Document:

Exhibit
10.11

    

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION.  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH  REGISTRATION IS NOT REQUIRED OR SUCH FOREIGN JURISDICTION LAWS HAVE
BEEN SATISFIED.

    

    VENTRUS
BIOSCIENCES, INC.

    10%
SENIOR PROMISSORY NOTE

    

    
      
        	 
      	
                Greenwood
      Village, Colorado

              
	
                $1,100,000

              	
                January
      23, 2009

              

      

    

    

    
      	
               
      

            	
              1.

            	
              Principal and
      Interest.

            

    

     

    VENTRUS BIOSCIENCES, INC. (the
“Company”), a
Delaware corporation, for value received, hereby promises to pay to the order of
PARAMOUNT CREDIT PARTNERS,
LLC, or his, her or its assigns (“Holder”), in lawful
money of the United States of America at the address for notices to Holder set
forth in the applicable Purchase Agreement (as defined below) (or such other
address as Holder shall provide to the Company in writing pursuant hereto), the
principal amount of One Million One Hundred Thousand Dollars ($1,100,000),
together with interest as set forth below.

     

    The
Company promises to pay interest on the unpaid principal amount from the date
hereof until such principal amount is paid in full at the rate of ten percent
(10%), or such lesser rate as shall be the maximum rate allowable under
applicable law; provided however, that upon an
Event of Default (as defined herein) during the Term (as defined herein) of this
Note, the interest rate on this Note shall be increased to twelve percent (12%)
per annum during the term of the default.  Interest from the date hereof
shall be computed on the basis of a 360-day year of twelve 30-day months, and
shall accrue and be payable quarterly in arrears.  All unpaid principal on
this Note shall be due and payable on the earlier of (i) December 31, 2013; (ii)
consummation by the Company of an equity financing (or series of related equity
financings), including without limitation a firm commitment underwritten initial
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, involving the sale of equity securities in
which the Company receives at least $10,000,000 in aggregate gross cash proceeds
(before brokers’ fees or other transaction related expenses) (a “Qualified
Financing”); and (iii) consummation of a merger, share exchange or other
transaction (or series of related transactions), other than in connection with a
Qualified Financing, in which (A) the Company merges into or otherwise becomes a
wholly owned subsidiary of a company subject to the public company reporting
requirements of the Securities Exchange Act of 1934, as amended, and (B) the
aggregate consideration payable to the Company or its stockholders in such
transaction(s) is greater than or equal to $10,000,000 (such period of time from
the date of issuance hereof, the “Term”).  For
purposes of this Note, an “Event of Default”
shall occur if (i) the Company shall default in the payment on the Note, when
and as the same shall become due and payable and any such failure to make
payment continues for five (5) business days; or (ii) the Company shall default
in the due observance or performance of any material covenant, condition or
agreement on the part of the Company contained in this Note or the Purchase
Agreement (as defined below) (other than the failure to make payment when due),
and any such default shall continue for a period of sixty (60) days after the
date on which the Company receives written notice thereof from the
Holder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This Note
is being issued pursuant to that certain Note Purchase Agreement between the
Company and the Holder, dated as of the date hereof (the “Purchase Agreement”),
and is subject to its terms.  Capitalized terms used herein but not defined
shall have the meanings given to such terms in the Purchase Agreement.  The
Note shall rank pari passu with all other senior existing indebtedness of the
Company and, pursuant to Section 2.8 of the Purchase Agreement, no new
indebtedness which is secured or senior in right of payment to the Notes may be
issued by the Company without the consent of the Holder.  No consent of the
Holder will be required for issuances by the Company of unsecured indebtedness
that ranks pari passu with, or junior to, the Notes.

     

    2. 
         Prepayment.  The Notes may be prepaid at
any time, in whole or in part, without penalty prior to the end of the
Term.

     

    3. 
         Attorneys’ Fees.  If the indebtedness
represented by this Note or any part thereof is collected in bankruptcy,
receivership or other judicial proceedings or if this Note is placed in the
hands of attorneys for collection after default, the Company agrees to pay, in
addition to the principal and interest payable hereunder, reasonable attorneys’
fees and costs incurred by Holder.

     

    4. 
         Notices.  Any notice, other communication
or payment required or permitted hereunder shall be in writing and shall be
deemed to have been given upon delivery to the address provided pursuant to the
Purchase Agreement.

     

    5. 
         Notice of Proposed Transfers.  This Note
shall not be transferable by the Holder without the prior written consent of the
Company, which shall not be unreasonably withheld.  Notwithstanding the
foregoing, the Holder may transfer this Note to one or more of its members, if
the transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were the original Holder hereunder.  Each
certificate evidencing the Note transferred as above provided shall bear an
appropriate restrictive legend, except that the Note shall not bear such
restrictive legend if, in the opinion of counsel for the Company, such legend is
not required in order to establish compliance with any provisions of the
Securities Act.

     

    6. 
         Acceleration.  This Note shall become
immediately due and payable if (i) the Company commences any proceeding in
bankruptcy or for dissolution, liquidation, winding-up, composition or other
relief under state or federal bankruptcy laws; or (ii) there is any material
breach of any material covenant, warranty, representation or other term or
condition of this Note or the Purchase Agreement at any time which is not cured
within the time periods permitted therein, or if no cure period is provided
therein, within sixty (60) days after the date on which the Company receives
written notice thereof from the Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7. 
         No Dilution or Impairment.  The Company
will not, by amendment of its Certificate of Incorporation or Bylaws or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Note, but will
at all times in good faith assist in the carrying out of all such terms and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Note against dilution or other
impairment.

     

    8. 
         Waivers.  The Company hereby waives
presentment, demand for performance, notice of non-performance, protest, notice
of protest and notice of dishonor.  No delay on the part of the Holder in
exercising any right hereunder shall operate as a waiver of such right or any
other right.  This Note is being delivered in and shall be construed in
accordance with the laws of the State of New York, without regard to the
conflicts of laws provisions thereof.

     

    9. 
         No Stockholder Rights.  Nothing contained
in this Note shall be construed as conferring upon the Holder or any other
person the right to vote or to consent or to receive notice as a stockholder of
the Company.

     

    10. 
       Amendment.  Any term of this Note may be amended
only with the written consent of the Company and the Holder.

     

    * 
*  *  *  *

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      
        	
                ISSUED as of the date
      first above written.

              
	 
      	 
      
	 
      	
                VENTRUS
      BIOSCIENCES, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Thom Rowland

              
	 
      	
                Name: 
      

              	
                Thom
      Rowland

              
	 
      	
                Title:

              	
                President
      and Chief Executive
Officer

              

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION.  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED OR SUCH FOREIGN JURISDICTION LAWS HAVE BEEN
SATISFIED.

     

    VENTRUS
BIOSCIENCES, INC.

    10%
SENIOR PROMISSORY NOTE

     

    
      	 
      	
              Greenwood
      Village, Colorado

            
	
              $100,000

            	
              March
      25, 2009

            

    

     

    1. 
         Principal and
Interest.

     

    VENTRUS BIOSCIENCES, INC. (the
“Company”), a
Delaware corporation, for value received, hereby promises to pay to the order of
PARAMOUNT CREDIT PARTNERS,
LLC, or his, her or its assigns (“Holder”), in lawful
money of the United States of America at the address for notices to Holder set
forth in the applicable Purchase Agreement (as defined below) (or such other
address as Holder shall provide to the Company in writing pursuant hereto), the
principal amount of One Hundred Thousand Dollars ($100,000), together with
interest as set forth below.

     

    The
Company promises to pay interest on the unpaid principal amount from the date
hereof until such principal amount is paid in full at the rate of ten percent
(10%), or such lesser rate as shall be the maximum rate allowable under
applicable law; provided however, that upon an
Event of Default (as defined herein) during the Term (as defined herein) of this
Note, the interest rate on this Note shall be increased to twelve percent (12%)
per annum during the term of the default.  Interest from the date hereof
shall be computed on the basis of a 360-day year of twelve 30-day months, and
shall accrue and be payable quarterly in arrears.  All unpaid principal on
this Note shall be due and payable on the earlier of (i) December 31, 2013; (ii)
consummation by the Company of an equity financing (or series of related equity
financings), including without limitation a firm commitment underwritten initial
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, involving the sale of equity securities in
which the Company receives at least $10,000,000 in aggregate gross cash proceeds
(before brokers’ fees or other transaction related expenses) (a “Qualified
Financing”); and (iii) consummation of a merger, share exchange or other
transaction (or series of related transactions), other than in connection with a
Qualified Financing, in which (A) the Company merges into or otherwise becomes a
wholly owned subsidiary of a company subject to the public company reporting
requirements of the Securities Exchange Act of 1934, as amended, and (B) the
aggregate consideration payable to the Company or its stockholders in such
transaction(s) is greater than or equal to $10,000,000 (such period of time from
the date of issuance hereof, the “Term”).  For
purposes of this Note, an “Event of Default”
shall occur if (i) the Company shall default in the payment on the Note, when
and as the same shall become due and payable and any such failure to make
payment continues for five (5) business days; or (ii) the Company shall default
in the due observance or performance of any material covenant, condition or
agreement on the part of the Company contained in this Note or the Purchase
Agreement (as defined below) (other than the failure to make payment when due),
and any such default shall continue for a period of sixty (60) days after the
date on which the Company receives written notice thereof from the
Holder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This Note
is being issued pursuant to that certain Note Purchase Agreement between the
Company and the Holder, dated as of the date hereof (the “Purchase Agreement”),
and is subject to its terms.  Capitalized terms used herein but not defined
shall have the meanings given to such terms in the Purchase Agreement.  The
Note shall rank pari passu with all other senior existing indebtedness of the
Company and, pursuant to Section 2.8 of the Purchase Agreement, no new
indebtedness which is secured or senior in right of payment to the Notes may be
issued by the Company without the consent of the Holder.  No consent of the
Holder will be required for issuances by the Company of unsecured indebtedness
that ranks pari passu with, or junior to, the Notes.

     

    2. 
         Prepayment.  The
Notes may be prepaid at any time, in whole or in part, without penalty prior to
the end of the Term.

     

    3. 
         Attorneys’
Fees.  If the indebtedness represented by this Note or any part
thereof is collected in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, the Company agrees to pay, in addition to the principal and interest
payable hereunder, reasonable attorneys’ fees and costs incurred by
Holder.

     

    4. 
         Notices.  Any
notice, other communication or payment required or permitted hereunder shall be
in writing and shall be deemed to have been given upon delivery to the address
provided pursuant to the Purchase Agreement.

     

    5. 
         Notice of Proposed
Transfers.  This Note shall not be transferable by the Holder
without the prior written consent of the Company, which shall not be
unreasonably withheld.  Notwithstanding the foregoing, the Holder may
transfer this Note to one or more of its members, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if such
transferee were the original Holder hereunder.  Each certificate evidencing
the Note transferred as above provided shall bear an appropriate restrictive
legend, except that the Note shall not bear such restrictive legend if, in the
opinion of counsel for the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act.

     

    6. 
         Acceleration. 
This Note shall become immediately due and payable if (i) the Company commences
any proceeding in bankruptcy or for dissolution, liquidation, winding-up,
composition or other relief under state or federal bankruptcy laws; or (ii)
there is any material breach of any material covenant, warranty, representation
or other term or condition of this Note or the Purchase Agreement at any time
which is not cured within the time periods permitted therein, or if no cure
period is provided therein, within sixty (60) days after the date on which the
Company receives written notice thereof from the Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7. 
         No Dilution or
Impairment.  The Company will not, by amendment of its Certificate
of Incorporation or Bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Note against dilution or other impairment.

     

    8. 
         Waivers.  The
Company hereby waives presentment, demand for performance, notice of
non-performance, protest, notice of protest and notice of dishonor.  No
delay on the part of the Holder in exercising any right hereunder shall operate
as a waiver of such right or any other right.  This Note is being delivered
in and shall be construed in accordance with the laws of the State of New York,
without regard to the conflicts of laws provisions thereof.

     

    9. 
         No Stockholder
Rights.  Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person the right to vote or to consent
or to receive notice as a stockholder of the Company.

     

    10. 
       Amendment.  Any
term of this Note may be amended only with the written consent of the Company
and the Holder.

     

    * 
*  *  *  *

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      
        	
                ISSUED as of the date
      first above written.

              
	 
      	 
      	 
      
	 
      	
                VENTRUS
      BIOSCIENCES, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                 /s/ Thom Rowland

              
	 
      	
                Name: 
      

              	
                Thom
      Rowland

              
	 
      	
                Title:

              	
                President
      and Chief Executive
Officer

              

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION.  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED OR SUCH FOREIGN JURISDICTION LAWS HAVE BEEN
SATISFIED.

     

    VENTRUS
BIOSCIENCES, INC.

    10%
SENIOR PROMISSORY NOTE

     

    
      	 
      	
              Greenwood
      Village, Colorado

            
	
              $250,000

            	
              June
      1, 2009

            

    

    

    1. 
         Principal and
Interest.

     

    VENTRUS BIOSCIENCES, INC. (the
“Company”), a
Delaware corporation, for value received, hereby promises to pay to the order of
PARAMOUNT CREDIT PARTNERS,
LLC, or his, her or its assigns (“Holder”), in lawful
money of the United States of America at the address for notices to Holder set
forth in the applicable Purchase Agreement (as defined below) (or such other
address as Holder shall provide to the Company in writing pursuant hereto), the
principal amount of Two Hundred Fifty Thousand Dollars ($250,000), together with
interest as set forth below.

     

    The
Company promises to pay interest on the unpaid principal amount from the date
hereof until such principal amount is paid in full at the rate often percent
(10%), or such lesser rate as shall be the maximum rate allowable under
applicable law; provided however, that upon an
Event of Default (as defined herein) during the Term (as defined herein) of this
Note, the interest rate on this Note shall be increased to twelve percent (12%)
per annum during the term of the default.  Interest from the date hereof
shall be computed on the basis of a 360-day year of twelve 30-day months, and
shall accrue and be payable quarterly in arrears.  All unpaid principal on
this Note shall be due and payable on the earlier of (i) December 31, 2013; (ii)
consummation by the Company of an equity financing (or series of related equity
financings), including without limitation a firm commitment underwritten initial
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, involving the sale of equity securities in
which the Company receives at least $10,000,000 in aggregate gross cash proceeds
(before brokers’ fees or other transaction related expenses) (a “Qualified
Financing”); and (iii) consummation of a merger, share exchange or other
transaction (or series of related transactions), other than in connection with a
Qualified Financing, in which (A) the Company merges into or otherwise becomes a
wholly owned subsidiary of a company subject to the public company reporting
requirements of the Securities Exchange Act of 1934, as amended, and (B) the
aggregate consideration payable to the Company or its stockholders in such
transaction(s) is greater than or equal to $10,000,000 (such period of time from
the date of issuance hereof, the “Term”).  For
purposes of this Note, an “Event of Default”
shall occur if (i) the Company shall default in the payment on the Note, when
and as the same shall become due and payable and any such failure to make
payment continues for five (5) business days; or (ii) the Company shall default
in the due observance or performance of any material covenant, condition or
agreement on the part of the Company contained in this Note or the Purchase
Agreement (as defined below) (other than the failure to make payment when due),
and any such default shall continue for a period of sixty (60) days after the
date on which the Company receives written notice thereof from the
Holder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This Note
is being issued pursuant to that certain Note Purchase Agreement between the
Company and the Holder, dated as of the date hereof (the “Purchase Agreement”),
and is subject to its terms.  Capitalized terms used herein but not defined
shall have the meanings given to such terms in the Purchase Agreement.  The
Note shall rank pari passu with all other senior existing indebtedness of the
Company and, pursuant to Section 2.8 of the Purchase Agreement, no new
indebtedness which is secured or senior in right of payment to the Notes may be
issued by the Company without the consent of the Holder.  No consent of the
Holder will be required for issuances by the Company of unsecured indebtedness
that ranks pari passu with, or junior to, the Notes.

     

    2. 
         Prepayment.  The
Notes may be prepaid at any time, in whole or in part, without penalty prior to
the end of the Term.

     

    3. 
         Attorneys’
Fees.  If the indebtedness represented by this Note or any part
thereof is collected in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, the Company agrees to pay, in addition to the principal and interest
payable hereunder, reasonable attorneys’ fees and costs incurred by
Holder.

     

    4. 
         Notices.  Any
notice, other communication or payment required or permitted hereunder shall be
in writing and shall be deemed to have been given upon delivery to the address
provided pursuant to the Purchase Agreement.

     

    5. 
         Notice of Proposed
Transfers.  This Note shall not be transferable by the Holder
without the prior written consent of the Company, which shall not be
unreasonably withheld.  Notwithstanding the foregoing, the Holder may
transfer this Note to one or more of its members, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if such
transferee were the original Holder hereunder.  Each certificate evidencing
the Note transferred as above provided shall bear an appropriate restrictive
legend, except that the Note shall not bear such restrictive legend if, in the
opinion of counsel for the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act.

     

    6. 
         Acceleration. 
This Note shall become immediately due and payable if (i) the Company commences
any proceeding in bankruptcy or for dissolution, liquidation, winding-up,
composition or other relief under state or federal bankruptcy laws; or (ii)
there is any material breach of any material covenant, warranty, representation
or other term or condition of this Note or the Purchase Agreement at any time
which is not cured within the time periods permitted therein, or if no cure
period is provided therein, within sixty (60) days after the date on which the
Company receives written notice thereof from the Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7. 
         No Dilution or
Impairment.  The Company will not, by amendment of its Certificate
of Incorporation or Bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Note against dilution or other impairment.

     

    8. 
         Waivers.  The
Company hereby waives presentment, demand for performance, notice of
non-performance, protest, notice of protest and notice of dishonor.  No
delay on the part of the Holder in exercising any right hereunder shall operate
as a waiver of such right or any other right.  This Note is being delivered
in and shall be construed in accordance with the laws of the State of New York,
without regard to the conflicts of laws provisions thereof.

     

    9. 
         No Stockholder
Rights.  Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person the right to vote or to consent
or to receive notice as a stockholder of the Company.

     

    10. 
       Amendment.  Any
term of this Note may be amended only with the written consent of the Company
and the Holder.

     

    * 
*  *  *  *

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  ISSUED as of the date
      first above written.

                
	 
      	 
      	 
      
	 
      	
                  VENTRUS
      BIOSCIENCES, INC.

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /s/ Timothy M. Hofer

                
	 
      	
                  Name: 
      

                	
                  Timothy
      M. Hofer

                
	 
      	
                  Title:

                	
                  Authorized
      Signatory

                

        

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN
JURISDICTION.  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS AND IN THE ABSENCE OF COMPLIANCE WITH APPLICABLE LAWS OF ANY
FOREIGN JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED OR SUCH FOREIGN JURISDICTION LAWS HAVE BEEN
SATISFIED.

     

    VENTRUS
BIOSCIENCES, INC.

    10%
SENIOR PROMISSORY NOTE

     

    
      	 
      	
              Greenwood
      Village, Colorado

            
	
              $123,000

            	
              June
      24, 2009

            

    

    

    1. 
         Principal and
Interest.

     

    VENTRUS BIOSCIENCES, INC. (the
“Company”), a
Delaware corporation, for value received, hereby promises to pay to the order of
PARAMOUNT CREDIT PARTNERS,
LLC, or his, her or its assigns (“Holder”), in lawful
money of the United States of America at the address for notices to Holder set
forth in the applicable Purchase Agreement (as defined below) (or such other
address as Holder shall provide to the Company in writing pursuant hereto), the
principal amount of One Hundred Twenty Three Thousand Dollars ($123,000),
together with interest as set forth below.

     

    The
Company promises to pay interest on the unpaid principal amount from the date
hereof until such principal amount is paid in full at the rate of ten percent
(10%), or such lesser rate as shall be the maximum rate allowable under
applicable law; provided however, that upon an
Event of Default (as defined herein) during the Term (as defined herein) of this
Note, the interest rate on this Note shall be increased to twelve percent (12%)
per annum during the term of the default.  Interest from the date hereof
shall be computed on the basis of a 360-day year of twelve 30-day months, and
shall accrue and be payable quarterly in arrears.  All unpaid principal on
this Note shall be due and payable on the earlier of (i) December 31, 2013; (ii)
consummation by the Company of an equity financing (or series of related equity
financings), including without limitation a firm commitment underwritten initial
public offering pursuant to an effective registration statement under the
Securities Act of 1933, as amended, involving the sale of equity securities in
which the Company receives at least $10,000,000 in aggregate gross cash proceeds
(before brokers’ fees or other transaction related expenses) (a “Qualified
Financing”); and (iii) consummation of a merger, share exchange or other
transaction (or series of related transactions), other than in connection with a
Qualified Financing, in which (A) the Company merges into or otherwise becomes a
wholly owned subsidiary of a company subject to the public company reporting
requirements of the Securities Exchange Act of 1934, as amended, and (B) the
aggregate consideration payable to the Company or its stockholders in such
transaction(s) is greater than or equal to $10,000,000 (such period of time from
the date of issuance hereof, the “Term”).  For
purposes of this Note, an “Event of Default”
shall occur if (i) the Company shall default in the payment on the Note, when
and as the same shall become due and payable and any such failure to make
payment continues for five (5) business days; or (ii) the Company shall default
in the due observance or performance of any material covenant, condition or
agreement on the part of the Company contained in this Note or the Purchase
Agreement (as defined below) (other than the failure to make payment when due),
and any such default shall continue for a period of sixty (60) days after the
date on which the Company receives written notice thereof from the
Holder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    This Note
is being issued pursuant to that certain Note Purchase Agreement between the
Company and the Holder, dated as of the date hereof (the “Purchase Agreement”),
and is subject to its terms.  Capitalized terms used herein but not defined
shall have the meanings given to such terms in the Purchase Agreement.  The
Note shall rank pari passu with all other senior existing indebtedness of the
Company and, pursuant to Section 2.8 of the Purchase Agreement, no new
indebtedness which is secured or senior in right of payment to the Notes may be
issued by the Company without the consent of the Holder.  No consent of the
Holder will be required for issuances by the Company of unsecured indebtedness
that ranks pari passu with, or junior to, the Notes.

     

    2. 
         Prepayment.  The
Notes may be prepaid at any time, in whole or in part, without penalty prior to
the end of the Term.

     

    3. 
         Attorneys’
Fees.  If the indebtedness represented by this Note or any part
thereof is collected in bankruptcy, receivership or other judicial proceedings
or if this Note is placed in the hands of attorneys for collection after
default, the Company agrees to pay, in addition to the principal and interest
payable hereunder, reasonable attorneys’ fees and costs incurred by
Holder.

     

    4. 
         Notices.  Any
notice, other communication or payment required or permitted hereunder shall be
in writing and shall be deemed to have been given upon delivery to the address
provided pursuant to the Purchase Agreement.

     

    5. 
         Notice of Proposed
Transfers.  This Note shall not be transferable by the Holder
without the prior written consent of the Company, which shall not be
unreasonably withheld.  Notwithstanding the foregoing, the Holder may
transfer this Note to one or more of its members, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if such
transferee were the original Holder hereunder.  Each certificate evidencing
the Note transferred as above provided shall bear an appropriate restrictive
legend, except that the Note shall not bear such restrictive legend if, in the
opinion of counsel for the Company, such legend is not required in order to
establish compliance with any provisions of the Securities Act.

     

    6. 
         Acceleration. 
This Note shall become immediately due and payable if (i) the Company commences
any proceeding in bankruptcy or for dissolution, liquidation, winding-up,
composition or other relief under state or federal bankruptcy laws; or (ii)
there is any material breach of any material covenant, warranty, representation
or other term or condition of this Note or the Purchase Agreement at any time
which is not cured within the time periods permitted therein, or if no cure
period is provided therein, within sixty (60) days after the date on which the
Company receives written notice thereof from the Holder.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    7. 
         No Dilution or
Impairment.  The Company will not, by amendment of its Certificate
of Incorporation or Bylaws or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Note, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Note against dilution or other impairment.

     

    8. 
         Waivers.  The
Company hereby waives presentment, demand for performance, notice of
non-performance, protest, notice of protest and notice of dishonor.  No
delay on the part of the Holder in exercising any right hereunder shall operate
as a waiver of such right or any other right.  This Note is being delivered
in and shall be construed in accordance with the laws of the State of New York,
without regard to the conflicts of laws provisions thereof.

     

    9. 
         No Stockholder
Rights.  Nothing contained in this Note shall be construed as
conferring upon the Holder or any other person the right to vote or to consent
or to receive notice as a stockholder of the Company.

     

    10. 
       Amendment.  Any
term of this Note may be amended only with the written consent of the Company
and the Holder.

     

    * 
*  *  *  *

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      
        	
                ISSUED as of the date
      first above written.

              
	 
      	 
      	 
      
	 
      	
                VENTRUS
      BIOSCIENCES, INC.

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Thom Rowland

              
	 
      	
                Name: 
      

              	
                Thom
      Rowland

              
	 
      	
                Title:

              	
                President

              

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
 

    VENTRUS
BIOSCIENCES, INC.

     

    WAIVER
AGREEMENT AND AMENDMENT

    

    This WAIVER AGREEMENT AND AMENDMENT
(the “Agreement”) is made as of August 30, 2010 with regard to (i) the Senior
Promissory Notes dated January 23, March 25, June 1 and June 24, 2010 (each a
“Note” and collectively the “Notes”), by and among Ventrus Biosciences, Inc., a
Delaware corporation (the “Company”)and Paramount Credit Partners, LLC (the
“Purchaser”). This Agreement is among the Company and the Purchaser. All
capitalized terms not defined herein shall have the meanings as set forth in the
Notes.

    

    WITNESSETH:

    

    WHEREAS, the Company is preparing for
an initial public offering of its common stock to be registered under the
Securities Act of 1933, as amended (the “Financing”); and

    

    WHEREAS, each Note, pursuant to clause
(ii) of the third sentence in the second paragraph of Section 1, provides that
the Note shall be due and payable upon the consummation of an equity financing,
including a firm commitment underwriting of an initial public offering
registered under the Securities Act of 1933, as amended, that raises a minimum
of $10 million in gross proceeds (the “IPO Maturity Date”); and

    

    WHEREAS, the Purchaser desires to waive
the IPO Maturity Date for purposes of the Financing.

    

    NOW, THEREFORE, in consideration of the
premises, the covenants of the parties set forth below and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows.

    

    1.         
 The Purchaser hereby agrees that the Financing shall not trigger the IPO
Maturity Date pursuant to clause (ii) of the third sentence in the second
paragraph of Section 1 of the Notes and hereby waives the IPO Maturity Date for
purposes of the Financing, but only for the Financing.

    

    2.         
 Each of the Company and the Purchaser agree that the third sentence in the
second paragraph of Section 1 is hereby deleted and replaced with the
following:

    

    All unpaid principal and interest on
this Note shall be due and payable on the earlier of (i) December 31, 2013; or
(ii) consummation by the Company of a transaction (or series of related
transactions) subsequent to the Company’s initial public offering, whether
involving the sale of equity securities, sale of assets, licensing, strategic
partnership or otherwise, in which the Company receives at least $5,000,000 in
aggregate gross cash proceeds (before brokers’ fees or other transaction related
expenses) (a “Qualified
Financing”) (such period
of time from the date of issuance hereof, the “Term”).

    

    3. 
         This Agreement shall be
governed by and interpreted in accordance with the laws of the State of
Delaware, without giving effect to the conflict of laws provisions
thereof.

    

    4.           This
Agreement may be executed in one or more counterparts.

    

    5.           This
Agreement shall be null and void if the Financing does not close on or prior to
March 31, 2011.

    

    [Signature
Page Follows]

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the undersigned have executed this Waiver Agreement and
Amendment as of the date first written above.

    

    
      
        	
                COMPANY:

              
	 
      
	
                VENTRUS
      BIOSCIENCES, INC.

              
	 
      
	
                By:

              	
                /s/ Russell H. Ellison

              
	
                Name:
      Russell H. Ellison

              
	
                Title:
      CEO

              
	 
      
	
                PURCHASER:

              
	 
      
	
                PARAMOUNT
      CREDIT PARTNERS, LLC

              
	 
      
	
                By:

              	
                /s/ Lindsay A. Rosenwald

              
	
                Name:  Lindsay
      A. Rosenwald

              
	
                Title:  Managing
      Member

              

      

    

    
      
         

      

      
        2LOAN AGREEMENT

          This Loan
Agreement (the “Agreement”) dated as of October 25, 2010, by and between
SEASIDE NATIONAL BANK AND TRUST (“Lender”) and the Borrower described below. 

          In
consideration of the Loan described below and the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, Lender
and Borrower agree as follows: 

          1. DEFINITIONS AND
REFERENCE TERMS. In addition to any other terms defined herein, the
following terms shall have the meaning set forth with respect thereto: 

               Accounting Terms. All accounting terms not
specifically defined or specified herein shall have the meanings generally
attributed to such terms under generally accepted accounting principles
(“GAAP”), as in effect from time to time, consistently applied, with respect to
the financial statements referenced in Section 3(h) hereof. 

               CD Account Agreement. CD Account Agreement
means the Assignment and Pledge of Certificate(s) of Deposit executed by each
of the Pledgors in favor of Lender dated even date therewith, together with all
modifications and substitutions thereof. 

               BlueCrest. BlueCrest shall have the meaning
set forth in Section 2 hereof. 

               Borrower. Bioheart, Inc., a Florida
corporation 

               Borrower’s Address. 13794 N.W. 4th
Street, Suite 212, Sunrise, Florida 33325. 

               Collateral. Collateral shall mean: (i) the
Reserve Account; and (ii) the certificate of deposit accounts pledged by the
Pledgors pursuant to the CD Account Agreements dated even date herewith. 

               Hazardous Materials. Hazardous Materials
include all materials defined as hazardous materials or substances under any
local, state or federal environmental laws, rules or regulations, and
petroleum, petroleum products, oil and asbestos. 

               Loan Documents. Loan Documents means this
Loan Agreement, the Note, the CD Account Agreements, and all other documents,
instruments, guarantees, letters of credit, certificates and agreements
executed and/or delivered by Borrower, any guarantor or third party in
connection with the Loan. 

               Indebtedness. Indebtedness means the indebtedness
evidenced by the Note or any other Loan Document, including all principal and
interest together with all other indebtedness and costs and expenses for which
Borrower or Guarantor or any other borrower, guarantor, pledgor, obligor or
accommodation party is responsible under this Agreement or under any of the
Loan Documents, including any swap, option or forward obligations. 

               Pledgors. Pledgors shall mean Daniel C.
Marino, Jr. and Jason P. Taylor. 

               Reserve Account. Reserve Account means the
blocked account maintained by Borrower with Lender under account number
4000036923-1 (or any substitution thereof). 

               Senior Loan Agreement. Senior Loan
Agreement means the Loan and Security Agreement No. V07107 between Lender and
BlueCrest dated May 31, 2007, as amended by that certain Amendment to the Loan
and Security Agreement dated April 2, 2009, that certain Amendment No. 2 to
Loan and Security Agreement dated as of July 1, 2009, and that certain
Amendment No. 3 to Loan and Security Agreement dated as of December 31, 2009. 

               Subordination Agreement. Subordination
Agreement means the Subordination Agreement between Lender and BlueCrest dated
on or about even date herewith. 

          2. LOAN. Lender hereby agrees to make a loan
(the “Loan”) to Borrower in the principal face amount of $980,000.00. The
obligation to repay the Loan is evidenced by that certain promissory note dated
even date herewith in the original principal amount of $980,000.00 (said promissory
note, together with all renewals, extensions or rearrangements thereof being
hereafter individually and collectively, as the case may be, referred to as the
“Note”). All terms governing the repayment, interest rate and maturity date of
the Loan shall be as set forth in the Note. 

               Lender
agrees and acknowledges that the right of the Lender to receive payments
hereunder and under the other Loan Documents are subordinated to the rights of
BlueCrest Venture Finance Master Fund Limited, as assignee of BlueCrest Capital
Finance, L.P. (“BlueCrest”) to receive payments from the Borrower of all
amounts (including, without limitation, principal, interest, and prepayment
premiums, if any) under that Amended and Restated Promissory Note, dated as of
December 31, 2009, made by Borrower in favor of BlueCrest, and the related
Senior Loan Agreement by and between Borrower and BlueCrest pursuant to the
terms of that certain Subordination Agreement between Lender and BlueCrest,
dated as of October __, 2010; provided, that, the foregoing subordination is
not applicable to, and Lender shall have the first priority lien and security
interest in (i) the amounts held in the Reserve Account of Borrower with Lender
(as further described in the Loan Agreement); (ii) Lender’s right to proceed
against the certificates of deposit under the Certificate of Deposit pledged
under the CD Account Agreements (as further described in the Loan Agreement);
or (iii) Lender’s rights to proceed against any other Collateral to secure
Borrower’s obligations hereunder and the other Loan Documents. 

          3. REPRESENTATIONS AND WARRANTIES. Borrower
hereby represents and warrants to Lender as follows: 

               (a) Good
Standing. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Florida, and has
the power and authority to own its property and to carry on its business in
each jurisdiction in which Borrower does business. 

               (b) Authority
and Compliance. Borrower has full power and authority to execute and
deliver the Loan Documents and to incur and perform the obligations provided
for therein, all of which have been duly authorized by all proper and necessary
action of the 

2

appropriate governing body of Borrower. No consent or approval of any
public authority or other third party is required as a condition to the
validity of any Loan Document, and Borrower is in compliance with all laws and
regulatory requirements to which it is subject. 

               (c) Binding
Agreement. This Agreement and the other Loan Documents executed by
Borrower constitute valid and legally binding obligations of Borrower,
enforceable in accordance with their terms. 

               (d) Litigation.
Except as referenced on Exhibit 3(d), there is no proceeding involving Borrower
pending or, to the knowledge of Borrower, threatened before any court or
governmental authority, agency or arbitration authority. 

               (e) No
Conflicting Agreements. There is no charter, bylaw, stock provision,
partnership agreement or other document pertaining to the organization, power
or authority of Borrower and no provision of any existing agreement (including,
without limitation, the Senior Loan Agreement and the Subordination Agreement),
mortgage, indenture or contract binding on Borrower or affecting its property,
which would conflict with or in any way prevent the execution, delivery or
carrying out of the terms of this Agreement and the other Loan Documents. 

               (f) Ownership
of Assets. Borrower has good title to its assets, and its assets are
free and clear of liens, except for the security interest of BlueCrest and
except for any liens that might arise by contract or operation of law pursuant
to intellectual property license agreements to which the Borrower is a party. 

               (g) Taxes.
All taxes and assessments due and payable by Borrower have been paid or are
being contested in good faith by appropriate proceedings and the Borrower has
filed all tax returns which it is required to file. 

               (h) Financial
Statements. The financial statements of Borrower heretofore
delivered to Lender have been prepared in accordance with GAAP applied on a
consistent basis throughout the period involved and fairly present Borrower’s
financial condition as of the date or dates thereof, and there has been no
material adverse change in Borrower’s financial condition or operations since
the date of the financial statements. All factual information furnished by
Borrower to Lender in connection with this Agreement and the other Loan
Documents is and will be accurate and complete on the date as of which such
information is delivered to Lender and is not and will not be incomplete by the
omission of any material fact necessary to make such information not
misleading. 

               (i) Place
of Business. Borrower’s chief executive office is located at 13794
N.W. 4th Street, Sunrise, Florida 33325. 

               (j) Environmental.
The conduct of Borrower’s business operations and the condition of Borrower’s
property does not and will not violate any federal laws, rules or ordinances
for environmental protection, regulations of the Environmental Protection
Agency, any applicable local or state law, rule, regulation or rule of common
law or any judicial interpretation thereof relating primarily to the
environment or Hazardous Materials. 

3

               (k) Continuation of Representations and
Warranties. All representations and warranties made under this Agreement shall
be deemed to be made at and as of the date hereof and at and as of the date of
any advance under any Loan. 

          4. AFFIRMATIVE
COVENANTS. Until full payment and performance of all obligations of
Borrower under the Loan Documents, Borrower will, unless Lender consents otherwise
in writing (and without limiting any requirement of any other Loan Document): 

               (a) Existence
and Compliance. Maintain its existence, good standing and
qualification to do business, where required, and comply with all laws,
regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions. 

               (b) Adverse
Conditions or Events. Promptly advise Lender in writing of (i) any
condition, event or act which comes to its attention that would or might
materially adversely affect Borrower’s financial condition, reputation or
operations or Lender’s rights under the Loan Documents, (ii) any litigation in
excess of $50,000 is filed by or against Borrower, (iii) any event that has
occurred that would constitute an event of default under any Loan Documents and
(iv) any uninsured or partially uninsured loss through fire, theft, liability
or property damage in excess of an aggregate of $10,000.00. 

               (c) Taxes
and Other Obligations. Pay all of its taxes, assessments and other
obligations, including, but not limited to, taxes, costs or other expenses
arising out of this transaction, as the same become due and payable, except to
the extent the same are being contested in good faith by appropriate
proceedings in a diligent manner. 

               (d) Maintenance.
Maintain all of its tangible property in good condition and repair and make all
necessary replacements thereof, and preserve and maintain all licenses,
trademarks, privileges, permits, franchises, certificates and the like
necessary for the operation of its business. 

               (e)  Environmental Matters. Immediately advise Lender in writing of (i)
any and all enforcement, cleanup, remedial, removal, or other governmental or
regulatory actions instituted, completed or threatened pursuant to any
applicable federal, state, or local laws, ordinances or regulations relating to
any Hazardous Materials affecting Borrower’s business operations; and (ii) all
claims made or threatened by any third party against Borrower relating to
damages, contribution, cost recovery, compensation, loss or injury resulting
from any Hazardous Materials. Borrower shall immediately notify Lender of any
remedial action taken by Borrower with respect to Borrower’s business
operations. Borrower will not use or permit any other party to use any
Hazardous Materials at any of Borrower’s places of business or at any other
property owned by Borrower except such materials as are incidental to
Borrower’s normal course of business, maintenance and repairs and which are
handled in compliance with all applicable environmental laws. Borrower agrees
to permit Lender, its agents, contractors and employees to enter and inspect
any of Borrower’s places of business or any other property of Borrower at any
reasonable times upon three (3) days prior notice for the purposes of
conducting an environmental investigation and audit (including taking physical
samples) to insure that Borrower is complying with this covenant and Borrower
shall reimburse Lender on demand for 

4

the costs of any such environmental investigation and audit. Borrower
shall provide Lender, its agents, contractors, employees and representatives
with access to and copies of any and all data and documents relating to or
dealing with any Hazardous Materials used, generated, manufactured, stored or
disposed of by Borrower’s business operations within five (5) days of the
request therefor. 

               (f) Security.
On even date herewith, Borrower shall pledge (or caused to be pledged) the
Reserve Account to Lender, which account shall contain a minimum of three (3)
months of interest payments on the outstanding principal amount due under the
Note (as calculated by Lender in accordance with the terms of the Note). The
Reserve Account shall serve as security for the Loan and Lender may setoff
against such Reserve Account following an Event of Default. As additional
security for the Note, Borrower shall cause the Pledgors to execute and deliver
to Lender the CD Account Agreements. 

               (g) Purpose.
The proceeds of the Loan shall be used solely for Borrower’s working capital
and the refinancing of existing indebtedness. The proceeds of the Loan shall
not be used directly or indirectly for the purpose of purchasing or carrying
“margin stock” as such term is defined in Regulation U of the Board of
Governors of the Federal Reserve System, or to reduce or retire indebtedness
incurred for such purpose. 

               (h) Accounts.
Borrower covenants and agrees to maintain, at all times, the Reserve Account
and its primary depository relationship with the Lender (i.e., primary
operating accounts measured in terms of balances and activity as well as primary
investment (dollars) and sweep accounts as primary investments, and sweep
accounts measured in terms of balances). 

          5. NEGATIVE
COVENANTS. Until full payment and performance of all obligations of
Borrower under the Loan Documents, Borrower will not, without the prior written
consent of Lender (and without limiting any requirement of any other Loan
Documents): 

               (a) Transfer
of Assets. Sell, lease, assign or otherwise dispose of or transfer
any assets for less than reasonably equivalent value, except in the normal
course of its business. 

               (b) Change
of Ownership. Other than by virtue of dilution, cause, permit, or
suffer any change, direct or indirect, in the Pledgor’s ownership in the
Borrower. 

               (c) Character
of Business. Change the general character of business as conducted
at the date hereof, or engage in any type of business not reasonably related to
its business as presently conducted. 

               (d) Management
Change. Make any substantial change in its present executive or
management personnel. 

          6. DEFAULT.
Borrower shall be in default under this Agreement and under each of the other
Loan Documents if Borrower shall default in the payment of any amounts due and
owing under the Loan or should Borrower and/or either Pledgor fail(s) to timely
and properly observe, keep or perform any term, covenant, agreement or
condition in any Loan Document or in any other loan agreement, promissory note,
security agreement, deed of trust, deed to secure 

5

debt, mortgage, assignment or other contract securing or evidencing
payment of any indebtedness of Borrower to Lender or its affiliates, if any
such failure is not cured within any applicable cure period. In addition, an
Event of Default under the Senior Loan Agreement shall constitute a default
under this Agreement. By their respective joinders herein, the Pledgors each
acknowledges and agrees as follows (i) they consent to the terms of the Loan
Documents, including this Agreement; (ii) in the event either Pledgor instructs
Lender to liquidate his respective Collateral to be applied to the payments due
under the Note in lieu of an actual payment being made, then such failure shall
constitute an event of default by the Pledgor under the Collateral and Lender
may, without further notice, proceed immediately to pursue all remedies
thereunder notwithstanding whether any default by the Borrower then exists
under the Loan Documents; (iii) the Lender may pursue all rights and remedies
against the Collateral notwithstanding any terminology in the Loan Documents
which may provide that the payments from the Borrower to Lender are (x)
subordinated to BlueCrest; and/or (y) “suspended” or other similar technology;
(iv) Pledgors are ultimately responsible to instruct Lender to liquidate their
respective Collateral to cause the payments to be timely made under the Note
notwithstanding any failure and/or restriction on the Borrower’s payment under
the Note, regardless of any lack of payment by the Borrower to the Lender
directly; and (v) all obligations of the Borrower to each Pledgor are
subordinated in terms of payment and priority to the interests of Lender until
the Indebtedness is paid in full. 

          7. REMEDIES
UPON DEFAULT. If an event of default shall occur, Lender shall,
subject to the terms of the Subordination Agreement, have all rights, powers
and remedies available under each of the Loan Documents as well as all rights
and remedies available at law or in equity including, without limitation, the
right to draw upon the certificate(s) of deposit, and accounts constituting the
Collateral. 

          8. NOTICES.
All notices, requests or demands which any party is required or may desire to
give to any other party under any provision of this Agreement must be in
writing delivered to the other party at the following address: 

	
  

 	
  

 	
  

 
	
  

 	
 Borrower:

 	
 Bioheart,
 Inc.

 
	
  

 	
  

 	
 13794 N.W. 4th
 Street, Suite 212

 
	
  

 	
  

 	
 Sunrise,
 Florida 33325

 
	
  

 	
  

 	
 Attention:
 Mike Tomas

 
	
  

 	
  

 	
  

 
	
  

 	
 Lender:

 	
 Seaside
 National Bank & Trust

 
	
  

 	
  

 	
 201 S.
 Orange Avenue, Suite 1350

 
	
  

 	
  

 	
 Orlando, FL
 32801

 

6

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 with copy to:

 	
 Ruden
 McClosky P.A. 

 
	
  

 	
  

 	
  

 	
 4855 N.
 Technology Way, Suite 630 

 
	
  

 	
  

 	
  

 	
 Boca Raton,
 FL 33431 

 
	
  

 	
  

 	
  

 	
 Attention:
 Peter Blacklock, Esq. 

 

or to such other address as any party may designate by written notice
to the other party. Each such notice, request and demand shall be deemed given
or made as follows: 

               (a) If sent by mail, upon the earlier of
the date of receipt or three (3) days after deposit in the U.S. Mail, first
class postage prepaid; 

               (b) If sent by any other means, upon
delivery or refusal of delivery. 

          9. COSTS, EXPENSES AND ATTORNEYS’ FEES.
Borrower shall pay to Lender immediately upon demand the full amount of all
costs and expenses, including reasonable attorneys’ fees incurred by Lender in
connection with (a) negotiation and preparation of this Agreement and each of
the Loan Documents, and (b) all other costs and attorneys’ fees incurred by
Lender for which Borrower is obligated to reimburse Lender in accordance with
the terms of the Loan Documents. 

          10. MISCELLANEOUS.
Borrower and Lender further covenant and agree as follows, without limiting any
requirement of any other Loan Document: 

               (a) Cumulative
Rights and No Waiver. Each and every right granted to Lender under
any Loan Document, or allowed it by law or equity shall be cumulative of each
other and may be exercised in addition to any and all other rights of Lender,
and no delay in exercising any right shall operate as a waiver thereof, nor
shall any single or partial exercise by Lender of any right preclude any other
or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration. No notice to or demand on Borrower in any case shall, of itself,
entitle Borrower to any other or future notice or demand in similar or other
circumstances. 

               (b) Applicable
Law. This Loan Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of Florida and applicable United States federal law. 

               (c) Amendment.
No modification, consent, amendment or waiver of any provision of this Loan
Agreement, nor consent to any departure by Borrower therefrom, shall be
effective unless the same shall be in writing and signed by an officer of
Lender, and then shall be effective only in the specified instance and for the
purpose for which given; provided that the parties may not modify the
subordination provisions hereof without the prior written consent of BlueCrest.
This Loan Agreement is binding upon Borrower, its successors and assigns, and
inures to the benefit of Lender, its successors and assigns; however, no
assignment or other transfer of Borrower’s rights or obligations hereunder
shall be made or be effective without Lender’s prior written consent, nor shall
it relieve Borrower of any obligations hereunder. 

7

Excepting
BlueCrest’s rights under the first sentence of this paragraph, there is no
third party beneficiary of this Loan Agreement. 

               (d) Documents.
All documents, certificates and other items required under this Loan Agreement
to be executed and/or delivered to Lender shall be in form and content
satisfactory to Lender and its counsel. 

               (e) Partial
Invalidity. The unenforceability or invalidity of any provision of
this Loan Agreement shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision
of any Loan Document to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons
or circumstances. 

               (f) Indemnification.
Notwithstanding anything to the contrary contained in Section 10(g), Borrower
shall indemnify, defend and hold Lender and its successors and assigns harmless
from and against any and all claims, demands, suits, losses, damages, assessments,
fines, penalties, costs or other expenses (including reasonable attorneys’ fees
and court costs) arising from or in any way related to any of the transactions
contemplated hereby, unless caused by the Lender’s gross negligence or willful
misconduct. 

               (g) Survivability.
All covenants, agreements, representations and warranties made herein or in the
other Loan Documents shall survive the making of the Loan and shall continue in
full force and effect so long as the Loan is outstanding or the obligation of
the Lender to make any Advances under the Line shall not have expired. 

               (h) USA
PATRIOT ACT. LENDER HEREBY NOTIFIES BORROWER THAT PURSUANT TO THE
REQUIREMENTS OF THE USA PATRIOT ACT (TITLE III OF PUB. L. 107-56 (SIGNED INTO
LAW OCTOBER 26, 2001) (THE “ACT”), LENDER IS REQUIRED TO OBTAIN, VERIFY AND
RECORD INFORMATION THAT IDENTIFIES BORROWER, WHICH INFORMATION INCLUDES THE
NAME AND ADDRESS OF BORROWER AND OTHER INFORMATION THAT WILL ALLOW LENDER TO
IDENTIFY BORROWER IN ACCORDANCE WITH THE ACT. 

          11. THIS
PARAGRAPH, INCLUDING THE SUBPARAGRAPHS BELOW, IS REFERRED TO AS THE “DISPUTE
RESOLUTION PROVISION.” THIS DISPUTE RESOLUTION PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT. 

               (a) THIS
DISPUTE RESOLUTION PROVISION CONCERNS THE RESOLUTION OF ANY CONTROVERSIES OR
CLAIMS BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT, TORT OR BY STATUTE,
INCLUDING BUT NOT LIMITED TO CONTROVERSIES OR CLAIMS THAT ARISE OUT OF OR
RELATE TO: (I) THIS AGREEMENT (INCLUDING ANY RENEWALS, EXTENSIONS OR
MODIFICATIONS); OR (II) ANY DOCUMENT RELATED TO THIS AGREEMENT (COLLECTIVELY A
“CLAIM”). FOR THE PURPOSES OF THIS DISPUTE RESOLUTION PROVISION ONLY, THE TERM
“PARTIES” SHALL INCLUDE ANY PARENT CORPORATION, SUBSIDIARY OR AFFILIATE OF THE 

8

LENDER INVOLVED IN THE SERVICING, MANAGEMENT
OR ADMINISTRATION OF ANY OBLIGATION DESCRIBED OR EVIDENCED BY THIS AGREEMENT. 

               (b) AT
THE REQUEST OF ANY PARTY TO THIS AGREEMENT, ANY CLAIM SHALL BE RESOLVED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (TITLE 9,
U.S. CODE) (THE “ACT”). THE ACT WILL APPLY EVEN THOUGH THIS AGREEMENT PROVIDES
THAT IT IS GOVERNED BY THE LAW OF A SPECIFIED STATE. 

               (c) ARBITRATION
PROCEEDINGS WILL BE DETERMINED IN ACCORDANCE WITH THE ACT, THE THEN-CURRENT
RULES AND PROCEDURES FOR THE ARBITRATION OF FINANCIAL SERVICES DISPUTES OF THE
AMERICAN ARBITRATION ASSOCIATION OR ANY SUCCESSOR THEREOF (“AAA”), AND THE
TERMS OF THIS DISPUTE RESOLUTION PROVISION. IN THE EVENT OF ANY INCONSISTENCY,
THE TERMS OF THIS DISPUTE RESOLUTION PROVISION SHALL CONTROL. IF AAA IS
UNWILLING OR UNABLE TO (I) SERVE AS THE PROVIDER OF ARBITRATION OR (II) ENFORCE
ANY PROVISION OF THIS ARBITRATION CLAUSE, THE LENDER MAY DESIGNATE ANOTHER
ARBITRATION ORGANIZATION WITH SIMILAR PROCEDURES TO SERVE AS THE PROVIDER OF
ARBITRATION. 

               (d) THE
ARBITRATION SHALL BE ADMINISTERED BY AAA AND CONDUCTED, UNLESS OTHERWISE
REQUIRED BY LAW, IN ANY U.S. STATE WHERE REAL OR TANGIBLE PERSONAL PROPERTY
COLLATERAL FOR THIS CREDIT IS LOCATED OR IF THERE IS NO SUCH COLLATERAL, IN THE
STATE SPECIFIED IN THE GOVERNING LAW SECTION OF THIS AGREEMENT. ALL CLAIMS
SHALL BE DETERMINED BY ONE ARBITRATOR; HOWEVER, IF CLAIMS EXCEED FIVE MILLION DOLLARS
($5,000,000), UPON THE REQUEST OF ANY PARTY, THE CLAIMS SHALL BE DECIDED BY
THREE ARBITRATORS. ALL ARBITRATION HEARINGS SHALL COMMENCE WITHIN NINETY (90)
DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN NINETY (90) DAYS OF
COMMENCEMENT AND THE AWARD OF THE ARBITRATOR(S) SHALL BE ISSUED WITHIN THIRTY
(30) DAYS OF THE CLOSE OF THE HEARING. HOWEVER, THE ARBITRATOR(S), UPON A
SHOWING OF GOOD CAUSE, MAY EXTEND THE COMMENCEMENT OF THE HEARING FOR UP TO AN
ADDITIONAL SIXTY (60) DAYS. THE ARBITRATOR(S) SHALL PROVIDE A CONCISE WRITTEN
STATEMENT OF REASONS FOR THE AWARD. THE ARBITRATION AWARD MAY BE SUBMITTED TO
ANY COURT HAVING JURISDICTION TO BE CONFIRMED AND HAVE JUDGMENT ENTERED AND
ENFORCED. 

               (e) THE
ARBITRATOR(S) WILL GIVE EFFECT TO STATUTES OF LIMITATION IN DETERMINING ANY
CLAIM AND MAY DISMISS THE ARBITRATION ON THE BASIS THAT THE CLAIM IS BARRED.
FOR PURPOSES OF THE APPLICATION OF ANY STATUTES OF LIMITATION, THE SERVICE ON
AAA UNDER APPLICABLE AAA RULES OF A NOTICE OF CLAIM IS THE EQUIVALENT OF THE
FILING OF A LAWSUIT. ANY DISPUTE CONCERNING THIS 

9

ARBITRATION PROVISION OR WHETHER A CLAIM IS
ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR(S), EXCEPT AS SET FORTH AT
SUBPARAGRAPH (H) OF THIS DISPUTE RESOLUTION PROVISION. THE ARBITRATOR(S) SHALL
HAVE THE POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS AGREEMENT. 

               (f) THIS
PARAGRAPH DOES NOT LIMIT THE RIGHT OF ANY PARTY TO: (I) EXERCISE SELF-HELP
REMEDIES, SUCH AS BUT NOT LIMITED TO, SETOFF; (II) INITIATE JUDICIAL OR
NON-JUDICIAL FORECLOSURE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL;
(III) EXERCISE ANY JUDICIAL OR POWER OF SALE RIGHTS, OR (IV) ACT IN A COURT OF
LAW TO OBTAIN AN INTERIM REMEDY, SUCH AS BUT NOT LIMITED TO, INJUNCTIVE RELIEF,
WRIT OF POSSESSION OR APPOINTMENT OF A RECEIVER, OR ADDITIONAL OR SUPPLEMENTARY
REMEDIES. 

               (g) THE
FILING OF A COURT ACTION IS NOT INTENDED TO CONSTITUTE A WAIVER OF THE RIGHT OF
ANY PARTY, INCLUDING THE SUING PARTY, THEREAFTER TO REQUIRE SUBMITTAL OF THE
CLAIM TO ARBITRATION. 

               (h) ANY
ARBITRATION OR TRIAL BY A JUDGE OF ANY CLAIM WILL TAKE PLACE ON AN INDIVIDUAL
BASIS WITHOUT RESORT TO ANY FORM OF CLASS OR REPRESENTATIVE ACTION (THE “CLASS
ACTION WAIVER”). REGARDLESS OF ANYTHING ELSE IN THIS DISPUTE RESOLUTION
PROVISION, THE VALIDITY AND EFFECT OF THE CLASS ACTION WAIVER MAY BE DETERMINED
ONLY BY A COURT AND NOT BY AN ARBITRATOR. THE PARTIES TO THIS AGREEMENT
ACKNOWLEDGE THAT THE CLASS ACTION WAIVER IS MATERIAL AND ESSENTIAL TO THE
ARBITRATION OF ANY DISPUTES BETWEEN THE PARTIES AND IS NONSEVERABLE FROM THE
AGREEMENT TO ARBITRATE CLAIMS. IF THE CLASS ACTION WAIVER IS LIMITED, VOIDED OR
FOUND UNENFORCEABLE, THEN THE PARTIES’ AGREEMENT TO ARBITRATE SHALL BE NULL AND
VOID WITH RESPECT TO SUCH PROCEEDING, SUBJECT TO THE RIGHT TO APPEAL THE
LIMITATION OR INVALIDATION OF THE CLASS ACTION WAIVER. THE PARTIES
ACKNOWLEDGE AND AGREE THAT UNDER NO CIRCUMSTANCES WILL A CLASS ACTION BE
ARBITRATED. 

               (i) BY
AGREEING TO BINDING ARBITRATION, THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM.
FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT THIS AGREEMENT TO ARBITRATE,
TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE PARTIES IRREVOCABLY AND
VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF SUCH
CLAIM. THIS WAIVER OF JURY TRIAL SHALL REMAIN IN EFFECT EVEN IF THE CLASS
ACTION WAIVER IS LIMITED, VOIDED OR FOUND UNENFORCEABLE. WHETHER THE CLAIM IS
DECIDED BY ARBITRATION OR BY TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND
THAT THE 

10

EFFECT OF THIS AGREEMENT IS THAT THEY ARE
GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW. 

          12. NO
ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. 

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

BORROWER: 

BIOHEART,
INC., a Florida corporation 

	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Mike
 Tomas
 	
 (SEAL)
 	
  
 
	
  
 	
  
 	  	  	
  
 
	
  
 	
 Name:
 	
 Mike Tomas
 	
  
 
	
  
 	
  
 	  	  	
  
 
	
  
 	
 Title:
 	
 President
 & Chief Executive Officer
 	
  
 
	
  
 	
  
 	  	  	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
   BANK:
 	
  
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
   SEASIDE
 	
  NATIONAL BANK & TRUST
 	
  
 
	
  
 	
  
 	
  
 	
  
 
	
  
 	
 By:
 	
 /s/ Roland
 Valdivieso
 	
 (SEAL)
 	
  
 
	
  
 	
  
 	  	  	
  
 
	
  
 	
 Name:
 	
 Roland
 Valdivieso
 	
  
 
	
  
 	
  
 	  	  	
  
 
	
  
 	
 Title:
 	
 Client
 Advisor
 	
  
 
	
  
 	
  
 	  	  	
  
 

11

JOINDER

          The
undersigned join into this Agreement to acknowledge, consent and agree to the
provisions of Section 6 of this Agreement. 

	
  

 	
  

 	
  

 
	
  

 	
 /s/Daniel C.
 Marino Jr.

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
 Daniel C.
 Marino, Jr.

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 /s/Jason
 Taylor

 	
  

 
	
  

 	 

 	
  

 
	
  

 	
 Jason P.
 Taylor

 	
  

 

12

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