AMENDMENT TO
LOAN AND SECURITY AGREEMENT
This
AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “
Agreement ”) dated as of April 2, 2009 is entered
into by and among BlueCrest Venture Finance Master Fund Limited, a
Cayman Islands limited company as successor to BlueCrest Capital
Finance, L.P. (“ Lender ”), and Bioheart, Inc.,
a Florida corporation (“ Borrower ”).
A.
Borrower and Lender are parties to the Loan and Security Agreement
(No. V07107) dated as of May 31, 2007, as amended from
time to time (the “ Loan Agreement ”), pursuant
to which Lender has agreed to provide certain financial
accommodations to or for the benefit of Borrower upon the terms and
conditions contained therein. Capitalized terms used but not
defined herein shall have the meaning ascribed to such terms in the
Loan Agreement.
B.
Borrower has informed Lender that an Event of Default (the “
Existing Default ”) has occurred and is continuing
under Section 8.1(a) of the Loan Agreement as a result of
Borrower’s failure to pay amounts due as scheduled for
January 2009, February 2009 and March 2009 with
respect to the Term Loan under the Loan Agreement.
C.
Borrower has requested that Lender forbear from exercising its
rights and remedies as a result of the Existing Default and that
Lender consider amending the Loan Agreement to restructure the
terms and conditions thereof.
D.
Lender is willing to amend the Loan Agreement and forbear from
exercising its rights and remedies as a result of the Existing
Default, on the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises herein, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower and Lender hereby agree as
follows:
1.
Ratification and Incorporation of Loan Agreement and Other
Agreements . Except
as expressly modified by this Agreement, Borrower hereby
acknowledges, confirms and ratifies all of the terms and conditions
set forth in, and all of its obligations under, the Loan Agreement
and the Other Agreements. Without limiting the generality of the
foregoing, Borrower acknowledges and agrees that as of
April 1, 2009, (i) the aggregate outstanding principal
amount of the Term Loan was $2,943,431.78, and (ii) accrued
but unpaid interest in respect of the Term Loan was $126,077.00.
Borrower represents that it has no offset, defense, counterclaim,
dispute or disagreement of any kind or nature whatsoever with
respect to the amount of such indebtedness.
2.
Forbearance in Respect of Existing Default .
2.1
Acknowledgment . Borrower hereby acknowledges and agrees
that the Existing Default has occurred and is continuing, and that
the Existing Default entitles Lender to exercise its rights and
remedies under the Loan Agreement and applicable law, and Borrower
further represents and warrants that as of the date hereof no
Defaults or Events of Default have occurred and are continuing
other than the Existing Default. Lender has not waived,
presently
does not intend
to waive and may never waive the Existing Default, and nothing
contained herein or in the transactions contemplated hereby shall
be deemed to constitute any such waiver. Borrower hereby
acknowledges and agrees that Lender has the presently exercisable
right to declare Borrower’s Liabilities to be immediately due
and payable under the terms of the Loan Agreement but that Lender
has agreed to forbear from exercising such rights in accordance
with the terms and conditions of this Agreement.
(a) In
reliance upon the representations, warranties and covenants of
Borrower contained in this Agreement, and subject to the terms and
conditions of this Agreement and any documents or instruments
executed in connection herewith, Lender agrees, during the period
(the “ Forbearance Term ”) beginning as of the
date hereof and ending on the occurrence of any Default or Event of
Default other than the Existing Default, to forbear from exercising
its rights and remedies under the Loan Agreement and Other
Agreements in respect of or arising out of the Existing Default,
subject to the conditions, amendments and modifications contained
herein.
(b) Upon
the termination of the Forbearance Term, the agreement of Lender to
forbear shall automatically and without further action terminate
and be of no force and effect, it being expressly agreed that the
effect of such termination will be for Lender to have the right in
its sole discretion to exercise such rights and remedies
immediately, without any further notice, passage of time or
forbearance of any kind.
2.3
No Waivers; Reservation of Rights .
(a) Lender
has not waived, is not by this Agreement waiving, and has no
intention of waiving, any Defaults or Events of Default that may be
continuing on the date hereof (including the Existing Default) or
any Defaults or Events of Default that may occur after the date
hereof (whether similar to the Existing Default or otherwise), and
Lender has not agreed to forbear with respect to any of its rights
or remedies concerning any Defaults or Events of Default (other
than, during the Forbearance Term, the Existing Default to the
extent expressly set forth herein), that may have occurred or are
continuing as of the date hereof or that may occur after the date
hereof.
(b) Subject
to Section 2.2 above (solely with respect to the Existing
Default), Lender reserves the right, in its sole discretion, to
exercise any or all of its rights and remedies under the Loan
Agreement and the Other Agreements as a result of any Defaults or
Events of Default that may be continuing on the date hereof or any
Defaults or Event of Default that may occur after the date hereof,
and Lender has not waived any of such rights or remedies, and
nothing in this Agreement, and no delay on its part in exercising
any such rights or remedies, should be construed as a waiver of any
such rights or remedies.
(c) Notwithstanding
anything herein to the contrary, Lender hereby waives its right to
collect interest at the default rate provided under the Loan
Agreement for the period commencing on date of the acceleration
notice, February 2, 2009, through the date hereof.
3.
Amendments to Loan Agreement .
3.1
Section 1.RR of the Loan Agreement is hereby amended to read,
in its entirety, as follows:
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“Ordinary
Course Indebtedness” means (i) accounts payable incurred
in the ordinary course of business; (ii) unsecured
indebtedness not to exceed, in the aggregate, $20,000;
(iii) leases or other financing or the acquisition of
equipment or property incurred in the ordinary course of business
not to exceed, in the aggregate, $250,000 during the term of the
Loan Agreement; and (iv) unsecured indebtedness, not to exceed
$385,000 in aggregate principal amount, provided that such
indebtedness is subject to a subordination agreement satisfactory
to Lender in its sole discretion.
3.2
Section 1.III of the Loan Agreement is hereby amended to read,
in its entirety, as follows:
“Warrant” means the Warrant
described in Section 2.5(b) of the Loan Agreement, together
with the Warrant to purchase $700,000 of the shares of
Borrower’s Common Stock at a purchase price of equal to the
average closing price over the five trading days immediately
preceding the execution of this Amendment to Loan and Security
Agreement minus 15%.
3.3
Section 2.1 of the Loan Agreement is hereby amended to read,
in its entirety, as follows:
Term
Loan. On the terms and
subject to the conditions contained in this Loan Agreement,
including those listed in Section 2.5 hereof, Lender has
loaned to Borrower on May 31, 2007, a term loan (the
“Term Loan”), in the original principal amount of Five
Million Dollars ($5,000,000.00), the proceeds of which were to be
used for working capital. As of the date hereof, the current
outstanding principal balance of the Term Loan is $2,943,431.78.
This is not a revolving line of credit and Borrower may not repay
and re-borrow the amounts advanced or to be advanced under this
Section 2.1(a). The Term Loan was initially to be repaid in
thirty-six (36) monthly scheduled installments as follows: (i)
commencing on the first Business Day of first full month after the
date of the Term Loan, and continuing on the first Business Day of
the second full calendar month and the third full calendar month
after the date of the Term Loan, three (3) monthly payments of
interest only (paid in arrears); then (ii) commencing on the
first Business Day of the fourth full calendar month after the date
of the Term Loan and continuing on the first Business Day of each
month thereafter, thirty-three (33) equal monthly payments of
principal and interest. From and after the date hereof, the Term
Loan shall be repaid as follows: (i) commencing on
April 1, 2009, three (3) monthly payments of interest
only (paid in arrears), then (ii) on July 1, 2009, twelve
(12) equal monthly payments of principal and interest (paid in
arrears). All such payments are to be made on the first Business
Day of relevant month.
3.4
Section 5.1 of the Loan Agreement is hereby amended to read,
in its entirety, as follows:
Grant of Security Interest. (a) To further secure to
Lender the prompt full and faithful payment and performance of
Borrower’s Liabilities and the prompt, full and complete
performance by Borrower of each of its covenants and duties under
this Loan Agreement and the Other Agreements, Borrower grants to
Lender, a valid, first priority continuing security interest in and
lien upon all of the following (except as to assets or property
with Permitted Liens, upon which a lien which may be other than a
first priority lien is granted), whether now owned or hereafter
acquired and wherever located:
(iv) All
General Intangibles (excluding Intellectual Property);
(vi) All
Investment Property;
(vii) All
Deposit Accounts and Securities Accounts (other than Account
Numbers 2290 0834 6165 and 2290 0834 6178 of the Borrower at Bank
of America (the “Bank of America Aggregation Account”
and the “Payroll Account”, respectively));
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(x) All Proceeds
from the sale, transfer or other disposition of Intellectual
Property;
(xi) All other
Goods and tangible and intangible personal property of Borrower
(other than Intellectual Property), whether now or hereafter owned
or existing, leased, consigned by or to, or acquired by, Borrower
and wherever located, and
(xii) to the
extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements
for, and rents, profits and products of each of the foregoing and
all attachments, accessories, accessions, replacements,
substitutions, additions or improvements to any of the foregoing,
wherever located and all products and proceeds of the foregoing
including without limitation proceeds of insurance policies
insuring the foregoing and all books and records with respect
thereto;
(all of the
foregoing personal property is hereinafter sometimes individually
and sometimes collectively referred to as
“Collateral”). Notwithstanding anything herein
contained or construed to the contrary, Borrower is not granting to
Lender, and Lender is not receiving from Borrower and the term
“Collateral” shall not include, any grant of a security
interest in any of Borrower’s now owned or hereafter acquired
Intellectual Property (other than a security interest in the
Proceeds from the sale, transfer or other disposition of
Intellectual Property), the Bank of America Aggregation Account
(and any payments from the Credit Support Providers to the Borrower
under any of the Bank of America Loan Guarantee Agreements received
therein), or the Payroll Account; provided , however
, that software, firmware and operating systems that cannot be
removed from the Collateral without rendering the Collateral
inoperable shall be deemed to be part of the
“Collateral” unless such construction is prohibited by
or inconsistent with any relevant license or other agreement
respecting such software, firmware or operating system. Borrower
shall make appropriate entries upon its financial statements and
its books and records disclosing Lender’s security interest
in the Collateral.
Borrower hereby
further agrees that, except as expressly permitted herein including
with respect to Permitted Liens, Borrower shall not hereafter grant
a security interest in or pledge any of its Intellectual Property
to any other party.
(b)
Notwithstanding the foregoing, in the event that an Event of
Default (other than the Existing Default)
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