of the 1933 Act without
volume or manner-of-sale restrictions.
 
11.4  “Liens” means a lien, charge pledge, security interest, encumbrance, right
of first refusal, preemptive right or other restriction.
 
11.5 “Material Adverse Effect” means (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document.
 
 
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11.6 “Registrable Securities” shall have the meaning set forth in the
Registration Rights Agreement.
 
11.7 “Short Sales” means “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the 1934 Act.
 
11.8 “Subsidiary” or “Subsidiaries” means any corporation or other entity of
which at least a majority of the securities or other ownership interest having
ordinary voting power for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries.
 
11.9 “Trading Day” means any day on which the Common Stock is traded on the
Trading Market, provided that “Trading Day” shall not include any day on which
the Common Stock is scheduled to trade on the Trading Market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the
final hour of trading on the Trading Market (or if the Trading Market does not
designate in advance the closing time of trading on the Trading Market, then
during the hour ending at 4:00:00 p.m., New York City time) unless such day is
otherwise designated as a Trading Day in writing by the Investor.
 
11.10 “Trading Market” means any of the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: the
OTC Bulletin Board, the NASDAQ Global Market, the NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT,
or the OTCQX Marketplace or the OTCQB Marketplace operated by OTC Markets Group
Inc. (or any successor to any of the foregoing).
 
11.11 “VWAP” means the volume weighted average price (the aggregate sales price
of all trades of Common Stock during a Trading Day divided by the total number
of shares of Common Stock traded during such Trading Day) of the Common Stock
during a Trading Day as reported by Bloomberg L.P. using the AQR function.
 
[SIGNATURES ON THE FOLLOWING PAGE]
 
 
 
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date provided above.
 

THE COMPANY

BIOHEART, INC.

By:                                                                           
 Name:
 Title:
 
 
 
 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date provided above.
 
THE INVESTOR:

MAGNA EQUITIES II, LLC, a New York limited liability company
 

By:                                                                           
Name:
Title:
 
 
 
 

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