EX-4.3 Loan & Security Agreement



 





EXHIBIT 4.3




LOAN AND SECURITY AGREEMENT

No. V07107




This Loan and Security Agreement (this “Loan Agreement”), made as of May 31, 2007 by and between
BlueCrest Capital Finance, L.P. (“Lender”), a Delaware limited partnership with its principal place
of business at 225 West Washington Street, Suite 200, Chicago, Illinois 60606, 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 Control Agreement” means control agreement, by and among Lender, Borrower and Bank
of America, relating to Account No. 0036 6244 3811 of Borrower at Bank of America.



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



     D. “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.



     E. “Bank of America” means Bank of America, N.A.



     F. “Bank of America Aggregation Account” has the meaning set forth in Section 5.1.



     G. “Bank of America Loan Guarantee Agreements” means the Loan Guarantee, Payment and Security
Agreements, each dated as of the date hereof, between the Borrower and each of the Credit Support
Providers.



     H. “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.



     I. “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.



     J. “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.



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     K. “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).



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



     M. “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.



     N. “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.



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



     P. “Controlled Accounts” mean the Deposit Accounts that are covered by the Account Control
Agreement.



     Q. “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.



     R. “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.



     S. “Credit Support Providers” means (i) Howard Leonhardt and Brenda Leonhardt, as guarantors
under that certain Guaranty between them and Bank of America, dated as of the date hereof, (ii) R&A
Spencer Family Limited Partnership, as sponsor under that certain Letter of Credit, dated as of the
date hereof, in favor of Bank of America for benefit of Borrower, (iii) William Murphy, Jr., M.D.,
as sponsor under that certain Letter of Credit, dated as of the date hereof, in favor of Bank of
America for benefit of Borrower, (iv) Bruce Carson, as sponsor under that certain Letter of Credit,
dated as of the date hereof, in favor of Bank of America for benefit of Borrower, and (v) Magellan,
as pledgor under that certain Pledge Agreement, dated as of the date hereof, in favor of Bank of
America.



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



     U. “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.



     V. “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.



     W. “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



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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.



     X. “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.



     Y. “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 substitutions therefore and all proceeds and
products thereof.



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



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



     BB. “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.



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



     DD. “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.



     EE. “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.



     FF. “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.



     GG. “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.



     HH. “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.



     II. “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



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may be in the possession or custody of any carriers, forwarding agents, truckers,
warehousemen, vendors, selling agents or other Persons.



     JJ. “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.



     KK. “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.



     LL. “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.



     MM. “Magellan” means Magellan Group Investments L.L.C.



     NN. “Material Adverse Effect” means a material adverse effect upon (i) the business
operations, 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 a promissory note and a loan agreement,
evidencing the Subordinated Debt and the Subordinated Debt — Bank, the Borrower’s execution of the
Bank of America Loan Guarantee Agreement shall not constitute a material adverse effect on the
Borrower’s ability to repay the Borrower’s Liabilities so long as the Subordination Agreements
delivered by Bank of America and each of the Credit Support Providers 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.



     OO. “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.



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



     QQ. “Other Agreements” means the Warrant, 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.



     RR. “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; 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.



     SS. “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.



     TT. “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.



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



     VV. “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



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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 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.



     WW. “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).



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




     YY. “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.



     ZZ. “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.



     AAA. “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.



     BBB. “Subordinated Debt — Bank” means any indebtedness of Borrower to Bank of America,
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 Bank of America 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.



     CCC. “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.



     DDD. “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.



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



     FFF. “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.



     GGG. “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



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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.



     HHH. “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 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.



     III. “Warrant” has the meaning set forth in Section 2.5(b) hereof.



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 shall loan to Borrower on the date hereof, a
term loan (the “Term Loan”) in the amount of Five Million Dollars ($5,000,000.00). This is not a
revolving line of credit and Borrower may not repay and subsequently re-borrow the amounts advanced
or to be advanced under this Section 2.1. The Term Loan shall be made concurrently with the
execution of this Agreement. The Term Loan shall be repaid in thirty-six (36) monthly scheduled
installments as follows: (i) commencing on the first Business Day of the first full calendar month
after the date of the Term Loan and continuing on the first Business Day of the second full
calendar month and the third full calendar month after the date of the Term Loan, three (3) monthly
payments of interest only (paid in arrears); then (ii) commencing on the first Business Day of the
fourth full calendar month after the date of the Term Loan and continuing on the first Business Day
of each month thereafter, thirty-three (33) equal monthly payments of principal and interest.



2.2 Evidence and Nature of Loans. The Term Loan to be made by Lender to Borrower pursuant
to this Loan Agreement will be evidenced by a promissory note in the form attached hereto as
Exhibit B) (the “Note”) to be executed and delivered by Borrower to Lender concurrently with
Lender’s disbursement of such Term Loan to or for the account of Borrower. 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. The following conditions precedent must be met before the Term
Loan is made hereunder: (i) No event, condition or change that has had, or could reasonably be
expected to have, a Material Adverse Effect shall have occurred since the date of this Loan
Agreement, (ii) The representations and warranties contained in this Loan Agreement and in the
Other Agreements shall be true and correct on and as of the date of such Term Loan, (iii) As of the
date of such Term Loan, no event shall have occurred and be continuing or would result from such
Loan or the application of the proceeds thereof that would constitute an Event of Default or a
Default, (iv) Borrower shall have paid all fees required under this Loan Agreement or the Other
Agreements, (v) Lender shall have received reasonably satisfactory release documents from any and
all conflicting secured creditors (other than holders of Permitted Liens), (vi) Lender shall have
received reasonable evidence of a perfected security interest in the Collateral, (vii) Lender shall
have received copies of the certificates and evidences of insurance contemplated under Section 5.6
hereof and the Financials described in Section 7.3, (viii) Lender shall have received reasonably
adequate proof of free and clear ownership of the Collateral, including but not limited to paid in
full invoices and cancelled checks or other means of payment for said invoices, (ix) Borrower and
applicable financial institution(s) shall have executed any required account control agreements (in
form reasonably satisfactory to Lender) for the benefit of Lender, (x) Borrower shall have
delivered to Lender a reasonably satisfactory landlord waiver duly


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executed and delivered by Borrower’s Sunrise, Florida landlord, (xi) Lender shall have received a
Warrant to purchase 105,264 shares of Borrower’s Common Stock at a purchase price of $4.75 per
share, in the form attached hereto as Exhibit C (the “Warrant”), (xii) Borrower shall have
successfully closed (A) an equity financing transaction of not less than $3,000,000, and (B)
Subordinated Debt and/or Subordinated Debt — Bank transactions (together, in the case of
Subordinated Debt and Subordinated Debt — Bank, with the delivery of such subordination agreements
from such lender(s) and the Credit Support Providers, each satisfactory to Lender in its sole
discretion) of not less than $5,000,000, such that, after consummation of the equity financing
transaction and the Subordinated Debt and/or Subordinated Debt — Bank transactions, Borrower held
not less than $9,000,000 in cash and cash equivalents on the date of the Term Loan, (xiii) an
officer’s certificate of Borrower, reasonably satisfactory to Lender, that its former wholly owned
subsidiary, Biopace, Inc., has no assets and has been liquidated; and (xiv) Borrower shall have
delivered to Lender a legal opinion of counsel to Borrower relating to this Loan Agreement and the
Other Agreements, in form and attached hereto as Exhibit D.



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) 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.  Borrower agrees to pay to Lender a fee of $100,000 to cover due
diligence and other costs and expenses incurred in connection with the Term Loan, of which Lender
acknowledges prior receipt of $50,000, and the remaining $50,000 of which is to be paid at closing.
All fees payable hereunder shall be earned when due and payable hereunder, and shall not be
refundable in whole or in part.



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.



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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, (ii) all accrued and
unpaid interest, fees and expenses on the Term Loan through the date of prepayment, and (iii) (A)
in the event that such prepayment is made on or prior to the first anniversary of the Term Loan, a
prepayment premium equal to 3.0% of the principal amount only of the Term Loan being prepaid, (B)
in the event that such prepayment is made after the first anniversary but on or prior to the second
anniversary of the Term Loan, a prepayment premium equal to 2.0% of the principal amount only of
the Term Loan being prepaid, and (C) in the event that such prepayment is made after the second
anniversary but on or prior to the third anniversary of the Term Loan, a prepayment premium equal
to 1.0% of the principal amount only of the Term Loan being prepaid.



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 hereafter acquired and
wherever located:




	 	(i)	 	All Receivables;
	 
	 	(ii)	 	All Equipment;
	 
	 	(iii)	 	All Fixtures;
	 
	 	(iv)	 	All General Intangibles (excluding Intellectual Property);
	 
	 	(v)	 	All Inventory;
	 
	 	(vi)	 	All Investment Property;
	 
	 	(vii)	 	All Deposit Accounts and Securities Accounts (other than Account Numbers 2290
0834 6165 and 2290 0834 6178 of the Borrower at Bank of America (the “Bank of America
Aggregation Account” and the “Payroll Account”, respectively));
	 
	 	(viii)	 	All Cash;
	 
	 	(ix)	 	All Documents;
	 
	 	(x)	 	All Proceeds from the sale, transfer or other disposition of Intellectual
Property;




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	 	(xi)	 	All other Goods and tangible and intangible personal property of Borrower
(other than Intellectual Property), 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 any of Borrower’s now
owned or hereafter acquired Intellectual Property (other than a security interest in the Proceeds
from the sale, transfer or other disposition of Intellectual Property), the Bank of America
Aggregation Account (and any payments from the Credit Support Providers to the Borrower under any
of the Bank of America Loan Guarantee Agreements received therein), or the Payroll Account;
provided, however, that software, firmware and operating systems that cannot be
removed from the Collateral without rendering the Collateral inoperable shall be deemed to be part
of the “Collateral” unless such construction is prohibited by or inconsistent with any relevant
license or other agreement respecting such software, firmware or operating system. 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.



5.4 Controlled Accounts; Proceeds of Collateral. (a) Borrower shall deliver, or cause to
be delivered to Lender the Account Control Agreement; 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


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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 C
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 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


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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
hereof and as of the date of the Term Loan made hereunder, 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 is (and when executed or delivered, each Other Agreement will be) 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 date hereof, 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 date hereof, 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 date hereof and the
date of the Term 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 occurred since
the date of this Loan Agreement;
	 
	 	(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




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	 	 	 	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 date hereof and of the Term Loan (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 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 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) on or
prior to June 30, 2007, 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,



12









 








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 and
(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.



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, Ordinary Course Indebtedness or payments under the Bank of America Loan
Guarantee Agreements (payable only upon the occurrence of a Trigger Date, as defined therein),
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; provided
that, notwithstanding the foregoing, if Borrower receives at least $30 million of net proceeds from
an initial public offering of its common stock occurring on or before January 31, 2008, Borrower
may voluntarily prepay up to $5.7 million of the outstanding principal and interest on the
Subordinated Debt and/or Subordinated Debt- Bank using proceeds from such initial public offering;
(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) 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 Bank of America Aggregation 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


13









 






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 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


14









 






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 inte
rest 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
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


15









 






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 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


16









 






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 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


17









 






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]




18









 








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 capital finance, l.p.
	 

	 	 	 	 	 	By: BlueCrest Capital Finance GP,
	 

	 	 	 	 	 	       LLC, its general partner
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 
	 	 	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	Title:

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	Address for

	 	13794 NW 4th Street
	 	Address for
	 	225 West Washington Street
	Notices:

	 	Suite 212
	 	Notices:
	 	Suite 200
	 

	 	Sunrise, Florida 33325
	 	 	 	Chicago, IL 60606
	 

	 	 	 	 	 	Attention: Legal Department
	Telephone:

	 	(954)-835-1500
	 	Telephone:
	 	312-368-4973
	Facsimile:

	 	(954)-845-9976
	 	Facsimile:
	 	312-443-0126
 

	 

	 	 	 	 	 	with a copy to:
 

	 

	 	 	 	 	 	225 West Washington
	 

	 	 	 	 	 	Chicago, IL 60606
	 

	 	 	 	 	 	Attention: Mark King
	 

	 	 	 	Telephone:
	 	312-368-4978
	 

	 	 	 	Facsimile:
	 	312-443-0126






19









 






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 Capital Finance, L.P. (“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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EXHIBIT B




FORM OF NOTE




22









 








EXHIBIT C




FORM OF WARRANT




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EXHIBIT D




FORM OF LEGAL OPINION





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