Warrant Agreement between Bioheart, Inc. and William P. Murphy, Jr. M.D. for Purchase of Common Stock

          Section 2.6.3 No Liability. Notwithstanding any other provision contained in this Section 2.6, there shall be no liability on the part of Bioheart or any of the HJL Sellers in the event that the sale pursuant to this Section 2.6 is not consummated for any reason whatsoever. The decision whether to propose or to consummate a Transfer pursuant to this Section 2.6 shall be in the sole and absolute discretion of the HJL Sellers.

     Section 2.7 Restrictive Legends; Termination of Agreement.

          Section 2.7.1 Legends. Each outstanding certificate representing the Stockholder’s shares of Common Stock issued prior to the date when the applicable restrictions are terminated pursuant to Section 2.7.3, shall bear endorsements reading substantially as follows:

               (a) The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under the securities laws of any state and may not be transferred, sold or otherwise disposed of except while such a registration is in effect or pursuant to an exemption from registration under said Act and applicable state securities laws confirmed to the issuer by an opinion (reasonably satisfactory to the issuer) of counsel (reasonably satisfactory to the issuer).

               (b) 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 Stockholder Agreement, dated as of ______________, 2006, a copy of which may be obtained from the issuer of this security. No transfer of such securities will be made on the books of the issuer unless accompanied by evidence of compliance with the terms of such agreement.

          Section 2.7.2 Copy of Agreement. A copy of this Agreement shall be filed with the corporate secretary of Bioheart and kept with the records of Bioheart.

          Section 2.7.3 Termination of Agreement.

               (a) Article I and Article II of this Agreement shall terminate when and if the Company’s IPO is consummated.

               (b) This entire Agreement (other than Section 2.2 and Section 2.7.4) shall terminate upon the first to occur of (i) the tenth (10th) annual anniversary of the date of the Agreement, (ii) upon such time when HJL (together with his family members and trusts for the benefit of him and/or his family members) and the Stockholders (including the Stockholder party hereto) who are party to this form of Stockholder Agreement in connection with the Offering contemplated by the Subscription Agreement (the “Stockholder Parties”) hold in the aggregate less than twenty five percent (25%) of the outstanding shares of Common Stock, (iii) upon the conclusion of the complete liquidation and dissolution of the Company, (iv) upon the approval of termination of this Agreement by HJL and the holders of not less than fifty percent of the aggregate number of shares of Common Stock then held by the Stockholder Parties, or (v) upon consummation of a reorganization, merger, or consolidation of, or any sale, transfer, conveyance or disposition of all or substantially all of the assets of, the Company or other form of corporate transaction, in each case, with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation, sale of assets or other transaction do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged, consolidated or asset-acquiring company’s then outstanding voting securities.

               (c) Nothing contained in this Section 2.7.3 shall affect or impair any rights or obligations arising under this Agreement prior to the time of, or in connection with, the termination of this Agreement. Subject to the foregoing sentence and Section 3.3 hereof, the Stockholder shall cease to be bound by this Agreement as a “Stockholder” hereunder from and after the time that such Stockholder ceases to own any Common Stock or any rights, warrants or options to purchase or exercisable for or convertible into shares of Common Stock (but only if all such Stockholder’s Common Stock is transferred or otherwise disposed of by such Stockholder as permitted and in accordance with this Stockholder Agreement).

          Section 2.7.4 Removal of Legends on Stock Certificates. The legend required pursuant to Section 2.7.1(a) shall cease to be required as to any particular shares of Common Stock (a) when, in the opinion of counsel for Bioheart, such restriction is no longer required in order to assure compliance with the Securities Act or (b) when such shares shall have been effectively registered and sold under the Securities Act. Bioheart or Bioheart’s counsel, at their election, may request from the Stockholder a certificate or an opinion of such Stockholder’s counsel with respect to any relevant matters in connection with the removal of the endorsement set forth in Section 2.7.1(a) from such Stockholder’s stock certificates, any such certificate or opinion of counsel to be reasonably satisfactory to Bioheart and its counsel.

     The legend referred to in Section 2.7.1(b) shall cease to be required as to any particular shares of Common Stock when, in the opinion of counsel for Bioheart, the provisions of this Agreement are no longer applicable to such shares and their Stockholder, in which event the holder of such shares shall be entitled to receive from Bioheart, new certificates for a like number of shares of Common Stock not bearing the relevant terminated legend.

ARTICLE III

OTHER AGREEMENTS

     Section 3.1 IPO Lockup Agreement

     The Stockholder shall comply with and agree to any customary form of “lock-up” agreement (meaning an agreement not to sell or engage in certain specified transactions regarding Common Stock or other Company securities for a period of time in connection with a public offering) that is requested by the underwriters managing the Company’s IPO if the term of such lock-up agreement is not more than 180 days and HJL also agrees to the terms of such lock-up agreement; and the Stockholder agrees to execute and deliver such form of lock-up agreement.

     Section 3.2 Specific Performance; Injunction

     The parties hereto acknowledge that the rights and obligations under this Agreement are unique, valuable and bargained for, and that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled (to the fullest extent permitted by law) to compel specific performance of the obligations of any other party under this Agreement in accordance with the terms and conditions of this Agreement, and to obtain injunction against violation of this Agreement, without the need to post or obtain any bond or similar requirement. Further, the Company may refuse to transfer on its books record ownership of Common Stock which has been sold or transferred in violation of this Agreement or to recognize any transferee as one of the Company’s shareholders for any purpose (including without limitation, for purposes of dividend and voting rights) until all applicable provisions of this Agreement have been complied with in full. All remedies provided by this Agreement are in addition to other remedies provided by law.

     Section 3.3 Recapitalizations and Exchanges Affecting Common Stock

     The provisions of this Agreement shall apply, to the full extent set forth herein with respect to Common Stock, to any and all shares of capital stock or equity securities of Bioheart or any successor or assign of Bioheart (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution of, the Common Stock, or which may be issued by reason of any stock dividend, stock split, reverse stock split, combination, recapitalization, reclassification or otherwise. Upon the occurrence of any of such events, numbers of shares and amounts hereunder shall be appropriately adjusted.

     Section 3.4 Indemnification

     The Company shall not amend the indemnification provisions of the Company’s Articles of Incorporation (as amended, the “Articles”) or Bylaws to eliminate or reduce the indemnification provided therein for the Company’s directors and officers. The Company may in its discretion also enter into separate indemnification agreements with its officers and directors.

     Section 3.5 No Right of Employment or Participation in Management

     No Stockholder shall have any right of employment or other employee benefits, or any right to be a Director or officer of the Company or otherwise participate in the management of the Company in any manner or respect, solely as a consequence of owning Common Stock in the Company.

     Section 3.6 Stockholder Indemnification. The Stockholder agrees to indemnify the Company and its officers, directors and controlling persons against any and all losses, claims, damages, expenses or liabilities to which the Company and such Persons may become subject under any federal or state securities law, at common law, or otherwise, insofar as such losses, claims, damages, expenses or liabilities arise out of or are based upon (1) any transfer of any shares of Common Stock or other securities of the Company by such Stockholder in violation of the Securities Act or the Securities Exchange of 1934, as amended, the rules and regulations promulgated thereunder, or other applicable securities laws, or (2) any untrue statement of a material fact in connection with such Stockholder’s representations pursuant to this Stockholder Agreement or in connection with such Stockholder’s acquisition of Common Stock or with respect to the facts and representations supplied to counsel to the Company or to Stockholder’s counsel upon which its opinion as to a proposed transfer by the Stockholder was based.

     Section 3.7 Failure to Deliver Stock. If the Stockholder (or any personal representative, administrator, executor or other attorney or representative of, or authorized holder on behalf of, the Stockholder) who is obligated to sell or deliver shares of Stock (or the certificates representing such Stock) of the Company hereunder shall fail to sell or deliver such Stock (or certificates) on the terms and in accordance with the provisions of this Stockholder Agreement (hereinafter, a “Defaulting Stockholder”), and such failure shall continue for a period of fifteen (15) days after notice from the Company to such Defaulting Stockholder, then, upon approval by the Board of Directors of the Company, the sale and delivery of such Stock (and such certificates) shall nonetheless be deemed conclusively and for all purposes to have been effected and perfected as required pursuant to this Agreement, and the Company (on behalf of itself, or the designated party entitled to effect the purchase hereunder), in addition to all other remedies it may have, shall be authorized to (i) transmit to such obligated party, by registered mail, return receipt requested, the purchase price for such Stock (if any), on the terms provided for in this Stockholder Agreement, and (ii) upon written notice to the Stockholder, cancel on the Company’s stock books and ledger the certificates representing the Stock so to be purchased. Upon any such action, which if taken by the Company shall be binding and conclusive on all parties, all of the Defaulting Stockholder’s rights in and to such Stock shall cease and terminate.

     Section 3.8 Business Days. Whenever the terms of this Stockholder Agreement call for the performance of a specific act on a specified date, which date falls on a Saturday, Sunday or legal (banking) holiday in the State of Florida, the date for the performance of such act shall be postponed to the next succeeding regular business day following such Saturday, Sunday or legal (banking) holiday.
Section 3.9 Void Transfers in Violation of Agreement. Any attempt by the Stockholder to transfer any Common Stock in violation of any applicable provision of this Agreement will be void. The Company will not be required (i) to transfer on its books any Common Stock that has been sold, given as a gift or otherwise transferred in violation of this Agreement, or (ii) to treat as owner of such Common Stock, or to accord the right to vote or pay dividends to any purchaser, donee or other transferee to whom such Common Stock may have been so transferred.

ARTICLE IV

PREEMPTIVE PURCHAE RIGHTS IN CETAIN SUBSEQUENT FINANCING TRANSACTIONS

     Section 4.1 Exchange Right for Stock in Certain Subsequent Equity Financings. In the event of the issuance and sale by the Company for cash of shares of any class or series of the Company’s authorized stock (other than Excluded Stock), including, but not limited to, those shares which are convertible into shares of Common Stock (which sale may or may not also include the issuance and sale of shares of Common stock or other securities) during the period commencing on the Effective Date and terminating one hundred and eighty days thereafter (a “Triggering Sale”), the Company shall give written notice of such Triggering Sale to the Stockholder, which notice shall describe the securities proposed to be issued by the Company in such transaction (the “Included Securities”), and the number, price and payment terms therefore. The Stockholder shall have the right, for a period of fifteen (15) days following the date of receipt of such notice, to agree irrevocably and in writing to purchase, at the same price and on the same terms and conditions (except for the form of payment, which shall be in Shares as provided in the next succeeding sentence) as in the Triggering Sale, that number (the “Required Number”) of Included Securities which is equal to the quotient of (a) the product of the number of shares purchased by the Stockholder pursuant to the Subscription Agreement (the “Payment Shares”) multiplied by $4.75 (as adjusted for stock splits and similar events as provided in this paragraph below), divided by (b) the purchase price per share (or other unit, as the case may be) of the securities constituting the Included Securities. In lieu of using cash as purchase price consideration for the purchase of Included Securities in the connection with exercising any purchase right under this Section 4.1, the Stockholder shall use its Payment Shares, properly tendered and endorsed for transfer to the Company, as purchase currency and consideration (the “Value Per Share”), which Payment Shares shall, upon the closing of such purchase, be transferred by the Stockholder to the Company free and clear of all liens, security interests and encumbrances or adverse claims of any kind or character other than restrictions under applicable securities laws. The Stockholder may agree to purchase all (but not less than all) of the Required Number of Included Securities, by written notice thereof — which shall constitute an irrevocable offer to purchase — given by him or it to the Company prior to the expiration of the aforesaid fifteen (15) day period, in which event the Company shall sell, and such stockholder shall buy, at the closing of the Triggering Sale or on a date specified by the Company within a reasonable period of time (not to exceed fifteen (15) days) after such closing, upon the terms and conditions specified in the Triggering Sale (except with respect to the purchase consideration, which shall be paid by the Stockholder’s delivery and transfer to the Company of all the Payment Shares as provided in the Section), all of the Required Number of Included Securities, which delivery and transfer shall include the Stockholder’s delivery of stock certificates and other appropriate instruments of transfer for the Payment Shares, duly endorsed for transfer, so as to effect the transfer of the Payment Shares to the Company free and clear of all liens and encumbrances other than restrictions under applicable securities laws. The $4.75 Value Per Share Specified above relates to the Shares as constituted on the date of this Agreement (and following the closing of the Subscription

Agreement, which is being effected at a price of $4.75 per share), which Value Per Share shall be adjusted appropriately (and without duplication of any other adjustment required hereunder or otherwise) to reflect the effect of any stock split, stock dividend, combination, reclassification or similar event or transaction, and any such adjustment made in good faith by the Company’s Board of Directors in accordance with the foregoing shall be binding on Stockholders.

     Notwithstanding anything to the contrary in this Agreement, upon the consummation of the Stockholder’s purchase of Included Securities under this Section 4.1 (including without limitation the Stockholder’s execution and delivery of the required agreements and insturments in connection therewith which shall provide rights equivalent to those of the purchasers of Included Securities (the “Section 4.1 Agreements”)), the Stockholder and the Stockholder’s Common Stock and other securities of the Company which were subject to this Agreement prior to such purchases under Section 4.1 together shall continue to be subject to and bound by this Agreement following such purchase as applicable pursuant to the terms hereof; provided, however, that it is hereby further agreed that if the provisions of this Agreement (upon application of this paragraph) conflict with the terms of the Section 4.1 Agreements, then this Agreement and/or the Section 4.1 Agreements shall be limited, modified and/or interpreted as and to the extent necessary, permissable and/or appropriate to resolve any such conflict; it being agreed that any such limitation, modification or interpretation of the terms hereof or thereof and the determination of the existence of any such conflict shall be determined solely by the Company’s Board of Directors in good faith.

     Section 4.2 Provisions of General Application. Notwithsatanding any term or provision of this Agreement ot the contrary, no purchase or acquisition rights are provided or available under this Article IV with regard to grants, issuances or slaes of Excluded Stock.

     Section 4.3 Termination. Notwithstanding any other term or provisons of this Agreement, the terms and provisons of this Article IV (ant the rights and obligations provided hereunder) shall terminate, and become null, void and of no further forece or effect, upon the earlier of (i) termination of this Article IV or this Agreement as provided in Article III, or (ii) in the event that the Stockholder ceases to own at least fifty percent (50%) of the Shares acquired under the Subscription Agreement or (iii) one hundred and eighty (180) days after the Effective Date.

ARTICLE V

VOTING

Section 5.1 Covenant to Vote

     Each of the Stockholders who owns or holds Common Stock entitled to vote on stockholder matters shall appear in person or by proxy at any annual or special meeting of stockholders of Bioheart for the purpose of obtaining a quorum and shall vote the shares of Common Stock entitled to vote on stockholder matters owned by such Stockholder, either in person or by proxy, at any annual or special meeting of stockholders of Bioheart, or shall so act by consensual action of stockholders (i.e., action by written consent as permitted by law); and (A) if the vote is called for the purpose of voting on the election or removal of directors, then each Stockholder shall vote (or act by consensual action) in favor of (i) the election of the “Bioheart Nominees” (as defined below) as the directors constituting the Board of Directors of Bioheart and (ii) the removal of directors of Bioheart who are “Bioheart Removal Candidates” (as defined below), and (B) if the vote is called for the purpose of voting on any matter that is subject to a “Bioheart Vote Recommendation” (as defined below) each Stockholder shall vote (or act by consensual action) in accordance with the applicable Bioheart Vote Recommendation (i.e., the Stockholder shall vote “For” or “Against” or otherwise in the manner directed by the Bioheart Vote

Recommendation). In addition, each Stockholder who holds Common Stock entitled to vote on stockholder matters shall appear in person or by proxy at any annual or special meeting of stockholders for the purpose of obtaining a quorum and shall vote the shares of Common Stock entitled to vote on stockholder matters owned by such Stockholder, either in person or by proxy, upon any matter submitted to a vote of the stockholders of Bioheart, or shall so act by consensual action of stockholders, in a manner so as to be consistent and not in conflict with, and to implement and effect, the terms of this Agreement. The terms “Bioheart Nominees”, “Bioheart Removal Candidates” and “Bioheart Vote Recommendation” shall mean such director nominees, such directors to be removed, and such vote recommendations, respectively, as determined by HJL in his discretion so long as HJL (together with his wife and any trusts for the benefit of him and/or his family members) hold in the aggregate Twenty Five Percent (25%) or more of Bioheart’s outstanding shares of Common Stock (or otherwise hold Bioheart securities having Twenty Five Percent (25%) or more of the combined voting power of Bioheart’s outstanding securities).

     Section 5.2 No Other Voting or Conflicting Agreements

     No Stockholder shall grant any proxy (except as provided in Section 5.3 below) or enter into or agree to be bound by any voting trust with respect to the Common Stock nor shall any Stockholder enter into any stockholder agreement or other agreements or arrangements of any kind with any Person with respect to the Common Stock or the Company that is inconsistent with, or that limits in any way the effectiveness or implementation of, the provisions of this Agreement (whether or not such agreements and arrangements are with other Stockholders or holders of Common Stock or other Persons that are not parties to this Agreement), and each Stockholder represents and warrants to Bioheart that no such prohibited agreement or arrangement with respect to such Stockholder exists as of the time such Stockholder became a party to this Agreement. The foregoing prohibition includes, but is not limited to, agreements or arrangements with respect to the acquisition, disposition or voting of (or providing a consent with respect to) shares of Common Stock inconsistent with the provisions of this Agreement. No Stockholder shall act, for any reason, on such Stockholder’s own behalf or as a member of a group or in concert with any other Persons in connection with the acquisition, disposition or voting of shares of Common Stock, or otherwise in any manner, which is inconsistent with the provisions of this Agreement.

     Section 5.3 Grant of Proxy; Corporate Governance Matters.

          Section 5.3.1 Irrevocable Proxy. Each Stockholder hereby irrevocably constitutes and appoints the “Proxy” (as defined below) as such Stockholder’s proxy, with full right and power to vote all of such Stockholder’s shares of Common Stock, in accordance with any vote of such shares required under Article V of this Agreement with respect to any Bioheart Nominees, Bioheart Removal Candidates or any Bioheart Vote Recommendation. The term “Proxy” means HJL (and/or any other individual selected by HJL, or designated as attorney-in-fact by HJL, to be Proxy in connection with a particular vote). The proxy granted hereby shall remain in effect for so long as and at all times that the provisions of Section 5.1 of this Agreement shall remain in effect and shall terminate immediately and automatically only upon the termination of Section 5.1 of this Agreement (or termination of this Article V) in accordance with the provisions hereof. The proxy granted hereby is irrevocable and is coupled with an interest, as provided in Section  ###-###-####(5) of the Florida Business Corporation Act.

          Section 5.3.2 Scope of Agreement. This Agreement shall govern the vote of each Stockholder’s shares of Common Stock to the extent provided herein, whether the vote is made by the Proxy or by the Stockholder or any other Person, with respect to any and all matters voted upon by shareholders of the Company, whether at a meeting or pursuant to written consent or otherwise, including, but not limited to the following (the following enumeration does not mean that the items must or will be submitted to a vote of the shareholders or that a shareholder vote is required in connection with such items):

          (i) any change in the authorized capital stock or capital structure of the Company, including the creation of any additional class of shares or the increase of the number of authorized shares of any class;

          (ii) any amendment of the Company’s Articles of Incorporation or bylaws;

          (iii) any merger, share exchange, sale of all or substantially all of the assets or dissolution of the Company;

          (iv) the election of the Company’s Board of Directors;

          (v) any change in the number of directors fixed to serve on the Company’s Board of Directors; and

          (vi) to the extent a shareholder vote is otherwise required, the establishment of restricted stock, stock option or similar plans, or the issuance by the Company of shares of Common Stock, whether in connection with acquisitions, strategic relationships or otherwise.

          Unless terminated as hereinafter provided, this Agreement shall remain in effect without regard to any action taken by shareholders of the Company.

          Section 5.3.3 Voting of Shares by Proxy. Each Stockholder and the Company agrees and covenants that at any meeting of shareholders of the Company and/or in connection with any corporate action by the shareholders of the Company as to which the Proxy is authorized to vote under Section 5.3.1, all of such Stockholder’s shares of Common Stock (whether now owned or hereafter acquired) shall be voted by the Proxy in the manner and to the effect as required under Section 5.1 hereof, unless such Stockholder otherwise votes its shares of Common Stock in the manner as required under Section 5.1.

          Section 5.3.4 Limitation of Proxy’s Liability. The Proxy shall not incur any liability or responsibility by reason of any error of judgment, mistake of law or other mistake, or for any act or omission of any agent or attorney, or for any misconstruction of this Agreement, or for any action of any kind taken or omitted hereunder or believed by him to be in accordance with the provisions and intents hereof, except for his own individual intentional misconduct in bad faith.

ARTICLE VI

MISCELLANEOUS

     Section 6.1 Notices

     All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, on the date of transmittal of services via facsimile or telecopy to the party to whom notice is to be given (if receipt is orally confirmed by phone and a confirming copy delivered thereafter in accordance with this Section), or on the fifth day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, or via a nationally recognized overnight courier providing a receipt for delivery and properly addressed as set forth on the signature pages to this Agreement, as the case may be. Any party may change its address for purposes of this paragraph by giving notice of the new address to each of the other parties in the manner set forth above.

     Section 6.2 Successors and Assigns

     This Agreement shall be binding upon and shall inure to the benefit of the parties, and their respective successors and assigns. If the Stockholder or any Affiliate thereof or any Transferee of the Stockholder shall acquire any shares of Common Stock in any manner, whether by operation of law or otherwise, such shares and such transferee shall be held subject to all of the terms of this Agreement and by taking and holding such shares such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, except in the case of a Stockholder’s Transfer for which the Transferee is not required to take shares subject to this Agreement as expressly provided in Section 2.1(c) hereof.

     Section 6.3 Governing Law

     This Agreement shall be governed and construed and enforced in accordance with the laws of the State of Florida, without regard to the principles of conflicts of law thereof.

     Section 6.4 Descriptive Headings, Etc.

     The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein. Unless the context of this Agreement otherwise requires, references to “hereof,” “herein,” “hereby,” “hereunder” and similar terms shall refer to this entire Agreement.

     Section 6.5 Amendment; Waiver

     Except as specifically provided otherwise herein (including without limitation Section 2.7.3 hereof), this Agreement may not be amended or supplemented or terminated except by an instrument in writing signed by each of (i) Bioheart, (ii) HJL (but only if he is a party to this Agreement at such time) and (iii) either the Stockholder, or by such Stockholder Parties holding not less than fifty percent of the aggregate number of shares of Common Stock then held by the Stockholder Parties. HJL is not a “Stockholder” under this Agreement. The foregoing notwithstanding, Bioheart, without the consent of any other party hereto, may in its discretion amend the signature pages hereto in order to add any holder of Bioheart Common Stock or other Bioheart securities as a party hereto in the capacity of a Stockholder hereunder if such person is required to become a party hereto under the terms of this Agreement.

     Except as expressly provided herein neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought; provided, however, that any amendments or terminations of this Agreement effected in accordance with the foregoing paragraph of this Section 5.5 shall be binding upon all parties hereto, including those not signing such amendment or termination.

     No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall any such waiver constitute a continuing waiver unless otherwise expressly so provided.

     Section 6.6 Severability

     If any term or provision of this Agreement shall to any extent be held to be invalid or unenforceable under applicable law by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Upon the determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect their original intent as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible, but in any event this Agreement shall be construed to give effect to the purposes and intents indicated herein to the fullest practicable extent, whether or not the parties are able to determine such modification to this Agreement.

     Section 6.7 Further Assurances

     The parties hereto shall from time to time execute and deliver all such further documents and do all acts and things as the other party may reasonably require to effectively carry out or better evidence or perfect the full intent and meaning of this Agreement, including, without limitation, to the extent necessary or appropriate or requested by Bioheart, using all reasonable efforts to cause the amendment of the Articles of Incorporation or the ByLaws of Bioheart in order to provide for the enforcement of this Agreement in accordance with its terms.

     Section 6.8 Entire Agreement; Counterparts

     This Agreement represents the complete agreement among the parties hereto with respect to the transactions contemplated hereby and supersedes all prior written or oral agreements and understandings. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

     Section 6.9 No Third Party Beneficiaries

     The provisions of this Agreement shall be only for the benefit of the parties to this Agreement, and no other Person shall have any third party beneficiary or other right hereunder.

     Section 6.10 Pronouns.

     Whenever the context of this Agreement permits, the masculine or neuter gender shall include the feminine, masculine and neuter genders, and any reference to the singular or plural shall be interchangeable with the other.

     Section 6.11 Dispute Resolution

     If two or more parties should have a material dispute arising out of or relating to this Agreement or the parties’ respective rights and duties hereunder, then the parties will resolve such dispute in the following manner: (i) any party may at any time deliver to the other parties to the dispute a written dispute notice setting forth a brief description of the issue for which such notice initiates the dispute resolution mechanism contemplated by this Section 5.11; (ii) during the forty-five (45) day period

following the delivery of the notice described in the foregoing clause (i) above, appropriate representatives of the various parties will meet and seek to resolve the disputed issue through negotiation, (iii) if representatives of the parties are unable to resolve the disputed issue through negotiation, then within thirty (30) days after the period described in the foregoing clause (ii) above, the parties will refer the issue (to the exclusion of a court of law) to final and binding arbitration in Broward County, Florida, in accordance with the then existing rules (the “Rules”) of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof; provided, however, that the law applicable to any controversy shall be the law of the State of Florida, regardless of principles of conflicts of laws. In any arbitration pursuant to this Agreement, (i) discovery shall be allowed and governed by the Florida Code of Civil Procedure and (ii) the award or decision shall be rendered by a majority of the members of a Board of Arbitration consisting of three (3) members, one of whom shall be appointed by each of the respective parties and the third of whom shall be the chairman of the panel and be appointed by mutual agreement of said two party-appointed arbitrators. In the event of failure of said two arbitrators to agree within sixty (60) days after the commencement of the arbitration proceeding upon the appointment of the third arbitrator, the third arbitrator shall be appointed by the AAA in accordance with the Rules. In the event that either party shall fail to appoint an arbitrator within thirty (30) days after the commencement of the arbitration proceedings, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with the Rules. Nothing set forth above shall be interpreted to prevent the parties from agreeing in writing to submit any dispute to a single arbitrator in lieu of a three (3) member Board of Arbitration or to submit the dispute to any state or federal court of proper jurisdiction. Upon the completion of the selection of the Board of Arbitration (or if the parties agree otherwise in writing, a single arbitrator), an award or decision shall be rendered within no more than forty-five (45) days. Notwithstanding the foregoing, the request by either party for specific performance or preliminary or permanent injunctive relief, whether prohibitive or mandatory, shall not be subject to mandatory arbitration under this Section 5.11 and may be adjudicated only by the courts of the State of Florida or the U.S. District Court in Florida which are located in Broward County, Florida.

[signatures on following page]

     IN WITNESS WHEREOF, the parties below have caused this Stockholder Agreement to be duly executed as of the respective date(s) set forth below.

Address: 13794 NW 4^th Street
Suite 212
Sunrise, Florida 33325

Dated: _______________________, 2006

[Stockholder’s signature is on the following page]

THIS PAGE INTENTIONALLY LEFT BLANK

STOCKHOLDER’S SIGNATURE PAGE

Bioheart, Inc. Stockholder Agreement

     This is the signature page to the STOCKHOLDER AGREEMENT by and among the undersigned STOCKHOLDER(s), BIOHEART, INC., a Florida corporation, and HOWARD J. LEONHARDT, and each person signing this page as a Stockholder below intends to be legally bound by such Stockholder Agreement as the “Stockholder” thereunder.

THIS PAGE INTENTIONALLY LEFT BLANK

EXHIBIT C

ASSIGNMENT FORM

FOR VALUE RECEIVED,

hereby sells, assigns and transfers unto

Name

(Please typewrite or print in block letters)

the right to purchase up to _____________ shares of Common Stock of BIOHEART, INC., a Florida corporation, pursuant to Section 4 of this Warrant, to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute and appoint Attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

DATED: ________,200_

Exhibit D

 

Page 1

17 C.F.R. § 230.144A

Effective: [See Text Amendments]

Code of Federal Regulations Currentness
 Title 17. Commodity and Securities Exchanges
  Chapter II. Securities and Exchange Commission
    Part 230. General Rules and Regulations, Securities Act of 1933 (Refs & Annos)
    General (Refs & Annos)

§ 230.144A Private resales of securities to institutions.

Preliminary Notes:

1. This section relates solely to the application of section 5 of the Act and not to antifraud or other provisions of the federal securities laws.

2. Attempted compliance with this section does not act as an exclusive election; any seller hereunder may also claim the availability of any other applicable exemption from the registration requirements of the Act.

3. In view of the objective of this section and the policies underlying the Act, this section is not available with respect to any transaction or series of transactions that, although in technical compliance with this section, is part of a plan or scheme to evade the registration provisions of the Act. In such cases, registration under the Act is required.

4. Nothing in this section obviates the need for any issuer or any other person to comply with the securities registration or broker-dealer registration requirements of the Securities Exchange Act of 1934 (the Exchange Act), whenever such requirements are applicable.

5. Nothing in this section obviates the need for any person to comply with any applicable state law relating to the offer or sale of securities.

6. Securities acquired in a transaction made pursuant to the provisions of this section are deemed to be restricted securities within the meaning of § 230.144(a)(3) of this chapter.

7. The fact that purchasers of securities from the issuer thereof may purchase such securities with a view to reselling such securities pursuant to this section will not affect the availability to such issuer of an exemption under section 4(2) of the Act, or Regulation D under the Act, from the registration requirements of the Act.

(a) Definitions.

(1) For purposes of this section, qualified institutional buyer shall mean:

(i) Any of the following entities, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with the entity:

(A) Any insurance company as defined in section 2(13) of the Act;

     Note: A purchase by an insurance company for one or more of its separate accounts, as defined by section 2(a)(37) of the Investment Company Act of 1940 (the “Investment Company Act”), which are neither registered under section 8 of the Investment Company Act nor required to be so registered, shall be deemed to be a purchase for the account of such insurance company.

(B) Any investment company registered under the Investment Company Act or any business development company as defined in section 2(a)(48) of that Act;

(C) Any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958;

(D) Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees;

(E) Any employee benefit plan within the meaning of title I of the Employee Retirement Income Security Act of 1974;

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Page 2

17 C.F.R. § 230.144A

(F) Any trust fund whose trustee is a bank or trust company and whose participants are exclusively plans of the types identified in paragraph (a)(1)(i) (D) or (E) of this section, except trust funds that include as participants individual retirement accounts or H.R. 10 plans.

(G) Any business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

(H) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation (other than a bank as defined in section 3(a)(2) of the Act or a savings and loan association or other institution referenced in section 3(a)(5)(A) of the Act or a foreign bank or savings and loan association or equivalent institution), partnership, or Massachusetts or similar business trust; and

(I) Any investment adviser registered under the Investment Advisers Act.

(ii) Any dealer registered pursuant to section 15 of the Exchange Act, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $10 million of securities of issuers that are not affiliated with the dealer, Provided, That securities constituting the whole or a part of an unsold allotment to or subscription by a dealer as a participant in a public offering shall not be deemed to be owned by such dealer;

(iii) Any dealer registered pursuant to section 15 of the Exchange Act acting in a riskless principal transaction on behalf of a qualified institutional buyer;

     Note: A registered dealer may act as agent, on a non-discretionary basis, in a transaction with a qualified institutional buyer without itself having to be a qualified institutional buyer.

(iv) Any investment company registered under the Investment Company Act, acting for its own account or for the accounts of other qualified institutional buyers, that is part of a family of investment companies which own in the aggregate at least $100 million in securities of issuers, other than issuers that are affiliated with the investment company or are part of such family of investment companies. Family of investment companies means any two or more investment companies registered under the Investment Company Act, except for a unit investment trust whose assets consist solely of shares of one or more registered investment companies, that have the same investment adviser (or, in the case of unit investment trusts, the same depositor), Provided That, for purposes of this section:

(A) Each series of a series company (as defined in Rule 18f-2 under the Investment Company Act [17 CFR 270.18f-2] ) shall be deemed to be a separate investment company; and

(B) Investment companies shall be deemed to have the same adviser (or depositor) if their advisers (or depositors) are majority-owned subsidiaries of the same parent, or if one investment company’s adviser (or depositor) is a majority-owned subsidiary of the other investment company’s adviser (or depositor);

(v) Any entity, all of the equity owners of which are qualified institutional buyers, acting for its own account or the accounts of other qualified institutional buyers; and

(vi) Any bank as defined in section 3(a)(2) of the Act, any savings and loan association or other institution as referenced in section 3(a)(5)(A) of the Act, or any foreign bank or savings and loan association or equivalent institution, acting for its own account or the accounts of other qualified institutional buyers, that in the aggregate owns and invests on a discretionary basis at least $100 million in securities of issuers that are not affiliated with it and that has an audited net worth of at least $25 million as demonstrated in its latest annual financial statements, as of a date not more than 16 months preceding the date of sale under the Rule in the case of a U.S. bank or savings and loan association, and not more than 18 months preceding such date of sale for a foreign bank or savings and loan association or equivalent institution.

(2) In determining the aggregate amount of securities owned and invested on a discretionary basis by an entity, the following instruments and interests shall be excluded: bank deposit notes and certificates of deposit; loan participations; repurchase agreements; securities owned but subject to a repurchase agreement; and currency, interest rate and commodity swaps.

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Page 3

17 C.F.R. § 230.144A

(3) The aggregate value of securities owned and invested on a discretionary basis by an entity shall be the cost of such securities, except where the entity reports its securities holdings in its financial statements on the basis of their market value, and no current information with respect to the cost of those securities has been published. In the latter event, the securities may be valued at market for purposes of this section.

(4) In determining the aggregate amount of securities owned by an entity and invested on a discretionary basis, securities owned by subsidiaries of the entity that are consolidated with the entity in its financial statements prepared in accordance with generally accepted accounting principles may be included if the investments of such subsidiaries are managed under the direction of the entity, except that, unless the entity is a reporting company under section 13 or 15(d) of the Exchange Act, securities owned by such subsidiaries may not be included if the entity itself is a majority-owned subsidiary that would be included in the consolidated financial statements of another enterprise.

(5) For purposes of this section, riskless principal transaction means a transaction in which a dealer buys a security from any person and makes a simultaneous offsetting sale of such security to a qualified institutional buyer, including another dealer acting as riskless principal for a qualified institutional buyer.

(6) For purposes of this section, effective conversion premium means the amount, expressed as a percentage of the security’s conversion value, by which the price at issuance of a convertible security exceeds its conversion value.

(7) For purposes of this section, effective exercise premium means the amount, expressed as a percentage of the warrant’s exercise value, by which the sum of the price at issuance and the exercise price of a warrant exceeds its exercise value.

(b) Sales by persons other than issuers or dealers. Any person, other than the issuer or a dealer, who offers or sells securities in compliance with the conditions set forth in paragraph (d) of this section shall be deemed not to be engaged in a distribution of such securities and therefore not to be an underwriter of such securities within the meaning of sections 2(11) and 4(1) of the Act.

(c) Sales by Dealers. Any dealer who offers or sells securities in compliance with the conditions set forth in paragraph (d) of this section shall be deemed not to be a participant in a distribution of such securities within the meaning of section 4(3)(C) of the Act and not to be an underwriter of such securities within the meaning of section 2(11) of the Act, and such securities shall be deemed not to have been offered to the public within the meaning of section 4(3)(A) of the Act.

(d) Conditions to be met. To qualify for exemption under this section, an offer or sale must meet the following conditions:

(1) The securities are offered or sold only to a qualified institutional buyer or to an offeree or purchaser that the seller and any person acting on behalf of the seller reasonably believe is a qualified institutional buyer. In determining whether a prospective purchaser is a qualified institutional buyer, the seller and any person acting on its behalf shall be entitled to rely upon the following non-exclusive methods of establishing the prospective purchaser’s ownership and discretionary investments of securities:

(i) The prospective purchaser’s most recent publicly available financial statements, Provided That such statements present the information as of a date within 16 months preceding the date of sale of securities under this section in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser;

(ii) The most recent publicly available information appearing in documents filed by the prospective purchaser with the Commission or another United States federal, state, or local governmental agency or self-regulatory organization, or with a foreign governmental agency or self-regulatory organization, Provided That any such information is as of a date within 16 months preceding the date of sale of securities under this section in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser;

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Page 4

17 C.F.R. § 230.144A

(iii) The most recent publicly available information appearing in a recognized securities manual, Provided That such information is as of a date within 16 months preceding the date of sale of securities under this section in the case of a U.S. purchaser and within 18 months preceding such date of sale for a foreign purchaser; or

(iv) A certification by the chief financial officer, a person fulfilling an equivalent function, or other executive officer of the purchaser, specifying the amount of securities owned and invested on a discretionary basis by the purchaser as of a specific date on or since the close of the purchaser’s most recent fiscal year, or, in the case of a purchaser that is a member of a family of investment companies, a certification by an executive officer of the investment adviser specifying the amount of securities owned by the family of investment companies as of a specific date on or since the close of the purchaser’s most recent fiscal year;

(2) The seller and any person acting on its behalf takes reasonable steps to ensure that the purchaser is aware that the seller may rely on the exemption from the provisions of section 5 of the Act provided by this section;

(3) The securities offered or sold:

(i) Were not, when issued, of the same class as securities listed on a national securities exchange registered under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system; Provided, That securities that are convertible or exchangeable into securities so listed or quoted at the time of issuance and that had an effective conversion premium of less than 10 percent, shall be treated as securities of the class into which they are convertible or exchangeable; and that warrants that may be exercised for securities so listed or quoted at the time of issuance, for a period of less than 3 years from the date of issuance, or that had an effective exercise premium of less than 10 percent, shall be treated as securities of the class to be issued upon exercise; and Provided further, That the Commission may from time to time, taking into account then-existing market practices, designate additional securities and classes of securities that will not be deemed of the same class as securities listed on a national securities exchange or quoted in a U.S. automated inter-dealer quotation system; and

(ii) Are not securities of an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under section 8 of the Investment Company Act; and

(4)(i) In the case of securities of an issuer that is neither subject to section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) (§ 240.12g3-2(b) of this chapter) under the Exchange Act, nor a foreign government as defined in Rule 405 (§ 230.405 of this chapter) eligible to register securities under Schedule B of the Act, the holder and a prospective purchaser designated by the holder have the right to obtain from the issuer, upon request of the holder, and the prospective purchaser has received from the issuer, the seller, or a person acting on either of their behalf, at or prior to the time of sale, upon such prospective purchaser’s request to the holder or the issuer, the following information (which shall be reasonably current in relation to the date of resale under this section): a very brief statement of the nature of the business of the issuer and the products and services it offers; and the issuer’s most recent balance sheet and profit and loss and retained earnings statements, and similar financial statements for such part of the two preceding fiscal years as the issuer has been in operation (the financial statements should be audited to the extent reasonably available).

(ii) The requirement that the information be reasonably current will be presumed to be satisfied if:

(A) The balance sheet is as of a date less than 16 months before the date of resale, the statements of profit and loss and retained earnings are for the 12 months preceding the date of such balance sheet, and if such balance sheet is not as of a date less than 6 months before the date of resale, it shall be accompanied by additional statements of profit and loss and retained earnings for the period from the date of such balance sheet to a date less than 6 months before the date of resale; and

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

Page 5

17 C.F.R. § 230.144A

(B) The statement of the nature of the issuer’s business and its products and services offered is as of a date within 12 months prior to the date of resale; or

(C) With regard to foreign private issuers, the required information meets the timing requirements of the issuer’s home country or principal trading markets.

(e) Offers and sales of securities pursuant to this section shall be deemed not to affect the availability of any exemption or safe harbor relating to any previous or subsequent offer or sale of such securities by the issuer or any prior or subsequent holder thereof.

[55 FR 17945, April 30, 1990; 57 FR 48722, Oct. 28, 1992]

SOURCE: 62 FR 24573, May 6, 1997; 63 FR 6384, Feb. 6, 1998; 63 FR 13943, 13984, March 23, 1998; 64 FR 61449, Nov. 10, 1999; 65 FR 47284, Aug. 2, 2000; 66 FR 8896, 9017, Feb. 5, 2001; 67 FR 230, Jan. 2, 2002; 67 FR 13536, March 22, 2002; 67 FR 19673, April 23, 2002; 68 FR 57777, Oct. 6, 2003; 72 FR 20414, April 24, 2007, unless otherwise noted.

AUTHORITY: 15 U.S.C. 77b, 77c, 77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-30, and 80a-37, unless otherwise noted.; Section 230.151 is also issued under 15 U.S.C. 77s(a).; Section 230.160 is also issued under Section 104(d) of the Electronic Signatures Act.; Sections 230.400 to 230.499 issued under 15 U.S.C. 77f, 77h, 77j, 77s, unless otherwise noted.; Section 230.473 is also issued under 15 U.S.C. 79(t).; Section 230.502 is also issued under 15 U.S.C. 80a-8, 80a-29, 80a-30.

17 C. F. R. § 230.144A, 17 CFR § 230.144A

     Current through July 19, 2007; 72 FR 39581

Copr. ^© 2007 Thomson/West

END OF DOCUMENT

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

EXHIBIT E

Page 1

1992 WL 55818 (S.E.C. No - Action Letter)

(SEC No-Action Letter)

*1 Black

Box
Incorporated

Publicly Available February 28, 1992

SEC LETTER

1933 Act / s 5

February 28, 1992
Publicly Available February 28, 1992

Kenneth R. Koch, Esq.
Squadron, Ellenoff, Pleasant & Lehrer
551 Fifth Avenue
New York, New York 10176Dear Mr. Koch:

Our responses to the interpretive questions raised in your letter of December 27, 1991 regarding the positions expressed in the staff’s letter dated June 26, 1990 to Black Box Incorporated (the “Black Box letter”) are as follows:

1. The staff’s positions in the Black Box letter were not based on the financial condition of the company. Specifically, in response to your concerns expressed during our telephone conversations, the staff’s position with respect to integration of the Black Box registered initial public offering and a simultaneous unregistered offering by Black Box of convertible debentures (the “Black Box offerings”) was a policy position taken primarily in consideration of the nature and number of the offerees, and not based on the financial condition of the company.

2. The number of offerees and purchasers is a factor considered by the staff in evaluating the applicability of the policy position. As we discussed, the Black Box policy position on integration was simply a formal articulation of an informal position the staff has taken previously with respect to simultaneous registered offerings and unregistered offerings to a limited number of first-tier institutional investors in connection with structured financings. Because the position expressed with respect to the Black Box offerings is a policy position, it is narrowly construed by the staff. The staff interprets the position to be limited in applicability to situations where a registered offering would otherwise be integrated with an unregistered offering to i) persons who would be qualified institutional buyers for purposes of Rule 144A and 2) no more than two or three large institutional accredited investors. The position does not constitute a determination by the staff that the unregistered offering is in fact a bona fide private placement.^[FN1]

FN1 With regard to the availability of the Section 4(2) private offering exemption, it should be noted that the staff takes the position that the filing of a registration statement is deemed to be the commencement of the public offering. See letter from former director of the Division of Corporation Finance, John J. Huber, to Michael Bradfield, general counsel of the Board of Governors of the Federal Reserve System (March 23, 1984). Further, your attention is directed to SEC Litigation Release No. 10241 (December 19, 1983), regarding SEC v. Michael A. Traiger, Traiger Energy Investments (U.S.D.C.C.D.Cal.Civil Action No. 83-2738-LTL JPx).

3. The position of the staff with respect to integration of the Black Box offerings would not have been different if common stock had been sold in both the public and the private offerings. In this regard, it should be noted that the staff historically has treated an offering of a class of securities and an offering of another security convertible into that class of securities as offerings of the same class of securities for purposes of the integration doctrine.

*2 I trust that the foregoing information is of assistance to you. Should you have any further questions regarding this matter, please feel free to contact me again.

Sincerely,

Cecilia D. Blye
Special Counsel
December 27, 1991

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.

1992 WL 55818 (S.E.C. No — Action Letter)		Page 2

Special Counsel
December 27, 1991
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington,. D.C. 20549

Re: Black Box Incorporated

Gentlemen:

At the suggestion of Cecilia Blye of the staff of the Securities and Exchange Commission (the “Commission”), I am writing to pose three interpretive questions concerning the Black Box Incorporated no-action letter (“Black Box”) recently promulgated by the Commission. In Black Box, the issuer on whose behalf the no-action request was made (the “Company”), proposed to engage in a contemporaneous private placement of convertible debentures and a public offering of common stock. Under the circumstances set forth in Black Box, the private placement and the public offering were not integrated.

1. In Black Box, the Company was apparently financially troubled. Would the Staff’s answer have changed if Black Box was not financially troubled or is Black Box a “hardship” exception to the general rules on integration?

2. In Black Box, the private placement was made to up to 35 “qualified institutional buyers” (as defined in Rule 144A promulgated under the Act, and up to four “accredited investors” (as defined in Regulation D promulgated under the Act). Is there any limit on the number of “qualified institutional buyers” or “accredited investors” to whom offers may be made or to whom sales may be made in order to fall within the rationale of Black Box? In this connection, I note Ms. Blye’s concern that sales made to large numbers of investors may indicate that a purportedly private placement has been conducted as a public offering. However, when the Commission adopted Regulation D, the Commission shifted away from the strict numerical limitations on investors under former Rule 146. When Regulation D was adopted in 1982, the limitations on numbers of investors (except for the limit of 35 on non-accredited investors) were eliminated. Rule 502(c) under Regulation D focuses instead on the manner of offering and not the number of offerees. Thus, although a large number of investors in an offering may be some indication that the offering was conducted in a manner violative of the prohibition against a “general solicitation” under Rule 502(c), it is not by itself determinative of whether such a general solicitation has occurred. Accordingly, I would think that the Commission would continue to rely on the body of interpretative law that has grown up around Rule 502(c), rather than a numerical limitation on investors, to determine whether a public offering has been made.

If the Staff does believe that a numerical limitation on investors is appropriate for Black Box to apply, the limit should probably only apply to the number of “accredited investors” involved in the private placement and should not restrict the number of “qualified institutional buyers”. Inherent in the Commission’s recent adoption of Rule 144A is the assumption that “qualified institutional buyers” do not need the protection which the registration process provides.

*3 3. In Black Box, the Company was privately placing convertible debentures and publicly selling common stock. Would the Staff’s answer have changed if the securities being sold in the private placement and the public offering were identical? For example, would the answer remain the same if Common Stock were being sold in both the private placement and the public offering.

We appreciate the Commission’s consideration of these questions. If you have any questions concerning the above, please contact me at ###-###-####.

An original and seven copies of this letter are submitted herewith.

Very truly yours,

Kenneth R. Koch
SQUADRON, ELLENOFF, PLESENT & LEHRER
551 Fifth Avenue
New York, NY 10176
(212 ###-###-####

^© 2007 Thomson/West. No Claim to Orig. U.S. Govt. Works.