WARRANT TO PURCHASE SHARES OF COMMON STOCK of BIOHEART, INC.
NEITHER
THIS WARRANT NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE HEREOF HAS
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT THERETO UNDER THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS, OR AN EXEMPTION THEREFROM EXISTS.
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No.
W - ____________
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Warrant
to Purchase 848,176 Shares of Common
Stock
(subject to adjustment)
|
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
of
This
certifies that, for value received, BlueCrest Venture Finance Master Fund
Limited, a company organized under the laws of the Cayman Islands (“BlueCrest”),
or its assigns (the “Holder”) is entitled, subject to the terms set forth below,
to purchase from Bioheart, Inc. (the “Company”), a Florida corporation, up to
848,176 shares (the “Warrant Shares”) of the common stock of the Company, par
value $.001 per share (the “Common Stock”), as constituted on the date hereof
(the “Warrant Issue
Date”), upon surrender hereof, at the principal office of the Company
referred to below, with the duly executed Notice of Exercise, attached hereto as
Exhibit A (the
“Notice of Exercise Form”), and simultaneous payment therefor in lawful money of
the United States or otherwise as hereinafter provided, at the Exercise Price
set forth in Section 2 below. The number of Warrant Shares and the Exercise
Price are subject to adjustment as provided below. The term “Warrant”
as used herein shall include this Warrant, and any warrants delivered in
substitution or exchange therefor as provided herein. This Warrant is
issued in connection with the Amendment to Loan and Security Agreement (the
“Loan Agreement”), made as of December 31, 2009 by and between BlueCrest and the
Company.
1. Term of
Warrant. Subject to the terms and conditions set forth herein,
this Warrant shall be exercisable, in whole or in part, at any time, or from
time to time, during the term commencing on the Warrant Issue Date and ending at
5:00 p.m., New York City time, on the ten year anniversary of the Warrant Issue
Date (the “Expiration Date”), and shall be void thereafter.
2. Exercise Price; Adjustment
of Number of Shares and Exercise Price.
(a) The price
at which this Warrant may be exercised shall be $0.7074 per share of Common
Stock, as may be adjusted from time to time pursuant to Section 14 hereof (the
“Exercise Price”).
If, prior
to the earlier of (i) June 30, 2010 or (ii) Holder’s exercise of all shares
issuable hereunder (the “Anti-Dilution Period”), the Company issues new stock
(or debt convertible into stock) in a new public or private offering (the
“Offering”) generating gross proceeds of not less than $1 million (the “New
Shares”), and the price at which the Company’s stock is offered in such Offering
is less than the Exercise Price, then this Warrant shall be cancelled and the
Company shall issue Holder a new warrant under which: (i) the Exercise Price
shall be reduced to the price per share at which the Company sold the New Shares
in the Offering (the “Reduced Price”); and (ii) the number of shares issuable
under the new warrant shall be determined by dividing $600,000 by the Reduced
Price. Holder shall deliver this original Warrant to the Company for
cancellation and, upon receipt of this Warrant, the Company shall promptly issue
a new warrant to the Holder reflecting the new terms as described in this
Section 2. Notwithstanding anything else contained in this Warrant to
the contrary, after the expiration of the Anti-Dilution Period, the Company
shall have no further right to any rights under this Section 2(b).
3. Exercise of
Warrant.
(a) In
accordance with the procedures set forth in Section 1(c) below, this Warrant may
be exercised, in whole or in part, at any time, or from time to time during the
period commencing on the date that is three hundred and sixty-six (366) days
following the Warrant Issue Date (the “One Year Exercise
Date”).
(b) During
the period that this Warrant is exercisable in accordance with Sections 1(a)
above, the Holder may exercise this Warrant by presentation and surrender of
this Warrant and the delivery of the Notice of Exercise Form duly completed and
executed on behalf of the Holder and, if the date of exercise is prior to an
Initial Public Offering, the Shareholders Agreement, attached hereto as Exhibit B, duly
completed and executed on behalf of the Holder, at the principal office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing on the
books of the Company), accompanied by payment of the Exercise Price for the
number of shares specified in such Notice of Exercise Form. Payment
may be made (i) in cash or by certified or official bank check, payable to the
order of the Company, (ii) by cancellation by the Holder of indebtedness or
other obligations of the Company to the Holder, or (iii) by a combination of the
consideration described in sub-clauses (i) and (ii)
above. Notwithstanding the foregoing, in the event that the Company
undertakes undergoes a sale or merger transaction, then (A) if the Fair Market
Value (as defined in Section 3(d) below) of one share of Common Stock is greater
than the Exercise Price in effect on such date, then this Warrant shall be
deemed automatically exercised pursuant to Section 3(d) below or (B) if the Fair
Market Value of one Share is less than the Exercise Price in effect on such
date, then this Warrant shall automatically terminate and be of no further force
and effect.
(c) This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the Warrant Shares shall be treated for all purposes
as the holder of record of such Warrant Shares as of the close of business on
such date. As promptly as practicable on or after such date and in
any event within ten (10) days thereafter, the Company at its expense shall
issue and deliver to the person or persons entitled to receive the same a
certificate or certificates
for the
number of shares issuable upon such exercise. In the event that this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
(d) Net Issue
Exercise. Notwithstanding any provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
making payment of the consideration provided for in Section 3(a) above upon the
exercise of all or any part of this Warrant, the Holder may surrender this
Warrant at the principal office of the Company, together with the duly executed
Notice of Exercise Form and, if the date of exercise is prior to the Initial
Public Offering, the duly executed Shareholders Agreement, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:
X
= Y (A –
B)
A
|
X
=
|
the
number of shares of Common Stock to be issued to the Holder upon
exercise
|
|
Y
=
|
the
number of shares of Common Stock purchasable under the Warrant or, if only
a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such calculation)
|
|
A
=
|
the
Fair Market Value of one share of the Company's Common Stock (at the date
of such calculation)
|
|
B
=
|
the
Exercise Price (as adjusted to the date of such
calculation)
|
For
purposes of the above calculation, the term “Fair Market Value” shall mean (i)
if the principal market for the Common Stock is The NASDAQ Stock Market or any
other national securities exchange, the last sales price of the Common Stock on
such day as reported by such exchange or market, or on a consolidated tape
reflecting transactions on such exchange or market, (ii) if the principal market
for the Common Stock is not a national securities exchange or The NASDAQ Stock
Market and the Common Stock is quoted on the National Association of Securities
Dealers Automated Quotations System, the mean between the closing bid and the
closing asked prices for the Common Stock on such day as quoted on such System
or (iii) if the Common Stock is not quoted on the National Association of
Securities Dealers Automated Quotations System, the mean between the highest bid
and lowest asked prices for the Common Stock on such day as reported by Pink
Sheets LLC; provided, however, that if none of (i), (ii) or
(iii) above is applicable, or if no trades have been made or no quotes are
available for such day, the Fair Market Value of the Common Stock shall be
reasonably determined, in good faith, by the Board of Directors of the
Company.
4. No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. In lieu of any
fractional share to which
the
Holder would otherwise be entitled, the Company shall make a cash payment equal
to the Exercise Price multiplied by such fraction.
5. Replacement of
Warrant. On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor and amount.
6. Rights of
Shareholders. Subject to Sections 12, 14 and 16 of this
Warrant, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein.
7. Transfer of
Warrant.
(a) Warrant
Register. The Company will maintain a register (the "Warrant
Register") containing the names and addresses of the Holder or Holders. Any
Holder of this Warrant or any portion thereof may change his or her address as
shown on the Warrant Register by written notice to the Company, requesting such
change. Any notice or written communication required or permitted to
be given to the Holder may be delivered or given by mail to such Holder as shown
on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register
of the Company, the Company may treat the Holder as shown on the Warrant
Register as the absolute owner of this Warrant for all purposes, notwithstanding
any notice to the contrary.
(b) Warrant
Agent. The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 7(a) above, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing
this Warrant, or any or all of the foregoing. Thereafter, any such registration,
issuance, exchange, or replacement, as the case may be, shall be made at the
office of such agent.
(c) Transferability
and Nonnegotiability of Warrant.
(i) The
Holder hereby acknowledges that neither this Warrant nor the Warrant Shares have
been registered under the Securities Act of 1933, as amended (the “Act”) and are
“restricted securities” under the Act inasmuch as they are being acquired in a
transaction not involving a public offering. The Holder hereby agrees
not to sell, transfer, assign, distribute, offer to sell,
hypothecate
or otherwise dispose of this Warrant or the Warrant Shares in the absence of:
(i) an effective registration statement under the Act as to this Warrant or the
Warrant Shares and the registration and/or qualification of this Warrant or the
Warrant Shares under any applicable federal or state securities laws then in
effect, or (ii) an exemption therefrom exists.
(ii) Subject
to compliance with Section 7(c)(i) above and the provisions of Section 9(f) of
this Warrant, this Warrant may be transferred by the Holder with respect to any
or all of the shares purchasable hereunder. Upon surrender of this
Warrant to the Company, together with the Assignment Form, attached hereto as
Exhibit C duly
executed, and funds sufficient to pay any transfer tax, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination or denominations specified in the Assignment
Form and shall issue to the assignor a new Warrant evidencing the portion of
this Warrant not so assigned. Thereafter, this Warrant shall promptly
be cancelled. This Warrant may be divided or combined with other Warrants that
carry the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a written
notice specifying the names and denominations in which new Warrants are to be
issued and signed by the Holder hereof. Notwithstanding the
foregoing, the Company shall not be required to issue a Warrant covering less
than 1,000 shares of Common Stock.
8. Representations and
Warranties of Company. In connection with the transactions
provided for herein, the Company hereby represents and warrants to the Holder
that:
(a) Organization, Good Standing,
and Qualification. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Florida and has all requisite corporate power and authority to carry on its
business as now conducted. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business or
properties.
(b) Authorization. The
Company has all necessary corporate power and authority to execute, deliver and
perform its obligations under this Warrant. All corporate action has
been taken on the part of the Company, its officers, directors, and shareholders
necessary for the due authorization, execution and delivery of this Warrant by
the Company and the performance by the Company of its obligations
hereunder. This Warrant 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, except as may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the enforcement of creditors’ rights. The
Warrant Shares have been duly and validly authorized and reserved for issuance
by the Company.
(c) Compliance with Other
Instruments. The authorization, execution and delivery of this
Warrant by the Company, the consummation of the transactions contemplated hereby
and the performance by the Company of its obligations hereunder will not (i)
violate any
judgment,
order, decree, injunction, law or regulation applicable to the Company; (ii)
violate any term or provision of the Articles of Incorporation (the "Articles")
or bylaws; (iii) violate, or result in a breach or default under, any other
agreement or instrument to which the Company is a party or by which it is bound
or to which its properties or assets are subject, except for such violations,
breaches or defaults under clauses (i), (ii) or (iii) above which, individually
or in the aggregate, will not result in a material adverse effect upon the
business operations, properties, assets, results of operations or condition
(financial or otherwise) of the Company, the enforceability of any material
provision of this Warrant or the ability of the Holder to enforce its rights and
remedies under this Warrant; or (iv) result in the creation of any lien, claim
or other encumbrance on any of the property or other assets of the
Company.
(d) Valid Issuance of Common
Stock. When the Warrant Shares have been delivered in
accordance with the terms of this Warrant, such Warrant Shares will be duly
authorized and validly issued, fully paid and nonassessable.
(e) Representations and
Warranties in the Loan Agreement. As of the date hereof, each
of the representations and warranties made in the Loan Agreement by the Company
are materially true and correct.
9. Representations and
Covenants of the Holder.
The
Holder hereby represents and covenants to the Company that:
(a) This
Warrant and any Warrant Shares purchased upon exercise of this Warrant will be
purchased for its own account for investment and not with a view to the offering
or distribution thereof within the meaning of the Act and any applicable state
securities laws;
(b) The
Holder has sufficient knowledge and expertise in financial and business matters
so as to be capable of evaluating the merits and risks of its investment in the
Company. The Holder understands that this investment involves a high
degree of risk and could result in a substantial or complete loss of its
investment. The Holder is capable of bearing the economic risks of
such investment;
(c) The
Holder is an “Accredited Investor” as such term is defined under Regulation D
promulgated pursuant to the Act;
(d) Any
subsequent sale of any Warrant Shares shall be made either pursuant to an
effective registration statement under the Act and any applicable state
securities laws, or pursuant to an exemption from registration under the Act and
any such state securities laws;
(e) If
requested by the Company, the Holder shall submit a written statement, in form
reasonably satisfactory to the Company, to the effect that the representations
set forth in paragraphs (a) through (d) above are (x) true and correct as of the
date of purchase of any Warrant Shares hereunder or (y) true and correct as of
the date of any sale of any Warrant Shares, as applicable; and
(f) The
Holder hereby agrees that, during the period of duration (not to exceed one
hundred eighty (180) days) specified by the Company and an underwriter of Common
Stock
or other
securities of the Company in an agreement in connection with any offering of the
Company’s securities, following the effective date of the registration statement
for a public offering of the Company's securities filed under the Act, it shall
not, to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without limitation,
any short sale), grant any option to purchase or otherwise transfer or dispose
of (other than to donees who agree to be similarly bound) any securities of the
Company held by it at any time during such period, except Common Stock, if any,
included in such registration; provided, that such “lock-up”
period applicable to the Holder shall not be greater than the shortest lock-up
period restricting any other shareholder of the Company executing lock-up
agreements in connection with such registration (including ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇).
10. Legend. Unless
the Warrant Shares or other securities issuable hereunder have been registered
under the Act, upon exercise of any of the Warrants and the issuance of any of
the Warrant Shares or other securities, all certificates representing such
securities shall bear on the face thereof substantially the following
legend:
“The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) and may not be sold or
transferred in the absence of an effective registration statement under the
Securities Act or an exemption from such registration. The securities
represented by this certificate are subject to certain restrictions and
agreements contained in, that certain Warrant Agreement dated July_1, 2009, by
and between BlueCrest Venture Finance Master Fund Limited and the Company and,
may not be sold, assigned, transferred, encumbered, pledged or otherwise
disposed of except upon compliance with the provisions of such Warrant
Agreement. By the acceptance of the shares of capital stock evidenced
by this certificate, the holder agrees to be bound by such Warrant Agreement and
all amendments thereto. A copy of such Warrant Agreement has been
filed at the office of the Company.”
In the
event the date the certificates referenced above are issued prior to an Initial
Public Offering, such certificates shall include the following additional
legend:
“The
securities represented by this certificate and the holder of such securities are
subject to the terms and conditions (including, without limitation, voting
agreements and restrictions on transfer) set forth in a Shareholders Agreement,
dated as of _____, 200___, a copy of which may be obtained from the
Company. No transfer of such securities will be made on the books of
the Company unless accompanied by evidence of compliance with the terms of such
agreement.”
11. Reservation of
Stock. The Company covenants that during the term this Warrant
is exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of this Warrant and, from time to time, will take all steps
necessary to amend its Articles to provide
sufficient
reserves of shares of Common Stock issuable upon exercise of the
Warrant. The Company further covenants that all shares that may be
issued upon the exercise of rights represented by this Warrant and payment of
the Exercise Price, all as set forth herein, will be free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously or otherwise specified
herein). The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the exercise of this Warrant.
12. Notices.
(a) Whenever
the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 14 hereof, the Company shall issue a certificate signed by
its Chief Executive Officer or Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
(b) in
case:
(i) The
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(ii) of any
capital reorganization of the Company, any reclassification of the capital stock
of the Company, any consolidation or merger of the Company with or into another
corporation, or any conveyance of all or substantially all of the assets of the
Company to another corporation, or
(iii) of any
voluntary dissolution, liquidation or winding-up of the Company,
(c) then, and
in each such case, the Company will mail or cause to be mailed to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record-of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed by overnight
delivery at least 15 days prior to the date therein specified.
(d) All such
notices, advices and communications shall be deemed to have been received (i) in
the case of personal delivery, on the date of such delivery and (ii) in the case
of mailing, on the next business day following the date of such mailing by
overnight delivery.
13. Amendments.
(a) Any term
of this Warrant may be amended with the written consent of the Company and the
Holder.
(b) No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
14. Adjustments. The
Exercise Price and the number of Warrant Shares purchasable hereunder are
subject to adjustment from time to time as follows:
(a) Reclassification,
etc. In case of any reorganization of the Company (or any
other corporation, the securities of which are at the time receivable on the
exercise of this Warrant) after the Warrant Issue Date or in case after such
date the Company (or any such other corporation) shall consolidate with or merge
into another corporation or convey all or substantially all of its assets to
another corporation, then, and in each such case, the Holder of this Warrant
upon the exercise thereof as provided herein at any time after the consummation
of such reorganization, consolidation, merger or conveyance, shall be entitled
to receive, in lieu of the securities and property receivable upon the exercise
of this Warrant prior to such consummation, the securities or property to which
such Holder would have been entitled upon such consummation if such Holder had
exercised this Warrant immediately prior thereto; in each such case, the terms
of this Warrant shall be applicable to the securities or property receivable
upon the exercise of this Warrant after such consummation.
(b) Split, Subdivision or
Combination of Shares. If the Company at any time while this
Warrant, or any portion hereof, remains outstanding and unexpired shall split,
subdivide or combine the securities as to which purchase rights under this
Warrant exist, into a different number of securities of the same class, the
Exercise Price for such securities shall be proportionately decreased in the
case of a split or subdivision or proportionately increased in the case of a
combination.
(c) Adjustments for Dividends in
Stock or Other Securities or Property. If while this Warrant,
or any portion hereof, remains outstanding and unexpired, the holders of the
securities as to which purchase rights under this Warrant exist at the time
shall have received, or, on or after the record date fixed for the determination
of eligible shareholders, shall have become entitled to receive, without payment
therefor, other or additional stock or other securities or property (other than
cash) of the Company by way of dividend, then and in each case, this Warrant
shall represent the right to acquire, in addition to the number of shares of the
security receivable upon exercise of this Warrant, and without payment of any
additional consideration therefor, the amount of such other or additional stock
or other securities or property (other than cash) of the Company that such
holder would hold on the date of such exercise had it been the holder of record
of the security receivable upon exercise of this Warrant on the date hereof
and
had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by the provisions of this Section 14.
(d) Certificate as to
Adjustments. Upon the occurrence of each adjustment or
readjustment pursuant to this Section 14, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each Holder of this Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the
written request, at any time, of any such Holder, furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of Warrant Shares and the amount, if any, of other property that at the
time would be received upon the exercise of the Warrant.
(e) No
Impairment. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 14 and in
the taking of all such action as may be reasonably necessary or appropriate in
order to protect the rights of the Holder of this Warrant against
impairment.
15. Piggyback Registration
Rights
15.1. If
at any time during the period commencing on the Six Month Post-IPO Exercise Date
and ending on the Expiration Date (the
“Piggyback
Registration Period”), the Company proposes to register any shares of its
Common Stock under the Securities Act on any form for registration thereunder
(the “Registration
Statement”) for its own account or the account of shareholders (other
than a registration solely relating to (i) shares of Common Stock underlying a
stock option, restricted stock, stock purchase or compensation or incentive plan
or of stock issued or issuable pursuant to any such plan, or a dividend
investment plan; (ii) a registration of securities proposed to be issued in
exchange for securities or assets of, or in connection with a merger or
consolidation with, another corporation or other entity; or (iii) a registration
of securities proposed to be issued in exchange for other securities of the
Company), it will at such time give prompt written notice to the Holder of its
intention to do so (the “Section 15.1
Notice”). Upon the written request of the Holder given to the
Company within ten (10) days after the giving of any Section 15.1 Notice setting
forth the number of shares of Warrant Shares intended to be disposed of by the
Holder and the intended method of disposition thereof, the Company will include
or cause to be included in the Registration Statement the shares of Warrant
Shares which the Holder has requested to register, to the extent provided in
this Section 15 (a “Piggyback
Registration”). Notwithstanding the foregoing, the Company
may, at any time, withdraw or cease proceeding with any registration pursuant to
this Section 15.1 if it shall at the same time withdraw or cease proceeding with
the registration of all of the Common Stock originally proposed to be
registered. The Company shall be obligated to file and cause the
effectiveness of only one (1) Piggyback Registration; provided however, that to
the extent that shares for which registration is requested pursuant hereto are
excluded under Section 15.5, such shares shall be eligible for Piggyback
Registration, notwithstanding the one Piggyback Registration
limit. The shares of Warrant Shares set forth in the Section 15.1
Notice are referred
to for
purposes of this Section 15 as the “Registrable
Shares”.
15.2 Company
Covenants. Whenever required under this Section 15 to include
Registrable Shares in a Registration Statement, the Company shall, as
expeditiously as reasonably possible:
(a) Use its
commercially reasonable efforts to cause such Registration Statement to become
effective and cause such Registration Statement to remain effective until the
earlier of the Holder having completed the distribution of all its Registrable
Shares described in the Registration Statement or six (6) months from the
effective date of the Registration Statement (or such later date by reason of
suspensions the effectiveness as provided hereunder). The Company will also use
its commercially reasonable efforts to, during the period that such Registration
Statement is required to be maintained hereunder, file such post-effective
amendments and supplements thereto as may be required by the Securities Act and
the rules and regulations thereunder or otherwise to ensure that the
Registration Statement does not contain any untrue statement of material fact or
omit to state a fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they are
made, not misleading; provided, however, that if applicable rules under the
Securities Act governing the obligation to file a post-effective amendment
permits, in lieu of filing a post-effective amendment that (i) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (ii) reflects
facts or events representing a material or fundamental change in the information
set forth in the Registration Statement, the Company may incorporate by
reference information required to be included in (i) and (ii) above to the
extent such information is contained in periodic reports filed pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
in the Registration Statement.
(b) Prepare
and file with the Unites States Securities and Exchange Commission (the “SEC”) such amendments
and supplements to such Registration Statement, and the prospectus used in
connection with such Registration Statement, as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement.
(c) Furnish
to the Holder such numbers of copies of a prospectus, including a preliminary
prospectus as amended or supplemented from time to time, in conformity with the
requirements of the Securities Act, and such other documents as it may
reasonably request in order to facilitate the disposition of Registrable Shares
owned by the Holder; provided that, in no event, shall the Company be required
to incur printing expenses in excess of $1,000 in complying with its obligations
under this Section 15.2(c).
(d) Use its
commercially reasonable efforts to register and qualify the securities covered
by such Registration Statement under such other federal or state securities laws
of such jurisdictions as shall be reasonably requested by the Holder; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act.
(e) In the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering.
(f) Notify
the Holder, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, (a) when the Registration Statement or any
post-effective amendment and supplement thereto has become effective; (b) of the
issuance by the SEC of any stop order or the initiation of proceedings for that
purpose (in which event the Company shall make use commercially reasonable
efforts to obtain the withdrawal of any order suspending effectiveness of the
Registration Statement. at the earliest possible time or prevent the entry
thereof); (c) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and (d) of
the happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(g) Cause all
such Registrable Shares registered hereunder to be listed on each exchange or
quotation service on which similar securities issued by the Company are then
listed or quoted.
(h) Provide a
transfer agent and registrar for all Registrable Shares registered pursuant
hereunder and CUSIP number for all such Registrable Shares, in each case not
later than the effective date of such registration.
15.3 Furnish
Information. In connection with a registration in which the
Holder is participating, such Holder agrees to execute and deliver such other
agreements as may be reasonably requested by the Company or the underwriter. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, the Holder shall provide,
within ten (10) days of such request, such information related to such Holder as
may be required by the Company or such representative in connection with the
completion of any public offering of the Company’s securities pursuant to a
registration statement filed under the Securities Act.
15.4 Expenses of Company
Registration. All expenses other than underwriting discounts
and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 15.1, including, without limitation, all
registration, filing and qualification fees, printers' and accounting fees and
fees, disbursements of counsel for the Company and disbursements of counsel for
the Holder up to $10,000 (the “Registration
Expenses”) shall be borne by the Company.
15.5 Underwriting
Requirements. In connection with any offering involving an
underwriting of shares of the Company’s capital stock, the Company shall not be
required under Section 15.1 to include any of the Holder’s Registrable Shares in
such underwriting unless the Holder accepts the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it (or by other
persons entitled to select the underwriters), and then only
in such
quantity as the underwriters determine in their sole and reasonable discretion
will not materially jeopardize the success of the offering by the Company, and
the Holder enters into such lock-up agreements as may be reasonably required of
other selling shareholders in such Registration Statement. If the
total amount of securities, including Registrable Shares, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Company that the underwriters determine in their sole and
reasonable discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Shares, which the underwriters determine in
their sole and reasonable discretion will not materially jeopardize the success
of the offering (the securities so included to be apportioned pro rata among the
selling shareholders according to the total amount of securities entitled to be
included therein owned by each selling shareholder or in such other proportions
as shall mutually be agreed to by such selling shareholders). For
purposes of the preceding parenthetical concerning apportionment, for any
selling shareholder who is a holder of Registrable Shares and is a partnership
or corporation, the partners, retired partners and shareholders of such holder,
or the estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons shall be deemed to be
a single “selling shareholder”, and any pro-rata reduction with respect to such
“selling shareholder” shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such “selling shareholder”, as defined in this sentence.
15.6 Indemnification. In
the event that any Registrable Shares are included in a Registration Statement
under this Section 15.
(a) To
the extent permitted by law, the Company will promptly indemnify and hold
harmless the Holder, any underwriter (as defined in the Securities Act) for the
Holder and each person, if any, who controls the Holder or underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, or the Exchange Act, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any of the following statements, omissions or violations
(collectively a “Violation”): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, or any rule or regulation promulgated under the Securities
Act, or the Exchange Act, and the Company will pay to the Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this Section 15.6(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim, damage, liability, or action incurred by the Holder,
underwriter or controlling person to the extent that such party’s loss, claim,
damage, liability or action arises out of or is based upon a Violation which
occurs in
reliance
upon and in conformity with written information furnished expressly for use in
connection with such registration by such party.
(b) To
the extent permitted by law, the Holder will indemnify and hold harmless the
Company, its directors, officers, and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act, any
underwriter, any other holder selling securities in such Registration Statement
and any controlling person of any such underwriter or other holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Securities Act, or the Exchange
Act, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) 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 furnished by the Holder expressly for
use in connection with such registration; and the Holder will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section 15.6(b), in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 15.6(b) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, further, that, in no
event shall any indemnity under this Section 15.6(b) exceed 20% of the cash
value of the gross proceeds from the offering received by the
Holder.
(c) Promptly
after receipt by an indemnified party under this Section 15.6 of notice of the
commencement of any action (including any governmental action), such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 15.6, 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 notified, to assume
the defense thereof with counsel selected by the indemnifying party and approved
by the indemnified party (whose approval shall not be unreasonably withheld);
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 15.6, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
15.6.
(d) If
the indemnification provided for in this Section 15.6 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage, or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable
by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the alleged
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties’ relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f) The
obligations of the Company and the Holder under this Section 15.6 shall survive
the completion of any offering of Registrable Shares in a Registration Statement
under this Section 15, and otherwise.
15.7. Reports Under Securities
Exchange Act of 1934. With a view to making available to the
Holder the benefits of Rule 144 under the Securities Act (“Rule 144”) and any
other rule or regulation of the SEC that may at any time permit the Holder to
sell shares of the Company’s Common Stock to the public without registration,
commencing immediately after the date on which a registration statement filed by
the Company under the Securities Act becomes effective, the Company agrees to
use its best efforts to:
(a) make
and keep public information available, as those terms are understood and defined
in Rule 144;
(b) 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; and
(c) furnish
to the Holder, so long as the Holder owns any Registrable Shares, forthwith upon
request (i) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (ii) such
other information as may be reasonably requested in availing any Holder of any
rule or regulation of the SEC which permits the selling of any such securities
without registration or pursuant to such form.
15.8. Permitted
Transferees. The rights to cause the Company to register
Registrable Shares granted to the Holder by the Company under this Section 15
may be assigned in full by a Holder in connection with a transfer by the Holder
of its Registrable Shares or Warrants if: (a) the Holder gives prior written
notice to the Company; (b) such transferee agrees to comply with and be bound by
the terms and provisions of this Agreement; (c) such transfer is otherwise in
compliance with this Agreement and (d) such transfer is otherwise effected in
accordance with applicable securities laws. Except as specifically
permitted by this Section 15.8, the rights of a Holder with respect to
Registrable Shares as set out herein shall not be transferable
to any
other person, and any attempted transfer shall cause all rights of the Holder
therein to be forfeited.
15.9 Termination of Registration
Rights. The Holder shall no longer be entitled to exercise any
registration rights provided for in Section 15.1 after such time at which all
Registrable Shares held by the Holder can be sold in any three-month period
without registration in compliance with Rule 144 of the Act.
16. Information. So
long as the Holder holds the Warrant and/or shares of Common Stock, the Company
shall deliver to the Holder, promptly after mailing, copies of all notices,
reports, financial statements, proxies or other written communication delivered
or mailed to the holders of the Common Stock.
17. Descriptive
Headings. The description headings of the several sections and
paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant.
18. Governing
Law. This Warrant shall be construed and enforced under the
laws of the State of Florida without regard to conflicts of law
provisions
19. Waiver of Jury
Trial. THE COMPANY AND
THE HOLDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT.
THIS WAIVER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY THE HOLDER AND
THE COMPANY.
IN
WITNESS WHEREOF, the parties have executed this Warrant as of the date set forth
below.
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Dated: December
31, 2009
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|
|
BLUECREST
VENTURE FINANCE MASTER FUND LIMITED
acting
through its duly appointed agent and investment manager, BlueCrest Capital
Management LLP
|
BIOHEART
INC.
|
|
By: ______________________________________________
|
By: ___________________________________________
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
EXHIBIT
A
NOTICE
OF EXERCISE FORM
To: Bioheart
Inc.
(1) The
undersigned hereby (A) elects to purchase ______ shares of Common Stock of
Bioheart Inc., pursuant to the provisions of Section 3(b) of the attached
Warrant, and tenders herewith payment of the purchase price for such shares in
full, or (B) elects to exercise this Warrant for the purchase of_______ shares
of Common Stock, pursuant to the provisions of Section 3(d) of the attached
Warrant.
(2) In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws.
(3) Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:
____________________________________
(Name)
(4) Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified
below:
_____________________________________
Name:
Date:
EXHIBIT
B
FORM OF
SHAREHOLDERS’ AGREEMENT
EXHIBIT
C
ASSIGNMENT
FORM
FOR VALUE
RECEIVED, the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under the within Warrant, with respect to the number of shares of Common Stock
set forth below:
|
Name
of Assignee
|
Address
|
No.
of Shares
|
and does
hereby irrevocably constitute and appoint _____________ Attorney to make such
transfer on the books of Bioheart Inc. maintained for the purpose, with full
power of substitution in the premises.
The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment and that the Assignee will not
offer, sell or otherwise dispose of this Warrant or any shares of stock to be
issued upon exercise hereof except under circumstances which will not result in
a violation of the Securities Act of 1933, as amended, or any state securities
laws. Further, the Assignee has acknowledged that upon exercise of
this Warrant, the Assignee shall, if requested by the Company, confirm in
writing, in a form satisfactory to the Company, that the shares of stock so
purchased are being acquired for investment and not with a view toward
distribution or resale.
Name:_______________________________________
Dated: