AMENDED AND RESTATED 

LOAN AND SECURITY AGREEMENT 

No. V07107


This Amended and Restated
Loan and Security Agreement (this “Loan Agreement”), made as of October 25,
2010 by and between BlueCrest
Venture Finance Master Fund Limited, as assignee of BlueCrest Capital Finance,
L.P. (“Lender”), and Bioheart, Inc. (“Borrower”), a Florida corporation with
its principal place of business at 13794 NW 4th Street, Suite 212, Sunrise,
Florida 33325. 


In consideration of the
promises set forth herein, Lender and Borrower agree upon the following terms
and conditions: 


	
  

 	
  

 
	
 1.

 	
 General
 Definitions 

 



The following words, terms
and /or phrases shall have the meanings set forth thereafter and such meanings
shall be applicable to the singular and plural form thereof giving effect to
the numerical difference: 


          A.
“Account” means any “account,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest and, in any event, shall include all accounts receivable,
book debts, rights to payment, and other forms of obligations now owned or
hereafter received or acquired by or belonging or owing to Borrower (including
under any trade name, style or division thereof), whether or not arising out of
goods or software sold or licensed or services rendered by Borrower or from any
other transaction (including any such obligation that may be characterized as
an account or contract right under the UCC), and all of Borrower’s rights in,
to and under all purchase orders or receipts now owned or hereafter acquired by
it for goods or services, and all of Borrower’s rights to any goods represented
by any of the foregoing (including unpaid seller’s rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Borrower under
all purchase orders and contracts for the sale of goods or the performance of
services or both by Borrower or in connection with any other transaction
(whether or not yet earned by performance on the part of Borrower), now in
existence or hereafter occurring, including the right to receive the proceeds
of said purchase orders and contracts, and all collateral security and
guarantees of any kind given by any Person with respect to any of the
foregoing. 


          B.
“Account Debtor” means any Person obligated on an Account. 


          C.
“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly
or indirectly, of the power (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.



          D.
“Borrower’s Liabilities” means all obligations and liabilities of Borrower to
Lender (including without limitation all debts, claims, and indebtedness)
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now and/or from time to time hereafter owing, due or payable, however
evidenced, created, incurred, acquired or owing arising under this Loan
Agreement, the Note, and/or the “Other Agreements” (hereinafter defined) or by
operation of law. 


          E.
“Business Day” means any day other than Saturday, Sunday or a day of the year
on which banks in New York City, New York or Chicago, Illinois are required or
authorized to close. 


          F.
“Cash” means all cash, money (as such term is defined in the UCC), currency,
and liquid funds, wherever held, in which Borrower now or hereafter acquires
any right, title, or interest. 


          G.
“Change of Control” means, at any time, (i) the current shareholders of
Borrower shall cease to beneficially own and control, directly or indirectly on
a fully diluted basis,a majority
of the economic and voting interests in the capital stock or other ownership
interests of Borrower or (ii) any Person or group other than the current
shareholders of Borrower shall have the right to elect a majority of the seats
on Borrower’s board of directors. Notwithstanding the foregoing, in no event
shall an initial public offering of the Company’s securities be deemed to be a
“Change of Control”, even if such initial public offering results in
non-compliance with clauses (i) and (ii). 


          H.
“Charges” means all national, federal, state, county, city, municipal and/or
other governmental 


1






taxes, levies, assessments,
charges, liens, claims or encumbrances imposed on or assessed against all or
any portion of the Collateral, Borrower’s business, Borrower’s ownership and/or
use of any of its assets, and/or Borrower’s income and/or gross receipts. 


          I.
“Chattel Paper” means any “chattel paper,” as such term is defined in the UCC,
now owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest. 


          J.
“Cleanup” means all actions required to: (1) clean up, remove, treat or
remediate Hazardous Materials in the indoor or outdoor environment; (2) prevent
the release of Hazardous Materials so that they do not migrate, endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment; (3) perform pre-remedial studies and investigations and
post-remedial monitoring and care; or (4) respond to any government requests
for information or documents in any way relating to cleanup, removal, treatment
or remediation or potential cleanup, removal, treatment or remediation of
Hazardous Materials in the indoor or outdoor environment. 


          K.
“Collateral” has the meaning set forth in Section 5.1 hereof. 


          L.
“Controlled Accounts” mean the Deposit Accounts that are covered by the Account
Control Agreement in favor of Lender. 


          M.
“Copyright License” means any written agreement granting any right to use any
Copyright or Copyright registration, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest. 


          N.
“Copyrights” means all of the following property, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (i) all copyrights, whether registered or unregistered, held pursuant
to the laws of the United States, any State thereof or of any other country;
(ii) all registrations, applications and recordings in the United States
Copyright Office or in any similar office or agency of the United States, of
any State thereof or of any other country; (iii) all continuations, renewals or
extensions thereof; and (iv) all registrations to be issued under any pending
applications. 


          O.
“Credit Support Providers” means Jason Taylor and Daniel C. Marino, Jr., as
credit support providers under the Assignment and Pledge of Certificate(s) of
Deposit executed by them in favor of Seaside Bank, each dated as of the date
hereof. 


          P.
“Default” means any condition or event that, after notice or lapse of time or
both, would constitute an Event of Default. 


          Q.
“Deposit Accounts” means any “deposit accounts,” as such term is defined in the
UCC, and in any event includes any checking account, savings account, or
certificate of deposit now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest. 


          R.
“Documents” means any “documents,” as such term is defined in the UCC, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest. 


          S.
“Environmental Claim” means any claim, action, cause of action, investigation
or notice (written or oral) by any Person alleging potential liability
(including, without limitation, an obligation to conduct a Cleanup or potential
liability for investigatory costs, Cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or penalties)
arising out of, based on or resulting from (a) the presence or release of any
Hazardous Materials at any location, whether or not owned, leased or operated
by Borrower or any of its Subsidiaries, or (b) circumstances forming the basis
of any violation, or alleged violation, of any Environmental Law. 


          T.
“Environmental Laws” means all federal, state, local and foreign laws and
regulations relating to pollution or protection of human health or the
environment, including, without limitation, laws relating to releases or
threatened releases of Hazardous Materials or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, release,
disposal, transport or handling of Hazardous Materials, laws and regulations
with regard to recordkeeping, notification, disclosure and reporting
requirements respecting Hazardous Materials and laws relating to the management
or use of natural resources. 


          U.
“Equipment” means any “equipment”, as such term is defined in the UCC, and in
any event shall include but not be limited to computers and peripherals,
laboratory equipment, manufacturing equipment, networking equipment, switching
and backbone equipment, servers and routers and other hardware including disk
drives and laser printers, office furniture, fixtures and office equipment,
test and other equipment, and software, and all accessions, additions,
attachments, accessories and improvements thereof and all replacements and/or 


2






substitutions therefore and
all proceeds and products thereof. 


          V.
“Event of Default” has the meaning set forth in Section 8.1 hereof. 


          W.
“Financials” means those financial statements described in Section 7.3 hereof. 


          X.
“Fixtures” means any “fixtures,” as such term is defined in the UCC, together
with all right, title and interest of Borrower in and to all extensions,
improvements, betterments, accessions, renewals, substitutes, and replacements
of, and all additions and appurtenances to any of the foregoing property, and
all conversions of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case may be, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest. 


          Y.
“GAAP” means generally accepted accounting principles in the United States, in
effect from time to time, consistently applied. 


          Z.
“General Intangibles” means any “general intangibles,” as such term is defined
in the UCC other than Intellectual Property, and, in any event, shall include
all right, title and interest which Borrower may now or hereafter have in or
under any rights to payment; payment intangibles; business records and
materials; customer lists; interests in partnerships, joint ventures, business
associations, corporations, and limited liability companies; permits; claims in
or under insurance policies (including unearned premiums and retrospective
premium adjustments); and rights to receive tax refunds and other payments and
rights of indemnification now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest. 


          AA.
“Goods” means any “goods,” as such term is defined in the UCC, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest. 


          BB.
“Hazardous Materials” means all substances defined as Hazardous Substances,
Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. § 300.5, or defined as such by, or
regulated as such under, any Environmental Law. 


          CC.
“Instruments” means any “instruments,” as such term is defined in the UCC, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest. 


          DD.
“Intellectual Property” means all current and future Copyrights, Trademarks,
Patents, Licenses, and applications therefor and reissues, extensions, or
renewals thereof, along with all confidential business information including
inventions, know how, trade secrets, manufacturing processes, formulae,
technical information, specifications, data, technology, plans and drawings and
goodwill associated with any of the foregoing; together with rights to sue for
past, present and future infringement of Intellectual Property and the goodwill
associated therewith, including (without limitation) Licenses where the
Borrower is both licensor and licensee. 


          EE.
“Inventory” means any “inventory,” as such term is defined in the UCC, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest, and, in any event, shall include all Goods and
personal property that are held by or on behalf of Borrower for sale or lease
or are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process or materials used or consumed or to
be used or consumed in Borrower’s business, or the processing, packaging,
promotion, delivery or shipping of the same, and all finished goods, whether or
not the same is in transit or in the constructive, actual or exclusive
possession of Borrower or is held by others for Borrower’s account, including
all property covered by purchase orders and contracts with suppliers and all
Goods billed and held by suppliers and all such property that may be in the
possession or custody of any carriers, forwarding agents, truckers, warehousemen,
vendors, selling agents or other Persons. 


          FF.
“Investment Property” means all “investment property,” as such term is defined
in the UCC and, in any event, includes any certificated security,
uncertificated security, money market funds, bonds, mutual funds, and U.S.
Treasury bills or notes, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest. 


          GG.
“Letter of Credit Rights” means any “letter of credit rights,” as such term is
defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest, including any right to
payment or performance under any letter of credit. 


          HH.
“License” means any Copyright License, Patent License, Trademark License or
other license of rights or interests now held or hereafter acquired by Borrower
or in which Borrower now holds or hereafter acquires any interest and any
renewals or extensions thereof.


          
II. “Material Adverse Effect” means a material adverse effect upon (i) the
business operations, 


3






properties, assets, business
prospects, results of operations or condition (financial or otherwise) of
Borrower, (ii) the prospect of repayment of any portion of Borrower’s Liabilities;
provided that, the Borrower’s execution of one or more promissory notes and
loan agreements evidencing the Subordinated Debt and the Subordinated Debt -
Bank shall not constitute a material adverse effect on the Borrower’s ability
to repay the Borrower’s Liabilities so long as the Subordination Agreement
delivered by Seaside Bank and the subordination provision in the notes of each
of the Subordinated Debt lenders remain in effect, (iii) the validity,
perfection, or priority of Lender’s security interest in the Collateral, (iv)
the enforceability of any material provision of this Loan Agreement or any
Other Agreement or (v) the ability of Lender to enforce its rights and remedies
under this Loan Agreement or any Other Agreement. 


          JJ.
“Material Agreement” means, with respect to any Person, any written contract
that is material to the business, operations, properties, assets, business
prospects, results of operations or condition (financial or otherwise) of such
Person. 


          KK.
“Note” has the meaning ascribed to such term in Section 2.2 hereof. 


          LL.
“Other Agreements” means the Warrants, the Note and any other documents or
instruments evidencing or relating to the Term Loan or the Collateral or any
other security which may now or hereafter be given as further security for or
in connection with the Term Loan, as each may be amended, superseded or
replaced from time to time. 


          MM.
“Ordinary Course Indebtedness” means (i) accounts payable incurred in the
ordinary course of business; (ii) unsecured indebtedness not to exceed, in the
aggregate, $20,000, which is, or prior to November 30, 2010 becomes, and
thereafter remains, subject to one or more subordination agreements in form and
substance satisfactory to Lender in its sole discretion; and (iii) leases or
other financing or the acquisition of equipment or property incurred in the
ordinary course of business not to exceed, in the aggregate, $250,000 during
the term of the Loan Agreement; and (iv) other unsecured indebtedness not to
exceed, in the aggregate, (A) during the period through November 30, 2010,
$800,000 and (B) thereafter $385,000, owing to one or more directors, officers
or shareholders of Borrower, and subject to a subordination agreement or
subordination provisions in the notes, each in form and substance satisfactory
to Lender in its sole discretion. 


          NN.
“Patent License” means any written agreement granting any right with respect to
any invention on which a Patent is in existence or a Patent application is
pending, in which agreement Borrower now holds or hereafter acquires any
interest. 


          OO.
“Patents” means all of the following property, now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest:
(a) all letters patent of, or rights corresponding thereto, in the United
States or in any other country or jurisdiction, all registrations and
recordings thereof, and all applications for letters patent of, or rights
corresponding thereto, in the United States or any other country or
jurisdiction, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any State thereof or any other country or jurisdiction; (b)
all reissues, continuations, continuations-in-part or extensions thereof; (c)
all petty patents, divisionals, and patents of addition; and (d) all patents to
be issued under any such applications. 


          PP.
“Payroll Account” has the meaning set forth in Section 5.1. 


          QQ.
“Permitted Liens” means any and all of the following (i) Charges for amounts
not yet delinquent or being contested in good faith by appropriate proceedings
and for which adequate reserves have been made in accordance with GAAP; (ii)
statutory liens of landlords, carriers, warehousemen, mechanics and materialmen
incurred in the ordinary course of business for sums not yet delinquent or that
are being contested in good faith by appropriate proceedings being diligently
conducted and for which Borrower maintains adequate reserves in accordance with
GAAP; (iii) liens arising from judgments, decrees or attachments in
circumstances which do not constitute an Event of Default hereunder; (iv) the
following deposits, to the extent made in the ordinary course of business:
deposits under worker’s compensation, unemployment insurance, social security
and other similar laws, or to secure the performance of bids, tenders or
contracts (other than for the repayment of borrowed money) or to secure
indemnity, performance or other similar bonds for the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to
secure statutory obligations (other than liens arising under ERISA or
environmental liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds; (v) banker’s liens, rights of setoff and
similar liens arising by operation of law on deposits made in the ordinary
course of business, provided such liens do not arise in respect of borrowed
money; (vi) non-exclusive licenses or sublicenses of Intellectual Property in
the ordinary course of business; (vii) licenses or sub-licenses of Intellectual
Property in connection with joint ventures and corporate collaborations
(provided that any proceeds from such licenses described in this clause (vii)
be used to pay down Borrower’s Liabilities hereunder); and (viii)liens arising in connection with clause
(iii) of the definition of Ordinary Course Indebtedness for leasing or
financing the 


4






acquisition of equipment or
property, if the liens are confined to the equipment or property so leased or
financed and the proceeds of such equipment or property. 


          RR.
“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal or otherwise, including
without limitation, any instrumentality, division, agency, body or department
thereof). 


          SS.
“Proceeds” means “proceeds,” as such term is defined in the UCC 


          TT.
“Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents,
Chattel Paper, Supporting Obligations, letters of credit, proceeds of any
letter of credit, and Letter of Credit Rights, and (ii) all customer lists,
software, and business records related thereto. 


          UU.
“Seaside Bank” means Seaside National Bank and Trust. 


          VV.
“Seaside Bank Reserve Account” has the meaning set forth in Section 5.1. 


          WW.
“Securities Account” means any
“securities account” as such term is defined in the UCC, and in any event
includes any account to which a financial asset is or may be credited in
accordance with an agreement under which the person maintaining the account
undertakes to treat the person for whom the account is maintained as entitled
to exercise the rights that comprise the financial asset. 


          XX.
“Subordinated Debt” means any indebtedness of Borrower (other than Subordinated
Debt – Bank (as defined below)) to a third party, subordinated to the rights of
Lender hereunder pursuant to the terms and conditions of a subordination
agreement satisfactory to Lender in its sole discretion, which indebtedness
shall not be secured by any of the Collateral. 


          YY.
“Subordinated Debt - Bank” means any indebtedness of Borrower to Seaside Bank,
subordinated to the rights of Lender hereunder pursuant to the terms and conditions
of a subordination agreement of an even date herewith, mutually acceptable to
Seaside Bank and Lender, in their reasonable discretion, which indebtedness
shall not be secured by any of the Collateral, and any obligations to third
parties under any letters of credit, guarantees, reimbursement agreements or
other credit support given in connection with such indebtedness, provided the
rights of such credit support providers are also subordinated to the rights of
Lender hereunder pursuant to the terms and conditions of a subordination
agreement acceptable to Lender, in its sole discretion. 


          ZZ.
“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof. 


          AAA.
“Supporting Obligations” means any “supporting obligations,” as such term is
defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest. 


          BBB.
“Term Loan” has the meaning set forth in Section 2.1 hereof. 


          CCC.
“Trademark License” means any written agreement granting any right to use any
Trademark or Trademark registration, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest. 


          DDD.
“Trademarks” means all of the following property, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (a) all trademarks (registered, common law or otherwise), tradenames,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers (and all goodwill associated therewith), prints
and labels on which any of the foregoing have appeared or appear, and designs
of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and any applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or jurisdiction or any
political subdivision thereof, and (b) all reissues, extensions or renewals
thereof. 


          EEE.
“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Illinois, provided that if by reason of mandatory provisions of law,
the perfection, the effect of perfection or non-perfection or the priority of
the security interest granted hereunder in any Collateral (as hereinafter
defined) or the availability 


5






of any remedy hereunder is
governed by the Uniform Commercial Code as in effect on or after the date
hereof in other jurisdiction(s), then “UCC” means the Uniform Commercial Code
as in effect on or after the date hereof in such other jurisdiction(s) for the
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection, or priority or availability of such remedy. 


          FFF.
“Warrants” means the Warrant to purchase 105,264 shares of the Borrower’s
Common Stock at a purchase price of $4.75 per share issued to the Lender on or
about May 31, 2007, together with (i) the Warrant to purchase 1,315,542 shares
of Borrower’s Common Stock at a purchase price of $0.5321 per share issued to
Lender on or about April 2, 2009, (ii) the Warrant to purchase 909,090 shares
of Borrower’s Common Stock at a purchase price of $0.66 per share issued to
Lender on or about July 1, 2009, and (iii) the Warrant to purchase 848,176
shares of Borrower’s Common Stock at a purchase price of $0.7074 per share
issued to the Lender on or about December 31, 2009. 


	
  

 	
  

 
	
 2.

 	
 The Loan 

 



2.1
Term Loan. On the terms and subject to the conditions contained in this
Loan Agreement, including those listed in Section 2.5 hereof, Lender has loaned
to Borrower on May 31, 2007, a
term loan (the “Term Loan”), in the original principal amount of Five Million
Dollars ($5,000,000.00), the proceeds of which were to be used for working capital.
As of the date hereof, the Term Loan has been partially repaid in accordance
with a previously agreed upon monthly payment schedule so that the current
outstanding principal balance of the Term Loan is $2,943,431.78. Such remaining
principal balance, together with interest, shall be repaid in twenty (20)
successive equal monthly payments of principal and interest (paid in arrears)
in the amount of $139,728.82 each, commencing November 1, 2010. All such
payments are to be made on the first Business Day of relevant month. 


 2.2
Evidence and Nature of Loans. The Term Loan made by Lender to Borrower
pursuant to this Loan Agreement is evidenced by a promissory note (the “Note”)
executed and delivered by Borrower to Lender. All of Borrower’s Liabilities
(including the Term Loan) shall be secured by Lender’s security interest in the
Collateral and by all other security interests, liens, claims and encumbrances
now and/or from time to time hereafter granted by Borrower to Lender, whether
hereunder or under the Other Agreements. 


 2.3
Use of Proceeds. Borrower covenants to Lender that Borrower shall use
the proceeds of the Term Loan made by Lender to Borrower pursuant to this Loan
Agreement and any advances made pursuant to the Other Agreements for working
capital and solely for legal and proper corporate purposes (duly authorized by
its Board of Directors) and consistent with all applicable laws and statutes. 


 2.4
Direction to Remit. Borrower hereby authorizes and directs Lender to disburse,
for and on behalf of Borrower and for Borrower’s account, the proceeds of the
Term Loan made by Lender to Borrower pursuant to this Loan Agreement to such
Person or Persons as the Executive Chairman, Chief Executive Officer or Chief
Financial Officer of Borrower shall direct in writing. 


 2.5
Conditions Precedent. [Reserved.] 


 2.6
Payments and Taxes. Any and all payments made by Borrower under this
Loan Agreement or any Other Agreement shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
duties, deductions, withholdings, assessments, fees or other charges imposed by
any governmental authority (including any interest, additions to tax or
penalties applicable thereto) other than any taxes imposed on or measured by
Lender’s overall net income and franchise taxes imposed on it (in lieu of net
income taxes), by a jurisdiction (or any political subdivision thereof) as a
result of Lender being organized or resident, conducting business (other than a
business deemed to arise from Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, or otherwise with
respect to, this Loan Agreement or any Other Agreement) or having its principal
office in such jurisdiction (“Indemnified Taxes”). If any Indemnified Taxes
shall be required by law to be withheld or deducted from or in respect of any
sum payable under this Loan Agreement or any Other Agreement to Lender (w) an
additional amount shall be payable by Borrower as may be necessary so that,
after making all required withholdings or deductions (including withholdings or
deductions applicable to additional sums payable under this Section) Lender
receives an amount equal to the sum it would have received had no such
withholdings or deductions been made, (x) Borrower shall make such withholdings
or deductions, (y) Borrower shall pay the full amount withheld or deducted to
the relevant taxing authority or other authority in accordance with applicable
law and (z) Borrower shall deliver to Lender evidence of such payment within
thirty (30) days of such payment. Borrower’s obligation hereunder shall survive
the termination of this Loan Agreement. 


	
  

 	
  

 
	
 3.

 	
 Interest,
 Fees and Repayment

 



 3.1
Interest. The Term Loan shall bear interest, payable monthly in arrears on the
first Business Day of each month in accordance with Section 2.1 hereof,
calculated on the basis of a 360 day year comprised of twelve (12) 


6






thirty day
months at a per annum rate equal to the interest rate specified in the related
note (the “Loan Interest Rate”), which rate shall be the sum of (i) 800 basis
points plus (ii) the greater of (a) 4.50%or
(b) the yield on Three-Year U.S. Treasury Notes on the date of the Term Loan,
as reported in the Federal Reserve Statistical Release H-15 or in such other
publication as Lender may reasonably select. In no event shall interest accrue
or be payable in connection with the Term Loan in an amount in excess of that
permitted under applicable law. If the note so provides, the interest
thereunder may be precomputed for the period ending when payments thereunder
are due and on the assumption that all payments will be made on their
respective due dates. Payments due under the note and not made by their
scheduled due date for a period in excess of five (5) days thereafter shall be
overdue and shall be subject to a service charge in an amount equal to two
percent (2%) of the delinquent amount, but not more than the maximum rate
permitted by law, whichever is less. In addition, and notwithstanding the
forgoing, during the continuance of an Event of Default all outstanding
Borrower Liabilities in respect of the Term Loan shall bear interest (payable
on demand) at a rate that is two percent (2%) per annum in excess of the Loan
Interest Rate applicable to the Term Loan and other Borrower Liabilities from
time to time.


3.2 Fees.
[Reserved.]


3.3 Repayment.
Borrower’s Liabilities under this Loan Agreement are absolute and
unconditional. Except as provided elsewhere in this Loan Agreement, including,
but not limited to, with respect to the payment of interest pursuant to the
payment schedule set forth in Section 2.1, any and all costs, fees and expenses
payable pursuant to this Loan Agreement or any of the Other Agreements shall be
payable by Borrower to Lender or to such other person or persons designated by
Lender, on demand. All payments to Lender shall be payable by 2:00 p.m.
(prevailing Chicago time) at Lender’s principal place of business specified at
the beginning of this Loan Agreement or at such other place or places as Lender
may designate in writing to Borrower. All payments to Persons other than Lender
shall be payable at such place or places as Lender may designate in writing to
Borrower. 


3.4 Application
of Payments. Except where an Event of Default has occurred and is
continuing, the application of payments received by Lender pursuant to this
Loan Agreement shall be applied first to any and all late charges, fees and
expenses then due and payable; second to interest then due and payable
hereunder; third to the principal amount of the Term Loan then due and payable,
fourth to any other Borrower Liabilities then outstanding and finally, to the
remaining Term Loan then outstanding. From and after an Event of Default that
is continuing, Lender shall have the continuing and exclusive right to apply
any and all such payments received by Lender to any portion of Borrower’s
Liabilities, including to any of Borrower’s Liabilities arising under any of
the Other Agreements. Solely for the purpose of computing interest earned by
Lender, payments received by Lender shall be applied as aforesaid on the
Business Day following receipt by Lender. Checks or other items of payment
received after 2:00 p.m. prevailing Chicago, Illinois time shall be deemed
received the following Business Day. 


3.5 Accuracy
of Statements Each statement of account by Lender delivered to Borrower
relating to Borrower’s Liabilities shall be presumed correct and accurate
(absent manifest error)and shall
constitute an account stated between Borrower and Lender unless thereafter
waived in writing by Lender, in Lender’s discretion. Any objection to the
statement that Borrower may have must be delivered to Lender, by registered or
certified mail, within thirty (30) days after Borrower’s receipt of said
statement. 


4. Term and Prepayment 


4.1 Term. This Loan Agreement
shall be in effect until the indefeasible payment in full to Lender of all of
Borrower’s Liabilities. Except as provided below, Borrower has no right to
prepay the principal amount of the Term Loan. Notwithstanding the foregoing,
Borrower may prepay the Borrower Liabilities other than the Term Loan at any
time without penalty. 


4.2 Voluntary
Prepayment. Borrower may, upon at least thirty (30) days prior written
notice to Lender (stating the proposed date of prepayment, which date shall
then be the due date for the Term Loan), prepay the outstanding principal
amount of the Term Loan then outstanding in whole, but not in part by paying to
Lender, in immediately available funds, an amount equal to the sum of (i) the
outstanding principal amount of the Term Loan then outstanding, and (ii) all
accrued and unpaid interest, fees and expenses on the Term Loan through the
date of prepayment. 


5. Collateral and Security 


5.1 Grant
of Security Interest. To further secure to Lender the prompt full and
faithful payment and performance of Borrower’s Liabilities and the prompt, full
and complete performance by Borrower of each of its covenants and duties under
this Loan Agreement and the Other Agreements, Borrower grants to Lender, a
valid, first priority continuing security interest in and lien upon all of the
following (except as to assets or property with Permitted Liens, upon which a
lien which may be other than a first priority lien is granted), whether now
owned or 


7






hereafter
acquired and wherever located: 


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 All
 Receivables; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 All
 Equipment; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 All
 Fixtures; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 All General
 Intangibles; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 All
 Intellectual Property; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)

 	
 All
 Inventory; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vii)

 	
 All
 Investment Property; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (viii)

 	
 All Deposit
 Accounts and Securities Accounts (other than Account Numbers 2000045910 and
 2000018859 of the Borrower at Seaside Bank (the “Seaside Bank Reserve
 Account” and the “Payroll Account”, respectively)); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ix)

 	
 All Cash; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (x)

 	
 All
 Documents; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (xi)

 	
 All other
 Goods and tangible and intangible personal property of Borrower, whether now
 or hereafter owned or existing, leased, consigned by or to, or acquired by,
 Borrower and wherever located, and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (xii)

 	
 to the
 extent not otherwise included, all Proceeds of each of the foregoing and all
 accessions to, substitutions and replacements for, and rents, profits and
 products of each of the foregoing and all attachments, accessories,
 accessions, replacements, substitutions, additions or improvements to any of
 the foregoing, wherever located and all products and proceeds of the
 foregoing including without limitation proceeds of insurance policies
 insuring the foregoing and all books and records with respect thereto; 

 



(all of the
foregoing personal property is hereinafter sometimes individually and sometimes
collectively referred to as “Collateral”). Notwithstanding anything herein
contained or construed to the contrary, Borrower is not granting to Lender, and
Lender is not receiving from Borrower and the term “Collateral” shall not
include, any grant of a security interest in the Seaside Bank Reserve Account
or the Payroll Account. 

Borrower shall make appropriate entries upon its
  financial statements and its books and records disclosing Lender’s security
  interest in the Collateral. Borrower hereby further agrees that, except as
  expressly permitted herein including with respect to Permitted Liens, Borrower
  shall not hereafter grant a security interest in or pledge any of its
  Intellectual Property to any other party. 

5.2 Further
Assurances. Borrower shall execute and/or deliver to Lender, at any time
and from time to time hereafter at the request of Lender, all agreements,
instruments, UCC financing statements (or other required perfection
instruments), documents and other written matter (hereinafter individually
and/or collectively, referred to as “Additional Documentation”) that Lender
reasonably may request, in a form and substance reasonably acceptable to
Lender, to perfect and maintain Lender’s perfected security interest in the
Collateral and to consummate the transactions contemplated in or by this Loan
Agreement and the Other Agreements. Borrower, irrevocably, (a) hereby makes,
constitutes and appoints Lender (and all Persons designated by Lender for that
purpose) as Borrower’s true and lawful attorney (and agent-in-fact) to sign the
name of Borrower on the Additional Documentation and to deliver the Additional
Documentation to such Persons as Lender, in its sole and absolute discretion,
may elect, (b) authorizes completion and filing of any such Additional
Documentation by Lender or its agents, whether paper or electronic, (c) hereby
ratifies and confirms the completion and filing of Additional Documentation by
Lender or its agent, paper or electronic, occurring prior to the date hereof,
and (d) declares that Borrower has the present intention to authenticate and process
any such Additional Documentation, whether paper or electronic, and whether or
not completed and filed by Lender or its agents before or after the date
hereof. 


5.3 Inspection
of Collateral. Lender (by any of its officers, employees and/or agents) shall
have the right, at any time or times during Borrower’s usual business hours, to
inspect the Collateral and all related records (and the premises upon which it
is located) and to verify the amount and condition of or any other and all
financial records and matters whether or not relating to the Collateral. During
the continuance of an Event of Default, all costs, fees and expenses incurred
by Lender, or for which Lender has become obligated, in connection with such
inspection and/or verification shall be payable by Borrower to Lender. Borrower
agrees to use its best efforts to cause its employees and agents to cooperate
with Lender in all inspections. 


8






5.4 Controlled
Accounts; Proceeds of Collateral. (a) Borrower shall deliver, or cause to
be delivered to Lender an Account Control Agreement in respect of Borrower’s
Deposit Account at Seaside Bank on or before November 1, 2010, and any other
Deposit Account or Securities Account (other than the Seaside Bank Reserve
Account or the Payroll Account) promptly after the creation thereof; provided,
however, that Lender will not exercise its right to control amounts in a
Controlled Account unless an Event of Default hereunder has occurred and is
continuing.


          (b)
All proceeds arising from the disposition of any Collateral by Borrower shall
be deposited in a Controlled Account within one Business Day after receipt by
Borrower. Nothing in this Section limits the restrictions on disposition of
Collateral set forth elsewhere in this Loan Agreement.


5.5 Third
Party Claims. Lender, in its sole and absolute discretion, without waiving
or releasing any obligation, liability or duty of Borrower under this Loan
Agreement or the Other Agreements or any Event of Default, may (but shall be
under no obligation to) at any time or times hereafter, pay, acquire and/or
accept an assignment of any security interest, lien, encumbrance or claim
asserted (other than Permitted Liens)by
any Person against the Collateral. All sums paid by Lender in respect thereof
and all costs, fees and expenses, including reasonable attorneys’ fees, court
costs, expenses and other charges relating thereto incurred by Lender on
account thereof shall be payable by Borrower to Lender. 


5.6 Insurance.
Borrower shall at all times throughout the term of this Loan Agreement and any
extension hereof procure and maintain at its own expense the following minimum
insurance coverages which shall be provided by insurance carriers with an AM
Best rating of A, Class x or as otherwise acceptable to Lender and with such
deductibles and exclusions as approved by Lender: (1) All risk property damage
insurance covering the Collateral which shall include but not be limited to
fire and extended coverage and where applicable mechanical breakdown and
electrical malfunction, and which shall be written in amount not less than the
greater of (x) the outstanding loan balance or (y) the current replacement
cost; and, (2) Commercial general liability insurance which may include excess
liability insurance written on occurrence basis with a limit of not less than
$2,000,000, and (3) Workers’ compensation insurance in accordance with
statutory limits and employers’ liability coverage which may include excess
liability in an amount not less than $2,000,000. 


Any insurance
carried and maintained in accordance with this Loan Agreement by Borrower shall
be endorsed to provide that: (i) Lender shall be additional insured and loss
payee with respect to the property insurance described in subsection (1) of the
prior paragraph (and such insurance shall provide that the interest of Lender
shall not be invalidated by any act or neglect of Lender, Borrower or other
person), and Lender shall be an additional insured with respect to the
liability insurance described in subsection (2) of the prior paragraph; and
(ii) The insurers thereunder waive all rights of subrogation against Lender,
any right of setoff and counterclaim and any other right to deduction due to
outstanding premiums, whether by attachment or otherwise; and (iii) Such
insurance shall be primary without right of contribution of any other insurance
carried by or on behalf of Lender; and (iv) Inasmuch as such policies are
written to cover more than one insured, all terms, conditions, insuring
agreements and endorsements (other than the limits of liability) shall operate
in the same manner as if there were a separate policy covering each insured;
and (v) If such insurance is canceled for any reason whatsoever, including
nonpayment of premium, or any substantial change is made in the coverage that
affects the interests of Lender, such cancellation or change shall not be
effective as to Lender until thirty (30) days after receipt by Lender of
written notice sent by registered mail from such insurer of such cancellation
or change; providing, however, that such thirty (30) day period shall be
reduced to ten (10) days in the case where cancellation results from the
nonpayment of premiums. Borrower, irrevocably, appoints Lender as Borrower’s
true and lawful attorney (and agent-in fact) for the purpose of making,
settling and adjusting claims under such policies, endorsing the name of
Borrower on any check, draft, instrument or other item of payment for the
proceeds of such policies and for making all determinations and decisions with
respect to such policies, and such appointment will be immediately effective
upon the occurrence of an Event of Default hereunder. 


On or before
the initial funding by Lender hereunder, and at each policy anniversary date, Borrower
shall arrange to furnish Lender with appropriate Certificates of Insurance.
Such Certificates of Insurance shall be executed by each insurer or by an
authorized representative of each insurer, and shall identify insurers, the
type of insurance, the insurance limits and the policy term and shall
specifically list the special endorsements (i) through (v) above. 


In case of the
failure to procure or maintain such insurance, Lender shall have the right, but
not the obligation, to obtain such insurance and any premium paid by Lender
shall be immediately due and payable by Borrower to Lender. The maintenance of
any policy or policies of insurance pursuant to this Section shall not limit
any obligation or liability of Borrower pursuant to any other Sections or
provisions of this Loan Agreement. 


5.7 Charges
on Collateral. Borrower shall not permit any Charges (other than Permitted
Liens)to arise, or to remain, and Borrower shall pay
promptly when due, and discharge, such Charges. In the event Borrower, at any 


9






time or times
hereafter, shall fail to pay such Charges when due or to obtain such
discharges, Borrower shall so advise Lender thereof in writing. Lender may,
without waiving or releasing any obligation or liability of Borrower hereunder
or Event of Default, in its sole and absolute discretion, at any time or times
thereafter, make such payment, or any part thereof, or obtain such discharge
and take any other action with respect thereto which Lender deems advisable.
All sums so paid by Lender and any expenses, including reasonable attorneys’
fees, court costs, expenses and other charges relating thereto, shall be
payable by Borrower to Lender upon demand. 


5.8 UCC
Filing Authorization. Borrower hereby authorizes Lender and its counsel and
other representatives to file, at any time on or after the date hereof, Uniform
Commercial Code financing statements and continuation statements, and
amendments to financing statements, in any jurisdictions and with any filing
offices as Lender may reasonably determine, in its sole discretion, are
necessary or advisable to perfect the security interests granted to Lender
hereunder and under the Other Agreements. Such financing statements may
describe the Collateral in the same manner as described herein or therein or
may contain an indication or description of Collateral that describes such
property in any other manner as Lender may reasonably determine is necessary or
advisable to ensure the perfection of the security interest in the Collateral. 


5.9 Accounts.
So long as no Event of Default has occurred and is continuing, subject to
Section 7.4 hereof, Borrower may settle, adjust or compromise any claim,
offset, counterclaim or dispute with any Account Debtor. At any time that an
Event of Default has occurred and is continuing, Lender may, at its option,
notify Borrower that Lender intends to have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with Account
Debtors or grant any credits, discounts or allowances and on and after such
notice from Lender to Borrower, Lender shall have such exclusive right. 


6.           Warranties and Representations 


	
  

 	
  

 
	
 6.1

 	
 Borrower
 Representations. Borrower warrants and represents to
 Lender, as of the date of the Term Loan made hereunder (“Term Loan Date”),
 and agrees and covenants to Lender that: 

 






	
  

 	
  

 
	
 (a)

 	
 Borrower’s
 legal name is “Bioheart, Inc.” Borrower is a corporation (i) duly organized
 and existing and in good standing under the laws of the state of its
 organization as set forth above and (ii) qualified or licensed to do business
 in all other states in which the laws require Borrower to be so qualified
 and/or licensed; 

 
	
  

 	
  

 
	
 (b)

 	
 Borrower is
 duly authorized and empowered to enter into, execute, deliver and perform
 this Loan Agreement and the Other Agreements and the execution, delivery
 and/or performance by Borrower of this Loan Agreement and the Other
 Agreements, and the use by Borrower of the proceeds of the Loans hereunder,
 shall not, by the lapse of time, the giving of notice or otherwise, conflict
 with or constitute a violation of any applicable law (including, without
 limitation, Regulation U or Regulation X of the Board of Governors of the
 Federal Reserve System or any other regulation thereof) or a breach of any
 provision contained in Borrower’s organizational documents or contained in
 any Material Agreement to which Borrower is a party or by which it is bound
 or give rise to or result in any default thereunder; 

 
	
  

 	
  

 
	
 (c)

 	
 This Loan
 Agreement and each Other Agreement are the legally valid and binding
 obligation of Borrower, enforceable against Borrower in accordance with its
 respective terms, except as may be limited by bankruptcy, insolvency,
 reorganization, moratorium or similar laws relating to or limiting creditors’
 rights generally or by equitable principles (whether enforcement is sought in
 equity or at law). 

 
	
  

 	
  

 
	
 (d)

 	
 Except as
 disclosed to Lender in writing prior to the Term Loan Date, there are no
 actions or proceedings which are pending, or to its knowledge threatened,
 against Borrower which, if adversely determined, could reasonably be expected
 to have a Material Adverse Effect. Borrower is not in breach of any Material
 Agreement or subject to any charge, restriction, judgment, decree or order
 which has or could reasonably be expected to have a Material Adverse Effect,
 nor is Borrower in default with respect to any indenture, security agreement,
 mortgage, deed or other similar agreement relating to the borrowing of monies
 to which it is a party or by which it is bound; 

 
	
  

 	
  

 
	
 (e)

 	
 Except as disclosed
 to Lender in writing prior to the Term Loan Date, Borrower has and is in good
 standing with respect to all licenses, patents, copyrights, trademarks, trade
 names, governmental permits, certificates, consents and franchises necessary
 to continue to conduct its business as previously conducted by it and to own
 or lease and operate its properties as now owned or leased by it; 

 
	
  

 	
  

 
	
 (f)

 	
 The
 financial statements delivered by Borrower to Lender prior to the Term Loan
 Date Loan fairly and accurately present the assets, liabilities and financial
 conditions and results of operations of Borrower as of the dates and for the
 periods stated therein and have been prepared in accordance with GAAP, and no
 event, condition or change that has had, or could reasonably be expected to
 have, a Material Adverse Effect has 

 


10









	
  

 	
  

 
	
  

 	
 occurred
 between the date of this Loan Agreement and the Term Loan Date; 

 
	
  

 	
  

 
	
 (g)

 	
 As to the
 Accounts and other Collateral, (i) Borrower has good, indefeasible and
 merchantable title to and ownership of the Collateral and the Accounts
 described and/or listed on any certificate or schedule relating to the
 Accounts delivered to Lender, free and clear of all liens, claims, security
 interests and encumbrances, except those of Lender and Permitted Liens.

 
	
  

 	
  

 
	
 (h)

 	
 As to
 Lender’s security interest, (i) Lender’s security interest in the Collateral
 is perfected and is of first priority (subject to Permitted Liens); (ii) the
 offices and/or locations where Borrower keeps the Collateral and Borrower’s
 books and records concerning the Collateral are at the locations identified
 to Lender in writing; and (iii) the addresses identified to Lender in writing
 as Borrower’s chief executive office and principal place(s) of business are
 Borrower’s sole offices and place(s) of business. 

 
	
  

 	
  

 
	
 (i)

 	
 Borrower is
 not an “investment company” or a company “controlled” by an “investment
 company” as such terms are defined in the Investment Company Act of 1940, as
 amended. 

 
	
  

 	
  

 
	
 (j)

 	
 All income
 and other tax returns and reports required to be filed by Borrower have been
 timely filed, and all taxes shown on such tax returns to be due and payable
 and all other assessments, fees and governmental charges upon Borrower and
 its properties, assets, income, businesses and franchises have been paid when
 due and payable except to the extent that (A) such taxes, assessments,
 charges or claims (i) are being contested in good faith by appropriate
 proceedings (promptly instituted and diligently conducted) so long as such
 reserve or other appropriate provision, if any, as shall be required in
 conformity with GAAP shall have been made therefor and (ii) such proceeding
 shall stay the attachment, sale, disposition, foreclosure or forfeiture of
 any asset of Borrower in connection with any such contested tax, assessment,
 charge or claim or, (B) the failure to timely pay such taxes, assessments,
 charges or claims could not reasonably be expected to have a Material Adverse
 Effect. All necessary and appropriate estimated payments (including any
 interest and penalties) in respect of assessed tax liability under Borrower’s
 state and federal tax returns have been made on a timely basis. 

 
	
  

 	
  

 
	
 (k)

 	
 As of the
 Term Loan Date (i) the sum of Borrower’s debt (including contingent
 liabilities) does not exceed the present fair saleable value of Borrower’s
 present assets; (ii) Borrower’s capital is not unreasonably small in relation
 to its business as it exists and as is contemplated at such time; and (iii)
 Borrower has not incurred and does not intend to incur, or believe that it
 will incur, debts beyond its ability to pay such debts as they become due. 

 
	
  

 	
  

 
	
 (l)

 	
 No
 information furnished in writing to Lender by or on behalf of Borrower for
 use in connection with the transactions contemplated hereby contains or will
 contain, any untrue statement of a material fact or omits to state a material
 fact necessary in order to make the statements contained herein or therein
 not misleading in light of the circumstances in which the same were made. Any
 projections contained in such materials are based upon good faith estimates
 and assumptions believed by Borrower to be reasonable at the time made. There
 are no facts known to Borrower that, individually or in the aggregate, could
 reasonably be expected to result in a Material Adverse Effect. 

 
	
  

 	
  

 
	
 (m)

 	
 Borrower has
 provided to Lender on or prior to the Term Loan Date hereof a schedule that
 correctly identifies the ownership interest (including all options, warrants
 and other rights to acquire capital stock) of Borrower and each of its
 Subsidiaries as of the date hereof. 

 
	
  

 	
  

 
	
 (n)

 	
 (i) Borrower
 (A) has been and is in compliance in all material respects with all
 applicable Environmental Laws; (B) has not received any communication,
 whether from a governmental authority or otherwise, alleging that Borrower is
 not in such compliance, and there are no past or present actions, activities,
 circumstances conditions, events or incidents that may prevent or interfere
 with such compliance in the future; (ii) there is no Environmental Claim
 pending or, to the best knowledge of Borrower, threatened against Borrower or
 against any Person whose liability for any Environmental Claim Borrower has
 or may have retained or assumed either contractually or by operation of law;
 and (iii) there are no past or present actions, activities, circumstances,
 conditions, events or incidents, including, without limitation, the release,
 threatened release or presence of any Hazardous Material, which could
 reasonably be expected to form the basis of any Environmental Claim against
 Borrower or, to the best knowledge of Borrower, against any Person whose
 liability for any Environmental Claim Borrower has or may have retained or
 assumed either contractually or by operation of law. 

 
	
  

 	
  

 
	
 (o)

 	
 (i) Borrower
 is an “operating company” within the meaning of the regulations of the United
 States Department of Labor included within 29 CFR Section 2510.3-101 (the
 “DOL Regulations”) or is in compliance with such other exception as may be
 available under such regulations to prevent the assets of Borrower from being
 treated as the assets of any employee benefit plan for purposes of the DOL
 Regulations and (ii) neither Borrower nor any subsidiary of Borrower
 maintains or is obligated to make contributions to any employee benefit plan
 that is 

 


11









	
  

 	
  

 
	
  

 	
 subject to
 Title IV of the Employee Retirement Income Security Act of 1974, as amended
 from time to time, and any successor statute (“ERISA”).

 



7.  Affirmative and Negative Covenants 


7.1 Affirmative
Covenants. Borrower covenants with Lender that Borrower shall, and shall
cause each of its Subsidiaries to: (a) preserve and keep in full force and
effect its existence and all rights and franchises, licenses and permits
material to its business, (b) pay all income and other taxes and assessments
imposed upon it or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty or fine accrues thereon,
(c) comply in all material respects with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, (d) keep
adequate books of record and account, in which complete entries shall be made
of all financial transactions and the assets and of its business, (e) promptly
after entering into a lease for a facility, deliver to Lender duly executed
landlord or collateral access agreements, in form and substance reasonably
satisfactory to Lender, for all premises (including offices and co-location
facilities) at which any Collateral is located (other than Borrower’s offices
in Sunrise, Florida for which a landlord agreement was delivered to Lender on
or prior to the date hereof), (f) promptly take any and all necessary Cleanup
action on, under or affecting any property owned, leased or operated by
Borrower in accordance with all laws and the policies, orders and directives of
all federal, state and local governmental authorities, and conduct and complete
such Cleanup action in material compliance with all applicable Environmental
Laws, (g) keep and/or maintain the Collateral and the books and records
relating thereto at the addresses identified in writing to Lender, unless
Borrower gives Lender written notice thereof at least thirty (30) days prior
thereto and the same is within the contiguous forty-eight (48) states of the
United States of America; (h) deliver to Lender any and all evidence of
ownership of, including without limitation, vendor invoices and proofs of
payment thereof, certificates of title to and applications for title to, any
Collateral promptly following any request by Lender, (i) keep and maintain the
Collateral in good operating condition and repair and make all necessary
replacements thereof and renewals thereto so that the value and operating
efficiency thereof shall at all times be maintained and preserved, (j) provide
written notice to Lender of any change in the addresses of Borrower’s chief
executive office and principal place of business at least thirty (30) days
prior thereto, (k) on or before November 1, 2010, deliver to Lender a duly
executed Security Agreement (Intellectual Property), in form and substance
satisfactory to Lender in its reasonable discretion. 


7.2 Negative
Covenants Borrower covenants with Lender that Borrower shall not, and shall
not permit any of its Subsidiaries to: (a) grant a security interest in, assign
sell of transfer any of the Collateral or any of its Intellectual Property to
any person or permit, grant, or suffer or permit a lien, claim or encumbrance
upon any of the Collateral or Intellectual Property, except for (i) Permitted
Liens, (ii) the sale of Inventory in the ordinary course of business and the
sale of obsolete or unneeded Equipment or (iii) the transfer to a currently
operating or newly formed wholly-owned subsidiary of any Intellectual Property
related to a product candidate other than Borrower’s MyoCell or MyoCell II with
SDF-1 product candidates; (b) permit or suffer any Charges to attach to or
affect any of the Collateral (other than Permitted Liens); (c) permit or suffer
any receiver, trustee or assignee for the benefit of creditors to be appointed
to take possession of any of the Collateral; (d) merge or consolidate with or
acquire any Person except in a transaction in which Borrower is the surviving
Person or, if Borrower is not the surviving Person, such transaction does not result
in a Change of Control; (e) other than Subordinated Debt – Bank, Subordinated
Debt, and Ordinary Course Indebtedness, incur or permit or suffer to exist any
indebtedness for borrowed money or for the deferred purchase price for property
or services, provided, however, that notwithstanding the foregoing, Borrower
may not pay any principal, interest or other costs, expenses or liabilities
(other than origination fees and legal expenses in connection with such
origination, not to exceed $425,000 in the aggregate) arising under or in
connection with Subordinated Debt – Bank or any Subordinated Debt prior to the
payment in full of all Borrower’s Liabilities and the termination of any
commitments of Lender hereunder; (f) with the exception of Ordinary Course Indebtedness,
voluntarily prepay any indebtedness prior to its scheduled maturity other than
pursuant to the terms hereof; (g) except in connection with a share repurchase
pursuant to which the Borrower offers to pay its then existing shareholders an
amount, in the aggregate, not more than $250,000 during the term of the Loan
Agreement, make or pay (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of Borrower (other
than dividends which are payable solely in capital stock of Borrower) or (ii)
any redemption, retirement or similar payment, purchase or other acquisition
for value, direct or indirect, of any shares of any class of stock of Borrower
or any outstanding warrants, options or other rights to acquire such shares;
(h) enter into any transaction with any Affiliate, which transaction is not
carried out or otherwise consummated in writing and on a basis at least as
favorable to the Borrower as a transaction could be carried out on an
arms-length basis with a similarly situated third party; (i) enter into any
transaction relating to the sale of substantially all of the assets of the
Borrower not in the ordinary course of its business, (j) make any change in any
of its business objectives, purposes and operations, which has, or could
reasonably be expected to have, a Material Adverse Effect; (k) without thirty
(30) days’ prior written notice to Lender, make any change in its legal name or
state of formation or organization; (l) 


12






adopt or
otherwise become obligated to contribute to any employee benefit plan that is
subject to Title IV of ERISA; (m) take any action or fail to take an action if,
as a result of such action or inaction, Borrower would fail to qualify as an
“operating company” within the meaning of the DOL Regulations or otherwise
comply with such other exception as may be available under such regulations to
prevent the assets of Borrower from being treated as the assets of any employee
benefit plan for purposes of the DOL Regulations; (n) transfer any cash,
directly or indirectly, to the Seaside Bank Reserve Account; or (o) after the
occurrence of an Event of Default which is then continuing, transfer any cash
to the Payroll Account (other a single transfer in an amount equal to the lesser
of $100,000 or the salary obligations of Borrower to its employees for the then
current two-week payroll period). 


7.3 Covenants
regarding Financial Statements. Borrower shall cause to be furnished to
Lender, (i) no later than 120 days after the end of each fiscal year, the
unqualified, audited financial statements of Borrower as of the end of such
year (which financial statements shall not contain any “going concern”
exception or any exception relating to scope of review, except for any going
concern exception attributable to the Borrower’s perceived need to raise
additional capital), (ii) no later than 30 days after the end of each month
unaudited interim financial statements of Borrower as of the end of such month,
certified, on behalf of Borrower and not in any personal capacity, by
Borrower’s chief financial officer to the effect that such financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower in accordance with GAAP, each containing
consolidated and consolidating profit and loss statements for the month then
ended and for Borrower’s fiscal year to date, consolidated and consolidating
balance sheets as at the last day of such month and a consolidated statement of
cash flows for the month then ended and for Borrower’s fiscal year to date,
(iii) summary monthly bank statements, no later than 30 days after the related
month end, reflecting month-end cash balances, (iv) concurrently with the
delivery of the financial statements required to be delivered by Section
7.3(ii), a monthly Compliance and Disclosure Certificate, substantially in the
form of Exhibit A attached hereto and made a part hereof, (v) promptly upon
Borrower’s Board of Directors approval thereof, copies of Borrower’s annual
operating plan, if any, and any revisions thereto and (vi) such other financial
and business information of Borrower as Lender may reasonably require,
including such other financial and operating performance data as is provided by
Borrower to its outside investors or commercial lenders and, if applicable,
required to be provided to shareholders by the Securities and Exchange
Commission. Each financial statement to be furnished to Lender must be prepared
in accordance with GAAP; provided, however, non-audited interim financial
statements need not include financial notes. Borrower also agrees to promptly
provide to Lender notice of, and such other data and information (financial and
otherwise) at any time and from time to time reasonably requested by Lender relating
to, any legal actions or proceedings pending, or to its knowledge, threatened
in writing, against Borrower or the occurrence of any event or change that has,
or could reasonably be expected to have, a Material Adverse Effect.
Notwithstanding anything to the contrary contained herein, Borrower may refuse
to provide any information required to be provided pursuant to this Section 7.3
if the disclosure would result in a waiver of Borrower’s attorney-client
privilege. Financial statements may be delivered via electronic mail to Lender.



7.4 Further
Covenants. (a) Borrower may not grant any credit, discount, allowance or
extension, or enter into any
agreement for any of the foregoing, except for credits, discounts, allowances
or extensions made or given in the ordinary course of Borrower’s business in
accordance with Borrower’s historic credit and collection practices and
policies without the prior consent of Lender. 

(b)
  Lender shall have the right at any time or times, in Lender’s name or in the
  name of a nominee of Lender, to verify the validity, amount or any other matter
  relating to any Accounts, by mail, telephone, facsimile transmission or
  otherwise. 

7.5 Indemnification
and Liability. Borrower hereby agrees to indemnify Lender and hold Lender
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, reasonable costs and
expenses (including reasonable attorneys’ fees), of every nature, character and
description, which Lender may sustain or incur based upon or arising out of the
Collateral, any of Borrower’s Liabilities or under this Loan Agreement (except
any such actual damage amounts sustained or incurred by Borrower as the result
of the gross negligence or willful misconduct of Lender). Should any
third-party suit or proceeding be instituted by or against Lender with respect
to any Collateral or relating to Borrower, Borrower shall, without expense to
Lender, make available Borrower and its officers, employees and agents and
Borrower’s books and records, to the extent that Lender may deem them
reasonably necessary in order to prosecute or defend any such suit or
proceeding. Borrower’s obligation hereunder shall survive termination of this
Loan Agreement. 


8. Default 


8.1 Events
of Default. The occurrence of any one of the following events shall
constitute a default (“Event of Default”) by Borrower under this Loan
Agreement: (a) if Borrower fails to pay any principal of the Term Loan when due
and payable or fails, within five (5) days after the same are due and payable,
to pay any other Borrower’s 


13






Liabilities;
(b) if any representation, warranty, financial statement, statement, report or
certificate made or delivered by Borrower, or any of its officers, employees or
agents, to Lender is not true and correct in any material respect, when made or
deemed made or delivered; (c) if Borrower fails or neglects to perform, keep or
observe any term, provision, condition or covenant contained in this Loan
Agreement or in the Other Agreements, which is required to be performed, kept
or observed by Borrower, other than the payment of Borrower’s Liabilities, and,
in the case of any covenant contained in Section 7.1 hereof, the same is not
cured within fifteen (15) days; provided, however, that if the default cannot
by its nature be cured within the fifteen (15) day period, and such default is
likely to be cured within a reasonable time, then Borrower shall have an
additional period (which shall not in any case exceed thirty (30) days) to
attempt to cure such default, and within such reasonable time period the
failure to cure the default shall not be deemed an Event of Default; (d) if any
portion of the Collateral or any other of Borrower’s other assets are attached,
seized, subjected to a writ or distress warrant, or are levied upon, or come
within the possession of any receiver, trustee, custodian or assignee for the
benefit of creditors and the attachment, seizure, writ or warrant is not
removed within fifteen (15) days; (e) if any event, condition or change shall
occur that has had a Material Adverse Effect; (f) if a petition under any
section or chapter of the Bankruptcy Code or any similar law or regulation
shall be filed by or against Borrower or if Borrower shall make an assignment
for the benefit of its creditors or if any case or proceeding is filed by
Borrower for its dissolution or liquidation; (g) if Borrower is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of its business affairs; (h) if an application is made by
Borrower or any Person for the appointment of a receiver, trustee or custodian
for the Collateral or any other of Borrower’s assets; (i) if a notice of lien
or Charges are filed of record with respect to any of the Collateral by any
Person and not paid within fifteen (15) days after Borrower receives notice;
provided, however, that an Event of Default will not be deemed to have occurred
if stayed or if a bond is posted pending contest by Borrower within such
fifteen (15) day period; (j) if any Change of Control shall occur; (k) if any money
judgment, writ or warrant of attachment or similar process in excess of
$100,000 (if not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Borrower or any of its Subsidiaries or any of their respective
assets; (l) this Loan Agreement or any Other Agreement shall for any reason
fail or cease to be valid and binding on, or enforceable against, Borrower or
any other party thereto in accordance with its terms, or Borrower shall so
assert; (m) this Loan Agreement or any Other Agreement shall cease to create a
valid and enforceable lien and security interest on any Collateral purported to
be covered thereby or any such lien and security interest shall fail or cease
to be a perfected and first priority lien and security interest (subject to
Permitted Liens); or (n) if Borrower is in default in the payment of any debt
to any Person other than Lender in excess of $100,000 or any other default or
breach shall occur under any agreement or instrument relating to any such debt
and such default, condition or event gives the holders of such debt (or any
agent or trustee on their behalf) the then current right to accelerate such
indebtedness; provided, that, Borrower shall not be considered to be in default
under any loan or other agreement relating to the Subordinated Debt - Bank if
(i) such default relates solely to the failure to pay principal or interest
thereunder and (ii) (A) there is sufficient collateral under such loan or other
agreement to cover amounts owed by Borrower thereunder, or (B) such amounts are
paid by the Credit Support Providers within fifteen (15) days after the
occurrence of such default. Borrower shall provide written notice of any events
or circumstances which would give rise to an Event of Default under this
Section 8.1 promptly (but in no event more than two (2) Business Days) after
becoming aware of such events or circumstances. Failure of Borrower to give
such notice promptly shall constitute an Event of Default hereunder.


8.2 Lender’s
Rights and Remedies. Upon an Event of Default under Section 8.1(f), without
notice by Lender to, or demand by Lender of, Borrower, all of Borrower’s Liabilities
shall be automatically accelerated and shall be due and payable forthwith and
any other commitments to provide any financing hereunder shall automatically
terminate, and upon any other Event of Default, without notice by Lender, to or
demand by Lender of, Borrower, Lender may accelerate all of Borrower’s
Liabilities and same shall be due and payable forthwith and/or Lender may
terminate any other commitments to provide any financing hereunder. Lender may,
in its sole and absolute discretion: (a) exercise any one or more of the rights
and remedies accruing to a Lender under the Uniform Commercial Code or other
applicable law of the relevant state or states or other applicable
jurisdiction, and in equity, and under any other instrument or agreement now or
in the future entered into between Lender and Borrower, including under this
Loan Agreement and the Other Agreements; (b) enter, with or without process of
law and without breach of the peace, any premises where the Collateral or the
books and records of Borrower related thereto is or may be located, and without
charge or liability to Lender therefor seize and remove the Collateral (and
copies of Borrower’s books and records relating to the Collateral) from said
premises and/or remain upon said premises and use the same (together with said
books and records) for the purpose of collecting, preparing and disposing of
the Collateral; (c) sell, lease, license or otherwise dispose of the Collateral
or any part thereof by one or more contracts at one or more public or private
sales for cash or credit, provided, however, that Borrower shall be credited
with the net proceeds of such sale(s) only when such proceeds are actually
received by Lender; and (d) require Borrower to assemble the Collateral and
make it available to Lender at a place or places to be designated by 


14






Lender which
is reasonably convenient to Lender and Borrower. 


In addition,
at any time an Event of Default has occurred and is continuing, Lender may, in
its discretion, enforce the rights of Borrower against any Account Debtor,
secondary obligor or other obligor in respect of any of the Accounts. Without
limiting the generality of the foregoing, at any time or times that an Event of
Default has occurred and is continuing, Lender may, in its discretion, at such
time or times (1) notify any or all Account Debtors, secondary obligors or
other obligors in respect thereof that the Accounts have been assigned to
Lender and that Lender has a security interest therein and Lender may direct
any or all accounts debtors, secondary obligors and other obligors to make
payment of Accounts directly to Lender, (2) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any secondary obligors or other obligors in respect thereof
without affecting any of Borrower’s Liabilities, (3) demand, collect or enforce
payment of any Accounts or such other obligations, but without any duty to do
so, and Lender shall not be liable for any failure to collect or enforce the
payment thereof nor for the negligence of its agents or attorneys with respect
thereto and (4) take whatever other action Lender may deem necessary or
desirable for the protection of its interests. At any time that an Event of
Default has occurred and is continuing, at Lender’s request, all invoices and
statements sent to any Account Debtor shall state that the Accounts and such
other obligations have been assigned to Lender and are payable directly and
only to Lender and Borrower shall deliver to Lender such originals of documents
evidencing the sale and delivery of goods or the performance of services giving
rise to any Accounts as Lender may require.


All of
Lender’s rights and remedies under this Loan Agreement and the Other Agreements
are cumulative and non-exclusive. Exercise or partial exercise by Lender of one
or more of its rights or remedies shall not be deemed an election, nor bar
Lender from subsequent exercise or partial exercise of any other rights or
remedies. Lender agrees to give notice of any sale to Borrower at least ten
(10) days prior to any public sale or at least ten (10) days before the time
after which any private sale may be held. Borrower agrees that Lender may
purchase any such Collateral (including by way of credit bid), and may postpone
or adjourn any such sale from time to time by an announcement at the time and
place of sale or by announcement at the time and place of such postponed or
adjourned sale, without being required to give a new notice of sale. Borrower
agrees that Lender has no obligation to preserve rights against prior parties
to the Collateral. 


8.3 Power
of Attorney. Upon the occurrence of any Event of Default, without limiting
Lender’s other rights and remedies, Borrower grants to Lender an irrevocable
power of attorney coupled with an interest (in addition to such other powers of
attorney granted to Lender elsewhere in this Loan Agreement), authorizing and
permitting Lender at any time, at its option, but without obligation, with or
without notice to Borrower, and at Borrower’s expense, to execute on behalf of
Borrower any Additional Documentation, or such other instruments or documents
as may be reasonably necessary in order to exercise a right of Borrower or
Lender, including but not limited to the execution of any proof of claim in
bankruptcy, any notice of lien, claim of mechanic’s or other lien, or assignment
or satisfaction of mechanic’s or other lien, or to take control in any manner
of any cash or non-cash proceeds of Collateral and take any action or pay any
sum required of Borrower pursuant to this Loan Agreement and any Other
Agreement. In no event shall Lender’s rights under the foregoing power of
attorney or any of Lender’s other rights under this Loan Agreement be deemed to
indicate that Lender is in control of the business, management or properties of
Borrower. 


9. General Provisions 


9.1 Notices.
All notices, demands or other communications required or permitted to be given
or delivered under or by reason of the provisions hereof shall be in writing
and shall be deemed to have been given when (i) delivered personally to the
recipient, (ii) sent via facsimile transmission, (iii) the next Business Day
after having been sent to the recipient by reputable overnight courier service
(charges prepaid) or (iv) four Business Days after having been mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
parties hereunder at their respective addresses and transmission numbers
indicated on the signature page hereof, or to such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. 


9.2 Severability.
Should any provision of this Loan Agreement be held by any court of competent
jurisdiction to be void or unenforceable, such defect shall not affect the
remainder of this Loan Agreement, which shall continue in full force and
effect. 


9.3 Integration;
Modification. This Loan Agreement, the Other Agreements and such other
written agreements, documents and instruments as may be executed in connection
herewith or pursuant hereto are the final, entire and complete agreement
between Borrower and Lender and supersede all prior and contemporaneous
negotiations and 


15






oral
representations and agreements, all of which are merged and integrated in this
Loan Agreement and the Other Agreements. There are no oral understandings,
representations or agreements between the parties which are not set forth in
this Loan Agreement or the Other Agreements or in other written instruments, documents
or agreements signed by the parties in connection herewith. If any provision
contained in this Loan Agreement is in conflict with, or inconsistent with, any
provision in the Other Agreements, the provision contained in this Loan
Agreement shall govern and control, it being the intent of the parties,
however, that the terms of each of the Loan Agreement and the Other Agreements
shall be remain in full force and effect. This Loan Agreement and the Other
Agreements may not be modified, altered or amended except by an agreement in
writing signed by Borrower and Lender. 


9.4 Time of
Essence. Time is of the essence in the performance by Borrower of each and
every obligation under this Loan Agreement. 


9.5 Attorneys’
Fees and Other Costs. Borrower shall reimburse Lender for all out-of-pocket
costs and expenses, including but not limited to reasonable attorneys’ fees and
all filing, recording, search, title insurance, appraisal, audit, and other
reasonable costs incurred by Lender in connection with any amendment or waiver
to this Loan Agreement or any Other Agreement; seeking to enforce any of its
rights hereunder against Borrower or the Collateral, including in bankruptcy;
enforcing Lender’s security interest in the Collateral, and representing Lender
in all such matters. Borrower shall also pay Lender’s standard charges for
returned checks in effect from time to time. Borrower’s obligation hereunder
shall survive termination of this Loan Agreement. 


9.6 Benefit
of Agreement; Assignment. The provisions of this Loan Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and Lender; provided,
however, that Borrower may not assign or transfer any of its rights under this
Loan Agreement without the prior written consent of Lender, and any prohibited
assignment shall be void. Borrower hereby consents to Lender’s sale,
assignment, transfer or other disposition, at any time and from time to time
hereafter, of this Loan Agreement, or the Other Agreements, or of any portion
thereof, including without limitation Lender’s rights, titles, interests,
remedies, powers and/or duties. Borrower shall establish and maintain a record
of ownership (the “Register”) in which it agrees to register by book entry
Lender’s and each initial and subsequent assignee’s interest in the Term Loan,
and in the right to receive any payments hereunder and any assignment of any
such interest. Notwithstanding anything to the contrary contained in this Loan
Agreement, the Term Loan (including the Note in respect of such Term Loan) are
registered obligations and the right, title, and interest of Lender and its
assignees in and to such Term Loan shall be transferable upon notation of such
transfer in the Register, pursuant to Borrower’s obligation above. In no event
is any note to be considered a bearer instrument or bearer obligation. This
Section shall be construed so that the Term Loan is at all times maintained in
“registered form” within the meaning of Sections 163(f), 871(h)(2) and
881(c)(2) of the Internal Revenue Code and any related regulations (or any
successor provisions of the Code or such regulations). 


9.7 Paragraph
Headings. Paragraph headings are only used in this Loan Agreement for
convenience. The term “including”, whenever used in this Loan Agreement, shall
mean “including but not limited to”. This Loan Agreement has been fully
reviewed and negotiated between the parties and no uncertainty or ambiguity in
any term or provision of this Loan Agreement shall be construed strictly
against Lender or Borrower under any rule of construction or otherwise.


9.8 Interest
Laws. Notwithstanding any provision to the contrary contained in this Loan
Agreement or any Other Agreement, Borrower shall not be required to pay, and
Lender shall not be permitted to collect, any amount of interest in excess of
the maximum amount of interest permitted by applicable law (“Excess Interest”).
If any Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Loan Agreement or in any Other
Agreement, then in such event: (1) the provisions of this subsection shall
govern and control; (2) Borrower shall not be obligated to pay any Excess
Interest; (3) any Excess Interest that Lender may have received hereunder or
under any Other Agreement shall be, at such Lender’s option, (a) applied as a
credit against the outstanding principal balance of Borrower’s Liabilities or
accrued and unpaid interest (not to exceed the maximum amount permitted by
law), (b) refunded to the payor thereof, or (c) any combination of the
foregoing; (4) the interest rate(s) provided for herein or in any Other
Agreement shall be automatically reduced to the maximum lawful rate allowed
from time to time under applicable law (the “Maximum Rate”), and this Loan
Agreement and the Other Agreements shall be deemed to have been and shall be,
reformed and modified to reflect such reduction; and (5) Borrower shall not
have any action against Lender for any damages arising out of the payment or
collection of any Excess Interest. 


9.9 No
Implied Waivers. Lender’s failure at any time or times hereafter to
exercise any rights or remedies or to require strict performance by Borrower of
any provision of this Loan Agreement shall not waive, affect or diminish any
right of Lender thereafter to demand strict compliance and performance
therewith and all rights and remedies shall continue in full force and effect
until all of Borrower’s Liabilities have been fully and indefeasibly paid and 


16






performed. Any
suspension or waiver by Lender of an Event of Default by Borrower under this
Loan Agreement or the Other Agreements shall not suspend, waive or affect any
other Event of Default by Borrower under this Loan Agreement or the Other
Agreements, whether the same is prior or subsequent thereto and whether of the
same or of a different type. No waiver by Lender of any Event of Default or of
any of the undertakings, agreements, warranties, covenants and representations
of Borrower contained in this Loan Agreement or the Other Agreements shall be
effective unless specifically waived by an instrument in writing signed by an
officer of Lender. 


9.11 Acceptance
by Lender. This Loan Agreement shall become effective upon acceptance by
Lender, in writing, at its principal place of business as set forth above. If
so accepted by Lender, this Loan Agreement and the Other Agreements shall be
deemed to have been made at said place of business. 


9.12 LAW
AND VENUE. THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS AND DECISIONS OF THE STATE OF ILLINOIS. BORROWER
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS. BORROWER WAIVES ANY RIGHT
IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST
BORROWER BY LENDER OR TO ASSERT THAT ANY ACTION INSTITUTED BY LENDER OR
BORROWER IN SUCH COURT IS AN IMPROPER VENUE OR SUCH ACTION SHOULD BE
TRANSFERRED TO A MORE CONVENIENT FORUM. 


9.13 WAIVER
OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING
TO, THIS LOAN AGREEMENT WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. 


9.14 CONFIDENTIALITY.
Each party acknowledges that certain information exchanged by the parties
hereunder is confidential or proprietary in nature (the “Confidential
Information”). Accordingly, each party receiving Confidential Information
hereunder (the “receiving party”) agrees that any Confidential Information it
may obtain shall be received in confidence and shall not be disclosed to any
other person or entity in any manner whatsoever, in whole or in part, without
the prior written consent of the party disclosing such information (the
“disclosing party”), except that the receiving party may disclose any such
information: (a) to its own directors, officers, employees, accountants,
counsel and other professional advisors and to its Affiliates (collectively,
“Representatives”), if receiving party in its reasonable discretion determines
that any such Representatives should have access to such information and,
provided that such Representative has been informed of the confidential nature
of such Confidential Information prior to its exposure thereto; (b) if such
information is generally available to the public when first disclosed to the
receiving party; (c) if required, in any report, statement or testimony
submitted to any governmental authority having or claiming to have jurisdiction
over the disclosing party; (d) if legally required in response to any summons
or subpoena or in connection with any litigation, to the extent permitted or
deemed advisable by counsel to the receiving party; (e) to comply with any
legal requirement or law applicable to Lender; (f) to the extent reasonably
necessary in connection with the exercise of any right or remedy under any this
Loan Agreement or any Other Agreement, including Lender’s sale, lease, or other
disposition of Collateral after default, which Collateral constitutes or is
reasonably related to Confidential Information;(g) to any participant or
assignee of Lender or any prospective participant or assignee, provided such
participant or assignee or prospective participant or assignee agrees in
writing to be bound by this Section prior to disclosure; or (h) otherwise with
the prior consent of the disclosing party; provided, that any disclosure made
in violation of this Agreement shall not affect the obligations of Borrower or
any of its Affiliates. 


 [Signature Page Follows]


17






In Witness Whereof,
this Loan and Security Agreement has been duly executed as of the day and year
first above written. 


	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Borrower:

 	
  

 	
  

 	
  

 	
 Accepted By:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Borrower:

 	
  

 	
 BIOHEART, INC.

 	
  

 	
 Lender:

 	
  

 	
 BLUECREST
 VENTURE FINANCE MASTER FUND LIMITED

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 acting
 by its duly appointed agent, BlueCrest Capital Management Guernsey LP (acting
 through its Geneva branch) acting by its general partner, BlueCrest Capital
 Management Guernsey Limited

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 By:

 	
  

 	
 /s/ Mike Tomas

 	
  

 	
 By:

 	
  

 	
 /s/ J.T. Sambrook

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name:

 	
  

 	
 Mike Tomas

 	
  

 	
 Name:

 	
  

 	
 J.T. Sambrook

 
	
 Title:

 	
  

 	
 President & CEO

 	
  

 	
 Title:

 	
  

 	
 Director

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Address for Notices:

 	
  

 	
 13794 NW 4th Street 
Suite 212 
Sunrise, Florida 33325

 	
  

 	
 Address for Notices:

 	
  

 	
 PO Box 309,
 Ugland House 
South Church Street 
George Town, Cayman Islands

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Telephone:

 	
  

 	
  (954)-835-1500

 	
  

 	
 Telephone Facsimile:

 	
  

 	
 with a copy to:

 
	
 Facsimile:

 	
  

 	
  (954)-845-9976

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 c/o 225 West Washington

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Chicago, IL 60606

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 Attention: Mark King

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 312-368-4978

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
 312-443-0126

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Telephone:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Facsimile:

 	
  

 	
  

 


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EXHIBIT A


Officer’s Compliance and Disclosure
Certificate
(attachment to monthly financial reports) 


          Reference
is hereby made to certain Loan and Security Agreement (the “Loan Agreement”)
(together with all instruments, documents and agreements entered into in
connection therewith, the “Loan Documents”) by and between BlueCrest Venture
Finance Master Fund Limited (“Lender “) and Bioheart, Inc. (“Borrower”).
Capitalized terms used but not defined herein shall have the meaning ascribed
to such terms in the Loan Agreement. The undersigned, _________________, hereby
certifies to Lender that he/she is the duly elected and acting
__________________ of Borrower and that: 


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 FINANCIAL
 STATEMENTS - General. The attached financial
 statements fairly reflect the financial condition and results of operations
 of Borrower in all material respects in accordance with GAAP, except as
 disclosed on the attached Schedule of Financial Statement Exceptions (if
 none, so state on said Schedule) and, except as disclosed on the Schedule
 of Events, since _______ ___, 200__, there has been no event or change
 that has, or could reasonably be expected to have, a Material Adverse Effect;
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 FINANCIAL
 STATEMENTS – Off-Balance Sheet. All material
 financial obligations and contingent obligations of Borrower not otherwise
 listed and itemized on the attached financial statements, are disclosed on
 the attached Schedule of Financial Statement Exceptions, including but
 not limited to material off-balance sheet leasing obligations, and guarantees
 of financial obligations of Borrower, its affiliates, subsidiaries, officers
 and related parties (if none, so state on said Schedule); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)

 	
 FINANCIAL STATEMENTS
 – Related Party Transactions. All material related
 party transactions, including but not limited to loans, receivables or
 payables due to/from Borrower’s officers or employees, affiliates,
 subsidiaries, or other related parties, are disclosed on the attached Schedule
 of Financial Statement Exceptions (if none, so state on said Schedule); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)

 	
 COMPLIANCE
 WITH APPLICABLE LAW. Except as noted on the attached
 Schedule of Compliance Issues, there are no material events whereby
 Borrower or, to the knowledge of Borrower, Borrower’s directors, employees,
 affiliates, subsidiaries or other related parties are acting or conducting
 business contrary to applicable local, state, or national laws in the country
 or countries in which said parties are conducting business; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)

 	
 ABSENCE OF
 DEFAULT. Except as noted on the attached Schedule
 of Compliance Issues, no Default or Event of Default exists on the date
 hereof; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)

 	
 LITIGATION.
 Except as disclosed on the Schedule of Compliance Issues, there are no
 actions, suits or proceedings pending or, to the knowledge of Borrower and
 the undersigned, threatened against or affecting Borrower in any court or
 before any governmental commission, board or authority which, if adversely
 determined could reasonably be expected to have Material Adverse Effect.
 Borrower is involved in such litigation and other disputes as are listed on
 the attached Schedule of Compliance Issues (if none, so state on said
 Schedule). 

 



The
undersigned has executed this certificate as of _______________________, 200_. 


	
  

 	
  

 
	
  

 	
 Signature:___________________________________

 
	
  

 	
  

 
	
  

 	
 By (printed
 name and title):______________________

 


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 SCHEDULE OF
 FINANCIAL STATEMENT EXCEPTIONS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Category of
 Disclosure

 	
  

 	
 Financial
 Date

 	
  

 	
 Comments (if
 none, state “none”)

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 General
 Exceptions:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Off-Balance
 Sheet:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Related
 Party Transactions:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 






	
  

 	
  

 	
  

 
	
 SCHEDULE OF
 COMPLIANCE ISSUES

 	
  

 
	
  

 	
  

 	
  

 
	
 Parties Involved

 	
 Date of
 filing/incident

 	
 Nature of
 Dispute or Issue (if none, state “none)”

 
	
  

 	
  

 	
  

 
	
 Compliance
 Issues:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Litigation
 Issues:

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
 Signatory
 Initials: _______________________

 	
  

 	
  

 


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