COMMON STOCK PURCHASE
AGREEMENT 

Dated as of October 23,
2014

 by and between


BIOHEART, INC.

and


MAGNA EQUITIES II, LLC,

a New York limited liability company

 

 







TABLE OF
CONTENTS 

					     	Page
		  
	ARTICLE I DEFINITIONS		1
		  
	ARTICLE II PURCHASE AND SALE OF COMMON
      STOCK		1
		  
	     	Section
      2.1.	     	Purchase and Sale
      of Stock		1
		Section
      2.2.		Closing Date;
      Settlement Dates		2
		Section
      2.3.		Initial Public
      Announcements and Required Filings		2
		  
	ARTICLE III DRAW DOWN TERMS		3
		  
		Section
      3.1.		Draw
    Downs		3
		Section
      3.2.		Settlement		4
		Section
      3.3.		Limitation of
      Draw Downs	 	5
		Section
      3.4.	 	Reduction of
      Commitment		5
		Section 3.5.		Failure to
      Deliver Shares or Additional Shares		5
		Section
      3.6.		Certain
      Limitations		6
		Section
      3.7.		Blackout
      Periods		7
		    		
	ARTICLE IV REPRESENTATIONS, WARRANTIES AND
      COVENANTS OF
      THE 
                           
      INVESTOR		8
		   
		Section
      4.1.		Organization and
      Standing of the Investor		8
		Section
      4.2.		Authorization and
      Power		8
		Section
      4.3.		No
      Conflicts		8
		Section
      4.4.		Investment
      Purpose		9
		Section
      4.5.		Accredited
      Investor Status		9
		Section
      4.6.		Reliance on
      Exemptions		9
		Section
      4.7.		Information		9
		Section
      4.8.		No Governmental
      Review		10
		Section
      4.9.		No General
      Solicitation		10
		Section
      4.10.		Not an
      Affiliate		10
		Section
      4.11.		Statutory
      Underwriter Status		10
		Section
      4.12.		Resales of
      Securities		10
		  
	ARTICLE V REPRESENTATIONS, WARRANTIES AND
      COVENANTS OF
      THE 
                           
      COMPANY		11
		  
		Section
      5.1.		Organization,
      Good Standing and Power		11
		Section
      5.2.		Authorization,
      Enforcement		11
		Section
      5.3.		Capitalization
      and Voting Rights		11
		Section
      5.4.		Issuance of
      Securities		12
		Section
      5.5.		No
      Conflicts		12
		Section
      5.6.		Commission
      Documents, Financial Statements		13
		Section
      5.7.		Subsidiaries		15









	     	Section
      5.8.	     	No Material
      Adverse Effect	     	15
		Section
      5.9.		No Undisclosed
      Liabilities		15
		Section
      5.10.		No Undisclosed
      Events or Circumstances		15
		Section
      5.11.		Indebtedness;
      Solvency		15
		Section
      5.12.		Title To
      Assets		16
		Section
      5.13.		Actions
      Pending		16
		Section
      5.14.		Compliance With
      Law		16
		Section
      5.15.		Certain
      Fees		17
		Section
      5.16.		Disclosure		17
		Section
      5.17.		Operation of
      Business		18
		Section
      5.18.		Environmental
      Compliance		19
		Section
      5.19.		Material
      Agreements		20
		Section
      5.20.		Transactions With
      Affiliates		20
		Section
      5.21.		Employees		20
		Section
      5.22.		Use of
      Proceeds		20
		Section
      5.23.		Investment
      Company Act Status		21
		Section
      5.24.		ERISA		21
		Section
      5.25.		Taxes		21
		Section
      5.26.		Insurance		21
		Section
      5.27.		U.S. Real
      Property Holding Corporation		22
		Section
      5.28.		Exemption from
      Registration; Valid Issuances		22
		Section
      5.29.		No General
      Solicitation or Advertising		22
		Section
      5.30.		No Integrated
      Offering		22
		Section
      5.31.		Dilutive
      Effect		22
		Section
      5.32.		Manipulation of
      Price		23
		Section
      5.33.		Securities
      Act		23
		Section
      5.34.		Listing and
      Maintenance Requirements; DTC Eligibility		23
		Section
      5.35.		Application of
      Takeover Protections		23
		Section 5.36.		Foreign Corrupt
      Practices Act		24
		Section
      5.37.	 	Money Laundering
      Laws		24
		Section
      5.38.		OFAC		24
		Section
      5.39.		No
      Disqualification Events		24
		Section
      5.40.		Acknowledgement
      Regarding Investor’s Acquisition of Securities		25
		  
	ARTICLE VI ADDITIONAL COVENANTS		25
		  
		Section
      6.1.		Securities
      Compliance		25
		Section
      6.2.		Reservation of
      Common Stock		25
		Section
      6.3.		Registration and
      Listing		25
		Section
      6.4.		Compliance with
      Laws		26
		Section
      6.5.		Keeping of
      Records and Books of Account; Due Diligence		26
		Section
      6.6.		Limitations on
      Holdings and Issuances		27
		Section
      6.7.		Other Agreements
      and Alternate Transactions		27
		Section
      6.8.		Corporate
      Existence		29
		Section
      6.9.		Fundamental
      Transaction		29
		Section
      6.10.		Delivery of
      Registration Statement and Prospectus; Subsequent Changes		30



ii 







	     	Section
      6.11.	     	Amendments to the
      Registration Statement; Prospectus Supplements	     	30
		Section
      6.12.		Stop
    Orders		31
		Section
      6.13.		Selling
      Restrictions		31
		Section
      6.14.		Effective
      Registration Statement		32
		Section
      6.15.		Blue
Sky		32
		Section
      6.16.		Non-Public
      Information		32
		Section
      6.17.		Broker/Dealer		33
		Section
      6.18.		Disclosure
      Schedule		33
		 
	ARTICLE VII CONDITIONS TO CLOSING AND
      CONDITIONS TO THE SALE AND		
	                           
      PURCHASE OF THE SHARES		33
		 
	 	Section
      7.1.		Conditions
      Precedent to Closing		33
		Section
      7.2.		Conditions
      Precedent to a Draw Down		34
		 
	ARTICLE VIII TERMINATION		38
		 
		Section
      8.1.		Termination		38
		Section
      8.2.		Other
      Termination		38
		Section
      8.3.		Effect of
      Termination		39
		 
	ARTICLE IX INDEMNIFICATION		40
		 
		Section
      9.1.		Indemnification
      of Investor		40
		Section
      9.2.		Indemnification
      Procedures		41
		 
	ARTICLE X MISCELLANEOUS		42
		 
		Section
      10.1.		Fees and
      Expenses; Commitment Shares		42
		Section
      10.2.		Specific
      Enforcement, Consent to Jurisdiction, Waiver of Jury Trial		44
		Section
      10.3.		Entire Agreement;
      Amendment		45
		Section
      10.4.		Notices	 	45
		Section
      10.5.		Waivers		46
		Section
      10.6.		Headings		46
		Section
      10.7.	 	Construction		47
		Section
      10.8.		Successors and
      Assigns		47
		Section
      10.9.		No Third Party
      Beneficiaries		47
		Section
      10.10.		Governing
      Law		47
		Section
      10.11.		Survival		47
		Section
      10.12.		Counterparts		47
		Section
      10.13.		Publicity		48
		Section
      10.14.		Severability		48
		Section
      10.15.		Further
      Assurances		48
		 
				
	
      Annex I. Definitions
      




iii 







COMMON STOCK PURCHASE
AGREEMENT 

This COMMON STOCK PURCHASE AGREEMENT is made and entered into as of October 23, 2014
(this “Agreement”), by and
between Magna Equities II, LLC, a New York limited liability company (the
“Investor”), and Bioheart, Inc., a corporation organized
and existing under the laws of the State of Florida (the “Company”). 

RECITALS 

WHEREAS, the parties desire that, upon the terms and
subject to the conditions and limitations set forth herein, the Company may
issue and sell to the Investor, from time to time as provided herein, and the
Investor shall purchase from the Company, up to $3,000,000 of newly issued
shares of the Company’s common stock, $0.001 par value (“Common Stock”); 

WHEREAS, such investments will be made in reliance upon
the provisions of Section 4(a)(2) of the Securities Act (“Section 4(a)(2)”) and Rule 506 of Regulation D promulgated by the
Commission under the Securities Act (“Regulation D”), and
upon such other exemption from the registration requirements of the Securities
Act as may be available with respect to any or all of the investments in Common
Stock to be made hereunder; 

WHEREAS, the parties hereto are concurrently entering into
a Registration Rights Agreement in the form of Exhibit A hereto (the “Registration Rights Agreement”), pursuant to which the Company shall register the Registrable
Securities (as defined in the Registration Rights Agreement), upon the terms and
subject to the conditions set forth therein; and 

WHEREAS, in consideration for the Investor’s execution
and delivery of this Agreement, the Company is concurrently causing its transfer
agent to issue to the Investor the Initial Commitment Shares, upon the terms and
subject to the conditions set forth in this Agreement; 

NOW, THEREFORE,
the parties hereto, intending to
be legally bound, hereby agree as follows: 

ARTICLE I 
DEFINITIONS


Capitalized terms used in
this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise set forth in this
Agreement. 

ARTICLE II

PURCHASE AND SALE OF
COMMON STOCK 

Section 2.1. Purchase and Sale of
Stock. Upon the
terms and subject to the conditions of this Agreement, during the Investment
Period, the Company in its discretion may issue and sell to the Investor, and
the Investor shall purchase from the Company, up to $3,000,000 (the
“Total
Commitment”) of duly
authorized, validly issued, fully paid and nonassessable shares of Common Stock
(the “Aggregate
Limit”), by the delivery to
the Investor of Draw Down Notices as provided in Article III hereof. 







Section 2.2. Closing Date; Settlement
Dates. This
Agreement shall become effective and binding (the “Closing”) upon payment of the Document Preparation Fee prior to the Closing
pursuant to Sections 7.1 and 10.1, the delivery of irrevocable instructions to
issue the Initial Commitment Shares to the Investor or its designees as provided
in Sections 7.1 and 10.1, the delivery of counterpart signature pages of this
Agreement and the Registration Rights Agreement executed by each of the parties
hereto and thereto, and the delivery of all other documents, instruments and
writings required to be delivered at the Closing, in each case as provided in
Section 7.1, to the offices of Greenberg Traurig, LLP, 200 Park Avenue, New
York, New York 10166, at 5:00 p.m., New York City time, on the Closing Date. In
consideration of and in express reliance upon the representations, warranties
and covenants contained in, and upon the terms and subject to the conditions of,
this Agreement, during the Investment Period the Company shall issue and sell to
the Investor, and the Investor shall purchase from the Company, the Shares in
respect of each Draw Down. The issuance and sale of Shares to the Investor
pursuant to any Draw Down shall occur in accordance with Section 3.2,
provided that all of the conditions precedent thereto set
forth in Article VII theretofore shall have been fulfilled on or prior to the
applicable Draw Down Exercise Date. 

Section 2.3. Initial Public Announcements and Required
Filings. The
Company shall, at or before 8:30 a.m., New York City time, on the first Trading
Day immediately following the Closing Date, issue a press release (the
“Press
Release”) reasonably
acceptable to the Investor disclosing the execution of this Agreement and the
Registration Rights Agreement by the Company and the Investor and the issuance
of the Initial Commitment Shares to the Investor, and briefly describing the
transactions contemplated thereby. At or before 8:30 a.m., New York City time,
on the second Trading Day immediately following the Closing Date, the Company
shall file a Current Report on Form 8-K describing all the material terms of the
transactions contemplated by the Transaction Documents in the form required by
the Exchange Act and attaching copies of each of this Agreement, the
Registration Rights Agreement and the Press Release as exhibits thereto
(including all exhibits thereto, the “Current Report”). The
Company shall provide the Investor a reasonable opportunity to comment on a
draft of the Current Report prior to filing the Current Report with the
Commission and shall give due consideration to all such comments. From and after
the issuance of the Press Release and the filing of the Current Report, the
Company shall have disclosed all material, nonpublic information delivered to
the Investor (or the Investor’s representatives or agents) by the Company or any
of its Subsidiaries, or any of their respective officers, directors, employees,
agents or representatives (if any) in connection with the transactions
contemplated by the Transaction Documents. The Investor covenants that until
such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 2.3, the Investor will
maintain the confidentiality of all disclosures made to it in connection with
the transactions contemplated by the Transaction Documents (including the
existence and terms of the transactions), except that the Investor may disclose
the terms of such transactions to its financial, accounting, legal and other
advisors (provided that the Investor directs such Persons to maintain the
confidentiality of such information). Not later than 15 calendar days following
the Closing Date, the Company shall file a Form D with respect to the Securities
in accordance with Regulation D and shall provide a copy thereof to the Investor
promptly after such filing. The Company shall prepare and file with the
Commission the Registration Statement (including the Prospectus) covering the
resale by the Investor of the Registrable Securities in accordance with the
Securities Act and the Registration Rights Agreement. At or
before 8:30 a.m. (New York City time) on the Trading Day immediately following
the Effective Date, the Company shall file with the Commission in accordance
with Rule 424(b) under the Securities Act the final Prospectus to be used in
connection with sales pursuant to the Registration Statement. If the
transactions contemplated by any Draw Down are material to the Company
(individually or collectively with all other prior Draw Downs, the consummation
of which have not previously been reported in any Prospectus Supplement filed
with the Commission under Rule 424(b) under the Securities Act or in any report,
statement or other document filed by the Company with the Commission under the
Exchange Act), or if otherwise required under the Securities Act (or the
interpretations of the Commission thereof), in each case as reasonably
determined by the Company or the Investor, then, at or before 5:30 p.m. (New
York City time) on the Trading Day immediately following the True-Up Date with
respect to such Draw Down, the Company shall file with the Commission a Prospectus
Supplement pursuant to Rule 424(b) under the Securities Act with respect to the
applicable Draw Down(s), disclosing the total Draw Down Amount Requested
pursuant to such Draw Down(s), the total number of Shares issued and sold to the
Investor pursuant to such Draw Down(s), the applicable Purchase Price(s) for
such Shares and the net proceeds that have been received by the Company from the
sale of such Shares. To the extent not previously disclosed in the Prospectus or
a Prospectus Supplement, the Company shall disclose in its Quarterly Reports on
Form 10-Q and in its Annual Reports on Form 10-K the information described in
the immediately preceding sentence relating to all Draw Down(s) consummated
during the relevant fiscal quarter, and include each such Quarterly Report on
Form 10-Q and Annual Report on Form 10-K in a Prospectus Supplement and file
such Prospectus Supplement with the Commission under Rule 424(b) under the
Securities Act. 

2







ARTICLE III 
DRAW DOWN
TERMS 

Subject to the satisfaction
of the conditions set forth in this Agreement, the parties agree as follows:


Section 3.1. Draw Downs.

(a) Draw Down Notice.
Subject to Section 3.1(b) hereof,
from time to time during the Investment Period, the Company may, in its sole
discretion, no later than 9:30 a.m. (New York City time) on the applicable Draw
Down Exercise Date, provide to the Investor a Draw Down Notice, substantially in
the form attached hereto as Exhibit B (each, a
“Draw Down
Notice”), which Draw Down
Notice shall become effective upon receipt thereof by the Investor on the
applicable Draw Down Exercise Date, and directing the Investor to purchase a
specified Draw Down Amount Requested (which shall not exceed the Maximum Draw
Down Amount Requested). As used in this Agreement, the term “Draw Down Exercise Date” shall mean the date on which the Investor
receives any Draw Down Notice in accordance with this Section 3.1;
provided, however, that if the
Investor receives the Draw Down Notice later than 9:30 a.m. (New York City time)
on a Trading Day, then the Draw Down Exercise Date shall not be the Trading Day
on which the Investor receives such Draw Down Notice, but rather shall be the
immediately following Trading Day (unless a subsequent Trading Day is therein
specified as the Draw Down Exercise Date). Upon the terms and subject to the
conditions of this Agreement, the Investor is obligated to accept each Draw Down
Notice prepared and delivered in accordance with the provisions of this Agreement and shall purchase from the Company the
Shares subject to such Draw Down Notice at the applicable Purchase Price in
accordance with Section 3.2 hereof. Anything to the contrary in this Agreement
notwithstanding, the parties hereto acknowledge and agree that the Investor
shall not be required to purchase, and shall not purchase, more than the Maximum
Draw Down Amount Requested pursuant to any single Draw Down Notice.

3







(b) Draw Down Exercise Floor Price. Notwithstanding anything in this Agreement to the contrary, the Company
shall not deliver any Draw Down Notice to the Investor if the Initial Purchase
Price with respect to the Shares subject to such Draw Down Notice is less than
the Draw Down Exercise Floor Price as of the applicable Draw Down Exercise Date,
and any such Draw Down Notice shall be void, ab initio, and the Company shall not sell, and the Investor shall not purchase,
any Shares pursuant thereto. 

Section 3.2. Settlement. The payment for, against simultaneous delivery
of, Shares in respect of any Draw Down shall be settled as provided in this
Section 3.2.

(a) Settlement Date. With
respect to each Draw Down pursuant to a Draw Down Notice received by the
Investor in accordance with Section 3.1(a) hereof, the settlement thereof shall
occur not later than the first Trading Day next following the applicable Draw
Down Exercise Date. Each date on which settlement of the purchase and sale of
Shares occurs under this Section 3.2(a) shall be referred to herein as a
“Settlement
Date”. On each Settlement
Date, the Company shall, or shall cause its transfer agent to, electronically
transfer to the Investor a number of duly authorized, validly issued, fully paid
and nonassessable Shares, rounded to the nearest whole Share, equal to the
quotient of (i) the Draw Down Amount Requested divided by (ii) the applicable
Initial Purchase Price, by crediting the Investor’s or its designees’ account
(provided the Investor shall have given the Company written notice of such
designee prior to the Settlement Date) at DTC through its Deposit/Withdrawal at
Custodian (DWAC) system, which Shares shall be freely tradable and transferable
and without restriction on resale pursuant to the Registration Statement,
against simultaneous payment of the total Draw Down Amount therefor, which shall
be equal to the product of (A) the number of Shares issued to the Investor on
such Settlement Date and (B) the applicable Initial Purchase Price, to the
Company’s designated account by wire transfer of immediately available funds;
provided that if the Shares are received by the Investor
later than 2:00 p.m., New York City time, payment of the total Draw Down Amount
therefor shall be made with next day funds. As set forth in Section 3.5, a
failure by the Company or its transfer agent (if applicable) to deliver such
Shares on the applicable Settlement Date, among other things, shall result in
the payment of partial damages by the Company to the Investor. 

(b) True-Up Date. With
respect to each Draw Down pursuant to a Draw Down Notice received by the
Investor in accordance with Section 3.1(a) hereof, a calculation of the True-Up
Purchase Price and the final Purchase Price with respect to such Draw Down shall
occur not later than the first Trading Day next following the last Trading Day
of the applicable True-Up Pricing Period. Each date on which calculation of a
True-Up Purchase Price and Purchase Price occurs under this Section 3.2(b) shall
be referred to herein as a “True-Up Date”. Not
later than 4:00 p.m. (New York City time) on the Trading Day immediately
following the True-Up Date (the “True-Up Settlement Date”), the Company shall, or shall cause its transfer agent to,
electronically transfer to the Investor the Additional Shares, if any, in
respect of the applicable Draw Down by crediting the
Investor’s or its designees’ account (provided the Investor shall have given the
Company written notice of such designee prior to the True-Up Date) at DTC
through its Deposit/Withdrawal at Custodian (DWAC) system, which Additional
Shares, if any, shall be freely tradable and transferable and without
restriction on resale pursuant to the Registration Statement. “Additional Shares” shall mean a number of duly authorized, validly issued,
fully paid and nonassessable Shares (which shall be appropriately adjusted for
any stock splits, stock combinations, stock dividends, recapitalizations and
other similar transactions that occur on or after the date of this Agreement),
rounded to the nearest whole Share, equal to the greater of (I) zero and (II)
the difference of (i) the quotient of (x) the total Draw Down Amount received by
the Company on the Settlement Date with respect to the applicable Draw Down
Notice divided by (y) the True-Up Purchase Price, less (ii) the number of Shares
issued to the Investor on the applicable Settlement Date with respect to the
applicable Draw Down Notice. As set forth in Section 3.5, a failure by the
Company or its transfer agent (if applicable) to deliver such Additional Shares,
if any, on the applicable True-Up Settlement Date, among other things, shall
result in the payment of partial damages by the Company to the
Investor.

4







(c) Purchase Price.
Notwithstanding anything herein to the contrary and for the avoidance of doubt,
with respect to each Draw Down pursuant to a Draw Down Notice received by the
Investor in accordance with Section 3.1(a) hereof, (i) the final purchase price
for the Shares subject to such Draw Down Notice shall be equal to the
lesser of (A) the Initial Purchase Price and (B) the
True-Up Purchase Price (such lesser price, the “Purchase Price”) and (ii) the Investor shall not be required to
return any Shares to the Company in the event the True-Up Purchase Price is
greater than the Initial Purchase Price. 

Section 3.3. Limitation of Draw
Downs. The Company
shall not make more than one Draw Down during the period between the applicable
Draw Down Exercise Date and the applicable True-Up Date with respect to such
Draw Down. At least two Trading Days shall elapse between the True-Up Date with
respect to a Draw Down and the delivery of any Draw Down Notice for any other
Draw Down during the Investment Period. Each Draw Down automatically shall
expire immediately following the completion of the delivery of Additional Shares
in respect of such Draw Down in accordance with Section 3.2(b) hereof or, if no
Additional Shares are required to be delivered in respect of such Drawn Down,
immediately following the completion of the calculation of the True-Up Purchase
Price and the Purchase Price on the True-Up Date. 

Section 3.4. Reduction of
Commitment. On
each Settlement Date, the Investor’s Total Commitment under this Agreement
automatically shall be reduced, on a dollar-for-dollar basis, by the total Draw
Down Amount paid to the Company on such Settlement Date. 

Section 3.5. Failure to Deliver Shares
or Additional Shares. If the Company
issues a Draw Down Notice to the Investor, and the Company or its transfer agent
shall fail for any reason or for no reason to electronically deliver all of the
Shares subject thereto to the Investor on the applicable Settlement Date by
crediting the Investor’s or its designees’ account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system in compliance with Section 3.2 of
this Agreement, then, in addition to all other remedies available to the
Investor, the Company shall pay the Investor, in cash, as partial damages for
such failure and not as a penalty, an amount equal to 2.0% of the payment
required to be paid by the Investor on such Settlement Date for the initial 30 days following such Settlement Date until the
Shares have been delivered, and an additional 2.0% for each additional 30-day
period thereafter until the Shares have been delivered, which amount shall be
prorated for such periods less than 30 days. If the Company issues a Draw Down
Notice to the Investor, and the Company or its transfer agent shall fail for any
reason or for no reason to electronically deliver all of the Additional Shares,
if any, subject thereto to the Investor on the applicable True-Up Settlement
Date by crediting the Investor’s or its designees’ account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system in compliance with Section 3.2 of
this Agreement, then, in addition to all other remedies available to the
Investor, the Company shall pay the Investor, in cash, as partial damages for
such failure and not as a penalty, an amount equal to 2.0% of the payment
required to be paid by the Investor on the applicable Settlement Date for the
initial 30 days following such True-Up Settlement Date until the Additional
Shares have been delivered, and an additional 2.0% for each additional 30-day
period thereafter until the Additional Shares have been delivered, which amount
shall be prorated for such periods less than 30 days. In addition to the
foregoing, if the Company or its transfer agent shall fail for any reason or for
no reason to electronically transfer all of the Shares or Additional Shares
subject to a Draw Down Notice to the Investor on the applicable Settlement Date
or True-Up Settlement Date, as applicable, by crediting the Investor’s or its
designees’ account at DTC through its Deposit/Withdrawal at Custodian (DWAC)
system in compliance with Section 3.2 of this Agreement, and if on or after such
applicable Settlement Date or True-Up Settlement Date, as applicable, the
Investor purchases, in an open market transaction or otherwise, shares of Common
Stock necessary to make delivery by the Investor in satisfaction of a sale by
the Investor of Shares or Additional Shares that the Investor anticipated
receiving from the Company in connection with such Draw Down, then the Company
shall, in addition to any other amounts due to the Investor pursuant to this
Agreement, within three Trading Days after the Investor’s request, pay cash to
the Investor in an amount equal to the Investor’s total purchase price
(including brokerage commissions, if any) for the Shares or Additional Shares so
purchased, at which point the Company’s obligation to credit such Investor’s or
its designee’s account at DTC for such Shares or Additional Shares shall
terminate. All amounts due and payable to the Investor pursuant to this Section
3.5 are hereinafter referred to collectively as the “Make Whole Amount”. If the Make Whole Amount is not paid within two
Trading Days following the date when due hereunder, the Make Whole Amount shall
accrue annual interest (on the basis of the 365 day year) compounded daily at a
rate equal to the greater of (i) the prime rate of interest then in effect as
published by the Wall Street Journal plus 3.0% and (ii) 10.0%, up to and
including the date on which the Make Whole Amount is actually paid. The Company
shall not issue a Draw Down Notice to the Investor until the Make Whole Amount,
plus all accrued interest, has been paid to the Investor in full.


5







Section 3.6. Certain
Limitations.
Notwithstanding anything to the contrary contained in this Agreement, in no
event may the Company issue a Draw Down Notice to the extent that (i) the Draw
Down Amount Requested in such Draw Down Notice exceeds the Maximum Draw Down
Amount Requested, (ii) the sale of Shares pursuant to such Draw Down Notice
would cause the Company to issue or sell or the Investor to acquire or purchase
a dollar value of shares of Common Stock which, when aggregated with all Draw
Down Amounts paid by the Investor pursuant to all prior Draw Down Notices issued
under this Agreement, would exceed the Aggregate Limit, or (iii) the sale of
Shares pursuant to such Draw Down Notice would cause the Company to sell or the
Investor to purchase a number of shares of Common Stock which, when aggregated
with all other shares of Common Stock then beneficially owned (as calculated
pursuant to Section 13(d) of the Exchange Act and Rule 13d-3
promulgated thereunder) by the Investor and its Affiliates, would result in the
beneficial ownership by the Investor or any of its Affiliates of more than 9.99%
of the then issued and outstanding shares of Common Stock (the “Ownership Limitation”). If the Company issues a Draw Down Notice in which the
Draw Down Amount Requested exceeds the Maximum Draw Down Amount Requested, such
Draw Down Notice shall be void ab
initio to the extent the Draw Down
Amount Requested exceeds the Maximum Draw Down Amount Requested. If the Company
issues a Draw Down Notice that otherwise would require the Investor to purchase
shares of Common Stock which would cause the aggregate purchases of Common Stock
by the Investor under this Agreement to exceed the Aggregate Limit, such Draw
Down Notice shall be void ab
initio to the extent of the amount by
which the dollar value of shares of Common Stock otherwise issuable pursuant to
such Draw Down Notice, together with all Draw Down Amounts paid by the Investor
pursuant to all prior Draw Down Notices issued under this Agreement, would
exceed the Aggregate Limit. If the Company issues a Draw Down Notice that
otherwise would require the Investor to purchase shares of Common Stock which
would cause the aggregate number of shares of Common Stock then beneficially
owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule
13d-3 promulgated thereunder) by the Investor and its Affiliates to exceed the
Ownership Limitation, such Draw Down Notice shall be void ab initio to the
extent of the amount by which the number of shares of Common Stock otherwise
issuable pursuant to such Draw Down Notice, together with all shares of Common
Stock then beneficially owned by the Investor and its Affiliates, would exceed
the Ownership Limitation.

6







Section 3.7. Blackout
Periods.
Notwithstanding any other provision of this Agreement, the Company shall not
deliver any Draw Down Notice or otherwise offer or sell Shares to the Investor,
and the Investor shall not be obligated to purchase any Shares pursuant to this
Agreement, (i) during any period in which the Company is, or may be deemed to
be, in possession of material non-public information, or (ii) except as
expressly provided in this Section 3.7, at any time from and including the date
(each, an “Announcement
Date”) on which the Company
shall issue a press release containing, or shall otherwise publicly announce,
its earnings, revenues or other results of operations (each, an
“Earnings
Announcement”) through and
including the time that is 24 hours after the time that the Company files (a
“Filing
Time”) a Quarterly Report on
Form 10-Q or an Annual Report on Form 10-K that includes consolidated financial
statements as of and for the same period or periods, as the case may be, covered
by such Earnings Announcement. If the Company wishes to deliver any Draw Down
Notice or otherwise offer, sell or deliver Shares to the Investor at any time
during the period from and including an Announcement Date through and including
the time that is 24 hours after the corresponding Filing Time, the Company
shall, as conditions thereto, (1) prepare and deliver to the Investor (with a
copy to counsel to the Investor) a report on Form 8-K which shall include
substantially the same financial and related information as was set forth in the
relevant Earnings Announcement (other than any earnings or other projections,
similar forward-looking data and officers’ quotations) (each, an
“Earnings
8-K”), (2) provide the
Investor with the compliance certificate substantially in the form attached
hereto as Exhibit D, dated the date of such Draw Down Notice, which certificate
shall be deemed to remain in effect during the applicable Pricing Period through
and including the applicable Settlement Date, and the “bring down” opinions in
the form mutually agreed to by the parties hereto prior to the date hereof,
dated the date of such Draw Down Notice and (3) file such Earnings 8-K with the
Commission (so that it is deemed “filed” for purposes of Section 18 of the
Exchange Act), include such Earnings 8-K in a Prospectus
Supplement and file such Prospectus Supplement with the Commission under Rule
424(b) under the Securities Act, in each case on or prior to the date of such
Draw Down Notice. The provisions of clause (ii) of this Section 3.7 shall not be
applicable for the period from and after the time at which all of the conditions
set forth in the immediately preceding sentence shall have been satisfied (or,
if later, the time that is 24 hours after the time that the relevant Earnings
Announcement was first publicly released) through and including the time that is
24 hours after the Filing Time of the relevant Quarterly Report on Form 10-Q or
Annual Report on Form 10-K, as the case may be. For purposes of clarity, the
parties agree that the delivery of the compliance certificate and the “bring
down” opinions pursuant to this Section 3.7 shall not relieve the Company from
any of its obligations under this Agreement with respect to the delivery of the
compliance certificate called for by Section 7.2(ii) and the “bring down”
opinions called for by Section 7.2(xv) on the applicable Settlement Date, which
Sections shall have independent application. 

7







ARTICLE IV

REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE INVESTOR 

The Investor hereby makes
the following representations, warranties and covenants to the Company:


Section 4.1. Organization and Standing of the
Investor. The
Investor is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of New York.

Section 4.2. Authorization and
Power. The
Investor has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and the Registration Rights
Agreement and to purchase or acquire the Securities in accordance with the terms
hereof. The execution, delivery and performance by the Investor of this
Agreement and the Registration Rights Agreement and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action, and no further consent or authorization of the
Investor, its Board of Directors or its stockholders is required. Each of this
Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Investor and constitutes a valid and binding obligation of the
Investor enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership, or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application
(including any limitation of equitable remedies). 

Section 4.3. No
Conflicts. The
execution, delivery and performance by the Investor of this Agreement and the
Registration Rights Agreement and the consummation by the Investor of the
transactions contemplated hereby and thereby do not and shall not (i) result in
a violation of such Investor’s charter documents, bylaws or other applicable
organizational instruments, (ii) conflict with, constitute a default (or an
event which, with notice or lapse of time or both, would become a default)
under, or give rise to any rights of termination, amendment, acceleration or
cancellation of, any material agreement, mortgage, deed of trust, indenture,
note, bond, license, lease agreement, instrument or obligation to which the
Investor is a party or is bound, (iii) create or impose any
lien, charge or encumbrance on any property of the Investor under any agreement
or any commitment to which the Investor is party or under which the Investor is
bound or under which any of its properties or assets are bound, or (iv) result
in a violation of any federal, state, local or foreign statute, rule, or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to the Investor or by which any of its properties or assets are bound
or affected, except, in the case of clauses (ii), (iii) and (iv), for such
conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, prohibit or otherwise
interfere with, in any material respect, the ability of the Investor to enter
into and perform its obligations under this Agreement and the Registration
Rights Agreement. The Investor is not required under any applicable federal,
state, local or foreign law, rule or regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement and the Registration Rights Agreement or to
purchase the Securities in accordance with the terms hereof; provided,
however, that for purposes of the representation made in this
sentence, the Investor is assuming and relying upon the accuracy of the relevant
representations and warranties and the compliance with the relevant covenants
and agreements of the Company in the Transaction Documents to which it is a
party. 

8







Section 4.4. Investment
Purpose. The
Investor is acquiring the Securities for its own account, for investment
purposes and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered under
or exempt from the registration requirements of the Securities Act;
provided, however, that by making
the representations herein, the Investor does not agree, or make any
representation or warranty, to hold any of the Securities for any minimum or
other specific term and reserves the right to dispose of the Securities at any
time in accordance with or pursuant to a registration statement or an exemption
under the Securities Act. The Investor does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the
Securities. 

Section 4.5. Accredited Investor
Status. The
Investor is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D. 

Section 4.6. Reliance on
Exemptions. The
Investor understands that the Securities are being offered and sold to it in
reliance on specific exemptions from the registration requirements of U.S.
federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Investor’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Investor set forth herein in order to determine the availability of such
exemptions and the eligibility of the Investor to acquire the Securities.


Section 4.7.
Information.
All materials relating to the business, financial condition, management and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Investor have been furnished or
otherwise made available to the Investor or its advisors, including, without
limitation, the Commission Documents. The Investor understands that its
investment in the Securities involves a high degree of risk. The Investor is
able to bear the economic risk of an investment in the Securities and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of a proposed investment in the Securities. The
Investor and its advisors have been afforded the opportunity to ask questions of
and receive answers from representatives of the Company
concerning the financial condition and business of the Company and other matters
relating to an investment in the Securities. Neither such inquiries nor any
other due diligence investigations conducted by the Investor or its advisors, if
any, or its representatives shall modify, amend or affect the Investor’s right
to rely on the Company’s representations and warranties contained in this
Agreement or in any other Transaction Document to which the Company is a party
or the Investor’s right to rely on any other document or instrument executed
and/or delivered in connection with this Agreement or the consummation of the
transaction contemplated hereby (including, without limitation, the opinions of
the Company’s counsel delivered pursuant to Sections 7.1(iv) and 7.2(xv)). The
Investor has sought such accounting, legal and tax advice as it has considered
necessary to make an informed investment decision with respect to its
acquisition of the Securities. The Investor understands that it (and not the
Company) shall be responsible for its own tax liabilities that may arise as a
result of this investment or the transactions contemplated by this Agreement.


9







Section 4.8. No Governmental
Review. The
Investor understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits
of the offering of the Securities. 

Section 4.9. No General
Solicitation. The
Investor is not purchasing the Securities as a result of any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities. 

Section 4.10. Not an
Affiliate. The
Investor is not an officer, director or an Affiliate of the Company. 

Section 4.11. Statutory Underwriter
Status. The
Investor acknowledges that it will be disclosed as an “underwriter” and a
“selling stockholder” in the Registration Statement and in any Prospectus
contained therein to the extent required by applicable law and to the extent the
Prospectus is related to the resale of Registrable Securities. 

Section 4.12. Resales of
Securities. The
Investor represents, warrants and covenants that it will resell such Securities
only pursuant to the Registration Statement, in a manner described under the
caption “Plan of Distribution” in the Registration Statement, and in a manner in
compliance with all applicable U.S. federal and state securities laws, rules and
regulations, including, without limitation, any applicable prospectus delivery
requirements of the Securities Act. 


10







ARTICLE V

REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE COMPANY 

Except as set forth in the
disclosure schedule delivered by the Company to the Investor (which is hereby
incorporated by reference in, and constitutes an integral part of, this
Agreement) (the “Disclosure
Schedule”), the Company
hereby makes the following representations, warranties and covenants to the
Investor: 

Section 5.1. Organization, Good Standing and
Power. The Company
and each of its Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the requisite corporate power and authority to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted
and as presently proposed to be conducted. The Company and each Subsidiary is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except for any jurisdiction in
which the failure to be so qualified would not have a Material Adverse Effect.


Section 5.2. Authorization,
Enforcement. The
Company has the requisite corporate power and authority to enter into and
perform its obligations under each of the Transaction Documents to which it is a
party and to issue the Securities in accordance with the terms hereof and
thereof. Except for approvals of the Company’s Board of Directors or a committee
thereof as may be required in connection with any issuance and sale of
Securities to the Investor hereunder (which approvals shall be obtained prior to
the delivery of any Draw Down Notice), the execution, delivery and performance
by the Company of each of the Transaction Documents to which it is a party and
the consummation by it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action, and no
further consent or authorization of the Company, its Board of Directors or its
stockholders is required. Each of the Transaction Documents to which the Company
is a party has been duly executed and delivered by the Company and constitutes a
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation,
conservatorship, receivership or similar laws relating to, or affecting
generally the enforcement of, creditor’s rights and remedies or by other
equitable principles of general application (including any limitation of
equitable remedies). 

Section 5.3. Capitalization and Voting
Rights. The
authorized capital stock of the Company and the shares thereof issued and
outstanding were as set forth in the Commission Documents as of the dates
reflected therein. All of the outstanding shares of Common Stock have been duly
authorized and validly issued, and are fully paid and nonassessable. Except as
set forth in the Commission Documents, this Agreement and the Registration
Rights Agreement, there are no agreements or arrangements under which the
Company is obligated to register the sale of any securities under the Securities
Act. Except as set forth in the Commission Documents, no shares of Common Stock
are entitled to preemptive rights and there are no outstanding debt securities
and no contracts, commitments, understandings, or arrangements by which the
Company is or may become bound to issue additional shares of the capital stock
of the Company or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of capital stock of the Company
other than those issued or granted in the ordinary course of business pursuant
to the Company’s equity incentive and/or compensatory plans or arrangements.
Except for customary transfer restrictions contained in agreements entered into
by the Company to sell restricted securities or as set forth in the Commission
Documents, the Company is not a party to, and it has no Knowledge of, any
agreement restricting the voting or transfer of any shares of the capital stock
of the Company. Except as set forth in the Commission Documents, the offer and
sale of all capital stock, convertible or exchangeable securities, rights,
warrants or options of the Company
issued prior to the Closing Date complied with all applicable federal and state
securities laws, and no stockholder has any right of rescission or damages or
any “put” or similar right with respect thereto that would have a Material
Adverse Effect. Except as set forth in the Commission Documents, there are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by this Agreement or any of the other Transaction Documents or
the consummation of the transactions described herein or therein. The Company
has furnished or made available to the Investor via EDGAR true and correct
copies of the Company’s Certificate of Incorporation as in effect on the Closing
Date (the “Charter”), and the
Company’s Bylaws as in effect on the Closing Date (the “Bylaws”).

11







Section 5.4. Issuance of
Securities. The
Initial Commitment Shares have been, the Additional Commitment Shares (if any)
to be issued under this Agreement have been or will be (prior to the issuance
thereof), and the Shares to be issued under this Agreement have been or will be
(prior to the delivery of any Draw Down Notice to the Investor hereunder), duly
authorized by all necessary corporate action on the part of the Company. The
Commitment Shares, when issued in accordance with the terms of this Agreement,
and the Shares, when issued and paid for in accordance with the terms of this
Agreement, shall be validly issued and outstanding, fully paid and nonassessable
and free from all liens, charges, taxes, security interests, encumbrances,
rights of first refusal, preemptive or similar rights and other encumbrances
with respect to the issue thereof. 

Section 5.5. No
Conflicts. The
execution, delivery and performance by the Company of each of the Transaction
Documents to which it is a party and the consummation by the Company of the
transactions contemplated hereby and thereby do not and shall not (i) result in
a violation of any provision of the Company’s Charter or Bylaws, (ii) conflict
with or result in a breach or violation of any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time or both,
would become a default) under, or give rise to any rights of termination,
amendment, acceleration or cancellation of, any material agreement, mortgage,
deed of trust, indenture, note, bond, license, lease agreement, instrument or
obligation to which the Company or any of its Significant Subsidiaries is a
party or is bound, (iii) create or impose a lien, charge or encumbrance on any
property or assets of the Company or any of its Significant Subsidiaries under
any agreement or any commitment to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of their respective properties or assets
is subject, or (iv) result in a violation of any federal, state, local or
foreign statute, rule, regulation, order, judgment or decree applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries are bound or affected (including federal and
state securities laws and regulations and the rules and regulations of the
Trading Market), except, in the case of clauses (ii), (iii) and (iv), for such
conflicts, defaults, terminations, amendments, acceleration, cancellations,
liens, charges, encumbrances and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. Except as specifically contemplated
by this Agreement or the Registration Rights Agreement and as required under the
Securities Act and any applicable state securities laws, the Company is not
required under any federal, state, local or foreign law, rule or regulation to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency (including, without
limitation, the Trading Market) in order for it to execute, deliver or perform
any of its obligations under the Transaction Documents to which it is a party,
or to issue the Securities to the Investor in accordance
with the terms hereof and thereof (other than such consents, authorizations,
orders, filings or registrations as have been obtained or made prior to the
Closing Date); provided, however, that,
for purposes of the representation made in this sentence, the Company is
assuming and relying upon the accuracy of the representations and warranties of
the Investor in this Agreement and the compliance by it with its covenants and
agreements contained in this Agreement and the Registration Rights
Agreement.

12







Section
5.6. Commission Documents,
Financial Statements. (a) The Company
has timely filed (giving effect to permissible extensions in accordance with
Rule 12b-25 under the Exchange Act) all Commission Documents. The Company has
delivered or made available to the Investor via EDGAR or otherwise true and
complete copies of the Commission Documents filed with or furnished to the
Commission prior to the Closing Date (including, without limitation, the 2013
Form 10-K). No Subsidiary of the Company is required to file or furnish any
report, schedule, registration, form, statement, information or other document
with the Commission. As of its filing date, each Commission Document filed with
or furnished to the Commission prior to the Closing Date (including, without
limitation, the 2013 Form 10-K) complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and other
federal, state and local laws, rules and regulations applicable to it, and, as
of its filing date (or, if amended or superseded by a filing prior to the
Closing Date, on the date of such amended or superseded filing), such Commission
Document did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Registration Statement, on the date it is filed with
the Commission, on the date it is declared effective by the Commission, on each
Draw Down Exercise Date and on each Settlement Date, shall comply in all
material respects with the requirements of the Securities Act (including,
without limitation, Rule 415 under the Securities Act) and shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, except that this representation and warranty shall not apply to
statements in or omissions from the Registration Statement made in reliance upon
and in conformity with information relating to the Investor furnished to the
Company in writing by or on behalf of the Investor expressly for use therein.
The Prospectus and each Prospectus Supplement required to be filed pursuant to
this Agreement or the Registration Rights Agreement after the Closing Date, when
taken together, on its date, on each Draw Down Exercise Date and on each
Settlement Date, shall comply in all material respects with the requirements of
the Securities Act (including, without limitation, Rule 424(b) under the
Securities Act) and shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that this representation and warranty
shall not apply to statements in or omissions from the Prospectus or any
Prospectus Supplement made in reliance upon and in conformity with information
relating to the Investor furnished to the Company in writing by or on behalf of
the Investor expressly for use therein. Each Commission Document (other than the
Registration Statement, the Prospectus or any Prospectus Supplement) to be filed
with or furnished to the Commission after the Closing Date and incorporated by
reference in the Registration Statement, the Prospectus or any Prospectus
Supplement required to be filed pursuant to this Agreement or the Registration
Rights Agreement (including, without limitation, the Current Report), when such
document is filed with or furnished to the Commission and, if applicable, when
such document becomes effective, as the case may be, shall
comply in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and other federal, state and local laws, rules
and regulations applicable to it, and shall not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company has
delivered or made available to the Investor via EDGAR or otherwise true and
complete copies of all comment letters and substantive correspondence received
by the Company from the Commission relating to the Commission Documents filed
with or furnished to the Commission as of the Closing Date, together with all
written responses of the Company thereto in the form such responses were filed
via EDGAR. There are no outstanding or unresolved comments or undertakings in
such comment letters received by the Company from the Commission. The Commission
has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company under the Securities Act or the
Exchange Act.

13








(b) The financial statements,
together with the related notes and schedules, of the Company included in the
Commission Documents comply as to form in all material respects with all
applicable accounting requirements and the published rules and regulations of
the Commission and all other applicable rules and regulations with respect
thereto. Such financial statements, together with the related notes and
schedules, have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements), and fairly present in all material respects
the financial condition of the Company and its consolidated Subsidiaries as of
the dates thereof and the results of operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments). 

(c) The Company has timely filed
with the Commission and made available to the Investor via EDGAR or otherwise
all certifications and statements required by (x) Rule 13a-14 or Rule 15d-14
under the Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the
Sarbanes-Oxley Act of 2002 (“SOXA”)) with respect
to all relevant Commission Documents. The Company is in compliance in all
material respects with the provisions of SOXA applicable to it as of the date
hereof. The Company maintains disclosure controls and procedures required by
Rule 13a-15 or Rule 15d-15 under the Exchange Act, except as disclosed on
Schedule 5.6(c); such controls and procedures are effective to ensure that all
material information concerning the Company and its Subsidiaries is made known
on a timely basis to the individuals responsible for the timely and accurate
preparation of the Company’s Commission filings and other public disclosure
documents. As used in this Section 5.6(c), the term “file” shall be broadly
construed to include any manner in which a document or information is furnished,
supplied or otherwise made available to the Commission. 

(d) Fiondella, Milone and
LaSarancina LLP, who shall express their opinion on the audited financial
statements and related schedules to be included or incorporated by reference in
the Registration Statement and the Prospectus are, with respect to the Company,
independent public accountants as required by the Securities Act and is an
independent registered public accounting firm within the meaning of SOXA as
required by the rules of the Public Company Accounting Oversight Board.
Fiondella, Milone and LaSarancina LLP has not been engaged by the Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act). 

14







Section 5.7.
Subsidiaries. The 2013 Form 10-K sets forth each Subsidiary of the Company as of
the Closing Date, showing its jurisdiction of incorporation or organization and
the percentage of the Company’s ownership of the outstanding capital stock or
other ownership interests of such Subsidiary, and the Company does not have any
other Subsidiaries as of the Closing Date. 

Section
5.8. No Material Adverse Effect. Except as disclosed in any Commission Documents
filed since December 31, 2013, or which may be deemed to have resulted from the
Company’s continued losses from operations, since December 31, 2013, the Company
has not experienced or suffered any Material Adverse Effect, and there exists no
current state of facts, condition or event which would have a Material Adverse
Effect. 

Section
5.9. No Undisclosed Liabilities. Neither the Company nor any of its Subsidiaries
has any liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise)
that would be required to be disclosed on a balance sheet of the Company or any
Subsidiary (including the notes thereto) in conformity with GAAP and are not
disclosed in the Commission Documents, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries respective businesses since December
31, 2013 and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect. 

Section
5.10. No Undisclosed Events or Circumstances. No event or circumstance has occurred or
information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, liabilities, operations (including results
thereof) or conditions (financial or otherwise), which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company at
or before the Closing but which has not been so publicly announced or disclosed,
except for events or circumstances which, individually or in the aggregate, do
not or would not have a Material Adverse Effect. 

Section
5.11. Indebtedness; Solvency. The Company’s Quarterly Report on Form 10-Q for its fiscal quarter
ended June 30, 2014 sets forth, as of June 30, 2014, all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments through such date. For the purposes of
this Agreement, “Indebtedness” shall
mean (a) any liabilities for borrowed money or amounts owed in excess of
$1,000,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements, indemnities and other contingent
obligations in respect of Indebtedness of others in excess of $1,000,000,
whether or not the same are or should be reflected in the Company’s balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; and (c) the present value of any lease payments in excess of
$1,000,000 due under leases required to be capitalized in accordance with GAAP.
There is no existing or continuing default or event of default in respect of any
Indebtedness of the Company or any of its Subsidiaries. The Company has not
taken any steps, and does not currently expect to take any steps, to seek
protection pursuant to Title 11 of the United States Code or any similar federal or state bankruptcy law or law for the
relief of debtors, nor does the Company have any Knowledge that its creditors
intend to initiate involuntary bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief under Title 11 of the
United States Code or any other federal or state bankruptcy law or any law for
the relief of debtors. The Company is financially solvent and is generally able
to pay its debts as they become due. 

15







Section
5.12. Title To Assets. Each of the Company and its Subsidiaries has
good and valid title to, or has valid rights to lease or otherwise use, all of
their respective real and personal property reflected in the Commission
Documents, free of mortgages, pledges, charges, liens, security interests or
other encumbrances, except for those indicated in the Commission Documents and
those that would not have a Material Adverse Effect. All real property and
facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company or any of its Subsidiaries.


Section
5.13. Actions Pending. There is no action, suit, claim, investigation
or proceeding pending, or, to the Knowledge of the Company, threatened, against
the Company or any Subsidiary which questions the validity of the Transaction
Documents or the transactions contemplated thereby or any action taken or to be
taken pursuant thereto. Except as set forth in the Commission Documents, there
is no action, suit, claim, investigation or proceeding pending, or to the
Knowledge of the Company threatened, against or involving the Company, any
Subsidiary or any of their respective properties or assets, or involving any
officers or directors of the Company or any of its Subsidiaries, including,
without limitation, any securities class action lawsuit or stockholder
derivative lawsuit related to the Company, in each case which, if determined
adversely to the Company, its Subsidiary or any officer or director of the
Company or its Subsidiaries, would have a Material Adverse Effect. Except as set
forth in the Commission Documents, no judgment, order, writ, injunction or
decree or award has been issued by or, to the Knowledge of the Company,
requested of any court, arbitrator or governmental agency which would be
reasonably expected to result in a Material Adverse Effect. 

Section
5.14. Compliance With Law. The business of the Company and the Subsidiaries
has been and is presently being conducted in compliance with all applicable
federal, state, local and foreign governmental laws, rules, regulations and
ordinances, except as set forth in the Commission Documents and except for such
non-compliance which, individually or in the aggregate, would not have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in
violation of any judgment, decree or order or any statute, ordinance, rule or
regulation applicable to the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries will conduct its business in violation of
any of the foregoing, except in all cases for possible violations which could
not, individually or in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, the Company has maintained all
requirements for the continued listing or quotation of its Common Stock on the
Trading Market, and the Company is not in violation of any of the rules,
regulations or requirements of the Trading Market and has no Knowledge of any
facts or circumstances that could reasonably lead to delisting or suspension of
the Common Stock by the Trading Market in the foreseeable future. 

16







Section
5.15. Certain Fees. No brokers, finders or financial advisory fees
or commissions are or shall be payable by the Company or any Subsidiary (or any
of their respective Affiliates) with respect to the transactions contemplated by
the Transaction Documents. 

Section 5.16.
Disclosure. The
Company confirms that neither it nor any other Person acting on its behalf has
provided the Investor or any of its agents, advisors or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information concerning the Company or any of its
Subsidiaries, other than the existence of the transactions contemplated by the
Transaction Documents. The Company understands and confirms that the Investor
will rely on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to Investor regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated
by the Transaction Documents (including, without limitation, the representations
and warranties of the Company contained in the Transaction Documents to which it
is a party (as modified by the Disclosure Schedule)) furnished by or on behalf
of the Company or any of its Subsidiaries, taken together, is true and correct
and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each
press release issued by the Company or any of its Subsidiaries during the 12
months preceding the Closing Date did not at the time of release (or, if amended
or superseded by a later dated press release issued by the Company or any of its
Subsidiaries prior to the Closing Date or by a later dated Commission Document
filed with or furnished to the Commission by the Company prior to the Closing
Date, at the time of issuance of such later dated press release or filing or
furnishing of such Commission Document, as applicable) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.


17







Section
5.17. Operation of Business. (a) The Company or one or more of its
Subsidiaries possesses such permits, licenses, approvals, consents and other
authorizations (including licenses, accreditation and other similar
documentation or approvals of any local health departments) issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including, without limitation, the U.S. Food and Drug Administration
(“FDA”), as are necessary to conduct the business now
operated by it (collectively, “Governmental Licenses”), except where the failure to possess such Governmental Licenses,
individually or in the aggregate, would not have a Material Adverse Effect. The
Company and its Subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses and all applicable FDA rules and regulations,
guidelines and policies, and all applicable rules and regulations, guidelines
and policies of any governmental authority exercising authority comparable to
that of the FDA (including any non-governmental authority whose approval or
authorization is required under foreign law comparable to that administered by
the FDA), except where the failure to so comply, individually or in the
aggregate, would not have a Material Adverse Effect or except as otherwise
disclosed in the Commission Documents. All of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in full
force and effect, individually or in the aggregate, would not have a Material
Adverse Effect or except as otherwise disclosed in the Commission Documents. As
to each product that is subject to FDA regulation or similar legal
provisions in any foreign jurisdiction that is developed, manufactured,
tested, packaged, labeled, marketed, sold, distributed and/or commercialized by
the Company or any of its Subsidiaries, each such product is being developed,
manufactured, tested, packaged, labeled, marketed, sold, distributed and/or
commercialized in compliance with all applicable requirements of the FDA (and
any non-governmental authority whose approval or authorization is required under
foreign law comparable to that administered by the FDA), including, but not
limited to, those relating to investigational use, investigational device
exemption, premarket notification, premarket approval, good clinical practices,
good manufacturing practices, record keeping, filing of reports, and patient
privacy and medical record security, except where such non-compliance,
individually or in the aggregate, would not have a Material Adverse Effect or
except as otherwise disclosed in the Commission Documents. As to each product or
product candidate of the Company or any of its Subsidiaries subject to FDA
regulation or similar legal provision in any foreign jurisdiction, all
manufacturing facilities of the Company and its Subsidiaries are operated in
compliance with the FDA’s Good Manufacturing Practices requirements at 21 C.F.R.
Part 210 and 211, as applicable, except where such non-compliance, individually
or in the aggregate, would not have a Material Adverse Effect. Except as set
forth in the Commission Documents, neither the Company nor any of its
Subsidiaries has received any written notice of proceedings relating to the
revocation or modification of any such Governmental Licenses or relating to a
potential violation of or failure to comply with any FDA rules and regulations,
guidelines or policies which, if the subject of any unfavorable decision, ruling
or finding, individually or in the aggregate, would have a Material Adverse
Effect. Except as set forth in the Commission Documents, neither the Company nor
any of its Subsidiaries has received any correspondence, notice or request from
the FDA, including, without limitation, notice that any one or more products or
product candidates of the Company or any of its Subsidiaries failed to receive
approval from the FDA for use for any one or more indications that, individually
or in the aggregate, would have a Material Adverse Effect. This Section 5.17
does not relate to environmental matters, such items being the subject of
Section 5.18. 

(b) The Company or one or more of
its Subsidiaries owns or possesses adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names, trade dress, logos,
copyrights and other intellectual property, including, without limitation, all
of the intellectual property described in the Commission Documents as being
owned or licensed by the Company (collectively, “Intellectual Property”), necessary to carry on the business now
operated by it. Except as set forth in the Commission Documents, there are no
actions, suits or judicial proceedings pending, or to the Company’s Knowledge
threatened, relating to patents or proprietary information to which the Company
or any of its Subsidiaries is a party or of which any property of the Company or
any of its Subsidiaries is subject, and neither the Company nor any of its
Subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which could render any Intellectual
Property invalid or inadequate to protect the interest of the Company and its
Subsidiaries therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy,
individually or in the aggregate, would have a Material Adverse Effect.


18







(c) All pre-clinical and clinical
trials conducted by, or on behalf of, the Company or any of its Subsidiaries, or
in which the Company or any of its Subsidiaries has participated that are
described in the Commission Documents, or the results of which are referred to
in the Commission Documents, if any, are the only pre-clinical and clinical
trials currently being conducted by or on behalf of the Company and its
Subsidiaries. All such pre-clinical and clinical trials conducted, supervised or
monitored by, or on behalf of, the Company or any of its Subsidiaries have been
conducted in compliance with all applicable federal, state, local and foreign
laws, and the regulations and requirements of any applicable governmental
entity, including, but not limited to, FDA good clinical practice and good
laboratory practice requirements, except where the failure to so comply,
individually or in the aggregate, would not have a Material Adverse Effect or
except as otherwise disclosed in the Commission Documents. Except as set forth
in the Commission Documents, neither the Company nor any of its Subsidiaries has
received any notices or correspondence from the FDA or any other governmental
agency requiring the termination, suspension, delay or modification of any
pre-clinical or clinical trials conducted by, or on behalf of, the Company or
any of its Subsidiaries or in which the Company or any of its Subsidiaries has
participated that are described in the Commission Documents, if any, or the
results of which are referred to in the Commission Documents. All pre-clinical
and clinical trials previously conducted by, or on behalf of, the Company or any
of its Subsidiaries while conducted by or on behalf of the Company or any of its
Subsidiaries, were conducted in compliance with all applicable federal, state,
local and foreign laws, and the regulations and requirements of any applicable
governmental entity, including, but not limited to, FDA good clinical practice
and good laboratory practice requirements, except where the failure to so
comply, individually or in the aggregate, would not have a Material Adverse
Effect or except as otherwise disclosed in the Commission Documents. 

Section
5.18. Environmental Compliance. Except as disclosed in the Commission Documents,
the Company and each of its Subsidiaries have obtained all material approvals,
authorization, certificates, consents, licenses, orders and permits or other
similar authorizations of all governmental authorities, or from any other
person, that are required under any Environmental Laws, except for any
approvals, authorization, certificates, consents, licenses, orders and permits
or other similar authorizations the failure of which to obtain does not or would
not have a Material Adverse Effect. “Environmental Laws”
shall mean all applicable laws relating to the protection of the environment
including, without limitation, all requirements pertaining to reporting,
licensing, permitting, controlling, investigating or remediating emissions,
discharges, releases or threatened releases of hazardous substances, chemical
substances, pollutants, contaminants or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature, into the air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of hazardous
substances, chemical substances, pollutants, contaminants or toxic substances,
material or wastes, whether solid, liquid or gaseous in nature. Except for such
instances as would not, individually or in the aggregate, have a Material
Adverse Effect, to the Company’s Knowledge, there are no past or present events,
conditions, circumstances, incidents, actions or omissions relating to or in any
way affecting the Company or its Subsidiaries that violate or could reasonably
be expected to violate any Environmental Law after the Closing Date or that
could reasonably be expected to give rise to any environmental liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation (i) under any Environmental Law, or (ii) based
on or related to the manufacture, processing, distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any hazardous substance.


19







Section
5.19. Material Agreements. Except as set forth in the Commission Documents,
neither the Company nor any Subsidiary of the Company is a party to any written
or oral contract, instrument, agreement commitment, obligation, plan or
arrangement, a copy of which would be required to be filed with the Commission
as an exhibit to an annual report on Form 10-K (collectively,
“Material
Agreements”). Except as set
forth in the Commission Documents, the Company and each of its Subsidiaries have
performed in all material respects all the obligations then required to be
performed by them under the Material Agreements, have received no notice of
default or an event of default by the Company or any of its Subsidiaries
thereunder and are not aware of any basis for the assertion thereof, and neither
the Company or any of its Subsidiaries nor, to the Knowledge of the Company, any
other contracting party thereto are in default under any Material Agreement now
in effect, the result of which would have a Material Adverse Effect. Except as
set forth in the Commission Documents, each of the Material Agreements is in
full force and effect, and constitutes a legal, valid and binding obligation
enforceable in accordance with its terms against the Company and/or any of its
Subsidiaries and, to the Knowledge of the Company, each other contracting party
thereto, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting generally the enforcement
of, creditor’s rights and remedies or by other equitable principles of general
application. 

Section
5.20. Transactions With
Affiliates. Except as set
forth in the Commission Documents, there are no loans, leases, agreements,
contracts, royalty agreements, management contracts, service arrangements or
other continuing transactions exceeding $120,000 between (a) the Company or any
Subsidiary, on the one hand, and (b) any person or entity who would be covered
by Item 404(a) of Regulation S-K, on the other hand. Except as disclosed in the
Commission Documents, there are no outstanding amounts payable to or receivable
from, or advances by the Company or any of its Subsidiaries to, and neither the
Company nor any of its Subsidiaries is otherwise a creditor of or debtor to, any
beneficial owner of more than 5% of the outstanding shares of Common Stock, or
any director, employee or affiliate of the Company or any of its Subsidiaries,
other than (i) reimbursement for reasonable expenses incurred on behalf of the
Company or any of its Subsidiaries or (ii) as part of the normal and customary
terms of such person’s employment or service as a director with the Company or
any of its Subsidiaries. 

Section 5.21.
Employees.
Neither the Company nor any
Subsidiary of the Company has any collective bargaining arrangements or
agreements covering any of its employees, except as set forth in the Commission
Documents. Except as disclosed in the Commission Documents, no officer,
consultant or key employee of the Company or any Subsidiary whose termination,
either individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect, has terminated or, to the Knowledge of the Company, has
any present intention of terminating his or her employment or engagement with
the Company or any Subsidiary. 

Section
5.22. Use of Proceeds. The proceeds from the sale of the Shares shall
be used by the Company and its Subsidiaries as set forth in the Prospectus and
any Prospectus Supplement filed pursuant to
Section 2.3 of this Agreement and pursuant to the Registration Rights Agreement.


20







Section
5.23. Investment Company Act
Status. The Company is not,
and as a result of the consummation of the transactions contemplated by the
Transaction Documents and the application of the proceeds from the sale of the
Shares as set forth in the Prospectus and any Prospectus Supplement shall not be
required to be registered as, an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended. 

Section 5.24.
ERISA. No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to any Plan by the Company or any of
its Subsidiaries which has had or would have a Material Adverse Effect. No
“prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of
the Code) or “accumulated funding deficiency” (as defined in Section 302 of
ERISA) or any of the events set forth in Section 4043(b) of ERISA has occurred
with respect to any Plan which has had or would have a Material Adverse Effect,
and the execution and delivery of this Agreement and the issuance and sale of
the Securities hereunder shall not result in any of the foregoing events. Each
Plan is in compliance in all material respects with applicable law, including
ERISA and the Code; the Company has not incurred and does not expect to incur
liability under Title IV of ERISA with respect to the termination of, or
withdrawal from, any Plan; and each Plan for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code is
so qualified in all material respects and nothing has occurred, whether by
action or failure to act, which would cause the loss of such qualifications. As
used in this Section 5.24, the term “Plan” shall mean an
“employee pension benefit plan” (as defined in Section 3 of ERISA) which is or
has been established or maintained, or to which contributions are or have been
made, by the Company or any Subsidiary or by any trade or business, whether or
not incorporated, which, together with the Company or any Subsidiary, is under
common control, as described in Section 414(b) or (c) of the Code. 

Section
5.25.
Taxes. The Company and each of its
Subsidiaries (i) has filed all necessary federal, state and foreign income and
franchise tax returns or has duly requested extensions thereof, except for those
the failure of which to file would not have a Material Adverse Effect, (ii) has
paid all federal, state, local and foreign taxes due and payable for which it is
liable, except to the extent that any such taxes are being contested in good
faith and by appropriate proceedings, except for such taxes the failure of which
to pay would not have a Material Adverse Effect, and (iii) does not have any tax
deficiency or claims outstanding or assessed or, to the Company’s Knowledge,
proposed against it which would have a Material Adverse Effect. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company and its Subsidiaries know of
no basis for any such claim. The Company is not operated in such a manner as to
qualify as a passive foreign investment company, as defined in Section 1297 of
the Code. 

Section
5.26.
Insurance. The Company and
its Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or
applied for, and neither the Company nor any such Subsidiary has any reason to
believe that it will be unable to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect. 

21







Section
5.27. U.S. Real Property Holding
Corporation. Neither the
Company nor any of its Subsidiaries is, or has ever been, and so long as any of
the Securities are held by the Investor, shall become a U.S. real property
holding corporation within the meaning of Section 897 of the Code. 

Section
5.28. Exemption from Registration; Valid
Issuances. Subject to, and in
reliance on, the representations, warranties and covenants made herein by the
Investor, the offer and sale of the Securities in accordance with the terms and
conditions of this Agreement is exempt from the registration requirements of the
Securities Act pursuant to Section 4(a)(2) and Rule 506 of Regulation D;
provided, however, that at the
request of and with the express agreement of the Investor, the Shares and the
Additional Commitment Shares will be delivered to the Investor via book entry
through DTC and will not bear legends noting restrictions as to resale of such
securities under federal or state securities laws, nor will any such securities
be subject to stop transfer instructions. Neither the offer or sale of the
Securities pursuant to, nor the Company’s performance of its obligations under,
the Transaction Documents to which it is a party shall (i) result in the
creation or imposition of any liens, charges, claims or other encumbrances upon
the Securities, or (ii) entitle the holders of any outstanding shares of capital
stock of the Company to preemptive or other rights to subscribe to or acquire
the shares of Common Stock or other securities of the Company. 

Section
5.29. No General Solicitation or
Advertising. Neither the
Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its
or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or
sale of the Securities. 

Section
5.30. No Integrated Offering. None of the Company, its Subsidiaries or any of
their Affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
issuance of any of the Securities under the Securities Act, whether through
integration with prior offerings or otherwise, or cause this offering of the
Securities to require approval of stockholders of the Company under any
applicable stockholder approval provisions, including, without limitation, under
the rules and regulations of the Trading Market. None of the Company, its
Subsidiaries, their Affiliates nor any Person acting on their behalf will take
any action or steps referred to in the preceding sentence that would require
registration of the issuance of any of the Securities under the Securities Act
or cause the offering of any of the Securities to be integrated with other
offerings. 

Section
5.31. Dilutive Effect. The Company is aware and acknowledges that
issuance of the Securities could cause dilution to existing stockholders and
could significantly increase the outstanding number of shares of Common Stock.
The Company further acknowledges that its obligation to issue Shares pursuant to
the terms of a Draw Down in accordance with this Agreement is, in each case, absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company. 

22







Section
5.32. Manipulation of Price. Neither the Company nor any of its officers,
directors or Affiliates has, and, to the Knowledge of the Company, no Person
acting on their behalf has, (i) taken, directly or indirectly, any action
designed or intended to cause or to result in the stabilization or manipulation
of the price of any security of the Company, or which caused or resulted in, or
which would in the future reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security of the Company, in
each case to facilitate the sale or resale of any of the Securities, or (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of,
any of the Securities. Neither the Company nor any of its officers, directors or
Affiliates will during the term of this Agreement, and, to the Knowledge of the
Company, no Person acting on their behalf will during the term of this
Agreement, take any of the actions referred to in the immediately preceding
sentence. 

Section
5.33. Securities Act. The Company has complied and shall comply with
all applicable federal and state securities laws in connection with the offer,
issuance and sale of the Securities hereunder, including, without limitation,
the applicable requirements of the Securities Act. The Registration Statement,
upon filing with the Commission and at the time it is declared effective by the
Commission, shall satisfy all of the requirements of the Securities Act to
register the resale of the Registrable Securities by the Investor in accordance
with the Registration Rights Agreement on a delayed or continuous basis under
Rule 415 under the Securities Act at then-prevailing market prices, and not
fixed prices. The Company is not, and has not previously been at any time, an
issuer identified in, or subject to, Rule 144(i). 

Section
5.34. Listing and Maintenance Requirements; DTC
Eligibility. The Company’s
Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its Knowledge
is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act, nor has the Company received any notification that
the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the Closing Date, received notice from any
Trading Market on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. As of the Closing Date, the Company is in
compliance with all such listing and maintenance requirements. The Common Stock
may be issued and transferred electronically to third parties via DTC through
its Deposit/Withdrawal at Custodian (DWAC) system. The Company has not received
notice from DTC to the effect that a suspension of, or restriction on, accepting
additional deposits of the Common Stock, electronic trading or book-entry
services by DTC with respect to the Common Stock is being imposed or is
contemplated. 

Section
5.35. Application of Takeover
Protections. The Company and
its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Charter or the laws of its state of
incorporation that is or could become applicable to the Investor as a result of
the Investor and the Company fulfilling their respective obligations or
exercising their respective rights under the
Transaction Documents (as applicable), including, without limitation, as a
result of the Company’s issuance of the Securities and the Investor’s ownership
of the Securities. 

23







Section
5.36. Foreign Corrupt Practices Act. None of the Company, any
Subsidiary or, to the Knowledge of the Company, any director, officer, agent,
employee, affiliate or other Person acting on behalf of the Company or any of
its Subsidiaries, is aware of or has taken any action, directly or indirectly,
that would result in a violation by such Persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder
(collectively, the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA. The Company and the Subsidiaries have
conducted their respective businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.


Section
5.37. Money Laundering Laws. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries with respect to the Money Laundering Laws
is pending or, to the Knowledge of the Company, threatened. 

Section 5.38.
OFAC. None of the
Company, any Subsidiary or, to the Knowledge of the Company, any director,
officer, agent, employee, affiliate or Person acting on behalf of the Company or
any of its Subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
Person, for the purpose of financing the activities of any Person currently
subject to any U.S. sanctions administered by OFAC. 

Section
5.39. No Disqualification Events. None of the Company, any of its predecessors,
any affiliated issuer, any director, executive officer, other officer of the
Company participating in the offering contemplated hereby, any beneficial owner
of 20% or more of the Company's outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the Securities Act) connected with the Company in any capacity at the
time of sale (each, an “Issuer
Covered Person”) is subject
to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to
(viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3) under the Securities Act. The Company has exercised reasonable care to
determine whether any Issuer Covered Person is subject to a Disqualification
Event. 

24







Section
5.40. Acknowledgement Regarding Investor’s
Acquisition of Securities.
The Company acknowledges and agrees that the Investor is acting solely in the
capacity of an arm’s length purchaser with respect to this Agreement and the
transactions contemplated by the Transaction Documents. The Company further
acknowledges that the Investor is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated by the Transaction Documents, and any advice given
by the Investor or any of its representatives or agents in connection therewith
is merely incidental to the Investor’s acquisition of the Securities. The
Company further represents to the Investor that the Company’s decision to enter
into the Transaction Documents to which it is a party has been based solely on
the independent evaluation of the transactions contemplated thereby by the
Company and its representatives. The Company acknowledges and agrees that the
Investor has not made and does not make any representations or warranties with
respect to the transactions contemplated by the Transaction Documents other than
those specifically set forth in Article IV of this Agreement. 

ARTICLE VI
ADDITIONAL
COVENANTS 

The Company covenants with
the Investor, and the Investor covenants with the Company, as follows, which
covenants of one party are for the benefit of the other party, during the
Investment Period: 

Section
6.1. Securities Compliance. The Company shall notify the Commission and the
Trading Market, if and as applicable, in accordance with their respective rules
and regulations, of the transactions contemplated by the Transaction Documents,
and shall take all necessary action, undertake all proceedings and obtain all
1s, permits, consents and approvals for the legal and valid issuance of the
Securities to the Investor in accordance with the terms of the Transaction
Documents, as applicable. 

Section
6.2. Reservation of Common Stock. The Company has available and the Company shall
reserve and keep available at all times, free of preemptive and other similar
rights of stockholders, the requisite aggregate number of authorized but
unissued shares of Common Stock to enable the Company to timely effect the
issuance, sale and delivery in full to the Investor of all Securities to be
issued and delivered under this Agreement, in any case prior to the issuance to
the Investor of such Securities. The number of shares of Common Stock so
reserved from time to time, as theretofore increased or reduced as hereinafter
provided, may be reduced by the number of shares of Common Stock actually
delivered pursuant to this Agreement. 

Section
6.3. Registration and Listing. The Company shall take all action necessary to
cause the Common Stock to continue to be registered as a class of securities
under Sections 12(b) or 12(g) of the Exchange Act, shall comply with its
reporting and filing obligations under the Exchange Act, and shall not take any
action or file any document (whether or not permitted by the Securities Act or
the Exchange Act) to terminate or suspend such registration or to terminate or
suspend its reporting and filing obligations under the Exchange Act or
Securities Act, except as permitted herein. The Company shall use its reasonable
best efforts to continue the listing and trading of its Common Stock and the
listing of the Securities purchased or acquired by the Investor hereunder on the
Trading Market and to comply with the Company’s reporting, filing and other obligations under the bylaws, listed
securities maintenance standards and other rules and regulations of the Trading
Market. The Company shall not take any action which could be reasonably expected
to result in the delisting or suspension of the Common Stock on the Trading
Market. If the Company receives any final and non-appealable notice that the
listing or quotation of the Common Stock on the Trading Market shall be
terminated on a date certain, the Company shall promptly (and in any case within
48 hours) notify the Investor of such fact in writing and shall use its
reasonable best efforts to cause the Common Stock to be listed or quoted on
another Trading Market prior to such date certain. 

25







Section
6.4. Compliance with Laws. 

(i) The Company shall comply, and
cause each Subsidiary to comply, (a) with all laws, rules, regulations and
orders applicable to the business and operations of the Company and its
Subsidiaries, except as would not have a Material Adverse Effect and (b) with
all applicable provisions of the Securities Act and the Exchange Act and the
rules and regulations of the Trading Market. Without limiting the foregoing,
neither the Company, nor any of its Subsidiaries, nor to the Knowledge of the
Company, any of their respective directors, officers, agents, employees or any
other Persons acting on their behalf shall, in connection with the operation of
the Company’s and its Subsidiaries’ respective businesses, (1) use any corporate
funds for unlawful contributions, payments, gifts or entertainment or to make
any unlawful expenditures relating to political activity to government
officials, candidates or members of political parties or organizations, (2) pay,
accept or receive any unlawful contributions, payments, expenditures or gifts,
or (3) violate or operate in noncompliance with any export restrictions,
anti-boycott regulations, embargo regulations or other applicable domestic or
foreign laws and regulations, including, without limitation, the FCPA and the
Money Laundering Laws. 

(ii) The Investor shall comply
with all laws, rules, regulations and orders applicable to the performance by it
of its obligations under this Agreement and its investment in the Securities,
except as would not, individually or in the aggregate, prohibit or otherwise
interfere with the ability of the Investor to enter into and perform its
obligations under this Agreement in any material respect. Without limiting the
foregoing, the Investor shall comply with all applicable provisions of the
Securities Act and the Exchange Act, including Regulation M thereunder, and any
applicable securities laws of any non-U.S. jurisdictions. 

Section
6.5. Keeping of Records and Books of Account; Due
Diligence. 

(i) The Company shall keep and
cause each Subsidiary to keep adequate records and books of account, in which
complete entries shall be made in accordance with GAAP consistently applied,
reflecting all financial transactions of the Company and its Subsidiaries, and
in which, for each fiscal year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in connection
with its business shall be made. The Company shall maintain a system of internal
accounting controls that (a) pertain to the maintenance of records that in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company; (b) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (c) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the Company’s financial
statements (it being acknowledged and agreed that the identification by the
Company and/or its independent registered public accounting firm of any
“significant deficiencies” or “material weaknesses” (each as defined by the
Public Company Accounting Oversight Board) in the Company’s internal controls
over its financial reporting shall not, in and of itself, constitute a breach of
this Section 6.5(i)). 

26







(ii) Subject to the requirements
of Section 6.16 of this Agreement, from time to time from and after the Closing
Date, the Company shall make available for inspection and review by the Investor
during normal business hours and after reasonable notice, customary
documentation reasonably requested by the Investor and/or its appointed counsel
or advisors to conduct due diligence; provided, however, that after the Closing Date, the Investor’s continued due diligence
shall not be a condition to the issuance of any Draw Down Notice or the
settlement of any Draw Down. 

Section
6.6. Limitations on Holdings and
Issuances. The Company shall
not issue and the Investor shall not purchase any shares of Common Stock which
would cause the aggregate number of shares of Common Stock then beneficially
owned (as calculated pursuant to Section 13(d) of the Exchange Act and Rule
13d-3 promulgated thereunder) by the Investor and its Affiliates to exceed the
Ownership Limitation. Promptly following any request by the Company, the
Investor shall inform the Company of the number of shares of Common Stock then
beneficially owned by the Investor and its Affiliates.

Section
6.7. Other Agreements and Alternate
Transactions.


(i) The Company shall not enter
into, announce or recommend to its stockholders any agreement, plan, arrangement
or transaction in or of which the terms thereof would restrict, materially
delay, conflict with or impair the ability or right of the Company to perform
its obligations under the Transaction Documents to which it is a party,
including, without limitation, the obligation of the Company to deliver (i) the
Initial Commitment Shares to the Investor not later than 4:00 p.m. (New York
time) on the second Trading Day immediately following the Closing Date, (ii) the
Shares to the Investor in respect of a Draw Down on the applicable Settlement
Date, (iii) the Additional Shares to the Investor in respect of a Draw Down on
the applicable True-Up Settlement Date and (iv) the Additional Commitment Shares
in accordance with Section 10.1. For the avoidance of doubt, nothing in this
Section 6.7(i) shall in any way limit the Company’s right to terminate this
Agreement in accordance with Section 8.1 (subject in all cases to Section 8.3).


27








(ii) If the Company enters into
any agreement, plan, arrangement or transaction with a third party or seeks to
utilize any existing agreement, plan or arrangement with a third party, in each
case the principal purpose of which is to implement, effect or consummate, at
any time during the period beginning on the 10th Trading Day
immediately preceding the applicable Draw Down Exercise Date on which the
Company has delivered a Draw Down Notice and ending on the second Trading Day
next following the applicable True-Up Date therefor (such period, a
“Reference
Period”), an Alternate
Transaction that does not constitute an Acceptable Transaction, the Company
shall provide notice thereof (an “Alternate Transaction Notice”) to the
Investor not later than the earlier of (x) 24 hours after the Company’s
execution of any agreement, plan, arrangement or transaction relating to such
Alternate Transaction (or, with respect to any existing agreement, plan or
arrangement, 24 hours after the Company has determined to utilize any such
existing agreement, plan or arrangement to implement, effect or consummate such
Other Financing) and (y) the applicable True-Up Date. If required under
applicable law, including, without limitation, Regulation FD promulgated by the
Commission, or under the applicable rules and regulations of the Trading Market,
the Company shall simultaneously publicly disclose the information included in
any Alternate Transaction Notice in accordance with Regulation FD and the
applicable rules and regulations of the Trading Market. For purposes of this
Section 6.7(ii), any press release issued by, or Commission Document filed by,
the Company shall constitute sufficient notice, provided that it is issued or
filed, as the case may be, within the time requirements set forth in the first
sentence (including the provisos thereto) of this Section 6.7(ii) for an
Alternate Transaction Notice. With respect to any Reference Period for which the
Company is required to provide an Alternate Transaction Notice pursuant to the
first sentence of this Section 6.7(ii), the Investor shall purchase the Shares
subject to the applicable Draw Down at the lower of (x) the Purchase Price therefor in accordance with the terms of this
Agreement or (y) the third party’s per share purchase price (or exercise or
conversion price, as the case may be) in connection with the Alternate
Transaction, net of such third party’s discounts, Warrant Value and fees.


28







(iii) For all purposes
of this Agreement, an “Alternate Transaction”
shall mean (w) the issuance of Common Stock for a purchase price less than, or
the issuance of securities convertible into or exchangeable for Common Stock at
an exercise or conversion price (as the case may be) less than, the then Current
Market Price of the Common Stock (including, without limitation, pursuant to any
“equity line” or other financing that is substantially similar to the financing
provided for under this Agreement, or pursuant to any other transaction in which
the purchase, conversion or exchange price for such Common Stock is determined
using a floating discount or other post-issuance adjustable discount to the then
Current Market Price (any such transaction, a “Similar Financing”)), in each case, after all fees, discounts,
Warrant Value and commissions associated with the transaction (a
“Below Market
Offering”); (x) an
“at-the-market” offering of Common Stock or securities convertible into or
exchangeable for Common Stock pursuant to Rule 415(a)(4) under the Securities
Act (an “ATM”); (y) the
implementation by the Company of any mechanism in respect of any securities
convertible into or exchangeable for Common Stock for the reset of the purchase
price of the Common Stock to below the then Current Market Price of the Common
Stock (including, without limitation, any antidilution or similar adjustment
provisions in respect of any Company securities, but specifically excluding
customary antidilution adjustments for stock splits, stock dividends, stock
combinations, recapitalizations, reclassifications and similar events) (a
“Price Reset
Provision”); or (z) the
issuance of options, warrants or similar rights of subscription or the issuance
of convertible equity or debt securities, in each case not constituting an
Acceptable Transaction. For all purposes of this Agreement, an
“Acceptable
Transaction” shall mean the
issuance by the Company of: (1) debt securities or any class or series of
preferred stock of the Company, in each case that are not convertible into or
exchangeable for Common Stock or securities convertible into or exchangeable for
Common Stock; (2) shares of Common Stock or securities convertible into or
exchangeable for Common Stock other than in connection with a Below Market
Offering or an ATM, and the issuance of shares of Common Stock upon the
conversion, exercise or exchange thereof; (3) shares of Common Stock or
securities convertible into or exchangeable for Common Stock in connection
with an underwritten public offering of equity securities of the Company or a
registered direct public offering of equity securities of the Company, in each
case where the price per share of such Common Stock (or the conversion or
exercise price of such securities, as applicable) is fixed concurrently with the
execution of definitive documentation relating to such offering, and the
issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof; (4) shares of Common Stock or securities convertible into or
exchangeable for Common Stock in connection with awards under the Company’s
benefit and equity plans and arrangements or shareholder rights plan (as
applicable), and the issuance of shares of Common Stock upon the conversion,
exercise or exchange thereof; (5) shares of Common Stock issuable upon the
conversion, exercise or exchange of equity awards or convertible, exercisable or
exchangeable securities outstanding as of the Closing Date; (6) shares of Common
Stock in connection with stock splits, stock dividends, stock combinations,
recapitalizations, reclassifications and similar events; (7) shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock issued in connection with the acquisition, license or sale of one or more
other companies, equipment, technologies, other assets or lines of business, and
the issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof; (8) shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock or similar rights to subscribe for
the purchase of shares of Common Stock in connection with technology sharing,
collaboration, partnering, licensing, research and joint development agreements
(or amendments thereto) with third parties, and the issuance of shares of Common
Stock upon the conversion, exercise or exchange thereof; (9) shares of Common
Stock or securities convertible into or exchangeable for Common Stock to
employees, consultants and/or advisors as consideration for services rendered or
to be rendered, and the issuance of shares of Common Stock upon the conversion,
exercise or exchange thereof; and (10) shares of Common Stock or securities
convertible into or exchangeable for Common Stock issued in connection with
capital or equipment financings and/or real property lease arrangements, and the
issuance of shares of Common Stock upon the conversion, exercise or exchange
thereof. 

Section
6.8. Corporate Existence. The Company shall take all steps necessary to
preserve and continue the corporate existence of the Company; provided, however, that, except as provided in Section 6.9, nothing
in this Agreement shall be deemed to prohibit the Company from engaging in any
Fundamental Transaction with another Person. For the avoidance of doubt, nothing
in this Section 6.8 shall in any way limit the Company’s right to terminate this
Agreement in accordance with Section 8.1 (subject in all cases to Section 8.3).


Section
6.9. Fundamental Transactions. If a Draw Down Notice has been delivered to the
Investor and the transactions contemplated therein have not yet been fully
settled in accordance with the terms and conditions of this Agreement, the
Company shall not effect any Fundamental Transaction until the expiration of
five Trading Days following the True-Up Settlement Date with respect to such
Draw Down Notice or, if no Additional Shares are required to be issued in
connection with such Draw Down Notice, two Trading Days following the True-Up
Date. 

29







Section
6.10. Delivery of Registration Statement and Prospectus;
Subsequent Changes. In
accordance with the Registration Rights Agreement, the Company shall deliver or
make available to the Investor and its counsel, without charge, an electronic
copy of the Registration Statement, the
Prospectus and all amendments and supplements to the Registration Statement or
Prospectus that are filed with the Commission during any period in which a
Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
Securities Act) is required by the Securities Act to be delivered in connection
with resales of the Registrable Securities, in each case as soon as reasonably
practicable after the filing thereof with the Commission. The Company shall
provide the Investor a reasonable opportunity to comment on a draft of each such
document and shall give due consideration to all such comments. The Company
consents to the use of the Prospectus (and of any Prospectus Supplement thereto)
in accordance with the provisions of the Securities Act and with the securities
or “Blue Sky” laws of the jurisdictions in which the Registrable Securities may
be sold by the Investor, in connection with the resale of the Registrable
Securities and for such period of time thereafter as the Prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the Securities Act) is
required by the Securities Act to be delivered in connection with resales of the
Registrable Securities. If during such period of time any event shall occur that
in the reasonable judgment of the Company and its counsel is required to be set
forth in the Registration Statement, the Prospectus or any Prospectus Supplement
or should be set forth therein in order to make the statements made therein (in
the case of the Prospectus or any Prospectus Supplement, in light of the
circumstances under which they were made) not misleading, or if it is necessary
to amend the Registration Statement or supplement or amend the Prospectus or any
Prospectus Supplement to comply with the Securities Act or any other applicable
law or regulation, the Company shall forthwith (i) notify the Investor to
suspend the resale of Registrable Securities during such period and (ii) prepare
and file with the Commission an appropriate amendment to the Registration
Statement or Prospectus Supplement to the Prospectus, and shall expeditiously
furnish or make available to the Investor an electronic copy thereof, so as to
correct such statement or omission or effect such compliance. 

Section
6.11. Amendments to the Registration Statement;
Prospectus Supplements.
Except as provided in this Agreement and other than periodic reports required to
be filed pursuant to the Exchange Act, the Company shall not file with the
Commission any amendment to the Registration Statement that relates to the
Investor, the Transaction Documents or the transactions contemplated thereby or
file with the Commission any Prospectus Supplement that relates to the Investor,
the Transaction Documents or the transactions contemplated thereby with respect
to which (a) the Investor shall not previously have been advised, or (b) the
Company shall not have given due consideration to any comments thereon received
from the Investor or its counsel, unless it is necessary to amend the
Registration Statement or make any supplement to the Prospectus to comply with
the Securities Act or any other applicable law or regulation, in which case the
Company shall promptly so inform the Investor, the Investor shall be provided
with a reasonable opportunity to review and comment upon any disclosure relating
to the Investor and the Company shall expeditiously furnish to the Investor an
electronic copy thereof. In addition, for so long as, in the reasonable opinion
of counsel for the Investor, the Prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) under the Securities Act) is required to be delivered
in connection with any sales of Registrable Securities by the Investor, the
Company shall not file any Prospectus Supplement without delivering or making
available a copy of such Prospectus Supplement to the Investor promptly.


30








Section
6.12. Stop Orders. The Company shall notify the Investor as soon as
possible (but in no event later than 24 hours), and confirm in writing, upon its
becoming aware of the occurrence of any of the
following events in respect of the Registration Statement or related Prospectus
or Prospectus Supplement relating to an offering of Registrable Securities: (i)
receipt of any request by the Commission or any other federal or state
governmental authority for any additional information relating to the
Registration Statement, the Prospectus or any Prospectus Supplement, or for any
amendment of or supplement to the Registration Statement, the Prospectus, or any
Prospectus Supplement; (ii) the issuance by the Commission or any other federal
or state governmental authority of any stop order suspending the effectiveness
of the Registration Statement or prohibiting or suspending the use of the
Prospectus or any Prospectus Supplement, or of the suspension of qualification
or exemption from qualification of the Securities for offering or sale in any
jurisdiction, or the initiation or contemplated initiation of any proceeding for
such purpose; and (iii) any event or the existence of any condition or state of
facts, which makes any statement of a material fact made in the Registration
Statement, the Prospectus or any Prospectus Supplement untrue or which requires
the making of any additions to or changes to the statements then made in the
Registration Statement, the Prospectus or any Prospectus Supplement in order to
state a material fact required by the Securities Act to be stated therein or
necessary in order to make the statements then made therein (in the case of the
Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or which requires an amendment to the
Registration Statement or a supplement to the Prospectus or any Prospectus
Supplement to comply with the Securities Act or any other law (other than the
transactions contemplated by any Draw Down Notice and the settlement thereof).
The Company shall not be required to disclose to the Investor the substance or
specific reasons of any of the events set forth in clauses (i) through (iii) of
the immediately preceding sentence, but rather, shall only be required to
disclose that the event has occurred. The Company shall not issue any Draw Down
during the continuation of any of the foregoing events. If at any time the
Commission or any other federal or state governmental authority shall issue any
stop order suspending the effectiveness of the Registration Statement or
prohibiting or suspending the use of the Prospectus or any Prospectus
Supplement, the Company shall use commercially reasonable efforts to obtain the
withdrawal of such order at the earliest possible time. 

Section
6.13. Selling Restrictions. 

(i) Except
as expressly set forth below, the Investor covenants that from and after the
Closing Date through and including the Trading Day next following the expiration
or termination of this Agreement (the “Restricted Period”),
neither the Investor nor any of its Affiliates nor any entity managed or
controlled by the Investor (collectively, the “Restricted Persons” and each of the foregoing is referred to herein
as a “Restricted
Person”) shall, directly or
indirectly, (x) engage in any Short Sales involving the Company’s securities or
(y) grant any option to purchase, or acquire any right to dispose of or
otherwise dispose for value of, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for any shares of Common Stock,
or enter into any swap, hedge or other similar agreement that transfers, in
whole or in part, the economic risk of ownership of the Common Stock.
Notwithstanding the foregoing, it is expressly understood and agreed that
nothing contained herein shall (without implication that the contrary would
otherwise be true) prohibit any Restricted Person during the Restricted Period
from: (1) selling “long” (as defined under Rule 200 promulgated under Regulation
SHO) the Securities; or (2) selling a number of shares of Common Stock equal to
the number of Shares that such Restricted Person is or may be obligated to purchase under a pending Draw Down Notice but
has not yet taken possession of so long as such Restricted Person (or the
Broker-Dealer, as applicable) delivers the Shares purchased pursuant to such
Draw Down Notice to the purchaser thereof or the applicable Broker-Dealer;
provided, however, such Restricted
Person (or the applicable Broker-Dealer, as applicable) shall not be required to
so deliver any such Shares subject to such Draw Down Notice if the Company fails
for any reason to deliver such Shares or Additional Shares to the Investor on
the applicable Settlement Date or True-Up Settlement Date, respectively, upon
the terms and subject to the provisions of this Agreement. 

31







(ii) In
addition to the foregoing, in connection with any sale of Securities (including
any sale permitted by paragraph (i) above), the Investor shall comply in all
respects with all applicable laws, rules, regulations and orders, including,
without limitation, the requirements of the Securities Act and the Exchange Act.


Section
6.14. Effective Registration Statement. During the Investment Period, the Company shall
use its commercially reasonable efforts to maintain the continuous effectiveness
of the Registration Statement under the Securities Act. 

Section
6.15. Blue Sky. The Company shall take such action, if any, as
is necessary in order to obtain an exemption for or to qualify the Securities
for issuance and sale to the Investor pursuant to the Transaction Documents, at
the request of the Investor, and the subsequent resale of Registrable Securities
by the Investor, in each case, under applicable state securities or “Blue Sky”
laws and shall provide evidence of any such action so taken to the Investor from
time to time following the Closing Date; provided, however, that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 6.15, (y)
subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. 

Section
6.16. Non-Public Information. Neither the Company or any of its Subsidiaries,
nor any of their respective directors, officers, employees or agents shall
disclose any material non-public information about the Company to the Investor,
unless a simultaneous public announcement thereof is made by the Company in the
manner contemplated by Regulation FD. In the event of a breach of the foregoing
covenant by the Company or any of its Subsidiaries, or any of their respective
directors, officers, employees and agents (as determined in the reasonable good
faith judgment of the Investor), (i) the Investor shall promptly provide written
notice of such breach to the Company and (ii) after such notice has been
provided to the Company and in addition to any other remedy provided herein or
in the other Transaction Documents, the Investor shall have the right to make a
public disclosure, in the form of a press release, public advertisement or
otherwise, of such material, non-public information without the prior approval
by the Company, any of its Subsidiaries, or any of their respective directors,
officers, employees or agents; provided that the Company shall have failed to
publicly disclose such material, non-public information within 24 hours
following demand therefor by the Investor. The Investor shall not have any
liability to the Company, any of its Subsidiaries, or any of their respective
directors, officers, employees, stockholders or agents, for any such disclosure.


32







Section 6.17.
Broker/Dealer. The
Investor shall use one or more broker-dealers to effectuate all sales, if any,
of Securities that it may purchase or otherwise acquire from the Company
pursuant to the Transaction Documents, as applicable, which (or whom) shall be
unaffiliated with the Investor and not then currently engaged or used by the
Company (collectively, the “Broker-Dealer”). The
Investor shall, from time to time, provide the Company with all information
regarding the Broker-Dealer reasonably requested by the Company. The Investor
shall be solely responsible for all fees and commissions of the Broker-Dealer,
which shall not exceed customary brokerage fees and commissions. 

Section
6.18. Disclosure Schedule. 

(i) The
Company may, from time to time, update the Disclosure Schedule as may be
required to satisfy the condition set forth in Section 7.2(i). For purposes of
this Section 6.18, any disclosure made in a schedule to the Compliance
Certificate substantially in the form attached hereto as Exhibit D shall be deemed to be an update of the Disclosure Schedule.
Notwithstanding anything in this Agreement to the contrary, no update to the
Disclosure Schedule pursuant to this Section 6.18 shall cure any breach of a
representation or warranty of the Company contained in this Agreement and made
prior to the update and shall not affect any of the Investor’s rights or
remedies with respect thereto. 

(ii) Notwithstanding anything to the contrary contained in the Disclosure
Schedule or in this Agreement, the information and disclosure contained in any
Schedule of the Disclosure Schedule shall be deemed to be disclosed and
incorporated by reference in any other Schedule of the Disclosure Schedule as
though fully set forth in such Schedule for which applicability of such
information and disclosure is readily apparent on its face. The fact that any
item of information is disclosed in the Disclosure Schedule shall not be
construed to mean that such information is required to be disclosed by this
Agreement. Except as expressly set forth in this Agreement, such information and
the thresholds (whether based on quantity, qualitative characterization, dollar
amounts or otherwise) set forth herein shall not be used as a basis for
interpreting the terms “material” or “Material Adverse Effect” or other similar
terms in this Agreement.

ARTICLE
VII
CONDITIONS TO CLOSING
AND CONDITIONS TO THE SALE AND
PURCHASE OF THE SHARES 

Section
7.1. Conditions Precedent to
Closing. The Closing is
subject to the satisfaction of each of the conditions set forth in this Section
7.1. 

(i) Accuracy of the Investor’s Representations and
Warranties. The
representations and warranties of the Investor contained in this Agreement (a)
that are not qualified by “materiality” shall be true and correct in all
material respects as of the Closing Date, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct in all material
respects as of such other date and (b) that are qualified by “materiality” shall
be true and correct as of the Closing Date, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct as of such other date.


33







(ii) Accuracy of the Company’s Representations and
Warranties. The
representations and warranties of the Company contained in this Agreement (a)
that are not qualified by “materiality” or “Material Adverse Effect” shall be
true and correct in all material respects as of the Closing Date, except to the
extent such representations and warranties are as of another date, in which
case, such representations and warranties shall be true and correct in all
material respects as of such other date and (b) that are qualified by
“materiality” or “Material Adverse Effect” shall be true and correct as of the
Closing Date, except to the extent such representations and warranties are as of
another date, in which case, such representations and warranties shall be true
and correct as of such other date. 

(iii) Payment of Document Preparation Fee; Issuance of
Initial
Commitment
Shares. Prior to the Closing, the Company shall have paid
by wire transfer of immediately available funds to an account designated by the
Investor, the total Document Preparation Fee in accordance with Section 10.1(i)
hereof, all of which fees shall be non-refundable when paid regardless of
whether any Draw Downs are issued by the Company or settled hereunder. On the
Closing Date, the Company shall deliver irrevocable instructions to its transfer
agent to issue to the Investor, not later than 4:00 p.m. (New York City time) on
the second Trading Day immediately following the Closing Date, a certificate
representing the Initial Commitment Shares in the name of the Investor or its
designee (in which case such designee name shall have been provided to the
Company prior to the Closing Date), in consideration for the Investor’s
execution and delivery of this Agreement. Such certificate shall be delivered to
the Investor by overnight courier at its address set forth in Section 10.4
hereof. For the avoidance of doubt, all of the Initial Commitment Shares shall
be fully earned as of the Closing Date regardless of whether any Draw Downs are
issued by the Company or settled hereunder. 

(iv) Closing Deliverables.
At the Closing, counterpart signature pages of this Agreement and the
Registration Rights Agreement executed by each of the parties hereto shall be
delivered as provided in Section 2.2. Simultaneously with the execution and
delivery of this Agreement and the Registration Rights Agreement, the Investor’s
counsel shall have received (a) an opinion of outside counsel to the Company,
dated the Closing Date, in the form mutually agreed to by the parties hereto
prior to the date hereof, (b) a certificate from the Company, dated the Closing
Date, in the form of Exhibit
C hereto, and (c) a copy of the
irrevocable instructions to the Company’s transfer agent regarding the issuance
to the Investor of the certificate representing the Initial Commitment Shares.


Section
7.2. Conditions Precedent to a
Draw Down. The right of
the Company to deliver a Draw Down Notice and the obligation of the Investor to
accept a Draw Down Notice and to acquire and pay for the Shares in accordance
therewith is subject to the satisfaction, at each Draw Down Exercise Date, of
each of the conditions set forth in this Section 7.2. 

(i) Accuracy of the Company’s Representations and
Warranties. The
representations and warranties of the Company contained in this Agreement (a)
that are not qualified by “materiality” or “Material Adverse Effect” shall have
been true and correct in all material respects when made and shall be true and
correct in all material respects as of the applicable Draw Down Exercise Date
with the same force and effect as if made on such dates, except to the extent
such representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct in all material
respects as of such other date and (b) that
are qualified by “materiality” or “Material Adverse Effect” shall have been true
and correct when made and shall be true and correct as of the applicable Draw
Down Exercise Date with the same force and effect as if made on such dates,
except to the extent such representations and warranties are as of another date,
in which case, such representations and warranties shall be true and correct as
of such other date. 

34







(ii) Performance of the Company. The Company shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement and the Registration Rights Agreement to be performed, satisfied or
complied with by the Company at or prior to the applicable Draw Down Exercise
Date. The Company shall deliver to the Investor on the applicable Draw Down
Exercise Date the Compliance Certificate substantially in the form attached
hereto as Exhibit
D. 

(iii) Registration Statement Effective. The Registration Statement covering the resale
by the Investor of the Registrable Securities shall have been declared effective
under the Securities Act by the Commission and shall remain effective, and the
Investor shall be permitted to utilize the Prospectus therein to resell (a) all
of the Initial Commitment Shares [and all of the Additional Commitment Shares
(if any) issuable pursuant to this Agreement], (b) all of the Shares issued
pursuant to all prior Draw Down Notices, and (c) all of the Shares issuable
pursuant to the applicable Draw Down Notice. 

(iv) No Material Notices.
None of the following events shall have occurred and be continuing: (a) receipt
of any request by the Commission or any other federal or state governmental
authority for any additional information relating to the Registration Statement,
the Prospectus or any Prospectus Supplement, or for any amendment of or
supplement to the Registration Statement, the Prospectus, or any Prospectus
Supplement; (b) the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus or
any Prospectus Supplement, or of the suspension of qualification or exemption
from qualification of the Securities for offering or sale in any jurisdiction,
or the initiation or contemplated initiation of any proceeding for such purpose;
or (c) the occurrence of any event or the existence of any condition or state of
facts, which makes any statement of a material fact made in the Registration
Statement, the Prospectus or any Prospectus Supplement untrue or which requires
the making of any additions to or changes to the statements then made in the
Registration Statement, the Prospectus or any Prospectus Supplement in order to
state a material fact required by the Securities Act to be stated therein or
necessary in order to make the statements then made therein (in the case of the
Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or which requires an amendment to the
Registration Statement or a supplement to the Prospectus or any Prospectus
Supplement to comply with the Securities Act or any other law (other than the
transactions contemplated by the applicable Draw Down Notice and the settlement
thereof). The Company shall have no Knowledge of any event that could reasonably
be expected to have the effect of causing the suspension of the effectiveness of
the Registration Statement or the prohibition or suspension of the use of the
Prospectus or any Prospectus Supplement in connection with the resale of the
Registrable Securities by the Investor. 

35







(v) Other Commission Filings. The Current Report and the Form D shall have been filed with the
Commission as required pursuant to Section 2.3, and the final Prospectus and all
other Prospectus Supplements required to have been filed with the Commission
pursuant to Section 2.3 and pursuant to the Registration Rights Agreement shall
have been filed with the Commission in accordance with Section 2.3 and the
Registration Rights Agreement. All reports, schedules, registrations, forms,
statements, information and other documents required to have been filed by the
Company with the Commission pursuant to the reporting requirements of the
Exchange Act, including all material required to have been filed pursuant to
Section 13(a) or 15(d) of the Exchange Act, shall have been filed with the
Commission and, if any Registrable Securities are covered by a Registration
Statement on Form S-3, such filings shall have been made within the applicable
time period prescribed for such filing under the Exchange Act. 

(vi) No Suspension of Trading in or Notice of Delisting of Common
Stock. Trading in the Common
Stock shall not have been suspended by the Commission, the Trading Market or the
FINRA (except for any suspension of trading of limited duration agreed to by the
Company, which suspension shall be terminated prior to the applicable Draw Down
Exercise Date), the Company shall not have received any final and non-appealable
notice that the listing or quotation of the Common Stock on the Trading Market
shall be terminated on a date certain (unless, prior to such date certain, the
Common Stock is listed or quoted on any other Trading Market), trading in
securities generally as reported on the Trading Market shall not have been
suspended or limited, nor shall a banking moratorium have been declared either
by the U.S. or New York State authorities (except for any suspension, limitation
or moratorium which shall be terminated prior to the applicable Draw Down
Exercise Date), there shall not have been imposed any suspension of, or
restriction on, accepting additional deposits of the Common Stock, electronic
trading or book-entry services by DTC with respect to the Common Stock that is
continuing, the Company shall not have received any notice from DTC to the
effect that a suspension of, or restriction on, accepting additional deposits of
the Common Stock, electronic trading or book-entry services by DTC with respect
to the Common Stock is being imposed or is contemplated (unless, prior to such
suspension or restriction, DTC shall have notified the Company in writing that
DTC has determined not to impose any such suspension or restriction), nor shall
there have occurred any material outbreak or escalation of hostilities or other
national or international calamity or crisis that has had or would reasonably be
expected to have a material adverse change in any U.S. financial, credit or
securities market that is continuing.

(vii) Compliance with Laws.
The Company shall have complied with all applicable federal, state and local
governmental laws, rules, regulations and ordinances in connection with the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the Company
shall have obtained all permits and qualifications required by any applicable
state securities or “Blue Sky” laws for the offer and sale of the Securities by
the Company to the Investor and the subsequent resale of the Registrable
Securities by the Investor (or shall have the availability of exemptions
therefrom). 

(viii) No Injunction. No
statute, regulation, order, decree, writ, ruling or injunction shall have been
enacted, entered, promulgated, threatened or endorsed by any court or governmental authority of competent jurisdiction
which prohibits the consummation of or which would materially modify or delay
any of the transactions contemplated by the Transaction Documents.


36







(ix) No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or
governmental authority shall have been commenced or threatened, and no inquiry
or investigation by any governmental authority shall have been commenced or
threatened, against the Company or any Subsidiary, or any of the officers,
directors or affiliates of the Company or any Subsidiary, seeking to restrain,
prevent or change the transactions contemplated by the Transaction Documents, or
seeking material damages in connection with such transactions. 

(x) Aggregate Limit.
The issuance and sale of the
Shares issuable pursuant to such Draw Down Notice shall not violate Sections
3.1, 3.6 and 6.6 hereof. 

(xi) Securities Authorized and Delivered.
The Shares issuable pursuant to such Draw Down Notice shall have been duly
authorized by all necessary corporate action of the Company. The Company shall
have delivered all Shares (including all Additional Shares) relating to all
prior Draw Down Notices and all Additional Commitment Shares required to be
delivered pursuant to this Agreement, as applicable. 

(xii) Listing of Securities. All of the Securities
that may be issued pursuant to this Agreement shall have been approved for
listing or quotation on the Trading Market as of the Closing Date, subject only
to notice of issuance. 

(xiii) No Material Adverse Effect. No condition,
occurrence, state of facts or event constituting a Material Adverse Effect shall
have occurred and be continuing. 

(xiv) No Restrictive Legends. If requested by the Investor from and after the Effective Date, the
Company shall have either (i) issued and delivered (or caused to be issued and
delivered) to the Investor a certificate representing the Initial Commitment
Shares that is free from all restrictive and other legends or (ii) caused the
Company’s transfer agent to credit the Investor’s or its designee’s account at
DTC through its Deposit/Withdrawal at Custodian (DWAC) system with a number of
shares of Common Stock equal to the number of Initial Commitment Shares
represented by the certificate delivered by the Investor to the Company in
accordance with Section 10.1(iv) of this Agreement. 

(xv) Opinion of Counsel; Bring-Down. Prior to the first Draw Down Exercise Date, the Investor shall have
received an opinion from outside counsel to the Company, in the form mutually
agreed to by the parties hereto prior to the date hereof. On each Settlement
Date, the Investor shall receive an opinion “bring down” from outside counsel to
the Company, dated the applicable Settlement Date, in the form mutually agreed
to by the parties hereto prior to the date hereof. 

37







ARTICLE VIII
TERMINATION


Section 8.1.
Termination. Unless earlier
terminated as provided hereunder, this Agreement shall terminate automatically
on the earliest to occur of (i) the first day of the month next
following the 24-month anniversary of the Effective Date, (ii) the date on which
the Investor shall have purchased or acquired shares of Common Stock pursuant to
this Agreement equal to the Aggregate Limit and (iii) the date on which the
Common Stock shall have failed to be listed or quoted on a Trading Market.
Subject to Section 8.3, the Company may terminate this Agreement effective upon
one Trading Day’s prior written notice to the Investor in accordance with
Section 10.4; provided, however, that (A) the Company shall have paid all fees and amounts and issued
all Commitment Shares owed to the Investor or its counsel, as applicable,
pursuant to Section 10.1 of this Agreement, prior to such termination, and (B)
prior to issuing any press release, or making any public statement or
announcement, with respect to such termination, the Company shall consult with
the Investor and its counsel on the form and substance of, and shall give due
consideration to all comments of the Investor and its counsel on, such press
release or other disclosure. Subject to Section 8.3, this Agreement may be
terminated at any time by the mutual written consent of the parties, effective
as of the date of such mutual written consent unless otherwise provided in such
written consent. 

Section 8.2. Other
Termination. Subject to
Section 8.3, the Investor shall have the right to terminate this Agreement
effective upon one Trading Day’s prior written notice to the Company in
accordance with Section 10.4, if: (i) any condition, occurrence, state of facts
or event constituting a Material Adverse Effect has occurred and is continuing;
(ii) the Company shall have entered into any agreement, plan, arrangement or
transaction with a third party or shall have determined to utilize any existing
agreement, plan or arrangement with a third party, in each case the principal
purpose of which is to implement, effect or consummate at any time during the
Investment Period a Similar Financing, an ATM or a Price Reset Provision; (iii)
a Fundamental Transaction shall have occurred; (iv) (A) the Registration
Statement is not filed by the Filing Deadline (as defined in the Registration
Rights Agreement) or declared effective by the Effectiveness Deadline (as
defined in the Registration Rights Agreement), or (B) the Company is otherwise
in breach or default in any material respect under any of the other provisions
of the Registration Rights Agreement, and in the case of this clause (B), if
such failure, breach or default is capable of being cured, such failure, breach
or default is not cured within 10 Trading Days after notice of such failure,
breach or default is delivered to the Company pursuant to Section 10.4; (v)
while the Registration Statement is required to be maintained effective pursuant
to the terms of the Registration Rights Agreement and the Investor holds any
Registrable Securities, the effectiveness of the Registration Statement lapses
for any reason (including, without limitation, the issuance of a stop order) or
the Registration Statement, the Prospectus or any Prospectus Supplement is
otherwise unavailable to the Investor for the resale of all of the Registrable
Securities in accordance with the terms of the Registration Rights Agreement,
and such lapse or unavailability continues for a period of 20 consecutive
Trading Days or for more than an aggregate of 60 Trading Days in any 365-day
period, other than due to acts of the Investor; (vi) trading in the Common Stock
on the Trading Market shall have been suspended and such suspension continues
for a period of five consecutive Trading Days or for more than an aggregate of
20 Trading Days in any 365-day period; (vii) the Company has filed for and/or is
subject to any bankruptcy, insolvency, reorganization or liquidation proceedings
or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors instituted by or against the
Company or (viii) the Company is in material breach or default of this
Agreement, and, if such breach or default is capable of being cured, such breach
or default is not cured within 10 Trading Days after notice of such breach or
default is delivered to the Company pursuant to Section 10.4. Unless
notification thereof is required elsewhere in this Agreement (in which case such
notification shall be provided in accordance with such other provision), the
Company shall promptly (but in no event later than 24 hours) notify the Investor
(and, if required under applicable law, including, without limitation,
Regulation FD promulgated by the Commission, or under the applicable rules and
regulations of the Trading Market, the Company shall publicly disclose such
information in accordance with Regulation FD and the applicable rules and
regulations of the Trading Market) upon becoming aware of any of the events set
forth in the immediately preceding sentence. 

38







Section 8.3. Effect
of Termination. In the event
of termination by the Company or the Investor pursuant to Section 8.1 or 8.2, as
applicable, written notice thereof shall forthwith be given to the other party
as provided in Section 10.4 and the transactions contemplated by this Agreement
shall be terminated without further action by either party. If this Agreement is
terminated as provided in Section 8.1 or 8.2 herein, this Agreement shall become
void and of no further force and effect, except that (i) the provisions of
Article V (Representations, Warranties and Covenants of the Company), Article IX
(Indemnification), Article X (Miscellaneous) and this Article VIII (Termination)
shall remain in full force and effect indefinitely notwithstanding such
termination, and, (ii) so long as the Investor owns any Securities, the
covenants and agreements of the Company contained in Article VI (Additional
Covenants) shall remain in full force and notwithstanding such termination for a
period of six months following such termination. Notwithstanding anything in
this Agreement to the contrary, no termination of this Agreement by any party
shall (i) become effective prior to (A) the first Trading Day immediately
following the True-Up Settlement Date related to any pending Draw Down Notice
that has not been fully settled in accordance with the terms and conditions of
this Agreement or (B) if no Additional Shares are required to be issued in
respect of such pending Draw Down Notice, the first Trading Day immediately
following the True-Up Date related to such pending Draw Down Notice (it being
hereby acknowledged and agreed that no termination of this Agreement shall
limit, alter, modify, change or otherwise affect any of the Company’s or the
Investor’s rights or obligations under the Transaction Documents with respect to
any pending Draw Down, and that the parties shall fully perform their respective
obligations with respect to any such pending Draw Down under the Transaction
Documents), (ii) limit, alter, modify, change or otherwise affect the Company’s
or the Investor’s rights or obligations under the Registration Rights Agreement,
all of which shall survive any such termination, (iii) affect any Initial
Commitment Shares previously issued or delivered, or any rights of any holder
thereof (it being hereby acknowledged and agreed that all of the Commitment
Shares shall be fully earned as of the Closing Date, regardless of whether any
Draw Downs are issued by the Company or settled hereunder), (iv) affect any
Additional Commitment Shares previously issued or delivered (if any), or any
rights of any holder thereof (it being hereby acknowledged and agreed that all
of the Additional Commitment Shares shall be fully earned as of the date such
shares are required to be issued to the Investor under this Agreement,
regardless of whether any Draw Downs are issued by the Company or settled
hereunder), or (v) affect any cash fees paid to the Investor pursuant to Section
10.1 (including, without limitation, the Document Preparation Fee), in each case
all of which fees shall be non-refundable when paid regardless of whether any
Draw Downs are issued by the Company or
settled hereunder. Nothing in this Section 8.3 shall be deemed to release the
Company or the Investor from any liability for any breach or default under this
Agreement or any of the other Transaction Documents to which it is a party, or
to impair the rights of the Company and the Investor to compel specific
performance by the other party of its obligations under the Transaction
Documents to which it is a party. 

39







ARTICLE
IX
INDEMNIFICATION 

Section
9.1. Indemnification of Investor. In consideration of the Investor’s execution and
delivery of this Agreement and acquiring the Shares hereunder and in addition to
all of the Company’s other obligations under the Transaction Documents to which
it is a party, subject to the provisions of this Section 9.1, the Company shall
indemnify and hold harmless the Investor, each of its directors, officers,
shareholders, members, partners, employees, representatives, agents and advisors
(and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding the lack of such title or any other title), each
Person, if any, who controls the Investor (within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act), and the respective
directors, officers, shareholders, members, partners, employees,
representatives, agents and advisors (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding the lack of such
title or any other title) of such controlling Persons (each, an
“Investor
Party”), from and against all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses (including all judgments, amounts paid in settlement, court costs,
reasonable attorneys’ fees and costs of defense and investigation)
(collectively, “Damages”) that any
Investor Party may suffer or incur as a result of or relating to (a) any breach
of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents to which it is a
party or (b) any action, suit, claim or proceeding (including for these purposes
a derivative action brought on behalf of the Company) instituted against such
Investor Party arising out of or resulting from the execution, delivery,
performance or enforcement of the Transaction Documents, other than claims for
indemnification within the scope of Section 6 of the Registration Rights
Agreement; provided, however, that (x) the foregoing indemnity shall not apply to any Damages to the
extent, but only to the extent, that such Damages resulted directly and
primarily from a breach of any of the Investor’s representations, warranties,
covenants or agreements contained in this Agreement or the Registration Rights
Agreement, and (y) the Company shall not be liable under subsection (b) of this
Section 9.1 to the extent, but only to the extent, that a court of competent
jurisdiction shall have determined by a final judgment (from which no further
appeals are available) that such Damages resulted directly and primarily from
any acts or failures to act, undertaken or omitted to be taken by such Investor
Party through its fraud, bad faith, gross negligence, or willful or reckless
misconduct. 

The Company shall reimburse
any Investor Party promptly upon demand (with accompanying presentation of
documentary evidence) for all legal and other costs and expenses reasonably
incurred by such Investor Party in connection with (i) any action, suit, claim
or proceeding, whether at law or in equity, to enforce compliance by the Company
with any provision of the Transaction Documents or (ii) any other any action,
suit, claim or proceeding, whether at law or in equity, with respect to which it
is entitled to indemnification under this Section 9.1; provided that the Investor shall promptly reimburse the Company for all such
legal and other costs and expenses to the
extent a court of competent jurisdiction determines that any Investor Party was
not entitled to such reimbursement. 

40







An Investor Party’s right
to indemnification or other remedies based upon the representations, warranties,
covenants and agreements of the Company set forth in the Transaction Documents
shall not in any way be affected by any investigation or knowledge of such
Investor Party. Such representations, warranties, covenants and agreements shall
not be affected or deemed waived by reason of the fact that an Investor Party
knew or should have known that any representation or warranty might be
inaccurate or that the Company failed to comply with any agreement or covenant.
Any investigation by such Investor Party shall be for its own protection only
and shall not affect or impair any right or remedy hereunder. 

To the extent that the
foregoing undertakings by the Company set forth in this Section 9.1 may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Damages which is permissible under
applicable law. 

Section
9.2. Indemnification Procedures. Promptly after an Investor Party receives notice
of a claim or the commencement of an action for which the Investor Party intends
to seek indemnification under Section 9.1, the Investor Party will notify the
Company in writing of the claim or commencement of the action, suit or
proceeding; provided, however, that failure to notify the Company will not relieve the Company from
liability under Section 9.1, except to the extent it has been materially
prejudiced by the failure to give notice. The Company will be entitled to
participate in the defense of any claim, action, suit or proceeding as to which
indemnification is being sought, and if the Company acknowledges in writing the
obligation to indemnify the Investor Party against whom the claim or action is
brought, the Company may (but will not be required to) assume the defense
against the claim, action, suit or proceeding with counsel satisfactory to it.
After the Company notifies the Investor Party that the Company wishes to assume
the defense of a claim, action, suit or proceeding, the Company will not be
liable for any further legal or other expenses incurred by the Investor Party in
connection with the defense against the claim, action, suit or proceeding except
that if, in the opinion of counsel to the Investor Party, it would be
inappropriate under the applicable rules of professional responsibility for the
same counsel to represent both the Company and such Investor Party. In such
event, the Company will pay the reasonable fees and expenses of no more than one
separate counsel for all such Investor Parties promptly as such fees and
expenses are incurred. Each Investor Party, as a condition to receiving
indemnification as provided in Section 9.1, will cooperate in all reasonable
respects with the Company in the defense of any action or claim as to which
indemnification is sought. The Company will not be liable for any settlement of
any action effected without its prior written consent, which consent shall not
be unreasonably withheld, delayed or conditioned. The Company will not, without
the prior written consent of the Investor Party, effect any settlement of a
pending or threatened action with respect to which an Investor Party is, or is
informed that it may be, made a party and for which it would be entitled to
indemnification, unless the settlement includes an unconditional release of the
Investor Party from all liability and claims which are the subject matter of the
pending or threatened action. 

The remedies provided for
in this Article IX are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Investor Party at law or in equity.


41







ARTICLE
X
MISCELLANEOUS 

Section
10.1. Fees and Expenses; Commitment
Shares. 

(i) Fees and Expenses.
Each party shall bear its own fees and expenses related to the transactions
contemplated by this Agreement; provided, however, that the Company shall have paid prior to the Closing by wire transfer
of immediately available funds to an account designated by the Investor, a
non-accountable and non-refundable document preparation fee of $25,000,
exclusive of disbursements and out-of-pocket expenses (the “Document Preparation Fee”), in connection with the preparation,
negotiation, execution and delivery of the Transaction Documents and legal due
diligence of the Company, it being acknowledged by the Investor that $12,500 of
such Document Preparation Fee was paid by the Company to the Investor’s counsel
on August 13, 2014. For the avoidance of doubt, the Document Preparation Fee
(and any portion thereof) shall be non-refundable when paid, regardless of
whether any Draw Downs are issued by the Company or settled hereunder. The
Company shall pay all U.S. federal, state and local stamp and other similar
transfer and other taxes and duties levied in connection with issuance of the
Securities pursuant hereto. 

(ii) Commitment Shares. In
consideration for the Investor’s execution and delivery of this Agreement,
concurrently with the execution and delivery of this Agreement on the Closing
Date, the Company shall deliver irrevocable instructions to its transfer agent
to issue to the Investor, not later than 4:00 p.m. (New York City time) on the
second Trading Day immediately following the Closing Date, a certificate
representing the Initial Commitment Shares in the name of the Investor or its
designee (in which case such designee name shall have been provided to the
Company prior to the Closing Date). Such certificate shall be delivered to the
Investor by overnight courier at its address set forth in Section 10.4 hereof.
For the avoidance of doubt, all of the Initial Commitment Shares shall be fully
earned as of the Closing Date, regardless of whether any Draw Downs are issued
by the Company or settled hereunder. Upon issuance, the Initial Commitment
Shares shall constitute “restricted securities” as such term is defined in Rule
144(a)(3) under the Securities Act and, subject to the provisions of subsection
(iv) of this Section 10.1, the certificate representing the Initial Commitment
Shares shall bear the restrictive legend set forth below in subsection (iii) of
this Section 10.1. In addition, not later than 4:00 p.m. (New York City time) on
the Trading Day immediately following the Effective Date, the Company shall, or
shall cause its transfer agent to, electronically transfer to the Investor the
Additional Commitment Shares by crediting the Investor’s or its designees’
account (provided the Investor shall have given the Company written notice of
such designee prior to the Effective Date) at DTC through its Deposit/Withdrawal
at Custodian (DWAC) system, which Additional Commitment Shares shall be freely
tradable and transferable and without restriction on resale pursuant to the
Registration Statement. “Additional Commitment Shares” shall mean a number of shares of duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock (which shall be appropriately
adjusted for any stock splits, stock combinations, stock dividends,
recapitalizations and other similar transactions that occur on or after the date
of this Agreement), rounded up to the nearest whole share, equal to the greater
of (I) zero and (II) the difference of (i) the quotient of (x) $150,000 divided
by (y) the greater of (A) the Effective Date Market Price and (B) $0.006, less
(ii) 9,109,128; provided, however, that in no event shall the Company issue more than an aggregate of
15,890,872 shares of Common Stock (subject to adjustment for any stock splits, stock combinations, stock dividends,
recapitalizations and other similar transactions that occur on or after the date
of this Agreement) as Additional Commitment Shares pursuant to this Agreement.
For the avoidance of doubt, all of the Additional Commitment Shares shall be
fully earned as of the date such shares are required to be issued to the
Investor under this Agreement, regardless of whether any Draw Downs are issued
by the Company or settled hereunder. The Initial Commitment Shares and the
Additional Commitment Shares shall constitute Registrable Securities and shall
be included in the Registration Statement in accordance with the terms of the
Registration Rights Agreement. 

42







(iii) Legends. The
certificate(s) representing the Initial Commitment Shares issued prior to the
Effective Date, except as set forth below, shall bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificate(s)): 

THE OFFER AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE
TO BE SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. 

Notwithstanding the
foregoing and for the avoidance of doubt, all Shares to be issued in respect of
any Draw Down Notice delivered to the Investor pursuant to this Agreement and
any Additional Commitment Shares issued after the Effective Date shall be issued
to the Investor in accordance with Section 3.2 and Section 10.1(ii), as
applicable, by crediting the Investor’s or its designees’ account at DTC through
its Deposit/Withdrawal at Custodian (DWAC) system, and all such Shares and
Additional Commitment Shares (if any) shall be freely tradable and transferable
and without restriction on resale (and no stop-transfer order shall be placed
against transfer thereof), and the Company shall not take any action or give
instructions to any transfer agent of the Company otherwise. 

43







(iv) Removal of Legend.
From and after the Effective Date, the Company shall, no later than two Trading
Days following the delivery by the Investor to the Company or the Company’s
transfer agent (with notice to the Company) of a legended certificate
representing the Initial Commitment Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, if applicable), as directed by the Investor, either:
(A) issue and deliver (or cause to be issued and delivered) to the Investor a
certificate representing such Initial Commitment Shares that is free from all
restrictive and other legends or (B) cause the Company’s transfer agent
to credit the Investor’s or its designee’s account at DTC through its
Deposit/Withdrawal at Custodian (DWAC) system with a number of shares of Common
Stock equal to the number of Initial Commitment Shares represented by the
certificate so delivered by the Investor (the date by which such certificate is
required to be delivered to the Investor or such credit is so required to be
made to the account of the Investor or its designee at DTC pursuant to the
foregoing is referred to herein as the “Required Delivery Date”). If the Company fails on or prior to the
Required Delivery Date to either (i) issue and deliver (or cause to be issued
and delivered) to the Investor a certificate representing the Initial Commitment
Shares that is free from all restrictive and other legends or (ii) cause the
Company’s transfer agent to credit the balance account of the Investor or its
designee at DTC through its Deposit/Withdrawal at Custodian (DWAC) system with a
number of shares of Common Stock equal to the number of Initial Commitment
Shares represented by the certificate delivered by the Investor pursuant hereto,
then, in addition to all other remedies available to the Investor, the Company
shall pay in cash to the Investor on each day after the Required Delivery Date
that the issuance or credit of such shares is not timely effected an amount
equal to 2.0% of the product of (A) the sum of the number of Initial Commitment
Shares not issued to the Investor on a timely basis and to which the Investor is
entitled and (B) the VWAP for the five Trading Day period immediately preceding
the Required Delivery Date. In addition to the foregoing, if the Company fails
to so properly deliver such unlegended certificates or so properly credit the
account of the Investor or its designee at DTC by the Required Delivery Date,
and if on or after the Required Delivery Date the Investor purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Investor of shares of Common Stock that the
Investor anticipated receiving from the Company without any restrictive legend,
then the Company shall, within three Trading Days after the Investor’s request,
pay cash to the Investor in an amount equal to the Investor’s total purchase
price (including brokerage commissions, if any) for the shares of Common Stock
so purchased, at which point the Company’s obligation to deliver a certificate
or credit such Investor’s or its designee’s account at DTC for such shares of
Common Stock shall terminate and such shares shall be cancelled. 

Section
10.2. Specific Enforcement, Consent to Jurisdiction,
Waiver of Jury Trial.


(i) The
Company and the Investor acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that either party shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement by
the other party and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any bond or other
security being required), this being in addition to any other remedy to which
either party may be entitled by law or equity. 

(ii) Each
of the Company and the Investor (a) hereby irrevocably submits to the
jurisdiction of the U.S. District Court and other courts of the United States
sitting in the State of New York for the purposes of any suit, action or
proceeding arising out of or relating to this Agreement, and (b) hereby waives,
and agrees not to assert in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.
Each of the Company and the Investor consents to process being served in any
such suit, action or proceeding by mailing a copy thereof to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 10.2 shall affect or limit any right to serve
process in any other manner permitted by law. 

44







(iii) EACH
OF THE COMPANY AND THE INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR DISPUTES RELATING
HERETO. EACH OF THE COMPANY AND THE INVESTOR (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2. 

Section
10.3. Entire Agreement; Amendment. The Transaction Documents set forth the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements, negotiations and
understandings between the parties, both oral and written, with respect to such
matters. There are no promises, undertakings, representations or warranties by
either party relative to subject matter hereof not expressly set forth in the
Transaction Documents. No provision of this Agreement may be amended by the
parties from and after the date that is one Trading Day immediately preceding
the initial filing of the Registration Statement with the Commission. Subject to
the immediately preceding sentence, no provision of this Agreement may be
amended other than by a written instrument signed by both parties hereto. The
Disclosure Schedule and all exhibits to this Agreement are hereby incorporated
by reference in, and made a part of, this Agreement as if set forth in full
herein. 

Section 10.4.
Notices. Any notice,
demand, request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery or
facsimile (with facsimile machine confirmation of delivery received) at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The address for such communications shall be:


If to the Company:


		Bioheart,
      Inc.
13794 NW 4th
      Street, Suite 212
Sunrise, Florida 33325 	



45







		Telephone Number:
      (954) 835-1500
Fax: (954)
      845-9976
Attention: Mike Tomàs 	
		 	
	
      With a copy (which
      shall not constitute notice) to:
 

		
      Jill Arlene Robbins,
      Esq.
525 93 Street
Surfside, Florida 33154
Telephone Number: (305) 531-1174
Fax:
      (305) 531-1274 
	
		 	
	
      If to the Investor:
      
 

		
      Magna Equities II,
      LLC, a New York
limited liability company
c/o Magna
5 Hanover
      Square
New York, NY 10004
Telephone Number: (347) 491-4240
Fax:
      (646) 737-9948
Attention: Marc Manuel 
	
		 	
	
      With a copy (which
      shall not constitute notice) to: 
 

		
      Greenberg Traurig,
      LLP
The MetLife Building
200 Park Avenue
New York, NY
      10166
Telephone Number: (212)
      801-9200
Fax: (212) 801-6400
Attention: Anthony J. Marsico
      
	



Either party hereto may
from time to time change its address for notices by giving at least 10 days
advance written notice of such changed address to the other party hereto.


Section 10.5.
 Waivers. No provision of this Agreement
may be waived by the parties from and after the date that is one Trading Day
immediately preceding the initial filing of the Registration Statement with the
Commission. Subject to the immediately preceding sentence, no provision of this
Agreement may be waived other than in a written instrument signed by the party
against whom enforcement of such waiver is sought. No failure or delay in the
exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercises thereof or of any other right,
power or privilege.

Section 10.6.
Headings. The article, section and
subsection headings in this Agreement are for convenience only and shall not
constitute a part of this Agreement for any other purpose and shall not be
deemed to limit or affect any of the provisions hereof. Unless the context
clearly indicates otherwise, each pronoun
herein shall be deemed to include the masculine, feminine, neuter, singular and
plural forms thereof. The terms “including,” “includes,” “include” and words of
like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found. 

46







Section 10.7.
Construction. The parties
agree that each of them and their respective counsel has reviewed and had an
opportunity to revise the Transaction Documents and, therefore, the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of the
Transaction Documents. In addition, each and every reference to share prices
(including the Floor Price) and shares of Common Stock in any Transaction
Document shall be subject to adjustment for any stock splits, stock
combinations, stock dividends, recapitalizations and other similar transactions
that occur on or after the date of this Agreement. Any reference in this
Agreement to “Dollars” or “$” shall mean the lawful currency of the United
States of America. 

Section 10.8.
Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. The Company may not assign this Agreement or any rights or obligations
hereunder to any Person without the prior written consent of the Investor, which
may be withheld or delayed in the Investor’s sole discretion, including by any
Fundamental Transaction. The Investor may not assign its rights or obligations
under this Agreement. 

Section
10.9. No Third Party
Beneficiaries. Except as
expressly provided in Article IX, this Agreement is intended only for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person. 

Section
10.10. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal procedural and substantive laws of the
State of New York, without giving effect to the choice of law provisions of such
state that would cause the application of the laws of any other jurisdiction.


Section 10.11.
Survival. The
representations, warranties, covenants and agreements of the Company and the
Investor contained in this Agreement shall survive the execution and delivery
hereof until the termination of this Agreement; provided, however, that (i) the provisions of Article V
(Representations, Warranties and Covenants of the Company), Article VIII
(Termination), Article IX (Indemnification) and this Article X (Miscellaneous)
shall remain in full force and effect indefinitely notwithstanding such
termination, and, (ii) so long as the Investor owns any Securities, the
covenants and agreements of the Company contained in Article VI (Additional
Covenants), shall remain in full force and effect notwithstanding such
termination for a period of six months following such termination. 

Section 10.12.
Counterparts. This
Agreement may be executed in counterparts, all of which taken together shall
constitute one and the same original and binding instrument and shall become
effective when all counterparts have been signed by each party and delivered to
the other parties hereto, it being understood that all parties hereto need not
sign the same counterpart. In the event any signature is
delivered by facsimile, digital or electronic transmission, such transmission
shall constitute delivery of the manually executed original and the party using
such means of delivery shall thereafter cause four additional executed signature
pages to be physically delivered to the other parties within five days of the
execution and delivery hereof. Failure to provide or delay in the delivery of
such additional executed signature pages shall not adversely affect the efficacy
of the original delivery.

47









Section 10.13.
Publicity. The Company shall afford the
Investor and its counsel with a reasonable opportunity to review and comment
upon, shall consult with the Investor and its counsel on the form and substance
of, and shall give due consideration to all such comments from the Investor or
its counsel on, any press release, Commission filing or any other public
disclosure made by or on behalf of the Company relating to the Investor, its
purchases hereunder or any aspect of the Transaction Documents or the
transactions contemplated thereby, prior to the issuance, filing or public
disclosure thereof. For the avoidance of doubt, the Company shall not be
required to submit for review any such disclosure (i) contained in periodic
reports filed with the Commission under the Exchange Act if it shall have
previously provided the same disclosure for review in connection with a previous
filing or (ii) any Prospectus Supplement if it contains disclosure that does not
reference the Investor, its purchases hereunder or any aspect of the Transaction
Documents or the transactions contemplated thereby. The Company agrees and
acknowledges that its failure to fully comply with this provision constitutes a
Material Adverse Effect. 

Section 10.14. Severability. The provisions of this Agreement
are severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement, and this Agreement shall be reformed and construed as if such
invalid or illegal or unenforceable provision, or part of such provision, had
never been contained herein, so that such provisions would be valid, legal and
enforceable to the maximum extent possible. 

Section
10.15. Further Assurances. From and after the Closing Date, upon the request of the Investor or
the Company, each of the Company and the Investor shall execute and deliver such
instrument, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement. 

[Signature Page Follows]


48







IN WITNESS
WHEREOF, the parties hereto have
caused this Agreement to be duly executed by their respective authorized officer
as of the date first above written. 


	BIOHEART, INC. 
	
			       		
			       		
	              	By:	       	/s/Mike Tomàs	
		Name: 		Mike Tomàs	
		Title:		President & CEO	
	       				
	       				
	MAGNA EQUITIES II, LLC, a New
York limited liability
      company: 

			       		
			       		
		
      By:
		
      /s/ Joshua Sason
	
		
      Name:
		
      Joshua Sason
	
		Title:		CEO	




49







ANNEX I TO
THE
COMMON STOCK PURCHASE
AGREEMENT
DEFINITIONS


“Acceptable Transaction” shall have the meaning assigned to such term in
Section 6.7(iii) hereof. 

“Additional Commitment Shares” shall have the meaning assigned to such term in
Section 10.1(ii) hereof. 

“Additional Shares” shall have the meaning assigned to such term in
Section 3.2(b) hereof. 

“Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with a Person, as such terms are used in and construed under Rule
144. With respect to the Investor, without limitation, any Person owning, owned
by, or under common ownership with the Investor, and any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as the Investor will be deemed to be an Affiliate. 

“Aggregate Limit” shall have the meaning assigned to such term in
Section 2.1 hereof. 

“Agreement” shall have the meaning assigned to such term in
the preamble hereof. 

“Alternate Transaction” shall have the meaning assigned to such term in
Section 6.7(iii) hereof. 

“Alternate Transaction Notice” shall have the meaning assigned to such term in
Section 6.7(ii) hereof. 

“Announcement Date” shall have the meaning assigned to such term in
Section 3.7 hereof. 

“ATM” shall have the meaning assigned to such term in Section 6.7(iii)
hereof. 

“Average Trading Volume” means the average trading volume of the Common
Stock on the Trading Market for the 10 Trading Days immediately prior to the
applicable Draw Down Exercise Date. 

“Below Market Offering” shall have the meaning assigned to such term in
Section 6.7(iii) hereof. 

“Broker-Dealer” shall have the meaning assigned to such term in
Section 6.17 hereof. 

“Bylaws” shall have the meaning assigned to such term in Section 5.3 hereof.


“Charter” shall have the meaning assigned to such term in Section 5.3 hereof.


“Closing” shall have the meaning assigned to such term in Section 2.2 hereof.


i







“Closing Date” means the date of this Agreement. 

“Closing Sale Price” means, with respect to any particular Trading
Day, the closing trade price of a share of Common Stock on the Trading Market
for such Trading Day, as reported by Bloomberg, L.P., or, if the Trading Market
begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of a share of Common Stock on the Trading
Market prior to 4:00 p.m., New York City time, as reported by Bloomberg, L.P.


“Code” means the Internal Revenue Code of 1986, as amended. 

“Commission” means the U.S. Securities and Exchange
Commission or any successor entity. 

“Commission Documents” shall mean (1) all reports, schedules,
registrations, forms, statements, information and other documents filed with or
furnished to the Commission by the Company pursuant to the reporting
requirements of the Exchange Act, including all material filed or furnished
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, since
December 31, 2013, including, without limitation, the Annual Report on Form 10-K
filed by the Company for its fiscal year ended December 31, 2013 (the
“2013 Form
10-K”), and which hereafter
shall be filed with or furnished to the Commission by the Company, including,
without limitation, the Current Report, (2) the Registration Statement, as the
same may be amended from time to time, the Prospectus and each Prospectus
Supplement and (3) all information contained in such filings and all documents
and disclosures that have been and heretofore shall be incorporated by reference
therein. 

“Commitment Shares” means, collectively, the Initial Commitment
Shares and the Additional Commitment Shares (if any). 

“Common Stock” shall have the meaning assigned to such term in
the recitals hereof. 

“Company” shall have the meaning assigned to such term in the preamble hereof.


“Current Market Price” means, with respect to any particular
measurement date, the closing trade price of a share of Common Stock on the
Trading Market for the Trading Day immediately preceding such measurement date,
as reported by Bloomberg, L.P. 

“Current Report” shall have the meaning assigned to such term in
Section 2.3 hereof. 

“Damages” shall have the meaning assigned to such term in Section 9.1 hereof.


“Disclosure Schedule” shall have the meaning assigned to such term in
the preamble to Article V hereof. 

“Disqualification Event” shall have the meaning assigned to such term in
Section 5.39 hereof.


“Document Preparation Fee” shall have the meaning assigned to such term in
Section 10.1(i) hereof. 

ii







“Draw Down” means the transactions contemplated in Article
III of this Agreement with respect to any Draw Down Notice delivered by the
Company in accordance with Article III of this Agreement. 

“Draw Down Amount” means the actual amount of proceeds received by
the Company pursuant to a Draw Down under this Agreement. 

“Draw Down Amount Requested” shall mean the specific aggregate dollar amount
worth of shares of Common Stock requested by the Company to be purchased by the
Investor in a Draw Down Notice delivered pursuant to Section 3.1, which shall
not exceed the Maximum Draw Down Amount Requested. 

“Draw Down Exercise Date” shall have the meaning assigned to such term in
Section 3.1(a) hereof. 

“Draw Down Exercise Floor Price” means $0.0025, which shall be appropriately
adjusted for any stock splits, stock combinations, stock dividends,
recapitalizations and other similar transactions that occur on or after the date
of this Agreement. 

“Draw Down Notice” shall have the meaning assigned to such term in
Section 3.1(a) hereof. 

“DTC” means The Depository Trust Company, a subsidiary of The Depository
Trust & Clearing Corporation, or any successor thereto.

“Earnings Announcement” shall have the meaning assigned to such term in
Section 3.7 hereof. 

“Earnings 8-K” shall have the meaning assigned to such term in
Section 3.7 hereof. 

“EDGAR” means the Commission’s Electronic Data Gathering, Analysis and
Retrieval System. 

“Effective Date” means the first Trading Day immediately
following the date on which the initial Registration Statement filed pursuant to
Section 2(a) of the Registration Rights Agreement is declared effective by the
Commission. 

“Effective Date Market Price” means the arithmetic average of the three lowest
daily VWAPs during the 10-Trading Day period immediately preceding the Effective
Date, as reported by Bloomberg, L.P. 

“Environmental Laws” shall have the meaning assigned to such term in
Section 5.18 hereof. 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended. 

iii







“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder. 

“FCPA” shall have the meaning assigned to such term in Section 5.36 hereof.


“FDA” shall have the meaning assigned to such term in Section 5.17(a) hereof.


“Filing Time” shall have the meaning assigned to such term in
Section 3.7 hereof. 

“FINRA” means the Financial Industry Regulatory Authority. 

“Fundamental Transaction” means that (i) the Company shall, directly or
indirectly, in one or more related transactions, (1) consolidate or merge with
or into (whether or not the Company is the surviving corporation) another
Person, with the result that the holders of the Company’s capital stock
immediately prior to such consolidation or merger together beneficially own less
than 50% of the outstanding voting power of the surviving or resulting
corporation, or (2) sell, lease, license, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
to another Person, or (3) take action to facilitate a purchase, tender or
exchange offer by another Person that is accepted by the holders of more than
50% of the outstanding shares of Common Stock (not including any shares of
Common Stock held by the Person or Persons making or party to, or associated or
affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (4) consummate a stock or share purchase agreement or other
business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common
Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock or share purchase agreement or other
business combination), or (5) reorganize, recapitalize or reclassify its Common
Stock, or (ii) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 50% of the aggregate ordinary voting power represented by issued
and outstanding Common Stock. 

“GAAP” shall mean generally accepted accounting principles in the United
States of America as applied by the Company. 

“Governmental Licenses” shall have the meaning assigned to such term in
Section 5.17(a) hereof. 

“Indebtedness” shall have the meaning assigned to such term in
Section 5.11 hereof. 

“Initial Commitment Shares” means 9,109,128 shares of duly authorized,
validly issued, fully paid and nonassessable shares of Common Stock which,
concurrently with the execution and delivery of this Agreement on the Closing
Date, the Company has caused its transfer agent to issue and deliver to the
Investor not later than 4:00 p.m. (New York City time) on the second Trading Day
immediately following the Closing Date. 

iv







“Initial Purchase Price” means a price equal to 93% of the
lowest of (i) the arithmetic average of the three lowest
daily VWAPs during the 10 consecutive Trading Days ending on the Trading Day
immediately preceding the applicable Draw Down Exercise Date, (ii) the
arithmetic average of the three lowest Closing Sale Prices for the Common Stock
during the 10 consecutive Trading Days ending on the Trading Day immediately
preceding the applicable Draw Down Exercise Date and (iii) the Closing Sale
Price for the Common Stock on the Trading Day immediately preceding the
applicable Draw Down Exercise Date (in each case, to be appropriately adjusted
for any stock splits, stock combinations, stock dividends, recapitalizations and
other similar transactions). 

“Intellectual Property” shall have the meaning assigned to such term in
Section 5.17(b) hereof. 

“Investment Period” means the period commencing on the Effective
Date and expiring on the date this Agreement is terminated pursuant to Article
VIII hereof. 

“Investor” shall have the meaning assigned to such term in
the preamble hereof. 

“Investor Party” shall have the meaning assigned to such term in
Section 9.1 hereof. 

“Issuer Covered Person” shall have the meaning assigned to such term in
Section 5.39 hereof. 

“Knowledge” means the actual knowledge of the Company’s
Chief Executive Officer or Chief Financial Officer, after reasonable inquiry of
all officers, directors and employees of the Company who could reasonably be
expected to have knowledge or information with respect to the matter in
question. 

“Make Whole Amount” shall have the meaning assigned to such term in
Section 3.5 hereof. 

“Material Adverse Effect” means (i) any condition, occurrence, state of
facts or event having, or insofar as reasonably can be foreseen would likely
have, any material adverse effect on the legality, validity or enforceability of
the Transaction Documents or the transactions contemplated thereby, (ii) any
condition, occurrence, state of facts or event having, or insofar as reasonably
can be foreseen would likely have, any effect on the business, operations,
properties or financial condition of the Company that is material and adverse to
the Company and its Subsidiaries, taken as a whole, and/or (iii) any condition,
occurrence, state of facts or event that would, or insofar as reasonably can be
foreseen would likely, prohibit or otherwise materially interfere with or delay
the ability of the Company to perform any of its obligations under any of the
Transaction Documents to which it is a party; provided, however, that none of the following, individually or in
the aggregate, shall be taken into account in determining whether a Material
Adverse Effect has occurred or insofar as reasonably can be foreseen would
likely occur: (a) changes in conditions in the U.S. or global capital, credit or
financial markets generally, including changes in the availability of capital or
currency exchange rates, provided such changes shall not have affected the
Company in a materially disproportionate manner as compared to other similarly
situated companies; (b) changes generally affecting the industries in which the
Company and its Subsidiaries operate, provided such changes shall not have
affected the Company in a materially
disproportionate manner as compared to other similarly situated companies; (c)
any effect of the announcement of, or the consummation of the transactions
contemplated by, this Agreement and the other Transaction Documents on the
Company’s relationships, contractual or otherwise, with customers, suppliers,
vendors, bank lenders, strategic venture partners or employees; and (d) the
receipt of any notice that the Common Stock may be ineligible to continue
listing or quotation on the Trading Market, other than a final and
non-appealable notice that the listing or quotation of the Common Stock on the
Trading Market shall be terminated on a date certain (unless, prior to such date
certain, the Common Stock is listed or quoted on any other Trading Market).


v







“Material Agreements” shall have the meaning assigned to such term in
Section 5.19 hereof.

“Maximum Draw Down Amount
Requested” means the
lesser of (i) the product of (a) the Average Trading
Volume and (b) 3.0 and (ii) $500,000. 

“Money Laundering Laws” shall have the meaning assigned to such term in
Section 5.37 hereof. 

“OFAC” shall have the meaning assigned to such term in Section 5.38 hereof.


“Ownership Limitation” shall have the meaning assigned to such term in
Section 3.6 hereof. 

“Person” means any person or entity, whether a natural person, trustee,
corporation, partnership, limited partnership, limited liability company, trust,
unincorporated organization, business association, firm, joint venture,
governmental agency or authority. 

“Plan” shall have the meaning assigned to such term in Section 5.24 hereof.


“Press Release” shall have the meaning assigned to such term in
Section 2.3 hereof. 

“Price Reset Provision” shall have the meaning assigned to such term in
Section 6.7(iii) hereof. 

“Prospectus” means the prospectus in the form included in the
Registration Statement, as supplemented from time to time by any Prospectus
Supplement, including the documents incorporated by reference therein.


“Prospectus Supplement” means any prospectus supplement to the
Prospectus filed with the Commission from time to time pursuant to Rule 424(b)
under the Securities Act, including the documents incorporated by reference
therein. 

“Purchase Price” shall have the meaning assigned to such term in
Section 3.2(c) hereof. 

“Reference Period” shall have the meaning assigned to such term in
Section 6.7(ii) hereof. 

vi







“Registrable Securities” shall have the meaning assigned to such term in
the Registration Rights Agreement. 

“Registration Rights Agreement” shall have the meaning assigned to such term in
the recitals hereof. 

“Registration Statement” shall have the meaning assigned to such term in
the Registration Rights Agreement. 

“Regulation D” shall have the meaning assigned to such term in
the recitals hereof. 

“Required Delivery Date” shall have the meaning assigned to such term in
Section 10.1(iv) hereto. 

“Restricted Period” shall have the meaning assigned to such term in
Section 6.13(i) hereof. 

“Restricted Person” shall have the meaning assigned to such term in
Section 6.13(i) hereof. 

“Restricted Persons” shall have the meaning assigned to such term in
Section 6.13(i) hereof. 

“Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect. 

“Section 4(a)(2)” shall have the meaning assigned to such term in
the recitals hereof. 

“Securities” means,
collectively, the Shares, including the Additional Shares, and the Commitment
Shares. 

“Securities Act” shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder. 

“Settlement Date” shall have the meaning assigned to such term in
Section 3.2 hereof. 

“Shares” shall mean the whole shares of Common Stock that are and/or may be
purchased by the Investor under this Agreement pursuant to one or more Draw
Downs, including the Additional Shares, but not including the Commitment Shares.


“Short Sales” shall mean “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act. 

“Significant Subsidiary” means any Subsidiary of the Company that would
constitute a Significant Subsidiary of the Company within the meaning of Rule
1-02 of Regulation S-X of the Commission. 

vii







“Similar Financing” shall have the meaning assigned to such term in
Section 6.7(iii) hereof. 

“SOXA” shall mean the Sarbanes-Oxley Act of 2002 and the rules and regulations
of the Commission thereunder. 

“Subsidiary” shall mean any corporation or other entity of
which at least a majority of the securities or other ownership interest having
ordinary voting power for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company
and/or any of its other Subsidiaries. 

“Total Commitment” shall have the meaning assigned to such term in
Section 2.1 hereof. 

“Trading Day” shall mean a full trading day (beginning at 9:30
a.m., New York City time, and ending at 4:00 p.m., New York City time) on the
Trading Market. 

“Trading Market” means the OTC Bulletin Board; provided, however, that in the event the Common Stock is ever
listed or quoted on the NASDAQ Global Market, the NASDAQ Global Select Market,
the NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT,
or the OTCQX Marketplace or the OTCQB Marketplace operated by OTC Markets Group
Inc., than the “Trading
Market” shall mean such other
market or exchange or any successor to the foregoing on which the Common Stock
is then listed or quoted. 

“Transaction Documents” means, collectively, this Agreement (as
qualified by the Disclosure Schedule) and the exhibits hereto, the Registration
Rights Agreement and each of the other agreements, documents, certificates and
instruments entered into or furnished by the parties hereto in connection with
the transactions contemplated hereby and thereby. 

“True-Up Date” shall have the meaning assigned to such term in
Section 3.2(b) hereof. 

“True-Up Floor Price” means $0.001, which shall be appropriately
adjusted for any stock splits, stock combinations, stock dividends,
recapitalizations and other similar transactions that occur on or after the date
of this Agreement. 

“True-Up Pricing Period” shall mean a period of eight consecutive Trading
Days commencing on the Trading Day immediately following the applicable
Settlement Date with respect to a Draw Down Notice delivered in accordance with
Section 3.1 hereof. 

“True-Up Purchase Price” means a price equal to the product of (i) 0.93
and (ii) the arithmetic average of the three lowest daily VWAPs during the
applicable True-Up Pricing Period, which shall be appropriately adjusted for any
stock splits, stock combinations, stock dividends, recapitalizations and other
similar transactions; provided, however, that in no event shall the True-Up Purchase Price be less than the
True-Up Floor Price. 

“True-Up Settlement Date” shall have the meaning assigned to such term in
Section 3.2(b) hereof. 

viii







“VWAP” means the volume weighted average price (the aggregate sales price of
all trades of Common Stock during a Trading Day divided by the total number of
shares of Common Stock traded during such Trading Day) of the Common Stock
during a Trading Day as reported by Bloomberg L.P. using the AQR function.


“Warrant Value” shall mean the fair value of all warrants,
options and other similar rights issued to a third party in connection with an
Alternate Transaction, determined by using a standard Black-Scholes
option-pricing model using a reasonable and appropriate expected volatility
percentage based on applicable volatility data from an investment banking firm
of nationally recognized reputation. 

ix







EXHIBIT A TO
THE
COMMON STOCK PURCHASE
AGREEMENT
FORM OF REGISTRATION RIGHTS AGREEMENT 
























REGISTRATION RIGHTS
AGREEMENT 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as
of October 23, 2014, is by and between Bioheart, Inc., a Florida corporation
(the “Company”), and Magna
Equities II, LLC, a New York limited liability company (the “Investor”). 

RECITALS 

A. The Company and the
Investor have entered into that certain Common Stock Purchase Agreement, dated
as of the date hereof (the “Purchase Agreement”),
pursuant to which the Company may issue, from time to time, to the Investor up
to $3,000,000 of newly issued shares of the Company’s common stock, $0.001 par
value (“Common
Stock”), as provided for
therein. 

B. Pursuant to the terms
of, and in consideration for the Investor entering into, the Purchase Agreement,
the Company has issued to the Investor the Initial Commitment Shares (as defined
in the Purchase Agreement) in accordance with the terms of the Purchase
Agreement. 

C. Pursuant to the terms of
the Purchase Agreement, the Company may be required to issue to the Investor the
Additional Commitment Shares (as defined in the Purchase Agreement) in
accordance with the terms of the Purchase Agreement. 

D. Pursuant to the terms
of, and in consideration for the Investor entering into, the Purchase Agreement,
and to induce the Investor to execute and deliver the Purchase Agreement, the
Company has agreed to provide the Investor with certain registration rights with
respect to the Registrable Securities (as defined herein) as set forth herein.


AGREEMENT


NOW,
THEREFORE, in consideration of
the premises, the representations, warranties, covenants and agreements
contained herein and in the Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
intending to be legally bound hereby, the Company and the Investor hereby agree
as follows: 

1. Definitions. 

Capitalized terms used
herein and not otherwise defined herein shall have the respective meanings set
forth in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings: 

(a) “Business Day” means any day other than Saturday, Sunday or any
other day on which commercial banks in New York, New York are authorized or
required by law to remain closed. 

(b) “Closing Date” shall mean the date of this Agreement.


(c) “Effective Date” means the date that the applicable Registration
Statement has been declared effective by the SEC. 

A-1







(d) “Effectiveness Deadline” means (i) with respect to the initial
Registration Statement required to be filed to pursuant to Section 2(a), the
earlier of (A) the 120th calendar day after the earlier of (1) the
Filing Deadline and (2) the date on which such initial Registration Statement is
filed with the SEC and (B) the fifth Business Day after the date the Company is
notified (orally or in writing, whichever is earlier) by the SEC that such
Registration Statement will not be reviewed or will not be subject to further
review and (ii) with respect to any additional Registration Statements that may
be required to be filed by the Company pursuant to this Agreement, the earlier
of (A) the 90th calendar day following the date on which the Company
was required to file such additional Registration Statement and (B) the fifth
Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that such Registration Statement will not be
reviewed or will not be subject to further review. 

(e) “Filing Deadline” means (i) with respect to the initial
Registration Statement required to be filed to pursuant to Section 2(a),
December 8, 2014 and (ii) with respect to any additional Registration Statements
that may be required to be filed by the Company pursuant to this Agreement, the
later of (A) the 60th calendar day following the sale of
substantially all of the Registrable Securities included in the initial
Registration Statement or the most recent prior additional Registration
Statement, as applicable, and (B) six months following the Effective Date of the
initial Registration Statement or the most recent prior additional Registration
Statement, as applicable, or such earlier date as permitted by the SEC.


(f) “Person” means any person or entity, whether a natural person, trustee,
corporation, partnership, limited partnership, limited liability company, trust,
unincorporated organization, business association, firm, joint venture,
governmental agency or authority. 

(g) “register,” “registered,” and
“registration” refer to
a registration effected by preparing and filing one or more Registration
Statements in compliance with the Securities Act and pursuant to Rule 415 and
the declaration of effectiveness of such Registration Statement(s) by the SEC.


(h) “Registrable Securities” means all of (i) the Shares, including all of
the Additional Shares, (ii) the Initial Commitment Shares, (iii) the Additional
Commitment Shares and (iv) any capital stock of the Company issued or issuable
with respect to such Shares (including Additional Shares), Initial Commitment
Shares or Additional Commitment Shares, including, without limitation, (1) as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise and (2) shares of capital stock of the Company into which the
shares of Common Stock are converted or exchanged and shares of capital stock of
a successor entity into which the shares of Common Stock are converted or
exchanged. 

(i) “Registration Statement” means a registration statement or registration
statements of the Company filed under the Securities Act covering the resale by
the Investor of Registrable Securities, as such registration statement or
registration statements may be amended and supplemented from time to time
(including pursuant to Rule 462(b) under the Securities Act), including all
documents filed as part thereof or incorporated by reference therein.


(j) “Rule 144” means Rule 144 promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any other
similar or successor rule or regulation of
the SEC that may at any time permit the Investor to sell securities of the
Company to the public without registration. 

A-2







(k) “Rule 415” means Rule 415 promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any other
similar or successor rule or regulation of the SEC providing for offering
securities on a delayed or continuous basis. 

(l) “SEC” means the U.S. Securities and Exchange Commission or any successor
entity. 

2. Registration. 

(a) Mandatory Registration. The Company shall prepare and, as soon as
practicable, but in no event later than the Filing Deadline, file with the SEC
an initial Registration Statement on Form S-1, or such other form reasonably
acceptable to the Investor and Legal Counsel, covering the resale by the
Investor of Registrable Securities in an amount equal to 143,812,591 shares of
Common Stock, 9,109,128 of which shares of Common Stock shall be registered as
Initial Commitment Shares and 15,890,872 of which shares of Common Stock shall
be registered as Additional Commitment Shares. Such initial Registration
Statement shall contain (except if otherwise directed by the Investor) the
“Selling
Stockholder” and “Plan of Distribution” sections in substantially the form attached
hereto as Exhibit
B. The Company shall use its
commercially reasonable efforts to have such initial Registration Statement, and
each other Registration Statement required to be filed pursuant to the terms
hereof, declared effective by the SEC as soon as practicable, but in no event
later than the applicable Effectiveness Deadline. 

(b) Legal Counsel. Subject to Section 5 hereof, the Investor shall
have the right to select one legal counsel to review and oversee, solely on its
behalf, any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Greenberg Traurig, LLP or such
other counsel as thereafter designated by the Investor. Except as provided under
Section 10.1(i) of the Purchase Agreement, the Company shall have no obligation
to reimburse the Investor for any and all legal fees and expenses of the Legal
Counsel incurred in connection with the transactions contemplated hereby.


(c) Reserved.

(d) Sufficient Number of Shares
Registered. If at any time all
Registrable Securities are not covered by the initial Registration Statement
filed pursuant to Section 2(a) as a result of Section 2(h) or otherwise, the
Company shall file with the SEC one or more additional Registration Statements
(on the short form available therefor, if applicable), so as to cover all of the
Registrable Securities not covered by such initial Registration Statement, in
each case, as soon as practicable (taking into account any Staff position with
respect to date on which the Staff will permit such additional Registration
Statement(s) to be filed with the SEC), but in no event later than the
applicable Filing Deadline for such additional Registration Statement(s). The
Company shall use its commercially reasonable efforts to cause such additional
Registration Statement(s) to become effective as soon as practicable following
the filing thereof with the SEC, but in no event later than the applicable
Effectiveness Deadline for such Registration Statement. 

A-3







(e) Piggyback Registrations. Without limiting any of the Company’s
obligations hereunder or under the Purchase Agreement, if there is not an
effective Registration Statement covering all of the Registrable Securities and
the Company shall determine to prepare and file with the SEC a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities (other than on Form S-4
or Form S-8 (each as promulgated
under the Securities Act) or their then equivalents relating to equity
securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans), then the Company shall deliver to the
Investor a written notice of such determination and, if within five (5) days
after the date of the delivery of such notice, the Investor shall so request in
writing, the Company shall include in such registration statement all or any
part of such Registrable Securities the offer and sale of which the Investor
requests to be registered. 

(f) No Inclusion of Other Securities. In no event shall the Company include any
securities other than Registrable Securities on any Registration Statement
pursuant to Section 2(a) or 2(d) without the prior written consent of the
Investor. Subject to the proviso in Section 2(e), in connection with any
offering involving an underwriting of shares, the Company shall not be required
under this Section 2 or otherwise to include the Registrable Securities of any
Investor therein unless such Investor accepts and agrees to the terms of the
underwriting, which shall be reasonable and customary, as agreed upon between
the Company and the underwriters selected by the Company. 

(g) Offering. If the staff of the SEC (the “Staff”) or the SEC
seeks to characterize any offering pursuant to a Registration Statement filed
pursuant to this Agreement as constituting an offering of securities that does
not permit such Registration Statement to become effective and be used for
resales by the Investor on a delayed or continuous basis under Rule 415 at
then-prevailing market prices (and not fixed prices) (or as otherwise may be
acceptable to the Investor), or if after the filing of the initial Registration
Statement with the SEC pursuant to Section 2(a), the Company is otherwise
required by the Staff or the SEC to reduce the number of Registrable Securities
included in such initial Registration Statement, then the Company shall reduce
the number of Registrable Securities to be included in such initial Registration
Statement (with the prior consent of the Investor and Legal Counsel as to the
specific Registrable Securities to be removed therefrom) until such time as the
Staff and the SEC shall so permit such Registration Statement to become
effective and be used as aforesaid. Notwithstanding anything in this Agreement
to the contrary, if after giving effect to the actions referred to in the
immediately preceding sentence, the Staff or the SEC does not permit such
Registration Statement to become effective and be used for resales by the
Investor on a delayed or continuous basis under Rule 415 at then-prevailing
market prices (and not fixed prices) (or as otherwise may be acceptable to the
Investor), the Company shall not request acceleration of the Effective Date of
such Registration Statement, the Company shall promptly (but in no event later
than 48 hours) request the withdrawal of such Registration Statement pursuant to
Rule 477 under the Securities Act, and the Effectiveness Deadline shall
automatically be deemed to have elapsed with respect to such Registration
Statement at such time as the Staff or the SEC has made a final and
non-appealable determination that the SEC will not permit such Registration
Statement to be so utilized (unless prior to such time the Company and the
Investor have received assurances from the Staff or the SEC reasonably
acceptable to Legal Counsel that a new Registration Statement filed by the Company with the SEC promptly
thereafter may be so utilized). In the event of any reduction in Registrable
Securities pursuant to this paragraph, the Company shall file additional
Registration Statements in accordance with Section 2(d) until such time as all
Registrable Securities have been included in Registration Statements that have
been declared effective and the prospectus contained therein is available for
use by the Investor. 

A-4







3. Related Obligations. 

The Company shall use its
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the intended method of disposition thereof, and,
pursuant thereto, the Company shall have the following obligations: 

(a) The Company shall
promptly prepare and file with the SEC a Registration Statement with respect to
the Registrable Securities (but in no event later than the applicable Filing
Deadline) and use its commercially reasonable efforts to cause such Registration
Statement to become effective as soon as practicable after such filing (but in
no event later than the applicable Effectiveness Deadline). Subject to Allowable
Grace Periods, the Company shall keep each Registration Statement effective (and
the prospectus contained therein available for use) pursuant to Rule 415 for
resales by the Investor on a delayed or continuous basis at then-prevailing
market prices (and not fixed prices) at all times until the earlier of (i) the
date as of which the Investor may sell all of the Registrable Securities
required to be covered by such Registration Statement (disregarding any
reduction pursuant to Section 2(g)) without restriction pursuant to Rule 144 and
without the need for current public information as required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) and (ii) the date on which the Investor shall
have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration
Period”). Notwithstanding
anything to the contrary contained in this Agreement (but subject to the
provisions of Section 3(q) hereof), the Company shall ensure that, when filed
and at all times while effective, each Registration Statement (including,
without limitation, all amendments and supplements thereto) and the prospectus
(including, without limitation, all amendments and supplements thereto) used in
connection with such Registration Statement shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not
misleading. The Company shall submit to the SEC, within two (2) Business Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the Staff or that the Staff
has no further comments on a particular Registration Statement (as the case may
be) and (ii) the approval of Legal Counsel is obtained pursuant to Section 3(c)
(which approval shall be promptly sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such request. 


A-5








(b) Subject to Section 3(q)
of this Agreement, the Company shall prepare and file with the SEC such
amendments (including, without limitation, post-effective amendments) and
supplements to each Registration Statement and the prospectus used in connection
with each such Registration Statement, which prospectus is to be filed pursuant
to Rule 424 promulgated under the Securities Act, as may be necessary to keep
each such Registration Statement effective (and the prospectus contained therein
current and available for use) at all times during the Registration Period for
such Registration Statement, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company required to be covered by such Registration Statement until such
time as all of such Registrable Securities shall have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement. Without limiting the
generality of the foregoing, the Company covenants and agrees that (i) at or
before 8:30 a.m. (New York City time) on the Trading Day immediately following
each Effective Date, the Company shall file with the SEC in accordance with Rule
424(b) under the Securities Act the final prospectus to be used in connection
with sales pursuant to the applicable Registration Statement, and (ii) if the
transactions contemplated by any Draw Down (as defined in the Purchase
Agreement) are material to the Company (individually or collectively with all
other prior Draw Downs, the consummation of which have not previously been
reported in any prospectus supplement filed with the SEC under Rule 424(b) under
the Securities Act or in any periodic report filed by the Company with the SEC
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), or if otherwise required under the Securities
Act, in each case as reasonably determined by the Company or the Investor, then,
on the first Trading Day immediately following the last Trading Day of the
Pricing Period with respect to such Draw Down, the Company shall file with the
SEC a prospectus supplement pursuant to Rule 424(b)
under the Securities Act with respect to the applicable Draw Down(s), disclosing
the total Draw Down Amount Requested pursuant to such Draw Down(s), the total
number of Shares that have been (or are to be) issued and sold to the Investor
pursuant to such Draw Down(s), the total purchase price for the Shares subject
to such Draw Down(s), the applicable Discount Price(s) for such Shares and the
net proceeds that have been (or are to be) received by the Company from the sale
of such Shares. To the extent not previously disclosed in the prospectus or a
prospectus supplement, the Company shall disclose in its Quarterly Reports on
Form 10-Q and in its Annual Reports on Form 10-K the information described in
the immediately preceding sentence relating to any Draw Down(s) consummated
during the relevant fiscal quarter. In the case of amendments and supplements to
any Registration Statement or prospectus which are required to be filed pursuant
to this Agreement (including, without limitation, pursuant to this Section 3(b))
by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or
any analogous report under the Exchange Act, the Company shall have incorporated
such report by reference into such Registration Statement and prospectus, if
applicable, or shall file such amendments or supplements to the Registration
Statement or prospectus with the SEC on the same day on which the Exchange Act
report is filed which created the requirement for the Company to amend or
supplement such Registration Statement or prospectus, for the purpose of
including or incorporating such report into such Registration Statement and
prospectus. The Company consents to the use of the prospectus (including,
without limitation, any supplement thereto) included in each Registration
Statement in accordance with the provisions of the Securities Act and with the
securities or “Blue Sky” laws of the jurisdictions in which the Registrable
Securities may be sold by the Investor, in connection with the resale of the
Registrable Securities and for such period of time thereafter as such prospectus
(including, without limitation, any supplement thereto) (or in lieu thereof, the
notice referred to in Rule 173(a) under the Securities Act) is required by the
Securities Act to be delivered in connection with resales of Registrable
Securities. 

A-6







(c) The Company shall (A)
permit Legal Counsel to review and comment upon (i) each Registration Statement
at least five (5) Business Days prior to its filing with the SEC (or such
shorter period as may be agreed to by the Investor and Legal Counsel) and (ii)
all amendments and supplements to each Registration Statement (including,
without limitation, the prospectus contained therein) (except for Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and
any similar or successor reports or prospectus supplements the contents of which
is limited to that set forth in such reports) within a reasonable number of days
prior to their filing with the SEC, and (B) shall give due consideration to all
comments of the Investor and Legal Counsel on any such Registration Statement or
amendment or supplement thereto or to any prospectus contained therein. The
Company shall promptly furnish to Legal Counsel, without charge, (i) electronic
copies of any correspondence from the SEC or the Staff to the Company or its
representatives relating to each Registration Statement (which correspondence
shall be redacted to exclude any material, non-public information regarding the
Company or any of its Subsidiaries), (ii) after the same is prepared and filed
with the SEC, one (1) electronic copy of each Registration Statement and any
amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if
requested by the Investor, and all exhibits and (iii) upon the effectiveness of
each Registration Statement, one (1) electronic copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 3. 

(d) Without limiting any
obligation of the Company under the Purchase Agreement, the Company shall
promptly furnish to the Investor, without charge, (i) after the same is prepared
and filed with the SEC, at least one (1) electronic copy of each Registration
Statement and any amendment(s) and supplement(s) thereto, including, without
limitation, financial statements and schedules, all documents incorporated
therein by reference, if requested by the Investor, all exhibits and each
preliminary prospectus, (ii) upon the effectiveness of each Registration
Statement, one (1) electronic copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as the Investor may reasonably request from time to time) and
(iii) such other documents, including, without limitation, copies of any
preliminary or final prospectus, as the Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor. 

(e) The Company shall take
such action as is necessary to (i) register and qualify, unless an exemption
from registration and qualification applies, the resale by the Investor of the
Registrable Securities covered by a Registration Statement under such other
securities or “Blue Sky” laws of all applicable jurisdictions in the United
States, (ii) prepare and file in those jurisdictions, such amendments
(including, without limitation, post-effective amendments) and supplements to
such registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(e), (y)
subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify Legal Counsel and the Investor of the receipt by the
Company of any notification with respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “Blue Sky” laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose. 

A-7







(f) The Company shall
notify Legal Counsel and the Investor in writing of the happening of any event,
as promptly as practicable after becoming aware of such event, as a result of
which the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, non-public
information regarding the Company or any of its Subsidiaries), and, subject to
Section 3(q), promptly prepare a supplement or amendment to such Registration
Statement and such prospectus contained therein to correct such untrue statement
or omission and deliver one (1) electronic copy of such supplement or amendment
to Legal Counsel and the Investor (or such other number of copies as Legal
Counsel or the Investor may reasonably request). The Company shall also promptly
notify Legal Counsel and the Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and the
Investor by facsimile or e-mail on the same day of such effectiveness and by
overnight mail), and when the Company receives written notice from the SEC that
a Registration Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, (iii) of
the Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate and (iv) of the receipt of any
request by the SEC or any other federal or state governmental authority for any
additional information relating to the Registration Statement or any amendment
or supplement thereto or any related prospectus. The Company shall respond as
promptly as practicable to any comments received from the SEC with respect to a
Registration Statement or any amendment thereto. Nothing in this Section 3(f)
shall limit any obligation of the Company under the Purchase Agreement.


(g) The Company shall (i)
use its reasonable best efforts to prevent the issuance of any stop order or
other suspension of effectiveness of a Registration Statement or the use of any
prospectus contained therein, or the suspension of the qualification, or the
loss of an exemption from qualification, of any of the Registrable Securities
for sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible time
and (ii) notify Legal Counsel and the Investor of the issuance of such order and
the resolution thereof or its receipt of actual notice of the initiation or
threat of any proceeding for such purpose. 

A-8







(h) Upon the written
request of the Investor, the Company shall make available for inspection during
normal business hours by (i) the Investor, (ii) Legal Counsel and (iii) one (1)
firm of accountants or other agents retained by such Investor (collectively, the
“Inspectors”), all pertinent financial and other records, and
pertinent corporate documents and properties of the Company (collectively, the
“Records”), as shall be reasonably deemed necessary by
each Inspector, and cause the Company’s officers, directors and employees to
supply all information which any Inspector may reasonably request;
provided, however, each Inspector
shall agree in writing to hold in strict confidence and not to make any
disclosure (except to the Investor) or use of any Record or other information
which the Company’s board of directors determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless
(a) the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
under the Securities Act, (b) the release of such Records is ordered pursuant to
a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
Agreement or any other Transaction Document (as defined in the Purchase
Agreement). The Investor agrees that it shall, upon learning that disclosure of
such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Nothing herein (or in any other confidentiality agreement between
the Company and the Investor, if any) shall be deemed to limit the Investor’s
ability to sell Registrable Securities in a manner which is otherwise consistent
with applicable laws and regulations. 

(i) The Company shall hold
in confidence and not make any disclosure of information concerning the Investor
provided to the Company unless (i) disclosure of such information is necessary
to comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required to be disclosed in such
Registration Statement pursuant to the Securities Act, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other Transaction Document. The
Company agrees that it shall, upon learning that disclosure of such information
concerning the Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information. 

(j) Without limiting any
obligation of the Company under the Purchase Agreement, the Company shall use
its reasonable best efforts either to (i) cause all of the Registrable
Securities covered by each Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) secure
designation and quotation of all of the Registrable Securities covered by each
Registration Statement on another Trading Market, or (iii) if, despite the
Company’s reasonable best efforts to satisfy the preceding clauses (i) or (ii)
the Company is unsuccessful in satisfying the preceding clauses (i) or (ii),
without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the Financial
Industry Regulatory Authority (“FINRA”) as such with
respect to such Registrable Securities. In addition, the Company shall cooperate
with the Investor and any Broker-Dealer through which the Investor proposes to
sell its Registrable Securities in effecting a filing with FINRA pursuant to
FINRA Rule 5110 as requested by the Investor. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(j).


A-9







(k) The Company shall
cooperate with the Investor and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts
(as the case may be) as the Investor may reasonably request from time to time
and registered in such names as the Investor may request. Certificates for
Registrable Securities free from all restrictive legends may be transmitted by
the transfer agent to the Investor by crediting an account at DTC as directed by
the Investor. 

(l) If requested by the
Investor, the Company shall as soon as practicable after receipt of notice from
the Investor and subject to Section 3(q) hereof, (i) incorporate in a prospectus
supplement or post-effective amendment such information as the Investor
reasonably requests to be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities to be sold in such offering; (ii) make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any
Registration Statement or prospectus contained therein if reasonably requested
by the Investor. 

(m) The Company shall use
its reasonable best efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities. 

(n) The Company shall make
generally available to its security holders as soon as practical, but not later
than ninety (90) days after the close of the period covered thereby, an earnings
statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the Securities Act) covering a twelve-month period beginning
not later than the first day of the Company’s fiscal quarter next following the
applicable Effective Date of each Registration Statement. 

(o) The Company shall
otherwise use its reasonable best efforts to comply with all applicable rules
and regulations of the SEC in connection with any registration hereunder.


(p) Within one (1) Business
Day after each Registration Statement which covers Registrable Securities is
declared effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investor) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A. 

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(q) Notwithstanding
anything to the contrary herein (but subject to the last sentence of this
Section 3(q)), at any time after the Effective Date of a particular Registration
Statement, the Company may delay the disclosure of material, non-public
information concerning the Company or any of its Subsidiaries the disclosure of
which at the time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the opinion of
counsel to the Company, otherwise required (a “Grace Period”), provided that the Company shall promptly, but
in no event later than 9:30 a.m. (New York City time) on the second Trading Day
immediately prior to the commencement of any Grace Period (except for such case
where it is impossible to provide such two-Trading Day advance notice, in which
case the Company shall provide such notice as soon as possible), notify the
Investor in writing of the (i) existence of material, non-public information
giving rise to a Grace Period (provided that in each such notice the Company
shall not disclose the content of such material, non-public information to the
Investor) and the date on which such Grace Period will begin and (ii) date on
which such Grace Period ends, provided further that (I) no Grace Period shall
exceed 20 consecutive Trading Days and during any 365-day period all such Grace
Periods shall not exceed an aggregate of 60 Trading Days; provided, further,
that the Company shall not register any securities for the account of itself or
any other stockholder during any such Grace Period (other than pursuant to a
registration statement on Form S-4 or S-8), (II) the first day of any Grace
Period must be at least three Trading Days (or such shorter period as may be
agreed by the parties) after the last day of any prior Grace Period and (III) no
Grace Period may exist during (A) the first 10 consecutive Trading Days after
the Effective Date of the particular Registration Statement or (B) the
five-Trading Day period following each Settlement Date (each, an
“Allowable Grace
Period”). For purposes of
determining the length of a Grace Period above, such Grace Period shall begin on
and include the date set forth in the notice referred to in clause (i) above,
provided that such notice is received by the Investor not later than 9:30 a.m.
(New York City time) on the second Trading Day immediately prior to such
commencement date (except for such case where it is impossible to provide such
two-Trading Day advance notice, in which case the Company shall provide such
notice as soon as possible) and shall end on and include the later of the date
the Investor receives the notice referred to in clause (ii) above and the date
referred to in such notice. The provisions of Section 3(l) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
each Grace Period, the Company shall again be bound by the first sentence of
Section 3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding
anything to the contrary contained in this Section 3(q), the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee
of the Investor in accordance with the terms of the Purchase Agreement in
connection with any sale of Registrable Securities with respect to which the
Investor has entered into a contract for sale, and delivered a copy of the
prospectus included as part of the particular Registration Statement to the
extent applicable, prior to the Investor’s receipt of the notice of a Grace
Period and for which the Investor has not yet settled. 

(r) The Company shall take
all other reasonable actions necessary to expedite and facilitate disposition by
the Investor of its Registrable Securities pursuant to each Registration
Statement. 

4. Obligations of the Investor. 

(a) At least five Business
Days prior to the first anticipated filing date of each Registration Statement
(or such shorter period to which the parties agree), the Company shall notify
the Investor in writing of the information the Company requires from the
Investor with respect to such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of the Investor that the Investor shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect and maintain
the effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. 

A-11







(b) The Investor, by its
acceptance of the Registrable Securities, agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of each Registration Statement hereunder, unless the Investor has
notified the Company in writing of the Investor’s election to exclude all of the
Investor’s Registrable Securities from such Registration Statement. 

(c) The Investor agrees
that, upon receipt of any notice from the Company of the happening of any event
of the kind described in Section 3(g) or the first sentence of 3(f), the
Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until the Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or
receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary in this Section 4(c), the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
the Investor in accordance with the terms of the Purchase Agreement in
connection with any sale of Registrable Securities with respect to which the
Investor has entered into a contract for sale prior to the Investor’s receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of Section 3(f) and for which the Investor
has not yet settled. 

(d) The Investor covenants
and agrees that it will comply with the prospectus delivery and other
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement. 

5. Expenses of Registration. 

All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, FINRA filing fees (if any) and fees and
disbursements of counsel for the Company shall be paid by the Company.



A-12







6. Indemnification. 

(a) In the event any
Registrable Securities are included in any Registration Statement under this
Agreement, to the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, each of its directors,
officers, shareholders, members, partners, employees, agents, advisors,
representatives (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls the Investor within the meaning of
the Securities Act or the Exchange Act and each of the directors, officers,
shareholders, members, partners,
employees, agents, advisors, representatives (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding the
lack of such title or any other title) of such controlling Persons (each, an
“Investor
Party” and collectively, the
“Investor
Parties”), against any
losses, obligations, claims, damages, liabilities, contingencies, judgments,
fines, penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees, costs of defense and investigation), amounts paid in
settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an Investor Party
is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “Blue Sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any prospectus (as amended or supplemented) or
in any prospectus supplement or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading (the matters in the foregoing clauses (i) and (ii) being,
collectively, “Violations”). Subject
to Section 6(c), the Company shall reimburse the Investor Parties, promptly as
such expenses are incurred and are due and payable, for any legal fees or other
reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a): (i) shall
not apply to a Claim by an Investor Party arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Investor Party for such Investor
Party expressly for use in connection with the preparation of such Registration
Statement, prospectus or prospectus supplement or any such amendment thereof or
supplement thereto; (ii) shall not be available to the Investor to the extent
such Claim is based on a failure of the Investor to deliver or to cause to be
delivered the prospectus (as amended or supplemented) made available by the
Company (to the extent applicable), including, without limitation, a corrected
prospectus, if such prospectus (as amended or supplemented) or corrected
prospectus was timely made available by the Company pursuant to Section 3(d) and
then only if, and to the extent that, following the receipt of the corrected
prospectus no grounds for such Claim would have existed; and (iii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Investor
Party and shall survive the transfer of any of the Registrable Securities by the
Investor pursuant to Section 9. 

A-13







(b) In connection with any
Registration Statement in which the Investor is participating, the Investor
agrees to severally and not jointly indemnify, hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration Statement
and each Person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act (each, an “Company Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the Securities Act, the Exchange Act
or otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case, to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information relating to the Investor furnished to the Company by the Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 6(c) and the below provisos in this Section 6(b), the Investor will
reimburse a Company Party any legal or other expenses reasonably incurred by
such Company Party in connection with investigating or defending any such Claim;
provided, however, the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Investor, which consent shall not be unreasonably withheld or
delayed, provided further that the Investor shall be liable under this Section
6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to the Investor as a result of the applicable sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Company Party and shall survive the transfer of any of the
Registrable Securities by the Investor pursuant to Section 9. 

(c) Promptly after receipt
by an Investor Party or Company Party (as the case may be) under this Section 6
of notice of the commencement of any action or proceeding (including, without
limitation, any governmental action or proceeding) involving a Claim, such
Investor Party or Company Party (as the case may be) shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Investor
Party or the Company Party (as the case may be); provided, however, an Investor Party or Company Party (as the case
may be) shall have the right to retain its own counsel with the fees and
expenses of such counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and expenses; (ii) the
indemnifying party shall have failed promptly to assume the defense of such
Claim and to employ counsel reasonably satisfactory to such Investor Party or
Company Party (as the case may be) in any such Claim; or (iii) the named parties
to any such Claim (including, without limitation, any impleaded parties) include
both such Investor Party or Company Party (as the case may be) and the
indemnifying party, and such Investor Party or such Company Party (as the case
may be) shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Investor Party or such
Company Party and the indemnifying party (in which case, if such Investor Party
or such Company Party (as the case may be) notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, then the indemnifying party shall not have the right to
assume the defense thereof on behalf of the indemnified party and such counsel
shall be at the expense of the indemnifying party, provided further that in the
case of clause (iii) above the indemnifying party shall not be responsible for
the reasonable fees and expenses of more than one (1) separate legal counsel for
all Investor Parties or Company Parties (as the case may be). The Company Party
or Investor Party (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Company Party or Investor Party (as the case may be) which relates to such
action or Claim. The indemnifying party shall keep the Company Party or Investor
Party (as the case may be) reasonably apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the prior written consent of the Company Party or Investor Party (as the case
may be), consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Company Party or Investor Party (as the case
may be) of a release from all liability in respect to such Claim or litigation,
and such settlement shall not include any admission as to fault on the part of
the Company Party. For the avoidance of doubt, the immediately preceding
sentence shall apply to Sections 6(a) and 6(b) hereof. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Company Party or Investor Party (as the case may be) with respect
to all third parties, firms or corporations relating to the matter for which
indemnification has been made. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Investor Party or Company Party (as the case may be) under this Section 6,
except to the extent that the indemnifying party is materially and adversely
prejudiced in its ability to defend such action. 

A-14







(d) No Person involved in
the sale of Registrable Securities who is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) in connection with
such sale shall be entitled to indemnification from any Person involved in such
sale of Registrable Securities who is not guilty of fraudulent
misrepresentation. 

(e) The indemnification
required by this Section 6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or Indemnified Damages are incurred; provided that the Investor shall promptly reimburse the Company for all such
payments to the extent a court of competent jurisdiction determines that any
Investor Party was not entitled to such payments. 

(f) The indemnity and
contribution agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Company Party or Investor Party against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law. 

7. Contribution. 

To the extent any
indemnification by an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 6 to the fullest
extent permitted by law; provided, however: (i) no contribution shall be made under circumstances where the maker
would not have been liable for indemnification under the fault standards set
forth in Section 6 of this Agreement, (ii)
no Person involved in the sale of Registrable Securities which Person is guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the amount of net proceeds
received by such seller from the applicable sale of such Registrable Securities
pursuant to such Registration Statement. Notwithstanding the provisions of this
Section 7, the Investor shall not be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by the Investor from the applicable sale of the Registrable Securities subject
to the Claim exceeds the amount of any damages that the Investor has otherwise
been required to pay, or would otherwise be required to pay under Section 6(b),
by reason of such untrue or alleged untrue statement or omission or alleged
omission. 

A-15







8. Reports Under the Exchange Act. 

With a view to making
available to the Investor the benefits of Rule 144, the Company agrees to:


(a) use its reasonable best
efforts to make and keep public information available, as those terms are
understood and defined in Rule 144; 

(b) use its reasonable best
efforts to file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act so long as
the Company remains subject to such requirements (it being understood that
nothing herein shall limit any of the Company’s obligations under the Purchase
Agreement) and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; 

(c) furnish to the Investor
so long as the Investor owns Registrable Securities, promptly upon request, (i)
a written statement by the Company, if true, that it has complied with the
reporting, submission and posting requirements of Rule 144 and the Exchange Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company with the SEC if such
reports are not publicly available via EDGAR, and (iii) such other information
as may be reasonably requested to permit the Investor to sell such securities
pursuant to Rule 144 without registration; and 

(d) take such additional
action as is reasonably requested by the Investor to enable the Investor to sell
the Registrable Securities pursuant to Rule 144, including, without limitation,
delivering all such legal opinions, consents, certificates, resolutions and
instructions to the Company’s Transfer Agent as may be reasonably requested from
time to time by the Investor and otherwise fully cooperate with Investor and
Investor’s broker to effect such sale of securities pursuant to Rule 144.


9. Assignment of Registration Rights. 

The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Investor. The Investor may not assign its rights under
this Agreement other than to an affiliate of the Investor. 

A-16







10. Amendment or Waiver. 

No provision of this
Agreement may be amended or waived by the parties from and after the date that
is one Trading Day immediately preceding the initial filing of the Registration
Statement with the SEC. Subject to the immediately preceding sentence, no
provision of this Agreement may be (i) amended other than by a written
instrument signed by both parties hereto or (ii) waived other than in a written
instrument signed by the party against whom enforcement of such waiver is
sought. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof. 

11. Miscellaneous. 

(a) Solely for purposes of
this Agreement, a Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from such record owner of such Registrable Securities.


(b) Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement shall be given in accordance with Section 10.4 of the
Purchase Agreement. 

(c) Failure of any party to
exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver thereof.
The Company and the Investor acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that either party shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement by
the other party and to enforce specifically the terms and provisions hereof
(without the necessity of showing economic loss and without any bond or other
security being required), this being in addition to any other remedy to which
either party may be entitled by law or equity. 

(d) All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New
York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 

A-17







(e) The Transaction
Documents set forth the entire agreement and understanding of the parties solely
with respect to the subject matter thereof and supersedes all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written, solely with respect to such matters. There are no
promises, undertakings, representations or warranties by either party relative
to subject matter hereof not expressly set forth in the Transaction Documents.
Notwithstanding anything in this Agreement to the contrary and without
implication that the contrary would otherwise be true, nothing contained in this
Agreement shall limit, modify or affect in any manner whatsoever (i) the
conditions precedent to a Draw Down contained in Article VII of the Purchase
Agreement, including, without limitation, the condition precedent contained in
Section 7.2(iii) thereof or (ii) any of the Company’s obligations under the
Purchase Agreement. 

(f) Subject to compliance
with Section 9, this Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto. This
Agreement is not for the benefit of, nor may any provision hereof be enforced
by, any Person, other than the parties hereto, their respective permitted
successors and assigns and the Persons referred to in Sections 6 and 7 hereof.


(g) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. Unless the context clearly indicates otherwise, each
pronoun herein shall be deemed to include the masculine, feminine, neuter,
singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words
“without limitation.” The terms “herein,” “hereunder,” “hereof” and words of
like import refer to this entire Agreement instead of just the provision in
which they are found. 

(h) This Agreement may be
executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party. If any signature is
delivered by facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such signature page
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
signature page were an original thereof. 

A-18







(i) Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby. 

(j) The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent and no rules of strict construction will be applied
against any party. 

[signature pages follow] 

A-19







IN WITNESS
WHEREOF, Investor and the Company
have caused their respective signature page to this Registration Rights
Agreement to be duly executed as of the date first written above. 


	COMPANY: 
	
	 	 
	 	
	BIOHEART, INC. 
	
	 	
	By:	/s/Mike Tomàs	 
	 		 
	Name: 	     Mike
      Tomàs	
	Title:	    
      President & CEO	




A-20







IN WITNESS
WHEREOF, Investor and the Company
have caused their respective signature page to this Registration Rights
Agreement to be duly executed as of the date first written above. 


	INVESTOR: 

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

	 
	/s/ Joshua Sason
	By:       
      	Joshua
      Sason
	Its:	CEO




A-21







EXHIBIT A 

FORM OF NOTICE OF
EFFECTIVENESS
OF
REGISTRATION STATEMENT


	 
	 
	 
	Attention: 	 



Re:       Bioheart, Inc. 

Ladies and Gentlemen:


[We are][I am] counsel to
Bioheart, Inc., a Florida corporation (the “Company”), and have represented the Company in connection with that certain
Common Stock Purchase Agreement, dated October 23, 2014 (the “Purchase Agreement”), entered into by and among the Company and the
Investor named therein (the “Holder”) pursuant to
which the Company will issue to the Holder from time to time shares of the
Company’s common stock, $0.001 par value per share (the “Common Stock”). Pursuant to the Purchase Agreement, the
Company also has entered into a Registration Rights Agreement with the Holder
(the “Registration Rights
Agreement”) pursuant to which
the Company agreed, among other things, to register the offer and sale of the
Registrable Securities (as defined in the Registration Rights Agreement) under
the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s obligations
under the Registration Rights Agreement, on ____________ ___, 2014, the Company
filed a Registration Statement on Form S-1 (File No. 333-_____________) (the
“Registration
Statement”) with the
Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names the Holder as an
underwriter and a selling stockholder thereunder. 

In connection with the
foregoing, based solely upon oral advice from the staff of the SEC, the
Registration Statement was declared effective under the Securities Act on [ENTER
DATE OF EFFECTIVENESS], and no stop order suspending its effectiveness has been
issued and no proceedings for that purpose have been instituted or overtly
threatened. 

This letter shall serve as
our standing opinion to you that the shares of Common Stock are freely
transferable by the Holder pursuant to the Registration Statement, provided the
Registration Statement remains effective. 


	Very truly
      yours,	
	 	
	[ISSUER’S COUNSEL]
	
	 	
	
      By:
	 	




CC:       [LIST NAMES OF HOLDERS]


A-22








EXHIBIT B 

SELLING STOCKHOLDER


This prospectus relates to
the possible resale from time to time by the selling stockholder of any or all
of the shares of common stock that have been or may be issued by us to MEII
under the Purchase Agreement. For additional information regarding the issuance
of common stock covered by this prospectus, see “Equity Enhancement Program With
MEII” above. We are registering the shares of common stock pursuant to the
provisions of the Registration Rights Agreement we entered into with MEII on
October 23, 2014 in order to permit the selling stockholder to offer the shares
for resale from time to time. Except for the transactions contemplated by the
Purchase Agreement and the Registration Rights Agreement, MEII has not had any
material relationship with us within the past three years. 

The table below presents
information regarding the selling stockholder and the shares of common stock
that it may offer from time to time under this prospectus. This table is
prepared based on information supplied to us by the selling stockholder, and
reflects holdings as of _______________, 2014. As used in this prospectus, the
term “selling stockholder” means MEII. The number of shares in the column
“Maximum Number of Shares of Common Stock to be Offered Pursuant to this
Prospectus” represents all of the shares of common stock that the selling
stockholder may offer under this prospectus. The selling stockholder may sell
some, all or none of its shares in this offering. We do not know how long the
selling stockholder will hold the shares before selling them, and we currently
have no agreements, arrangements or understandings with the selling stockholder
regarding the sale of any of the shares. 

Beneficial ownership is
determined in accordance with Rule 13d-3(d) promulgated by the SEC under the
Exchange Act, and includes shares of common stock with respect to which the
selling stockholder has voting and investment power. The percentage of shares of
common stock beneficially owned by the selling stockholder prior to the offering
shown in the table below is based on an aggregate of ____________ shares of our
common stock outstanding on _________________, 2014. Because the purchase price
of the shares of common stock issuable under the Purchase Agreement is
determined on each settlement date, the number of shares that may actually be
sold by the Company under the Purchase Agreement may be fewer than the number of
shares being offered by this prospectus. The fourth column assumes the sale of
all of the shares offered by the selling stockholder pursuant to this
prospectus. 

A-23







	Name of Selling Stockholder	 	      	Number of Shares of
Common Stock Owned Prior
to
      Offering	      	Maximum Number of
Shares of Common Stock
to be Offered
      Pursuant to
this Prospectus	      	Number of Shares of
Common Stock Owned
      After
Offering
			Number(1)	      	Percent(2)			 	Number(3)	      	Percent(2)
	Magna Equities II, LLC
    (4)	 	 	 	4.99%	 	143,812,591				


____________________


	
      * 
		
      Represents beneficial
      ownership of less than one percent of the outstanding shares of our common
      stock. 

			  
	(1)	      	This
      number represents (i) __________ shares of common stock underlying a
      senior convertible note we issued to MEII on October 7, 2014, which
      provides that we may not issue shares of our common stock to Magna to the
      extent that Magna or any of its affiliates would, at any time,
      beneficially own more than 4.99% of our outstanding common stock, and (ii)
      the 9,109,128 shares of common stock we issued to MEII on October 23, 2014
      as Initial Commitment Shares in consideration for entering into the
      Purchase Agreement with us. In accordance with Rule 13d-3(d) under the
      Exchange Act, we have excluded from the number of shares beneficially
      owned prior to the offering (i) up to __________ shares that may be issued
      to MEII as Additional Commitment Shares under the terms of the Purchase
      Agreement, because the issuance of such shares is dependent on, among
      other things, the registration statement of which this prospectus is a
      part becoming effective and (ii) all of the shares that MEII may be
      required to purchase pursuant to draw downs under the Purchase Agreement,
      because the issuance of such shares is solely at our discretion and is
      subject to certain conditions, the satisfaction of all of which are
      outside of MEII’s control, including the registration statement of which
      this prospectus is a part becoming and remaining effective. Furthermore,
      the maximum amount of each put of common stock to MEII under the Purchase
      Agreement is subject to certain agreed upon threshold limitations set
      forth in the Purchase Agreement. Also, under the terms of the Purchase
      Agreement, we may not issue shares of our common stock to MEII to the
      extent that MEII or any of its affiliates would, at any time, beneficially
      own more than 9.99% of our outstanding common stock.
	 
	(2)		Applicable
      percentage ownership is based on _________ shares of our common stock
      outstanding as of ___________2014.
	 
	(3)		Assumes
      the sale of all shares being offered pursuant to this
  prospectus.
	 
	(4)		The
      business address of MEII is c/o Magna, 5 Hanover Square, New York, New
      York 10004. MEII’s principal business is that of a private investment
      firm. We have been advised that MEII is not a member of the Financial
      Industry Regulatory Authority, or FINRA, or an independent broker-dealer,
      and that neither MEII nor any of its affiliates is an affiliate or an
      associated person of any FINRA member or independent broker-dealer. We
      have been further advised that Joshua Sason is the Chief Executive Officer
      and managing member of MEII and owns all of the membership interests in
      MEII, and that Mr. Sason has sole power to vote or to direct the vote and
      sole power to dispose or to direct the disposition of all securities owned
      directly by MEII.


A-24







PLAN OF DISTRIBUTION


We are registering shares
of common stock that have been or may be issued by us from time to time to MEII
under the Purchase Agreement to permit the resale of these shares of common
stock after the issuance thereof by the selling stockholder from time to time
after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling stockholder of the shares of common stock. We will bear
all fees and expenses incident to our obligation to register the shares of
common stock. 

The selling stockholder may
decide not to sell any shares of common stock. The selling stockholder may sell
all or a portion of the shares of common stock beneficially owned by it and
offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents, who may receive compensation in the form of discounts,
concessions or commissions from the selling stockholder and/or the purchasers of
the shares of common stock for whom they may act as agent. In effecting sales,
broker-dealers that are engaged by the selling stockholder may arrange for other
broker-dealers to participate. MEII is an “underwriter” within the meaning of
the Securities Act. Any brokers, dealers or agents who participate in the
distribution of the shares of common stock by the selling stockholder may also
be deemed to be “underwriters,” and any profits on the sale of the shares of
common stock by them and any discounts, commissions or concessions received by
any such brokers, dealers or agents may be deemed to be underwriting discounts
and commissions under the Securities Act. MEII has advised us that it will use
an unaffiliated broker-dealer to effectuate all resales of our common stock. To
our knowledge, MEII has not entered into any agreement, arrangement or
understanding with any particular broker-dealer or market maker with respect to
the shares of common stock offered hereby, nor do we know the identity of the
broker-dealers or market makers that may participate in the resale of the
shares. Because MEII is, and any other selling stockholder, broker, dealer or
agent may be deemed to be, an “underwriter” within the meaning of the Securities
Act, MEII will (and any other selling stockholder, broker, dealer or agent may)
be subject to the prospectus delivery requirements of the Securities Act and may
be subject to certain statutory liabilities of the Securities Act (including,
without limitation, Sections 11, 12 and 17 thereof) and Rule 10b-5 under the
Exchange Act. 

The selling stockholder
will act independently of us in making decisions with respect to the timing,
manner and size of each sale. The shares of common stock may be sold in one or
more transactions at fixed prices, at prevailing market prices at the time of
the sale, at varying prices determined at the time of sale, or at negotiated
prices. These sales may be effected in transactions, which may involve crosses
or block transactions, pursuant to one or more of the following methods:


	on any national securities exchange or
  quotation service on which the securities may be listed or quoted at the time of
  sale;
 
  
	in the over-the-counter market in
  accordance with the rules of NASDAQ;
 
  
	in transactions otherwise than on
  these exchanges or systems or in the over-the-counter market;


A-25 







	through the writing or settlement of
  options, whether such options are listed on an options exchange or otherwise;
 
  
	ordinary brokerage transactions and
  transactions in which the broker-dealer solicits purchasers;
 
  
	block trades in which the
  broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block
  as principal to facilitate the transaction;
 
  
	purchases by a broker-dealer as
  principal and resale by the broker-dealer for its account;
 
  
	an exchange distribution in accordance
  with the rules of the applicable exchange;
 
  
	privately negotiated
  transactions;
 
  
	broker-dealers may agree with the
  selling stockholder to sell a specified number of such shares at a stipulated price per
  share;
 
  
	a combination of any such methods of
  sale; and
 
  
	any other method permitted pursuant to
  applicable law.


In addition, the selling
stockholder may transfer the shares of common stock by other means not described
in this prospectus. 

Any broker-dealer
participating in such transactions as agent may receive commissions from the
selling stockholder (and, if they act as agent for the purchaser of such shares,
from such purchaser). MEII has informed us that each such broker-dealer will
receive commissions from MEII which will not exceed customary brokerage
commissions. Broker-dealers may agree with the selling stockholder to sell a
specified number of shares at a stipulated price per share, and, to the extent
such a broker-dealer is unable to do so acting as agent for the selling
stockholder, to purchase as principal any unsold shares at the price required to
fulfill the broker-dealer commitment to the selling stockholder. Broker-dealers
who acquire shares as principal may thereafter resell such shares from time to
time in one or more transactions (which may involve crosses and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above and pursuant to the one or
more of the methods described above) at fixed prices, at prevailing market
prices at the time of the sale, at varying prices determined at the time of
sale, or at negotiated prices, and in connection with such resales may pay to or
receive from the purchasers of such shares commissions computed as described
above. To the extent required under the Securities Act, an amendment to this
prospectus or a supplemental prospectus will be filed, disclosing: 

	the name of any such
  broker-dealers;
 
  
	the number of shares
  involved;


A-26 







	the price at which such shares are to
  be sold;
 
  
	the commission paid or discounts or
  concessions allowed to such broker-dealers, where applicable;
 
  
	that such broker-dealers did not
  conduct any investigation to verify the information set out or incorporated by reference in this
  prospectus, as supplemented; and
 
  
	other facts material to the
  transaction.


MEII has informed us that
it does not have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the common stock.

Under the securities laws
of some states, the shares of common stock may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states
the shares of common stock may not be sold unless such shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with. 

There can be no assurance
that the selling stockholder will sell any or all of the shares of common stock
registered pursuant to the registration statement, of which this prospectus
forms a part. 

Underwriters and purchasers
that are deemed underwriters under the Securities Act may engage in transactions
that stabilize, maintain or otherwise affect the price of the common stock,
including the entry of stabilizing bids or syndicate covering transactions or
the imposition of penalty bids. The selling stockholder and any other person
participating in the sale or distribution of the shares of common stock will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder (including, without limitation, Regulation M of the
Exchange Act), which may restrict certain activities of, and limit the timing of
purchases and sales of any of the shares of common stock by, the selling
stockholder and any other participating person. To the extent applicable,
Regulation M may also restrict the ability of any person engaged in the
distribution of the shares of common stock to engage in market-making and
certain other activities with respect to the shares of common stock. In
addition, the anti-manipulation rules under the Exchange Act may apply to sales
of the shares of common stock in the market. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock. 

A-27 







We have agreed to pay all
expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, estimated to be $[ ] in total, including, without
limitation, Securities and Exchange Commission filing fees and expenses of
compliance with state securities or “Blue Sky” laws; provided, however, MEII
will pay all selling commissions, concessions and discounts, and other amounts
payable to underwriters, dealers or agents, if any, as well as transfer taxes
and certain other expenses associated with the sale of the shares of common
stock. We have agreed to indemnify MEII and certain other persons against
certain liabilities in connection with the offering of shares of common stock
offered hereby, including liabilities
arising under the Securities Act or, if such indemnity is unavailable, to
contribute amounts required to be paid in respect of such liabilities. MEII has
agreed to indemnify us against liabilities under the Securities Act that may
arise from any written information furnished to us by MEII specifically for use
in this prospectus or, if such indemnity is unavailable, to contribute amounts
required to be paid in respect of such liabilities. 

At any time a particular
offer of the shares of common stock is made by the selling stockholder, a
revised prospectus or prospectus supplement, if required, will be distributed.
Such prospectus supplement or post-effective amendment will be filed with the
Securities and Exchange Commission to reflect the disclosure of any required
additional information with respect to the distribution of the shares of common
stock. We may suspend the sale of shares by the selling stockholder pursuant to
this prospectus for certain periods of time for certain reasons, including if
the prospectus is required to be supplemented or amended to include additional
material information. 

A-28 







EXHIBIT B TO THE

COMMON STOCK PURCHASE
AGREEMENT 
FORM OF DRAW DOWN NOTICE 

Reference is made to the
Common Stock Purchase Agreement dated as of October 23, 2014 (the
“Purchase
Agreement”) between Bioheart,
Inc., a corporation organized and existing under the laws of the State of
Florida (the “Company”), and Magna
Equities II, LLC, a New York limited liability company. Capitalized terms used
and not otherwise defined herein shall have the meanings given such terms in the
Purchase Agreement. In accordance with and pursuant to Section 3.1 of the
Purchase Agreement, the Company hereby issues this Draw Down Notice to exercise
a Draw Down for the Draw Down Amount Requested indicated below. 

	       	Draw Down
      Amount Requested (dollar amount):	      	$	 
		Initial Purchase Price Per Share
      (specify whether calculated in accordance with section (i), (ii) or (iii)
      of definition of Initial Purchase Price in Purchase Agreement):	 	$	 
	 	Settlement
      Date:			 



On behalf of the Company,
the undersigned hereby certifies to the Investor that (i) the above Draw Down
Amount Requested does not exceed the Maximum Draw Down Amount Requested, (ii)
the sale of Shares pursuant to this Draw Down Notice shall not cause the Company
to sell or the Investor to purchase shares of Common Stock which, when
aggregated with all purchases made by the Investor pursuant to all prior Draw
Down Notices issued under the Purchase Agreement, would exceed the Aggregate
Limit, (iii) to the Company’s Knowledge, the sale of Shares pursuant to this
Draw Down Notice shall not cause the Company to sell or the Investor to purchase
shares of Common Stock which would cause the aggregate number of shares of
Common Stock then beneficially owned (as calculated pursuant to Section 13(d) of
the Exchange Act and Rule 13d-3 promulgated thereunder) by the Investor and its
Affiliates to exceed the Ownership Limitation and (iv) as of the date hereof,
the Company does not possess any material non-public information. 

	       Dated:	By:	 
		Name
		Title:
	  
		Address:
		Facsimile
      No.



AGREED AND ACCEPTED


	By: 
      	
		Name
		Title:



B-1 







EXHIBIT C TO THE

COMMON STOCK PURCHASE
AGREEMENT 

CERTIFICATE OF THE COMPANY 

CLOSING CERTIFICATE


October 24th,
2014 

The undersigned, the Chief
Executive Officer of Bioheart, Inc., a corporation organized and existing under
the laws of the State of Florida (the “Company”), delivers
this certificate in connection with the Common Stock Purchase Agreement, dated
as of October 23, 2014 (the “Agreement”), by and
between the Company and Magna Equities II, LLC, a New York limited liability company (the “Investor”), and hereby
certifies on the date hereof that (capitalized terms used herein without
definition have the meanings assigned to them in the Agreement): 

1. Attached hereto as
Exhibit A is a true, complete and correct copy of the
Articles of Incorporation of the Company as filed with the Secretary of State of
the State of Florida. The Articles of Incorporation of the Company have not been
further amended or restated, and no document with respect to any amendment to
the Articles of Incorporation of the Company has been filed in the office of the
Secretary of State of the State of Florida since the date shown on the face of
the state certification relating to the Company’s Articles of Incorporation,
which is in full force and effect on the date hereof, and no action has been
taken by the Company in contemplation of any such amendment or the dissolution,
merger or consolidation of the Company. 

2. Attached hereto as
Exhibit B is a true and complete copy of the Bylaws of the
Company, as amended and restated
through, and as in full force and effect on, the date hereof, and no proposal
for any amendment, repeal or other modification to the Bylaws of the Company has
been taken or is currently pending before the Board of Directors or stockholders
of the Company. 

3. The Board of Directors
of the Company has approved the transactions contemplated by the Transaction
Documents; said approval has not been amended, rescinded or modified and remains
in full force and effect as of the date hereof. 

4. Each person who, as an
officer of the Company, or as attorney-in-fact of an officer of the Company,
signed the Transaction Documents to which the Company is a party, was duly
elected, qualified and acting as such officer or duly appointed and acting as
such attorney-in-fact, and the signature of each such person appearing on any
such document is his genuine signature. 

IN WITNESS
WHEREOF, I have signed my name as
of the date first above written 


	/s/ Mike Tomàs
	Name: Mike
      Tomàs
	Title: President
      & CEO




C-1 







EXHIBIT D TO THE

COMMON STOCK PURCHASE
AGREEMENT 
COMPLIANCE CERTIFICATE 

In connection with the
issuance of shares of common stock of Bioheart, Inc., a corporation organized
and existing under the laws of the State of Florida (the “Company”), pursuant to the Draw Down Notice, dated [_____________], delivered by
the Company to Magna Equities II, LLC, a New York limited liability company (the
“Investor”) pursuant to Article III of the Common Stock
Purchase Agreement, dated October 23, 2014, by and between the Company and the
Investor (the “Agreement”), the
undersigned hereby certifies to the Investor as follows: 

1. The undersigned is the
duly appointed [_____________] of the Company. 

2. Except as set forth in
the attached Disclosure Schedule, the representations and warranties of the
Company set forth in Article V of the Agreement (i) that are not qualified by
“materiality” or “Material Adverse Effect” are true and correct in all material
respects as of [insert Draw Down Exercise Date] and as of the date hereof with
the same force and effect as if made on such dates, except to the extent such
representations and warranties are as of another date, in which case, such
representations and warranties are true and correct in all material respects as
of such other date and (ii) that are qualified by “materiality” or “Material
Adverse Effect” are true and correct as of [insert Draw Down Exercise Date] and
as of the date hereof with the same force and effect as if made on such dates,
except to the extent such representations and warranties are as of another date,
in which case, such representations and warranties are true and correct as of
such other date. 

3. The Company has
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by the Agreement and the Registration Rights
Agreement to be performed, satisfied or complied with by the Company at or prior
to [insert Draw Down Exercise Date] and the date hereof. 

4. The Shares issuable on
the date hereof, and any Additional Shares issuable on the applicable True-Up
Settlement Date, in each case in respect of the Draw Down Notice referenced
above shall be delivered electronically by crediting the Investor’s or its
designees’ account at DTC through its Deposit/Withdrawal at Custodian (DWAC)
system, and shall be freely tradable and transferable and without restriction on
resale. To the extent requested by the Investor pursuant to Section 10.1(iv)
under the Agreement, the legend set forth in Section 10.1(iii) of the Agreement
has been removed from the certificate representing the Initial Commitment Shares
in accordance with Section 10.1(iv) of the Agreement. 

5. As of the date hereof,
the Company does not possess any material non-public information. 

Capitalized terms used but
not otherwise defined herein shall have the meanings assigned to them in the
Agreement. 

The undersigned has
executed this Certificate this [___] day of [___________], 20[__]. 


	By:	 	 
		 
	


    	Name:	 	 
		 
	


    	Title:		




D-1 







DISCLOSURE SCHEDULE

RELATING TO THE COMMON STOCK
PURCHASE AGREEMENT, DATED AS OF OCTOBER 23, 2014 
BETWEEN BIOHEART,
INC. AND MAGNA EQUITIES II, LLC 

This disclosure schedule is
made and given pursuant to Article V of the Common Stock Purchase Agreement,
dated as of October 23, 2014 (the “Agreement”), by and
between Bioheart, Inc., a Florida corporation (the “Company”), and Magna Equities II, LLC, a New York limited liability company.
Unless the context otherwise requires, all capitalized terms are used herein as
defined in the Agreement. The numbers below correspond to the section numbers of
representations and warranties in the Agreement most directly modified by the
below exceptions. 

Schedule
5.6(c) 

Under the supervision and
with the participation of our management, including our CEO and Principal
Financial and Accounting Officer, an evaluation was performed on the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this quarterly report. Based
on that evaluation, our management, including our CEO and Principal Financial
and Accounting Officer, concluded that our disclosure controls and procedures
were ineffective as of the end of the period covered by this report due to the
Company’s limited resources and limited number of employees. To mitigate the
current limited resources and limited employees, we rely heavily on direct
management oversight of transactions, along with the use of legal and outsourced
accounting professionals. As we grow, we expect to increase our number of
employees, which, we believe, will enable us to implement adequate segregation
of duties within the internal control framework.

D-2







FORM OF OPINION OF
OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO 
SECTION 7.1(iv) OF THE COMMON
STOCK PURCHASE AGREEMENT 
DATED AS OF OCTOBER 23, 2014 BETWEEN BIOHEART, INC.
AND MAGNA 
EQUITIES II, LLC


[Company Counsel’s
Letterhead] 

	1.	     	The
      Company has been duly incorporated and is validly existing and in good
      standing under the laws of the State of Florida, with full corporate power
      and authority to own its properties and to conduct its business as
      described in the Registration Statement and the Prospectus. The Company is
      duly qualified to do business as a foreign corporation and is in good
      standing in every jurisdiction in which the nature of the business
      conducted or property owned by it makes such qualification necessary,
      except for any jurisdiction in which the failure to be so qualified would
      not have a Material Adverse Effect.
	 
	2.		The
      Company has the requisite corporate power and authority to execute,
      deliver and perform its obligations under the Transaction Documents to
      which it is a party and to issue the Securities in accordance with the
      terms thereof. The execution and delivery by the Company of the
      Transaction Documents to which it is a party, and the consummation by the
      Company of the transactions contemplated thereby (including, without
      limitation, the issuance of the Securities) have been duly and validly
      authorized by all necessary corporate action and, except for any consent
      or authorization of the Company’s Board of Directors or a committee
      thereof in connection with the delivery of a Draw Down Notice to the
      Investor, no further consent or authorization of the Company, its Board of
      Directors or its stockholders is required.
	     
	3.		Each of
      the Transaction Documents to which the Company is a party has been duly
      executed and delivered by the Company and constitutes a legal, valid and
      binding obligation of the Company, enforceable against the Company in
      accordance with its terms, subject to applicable bankruptcy, insolvency,
      fraudulent conveyance, reorganization, moratorium and similar laws
      affecting creditors’ rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in
    equity).
	 
	4.		
      The execution, delivery and
      performance by the Company of the Transaction Documents to which it is a
      party and the consummation by the Company of the transactions contemplated
      thereby (including, without limitation, the issuance of the Securities) do
      not and will not: (i) violate the Company’s certificate of incorporation
      or bylaws (the “Governing Documents”); (ii) violate the general
      corporation law of the State of Delaware, or any federal or Florida
      statute, rule or regulation applicable to the Company; (iii) require any
      consents, approvals, or authorizations to be obtained by the Company, or
      any registrations, declarations or filings to be made by the Company, in
      each case, under the general corporation law of the State of Delaware or
      any federal or Florida statute, rule or regulation applicable to the
      Company that have not been obtained or made; (iv) conflict with, or
      constitute a default (or an event which with notice or lapse of time or
      both would become a default) under, or give to others any rights of
      termination, amendment, acceleration or cancellation
      of, any material agreement, mortgage, deed of trust, indenture, note,
      bond, license, lease agreement, instrument or obligation to which the
      Company is a party or is bound that has been filed as an exhibit to the
      2013 Form 10-K or any other Commission Document filed after the 2013 Form
      10-K; (v) create or impose a lien, charge or encumbrance on any property
      of the Company under any agreement or commitment to which the Company is a
      party or is bound that has been filed as an exhibit to the 2013 Form 10-K
      or any other Commission Document filed after the 2013 Form 10-K; or (vi)
      to our knowledge, result in a violation of any federal or state order,
      judgment or decree applicable to the Company or any of its Subsidiaries or
      by which any property or asset of the Company or any of its Subsidiaries
      are bound or affected.



D-3 







	5.	     	Assuming the accuracy
      of the representations and warranties made by you in the Purchase
      Agreement and your compliance with the covenants made by you in the
      Purchase Agreement and the Registration Rights Agreement, the offering,
      sale and issuance of the Securities in accordance with the Transaction
      Documents is exempt from the registration requirements of the Securities
      Act of 1933, as amended (the “Securities Act”).
	     
	6.		When issued in
      accordance with the Purchase Agreement, the Initial Commitment Shares and
      the Additional Commitment Shares will be duly authorized and validly
      issued, fully paid and nonassessable, free and clear of all liens,
      charges, taxes, security interests, encumbrances, rights of first refusal,
      preemptive or similar rights and other encumbrances under the Company’s
      Governing Documents, the laws of the State of Delaware or any material
      agreement, mortgage, deed of trust, indenture, note, bond, license, lease
      agreement, instrument or obligation to which the Company is a party or is
      bound that has been filed as an exhibit to the 2013 Form 10-K or any other
      Commission Document filed after the 2013 Form 10-K. When issued and paid
      for in accordance with the Purchase Agreement, the Shares will be duly
      authorized and validly issued, fully paid and nonassessable, free and
      clear of all liens, charges, taxes, security interests, encumbrances,
      rights of first refusal, preemptive or similar rights and other
      encumbrances under the Company’s Governing Documents, the laws of the
      State of Delaware or any material agreement, mortgage, deed of trust,
      indenture, note, bond, license, lease agreement, instrument or obligation
      to which the Company is a party or is bound that has been filed as an
      exhibit to the 2013 Form 10-K or any other Commission Document filed after
      the 2013 Form 10-K. To our knowledge, the execution and delivery of the
      Registration Rights Agreement do not, and the performance by the Company
      of its obligations thereunder shall not, give rise to any rights of any
      other person for the registration under the Securities Act of any shares
      of Common Stock or other securities of the Company which have not been
      waived.
	     
	7.		There is no
      action, suit, claim, investigation or proceeding pending or, to our
      knowledge, threatened against the Company or any Subsidiary which
      questions the validity of any of the Transaction Documents or the
      transactions contemplated thereby or any action taken or to be taken
      pursuant thereto. Except as set forth in the Commission Documents, to our
      knowledge, there is no action, suit, claim, investigation or proceeding
      pending or threatened against or involving the
      Company, any Subsidiary or any of their respective properties or
      assets.

	  
	8.		The Company is not an “investment company”
      or any entity controlled by an “investment company,” as such term is
      defined in the Investment Company Act of 1940, as
  amended.


D-4







FORM OF OPINION OF
OUTSIDE COUNSEL TO BE DELIVERED PURSUANT TO 
SECTION 7.2(xv) OF THE COMMON
STOCK PURCHASE AGREEMENT 
DATED AS OF OCTOBER 23, 2014 BETWEEN BIOHEART, INC.
AND MAGNA 
EQUITIES II, LLC


[Company Counsel’s
Letterhead] 

	1.	     	The
      Registration Statement has become effective under the Securities Act. With
      your consent, based solely on a telephonic confirmation by a member of the
      Staff of the Commission on [__________], 2014, no stop order suspending
      the effectiveness of the Registration Statement has been issued under the
      Securities Act and no proceedings therefor have been initiated or, to our
      knowledge threatened, by the Commission, and the Registrable Securities
      may be resold under the Securities Act pursuant to the Registration
      Statement. Any required filing of the Prospectus and a Prospectus
      Supplement pursuant to Rule 424 under the Securities Act has been made in
      accordance with Rule 424 under the Securities Act.
	     
	2.		The
      Registration Statement, as of the date it became effective, and the
      Prospectus and each Prospectus Supplement, as of its date, complied as to
      form in all material respects with the requirements for registration
      statements on Form S-1 under the Act; it being understood, however, that
      we express no opinion with respect to Regulation S-T or the financial
      statements, schedules or other financial data included in or incorporated
      by reference in or omitted from the Registration Statement, the Prospectus
      or any Prospectus Supplement. For purposes of this paragraph, we have
      assumed that the statements made in the Registration Statement, the
      Prospectus and each Prospectus Supplement are correct and
    complete.


In addition, we have
participated in conferences with officers and other representatives of the
Company and representatives of the independent registered public accounting firm
for the Company, at which the contents of the Registration Statement, the
Prospectus and each Prospectus Supplement, and the Commission Documents
incorporated by reference therein, and related matters were discussed and,
although we are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained or incorporated
by reference in the Registration Statement, the Prospectus, each Prospectus
Supplement, or the Commission Documents incorporated by reference therein, and
have not made any independent check or verification thereof, during the course
of such participation, no facts came to our attention that caused us to believe
that the Registration Statement, at the time it became effective and as of the
date hereof, together with the Commission Documents incorporated by reference
therein, at such time and as of the date hereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, together with the
Commission Documents incorporated by reference therein, at that date and as of
the date hereof, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, the notes
and schedules thereto, other financial data, or exhibits included in, incorporated by
reference in, or omitted from, the Registration Statement or the
Prospectus.

D-5







FORM OF OPINION “BRING
DOWN” OF OUTSIDE COUNSEL TO BE DELIVERED 
PURSUANT TO SECTION 7.2(xv) OF THE
COMMON STOCK PURCHASE 
AGREEMENT DATED AS OF OCTOBER 23, 2014 BETWEEN
BIOHEART, INC. AND 
MAGNA
EQUITIES II, LLC 

[Company Counsel’s
Letterhead] 

	1.	     	The
      Registration Statement has become effective under the Securities Act. With
      your consent, based solely on a telephonic confirmation by a member of the
      Staff of the Commission on [_____] [___], 20[_], no stop order suspending
      the effectiveness of the Registration Statement has been issued under the
      Securities Act and no proceedings therefor have been initiated or, to our
      knowledge threatened, by the Commission, and the Registrable Securities
      may be resold under the Securities Act pursuant to the Registration
      Statement. Any required filing of the Prospectus and a Prospectus
      Supplement pursuant to Rule 424 under the Securities Act has been made in
      accordance with Rule 424 under the Securities Act.
	     
	2.		Based on
      our inquiry of the Company’s [______________], no facts have come to our
      attention that cause us to believe that any of the opinions expressed in
      our opinion letter to you dated [_______], 2014 are not true and correct as of the date hereof.
	  
	3.		Based on
      our inquiry of the Company’s [______________], no facts have come to our
      attention that cause us to believe that the opinion expressed in paragraph
      2 of our opinion letter to you dated [_______], 20[__] is not true and
      correct as of the date hereof.


In addition, we have
participated in conferences with officers and other representatives of the
Company and representatives of the independent registered public accounting firm
for the Company, at which the contents of the Registration Statement, the
Prospectus and each Prospectus Supplement, and the Commission Documents
incorporated by reference therein, and related matters were discussed and,
although we are not passing upon, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements contained or incorporated
by reference in the Registration Statement, the Prospectus, each Prospectus
Supplement, or the Commission Documents incorporated by reference therein, and
have not made any independent check or verification thereof, during the course
of such participation, no facts came to our attention that caused us to believe
that the Registration Statement, at the time it became effective and as of the
date hereof, together with the Commission Documents incorporated by reference
therein, at such time and as of the date hereof, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of its date and as of the date hereof, together with the
Commission Documents incorporated by reference therein, at that date and as of
the date hereof, contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that we express no belief with respect to the financial statements, the notes
and schedules thereto, other financial data, or exhibits included in,
incorporated by reference in, or omitted from, the Registration Statement or the
Prospectus. 

D-6