Document:

GUARANTEE

                               (WORLD HEART INC.)

TO:  Edwards LifeSciences LLC ("Edwards") and Sherfam Inc. (together, the
     "Lenders")

     WHEREAS World Heart  Corporation  (the  "Debtor") and World Heart Inc. (the
"Guarantor"),  Argosy Bridge Fund L.P.I. ("Argosy") and Sherfam Inc. ("Sherfam")
have entered into a senior loan agreement  dated January 28, 2003  (including as
same may be amended,  supplemented,  revised,  restated or replaced from time to
time, the "Senior Loan Agreement")

     WHEREAS the Lenders,  the Debtor and the Guarantor have entered into a loan
agreement   dated   January  28,  2003   (including  as  same  may  be  amended,
supplemented,  revised,  restated  or  replaced  from  time to time,  the  "Loan
Agreement").

     WHEREAS the Debtor, the Guarantor, Argosy, Sherfam and Edwards have entered
into an  inter-creditor  agreement  dated  January  28,  2003 which sets out the
parties  respective  rights and priorities  with respect to the repayment of the
Indebtedness owing to them and the security granted in connection therewith.

     IN CONSIDERATION of the Lenders extending loans to the Debtor and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor,  the Guarantor hereby unconditionally  guarantees
payment to the Lenders of all  obligations,  indebtedness and liabilities of any
kind, present and future, direct or indirect, absolute or contingent, matured or
not, joint or several,  of the Debtor to the Lender under the Loan Agreement and
the Security ("Guaranteed Obligations") whether as principal or surety, together
with all  reasonable  costs  and  expenses  (including  reasonable  legal  fees)
incurred by the Lenders,  any receiver,  receiver  manager,  representatives  or
agent in the  enforcing  or  endeavouring  to collect any of such  indebtedness,
obligations or liabilities,  and interest thereon or enforcing any of its rights
hereunder;   (all  of  which  present  and  future  indebtedness,   obligations,
liabilities,  costs,  expenses and interest arising under the Loan Agreement and
Security  are  herein  collectively  referred  to as the  "Indebtedness"  by the
Debtor).

     AND IT IS AGREED THAT:

1.   The Guarantor  hereby  affirms that the Guarantor is a primary  obligor and
     that this Guarantee is not merely a guaranty of  collection,  is continuing
     in nature and applies to all Guaranteed  Obligations,  whether existing now
     or in the  future,  including  Guaranteed  Obligations  arising or accruing
     before or after  bankruptcy  of Debtor.  The  Guarantor  agrees to make all
     payments under this  Guarantee  upon demand by the Lenders.  Each and every
     default in payment of the  Indebtedness  by the Debtor shall give rise to a
     separate  cause of action  hereunder  and  separate  suits  may be  brought
     hereunder as each cause of action  arises.  In the event of such a default,
     the Lenders shall have the right to proceed first and directly  against the
     Guarantor under this Guarantee without  proceeding against any other person
     or entity or exhausting  any other  remedies which it may have, and without
     resorting  to any  security  of the  Debtor  held by it.  Furthermore,  the
     Guaranteed Obligations are independent of the obligations and duties of the
     Debtor  under the Loan  Agreement  and a separate  action or actions may be
     brought and prosecuted
<PAGE>
                                      -2-

     against  the  Guarantor  hereunder,  whether  or not an action  is  brought
     against the Debtor under the Loan Agreement or any other person, whether or
     not the Debtor or the Guarantor or any other person or entity may be joined
     in any such action or actions,  and whether or not an action or actions may
     be brought against the Guarantor or any other person or entity.

2.   No change in the name, objects, capital stock or constitution of the Debtor
     or the  Guarantor  shall in any way release,  discharge,  limit,  lessen or
     otherwise  affect the  liability of the  Guarantor,  either with respect to
     transactions  occurring  before or after any such  change,  and the Lenders
     shall not be concerned to see or inquire into the powers of the Debtor, the
     Guarantor,  or any of their  directors or other agents  acting on behalf of
     the Debtor or the  Guarantor,  or any of their  directors  or other  agents
     acting or purporting to act on their behalf, and moneys, advances, renewals
     or credits in fact  borrowed  or  obtained  from the  Lenders in  professed
     exercise  of such powers  shall be deemed to form part of the  Indebtedness
     notwithstanding  that such  borrowing  or  obtaining  of moneys,  advances,
     renewals  or credits  shall be in excess of the powers of the  Debtor,  the
     Guarantor or their  directors or other agents  aforesaid,  the Debtor shall
     not be a legal or suable  entity  or there  shall  exist any  irregularity,
     defect  or  informality  in the  borrowing  or  obtaining  of such  moneys,
     advances,  renewals or credits,  the whole  whether known to the Lenders or
     not.

3.   The  Guarantor  hereby waives  protest,  promptness,  diligence,  notice of
     acceptance,  demand for  payment  and notice of default or  non-payment  in
     respect of the Loan Agreement and the Guarantor waives all other notices of
     every  kind  and  description  with  respect  to  any  indebtedness  now or
     hereafter  provided by any  statute or rule of law.  The  Guarantor  hereby
     waives any requirement that the Lenders protect,  secure, perfect or insure
     any security  interest or lien or any property  subject  thereto or exhaust
     any right or take any action  against  the  Debtor,  or  against  any other
     guarantor or any other  person,  entity or any  collateral.  The  Guarantor
     hereby  waives,  to the fullest  extent  permitted by  applicable  law, the
     benefit of any  statute  of  limitations  which may  affect  its  liability
     hereunder  or the  enforcement  hereof.  Any payment by the Debtor or other
     circumstance  that  operates to toll any statute of  limitations  as to the
     Debtor  shall not  operate  to toll the  statute of  limitations  as to the
     Guarantor.

4.   The Lenders  shall not be bound to seek or exhaust their  recourse  against
     the Debtor or any other persons or to realize on any securities it may hold
     in respect of the  Indebtedness  before being  entitled to payment from the
     Guarantor under this Guarantee.

5.   All  monies  received  by a Lender in respect  of the  Indebtedness  may be
     applied on such part or parts of the Indebtedness as the Lender may see fit
     and  the  Lender  shall  at  all  times  and  from  time  to  time,  in any
     circumstance  where the Lender would otherwise be required to return to the
     Guarantor any monies paid to the Lender by the Guarantor, have the right to
     change any  appropriation  of any moneys  received by it and to reapply the
     same on any other part or parts of the  Indebtedness  as the Lender may see
     fit, notwithstanding any previous application by whomsoever made.

6.   All dividends, compositions and moneys received by a Lender from the Debtor
     or the  Guarantor  or from any  other  person or  estate  capable  of being
     applied by the Lender in
<PAGE>

                                      -3-

     reduction  of the  Indebtedness  shall  be  regarded  for all  purposes  as
     payments in gross,  and,  subject to the  aforesaid,  each Lender  shall be
     entitled to prove  against the estate of the Debtor or the  Guarantor  upon
     any  insolvency or winding-up in respect of the whole of the  Indebtedness,
     and the Guarantor  shall not have any right to be subrogated to the Lenders
     in respect of any such proof until the  Lenders  shall have  received  from
     such estate payment in full of their claim with interest.

7.   This  Guarantee will not be diminished or affected on account of any act or
     failure to act on the part of the Lenders which would  prevent  subrogation
     from  operating in favour of the  Guarantor.  The Guarantor  agrees that it
     shall  not have and  hereby  waives  any  rights of  subrogation  under the
     Guarantee  until  such  time  as all  Indebtedness  is  paid in full to the
     Lenders.  All  monies  received  by the  Guarantor  as a result of any such
     subrogation  shall be received in trust for the Lenders  until  payment and
     satisfaction of the Indebtedness in full.

8.   The Lenders,  without  exonerating in whole or in part the  Guarantor,  may
     grant time, renewals, extensions,  indulgences, releases and discharges to,
     may take security  from and give the same and any or all existing  security
     up  to,  may  abstain  from  taking  security  from  or  from   perfecting,
     registering,  renewing or realizing upon security of and may otherwise deal
     with the  Debtor or the  Guarantor  and all other  persons  (including  the
     Guarantor and any other guarantor) and security as the Lenders may see fit.

9.   Without  in any  manner  limiting  the  generality  of the  foregoing,  the
     Guarantor  agrees that the Lenders may,  from time to time,  consent to any
     action or non-action of the Debtor or the Guarantor  which,  in the absence
     of such  consent,  violates  or may  violate any  agreement  or  agreements
     between the Debtor or the Guarantor and the Lenders  relating to any of the
     Indebtedness, with or without consideration on such terms and conditions as
     may be  acceptable  to  the  Lenders,  without  in  any  manner  affecting,
     releasing  or  impairing  the  liability or  obligations  of the  Guarantor
     hereunder.

10.  This shall be a continuing,  absolute and unconditional Guarantee and shall
     cover  all  the  Indebtedness,   shall  not  be  subject  to  any  set-off,
     counterclaim,  reduction or diminution of an obligation,  or any defence of
     any kind or nature (other than the payment of the  Indebtedness)  which the
     Guarantor  may have or assert  against  the  Lenders and shall apply to and
     secure any ultimate balance owing to the Lenders,  notwithstanding that any
     other security for the repayment of the Indebtedness or for the obligations
     of the  Guarantor  to the  Lenders  may no longer be  enforceable,  but the
     Lenders shall not be obliged to exhaust its recourse  against the Debtor or
     other  persons or the  securities  they may hold before  being  entitled to
     payment from the  Guarantor  of all of the  Indebtedness.  The  Guarantor's
     liability hereunder shall in no way be limited or impaired by any or all of
     the following: (i) the failure of the Lenders to exercise or to exhaust any
     right or remedy or take any action  against the Debtor;  (ii) any change in
     the time,  manner or place of payment or performance,  of all or any of the
     obligations  of the Debtor under the Loan  Agreement or any  extensions  of
     time for payment or performance,  whether in whole or in part, of the terms
     of the Loan  Agreement on the part of the Lenders to be paid,  performed or
     observed, as applicable;  (iii) any failure or delay of the to exercise, or
     any lack of  diligence in  exercising,  any right or remedy with respect to
     the Loan  Agreement or this  Guarantee;  (iv) any dealings or  transactions
     between the Lenders and the Debtor, whether
<PAGE>

                                      -4-

     or not the  Guarantor  shall be a party to or cognizant of the same,  other
     than the payment of the Guaranteed Obligations;  (v) any financial decline,
     bankruptcy,   insolvency,   assignment   for  the  benefit  of   creditors,
     receivership,  trusteeship or dissolution of or affecting the Debtor;  (vi)
     any other guaranty now or hereafter  executed by the Guarantor or any other
     guarantor  or the  release  of any other  guarantor  from or failure of any
     other Person to assume liability for the payment, performance or observance
     of the Guaranteed Obligations or any of the terms of the Loan Agreement, or
     any other  agreement  on the part of the Lenders to be paid,  performed  or
     observed whether by operation of law or otherwise; (vii) any rights, powers
     or privileges  the Lenders may now or hereafter  have against any Person or
     collateral in respect of the Guaranteed  Obligations;(viii)  the failure to
     give the Guarantor any notices whatsoever (the Guarantor expressly agreeing
     that upon the Debtor's failure to perform the Guaranteed  Obligations,  the
     Guarantor  shall  perform  such  Guaranteed  Obligations  immediately  upon
     request from the Lenders);  (ix) any other  circumstance which might in any
     manner or to any extent constitute a defense available to the Guarantor, or
     vary the risk of the Guarantor,  or might  otherwise  constitute a legal or
     equitable discharge or defense available to a surety or guarantor,  whether
     similar  or  dissimilar  to the  foregoing;  (x) any and all  notice of the
     creation,  renewal or extension  of the  Guaranteed  Obligations;  (xi) any
     change,  restructuring  or termination of the structure or existence of the
     Debtor;  and (xii) the  invalidity,  irregularity or  unenforceability,  in
     whole or in part, of this Guarantee or the Loan Agreement, and, in any such
     case,  whether with or without  notice to the Guarantor and with or without
     consideration.

11.  Notwithstanding  the provisions of any statute relating to interest payable
     by debtors,  this Guarantee  shall remain in full force and effect whatever
     the rate of interest  received or demanded by the Lenders.  No  invalidity,
     irregularity  or  unenforceability  (by reason of any bankruptcy or similar
     law, any law or order of any  government  or agency  thereof  purporting to
     reduce,  amend or otherwise  affect the  Indebtedness  or any  liability or
     obligation of the Guarantor to the Lenders) of the  Indebtedness  or of any
     liabilities  or  obligations  of the  Guarantor  to the  Lenders  or of any
     security  therefor shall affect,  impair or be a defence to this Guarantee.
     If one or more of the provisions contained herein shall be invalid, illegal
     or unenforceable in any respect, the validity,  legality and enforceability
     of the  remaining  provisions  contained  herein  shall  not in any  way be
     affected or impaired thereby.

12.  The  Guarantor  shall  at all  times  and from  time to time  do,  execute,
     acknowledge  and deliver or cause to be done,  executed,  acknowledged  and
     delivered  all  and  singular  every  such  further  act,  deed,  transfer,
     assignment,   assurance,   document  and  instrument  as  the  Lenders  may
     reasonably  require for the better  accomplishing  and effectuating of this
     Guarantee and the  provisions  contained  herein,  and every officer of the
     Lenders and each of them are irrevocably appointed attorney or attorneys of
     the Guarantor from and after any demand for payment having been made by the
     Lenders upon the Guarantor hereunder which has not been remedied or waived,
     to  execute  in the name and on behalf of the  Guarantor  any  document  or
     instrument for the said purpose.

13.  This Guarantee shall continue to be effective or be reinstated (as the case
     may be) if at any time payment by the Debtor or the Guarantor of all or any
     part of the Indebtedness or the obligations of the Guarantor to the Lenders
     is  rescinded  or must  otherwise  be  returned
<PAGE>

                                      -5-

     by the Lenders upon the  insolvency,  bankruptcy or  reorganization  of the
     Debtor or the  Guarantor  or  otherwise,  all as though such payment to the
     Lenders had not been made.

14.  The Lenders  may assign,  transfer  and  deliver to any  transferee  of the
     Indebtedness  or any part  thereof the  liability  and  obligations  of the
     Guarantor  under this  Guarantee and any security  documents or instruments
     held by the  Lenders  in respect of the  Guarantee,  provided  that no such
     assignment,  transfer or delivery  shall  release the  Guarantor  from said
     liability.  Such  transferee  shall be vested with all powers and rights of
     the Lenders hereunder and under such security documents or instruments, but
     the Lenders  shall  retain all rights and powers  with  respect to any such
     security   documents  or  instruments  not  so  assigned,   transferred  or
     delivered.

15.  This  Guarantee  shall be binding upon the Guarantor and its successors and
     permitted  assigns  provided  that the  Guarantor may not assign any of its
     rights or obligations  hereunder  without the prior written  consent of the
     Lenders and shall  enure to the  benefit of the Lenders and its  successors
     and assigns.

16.  The Guarantor  acknowledges  that this Guarantee has been delivered free of
     any conditions and that no representations  have been made to the Guarantor
     affecting the liability of the Guarantor  under this  Guarantee save as may
     be  specifically  embodied  herein and  agrees  that this  Guarantee  is in
     addition to and not in  substitution  for any other guarantee held or which
     may  hereafter  be held by the Lenders.  The rights,  remedies and benefits
     herein are  cumulative  and not in  substitution  for or  exclusive  of any
     rights, remedies or benefits which the Lenders may otherwise have.

17.  Any account  settled or stated  between the Debtor and the Lenders shall be
     accepted by the Guarantor as conclusive  evidence,  absent  manifest error,
     that the amount  thereby  appearing  due by the Debtor to the Lenders is so
     due and if no such account has been so settled  immediately  before  demand
     for payment under this  Guarantee,  any account stated by the Lenders shall
     be accepted by the Guarantor as conclusive  evidence of the amount which at
     the date of the  account  so  settled or stated is due by the Debtor to the
     Lenders.

18.  If demand for, or  acceleration  of the time for,  payment by the Debtor of
     any   Indebtedness   is  stayed   upon  the   insolvency,   bankruptcy   or
     reorganization of the Debtor, the Indebtedness  otherwise subject to demand
     for payment or acceleration  shall  nonetheless be payable by the Guarantor
     hereunder forthwith on demand by the Lenders.

19.  This Guarantee shall be construed in accordance with and be governed by the
     laws of the State of New York  applicable  therein  and for the  purpose of
     legal proceedings,  this Guarantee shall be deemed to have been made in the
     State of New York  and to be  performed  there,  and the  state or  federal
     Courts  located in the State of New York shall have  jurisdiction  over all
     disputes  which may arise under this  Guarantee  and the  Guarantor  hereby
     irrevocably and unconditionally  submits to the non-exclusive  jurisdiction
     of such Courts.  The Guarantor and Lenders hereby irrevocably waive, to the
     fullest  extent  possible,   the  defence  of  an  inconvenient  forum  and
     irrevocably  agrees to be bound by any final  judgement of any court of the
     State of New York.  The Guarantor and the Lenders agree that a judgement or
     order of any such  court  may be  enforced  in other  jurisdictions  in any
     manner provided by law.
<PAGE>

                                      -6-

20.  All  payments  made  by the  Guarantor  to the  Lenders  pursuant  to  this
     Guarantee  shall be made free and  clear of and  without  deduction  for or
     withholding  of any and all  present  and future  taxes,  levies,  imposts,
     deductions,  stamp taxes, charges and withholdings with respect thereto. If
     any such amount is deducted  or withheld  from any payment to the  Lenders,
     then the Guarantor shall promptly remit to the Lenders,  in the currency in
     which such payment is to be made,  the equivalent of the amount so deducted
     or withheld together with relevant receipts addressed to the Lenders.

21.  With  respect  to any  portion  of the  Indebtedness  which is payable in a
     currency other than Canadian currency (the "Foreign Currency  Obligation or
     Foreign Currency"), the following provisions shall apply:

     (a)  Payment  hereunder  with  respect to the Foreign  Currency  Obligation
          shall be made in  immediately  available  funds in lawful money of the
          jurisdiction in the currency of which the Foreign Currency  obligation
          is payable (the "Foreign Currency") in such form as shall be customary
          at the time of payment for  settlement  of  international  payments in
          Ottawa,  Ontario without set-off or counterclaim and free and clear of
          and  without  deduction  for any and all  present  and  future  taxes,
          levies,  imposts,  stamp taxes,  reductions,  charges and withholdings
          with respect thereto.

     (b)  The Guarantor  shall hold the Lenders  harmless from any loss incurred
          by the  Lenders  arising  from any  change  in the  value of  Canadian
          currency  in relation  to the  Foreign  Currency  between the date the
          Foreign  Currency  Obligation  becomes  due  and the  date of  Payment
          thereof.

     (c)  If for the purpose of obtaining  judgment in any court it is necessary
          to convert a sum due  hereunder in the Foreign  Currency into Canadian
          funds ("Canadian dollars"), the rate of exchange used shall be that at
          which in accordance  with normal banking  procedures the Lenders could
          purchase the Foreign  Currency with  Canadian  dollars on the business
          day preceding that on which final judgment is given.

     (d)  The  obligation  of the  Guarantor in respect of any Foreign  Currency
          Obligation due by it to the Lenders  hereunder shall,  notwithstanding
          any judgment in Canadian  dollars,  be  discharged  only to the extent
          that on the business day  following  receipt by the Lenders of any sum
          adjudged  to be so  due  in  Canadian  dollars,  the  Lenders  may  in
          accordance  with  normal  banking  procedures   purchase  the  Foreign
          Currency  with the  Canadian  dollars;  if the  amount of the  Foreign
          Currency  so  purchased  is less  than the sum  originally  due to the
          Lenders in the Foreign  Currency,  the Guarantor agrees, as a separate
          obligation and  notwithstanding  any such  judgment,  to indemnify the
          Lenders  against  such  loss  and if the  Foreign  Currency  purchased
          exceeds the sum originally due to the Lenders in the Foreign Currency,
          the  Lenders  agrees  to remit  such  excess to the  Guarantor  as the
          Guarantor may be entitled thereto.

22.  All  notices,  requests and demands  hereunder  shall be in writing and (a)
     made to the Lenders at its address set forth below and to the  Guarantor at
     its office set forth  below,  or
<PAGE>

                                      -7-

     to such other  address as either party may  designate by written  notice to
     the other in accordance  with this  provision,  and (b) deemed to have been
     given or made: if delivered in person,  immediately  upon  delivery;  if by
     facsimile  transmission,  immediately upon sending and upon confirmation of
     receipts;  and if by nationally  recognized  overnight courier service with
     instructions  to deliver  within the next two (2) business days, on two (2)
     business days after sending:

         For the Guarantor:

                  World Heart Inc.
                  c/o 1 Laser Street
                  Ottawa, Ontario  K2E 7V1

                  Attention:        Vice President
                  Fax No:           (613) 226-4744

         For the Lenders:

                  Edwards LifeSciences LLC
                  One Edwards Way

                  Irvine, California

                  Attention:  Jack Westhart
                  Fax No:  (949) ) 250-2701

                  Sherfam Inc.
                  150 Signet Drive
                  Weston, Ontario
                  M5L 1T9

                  Attention:        Meyer F. Florence, President
                  Fax No:  (416) 401-3812

     23. Time shall be of the essence of all provisions of this Guarantee.
<PAGE>

     AS WITNESS the hand and seal of the  Guarantor at Ottawa,  this 28th day of
January, 2003.

                                       WORLD HEART INC.

                                       Per: /s/Ian Malone
                                           -------------------------------------
                                           Name   Ian W. Malone
                                           Title  Vice PresidentAGENCY AGREEMENT

                                                               December 30, 2002

World Heart Corporation
1 Laser Street
Ottawa, Ontario
Canada
K2E 7V1

Attention:  Mr. Roderick Bryden, President and Chief Executive Officer

Dear Sirs/Mesdames:

Re:  Private Placement of Common Shares
     ----------------------------------

     We understand that:

     (a)  World Heart Corporation (the  "Corporation") is authorized to issue an
          unlimited  number  of  Common  Shares  without  par  value(as  defined
          hereinafter)  and an unlimited  number of preferred shares without par
          value, issuable in series;

     (b)  as at December 30, 2002, 17,970,127 Common Shares and 1,374,570 Series
          A  convertible  preferred  shares were  outstanding  as fully paid and
          non-assessable  shares and an aggregate of  14,222,792  Common  Shares
          were reserved for issue  pursuant to  outstanding  options,  warrants,
          share incentive  plans,  convertible and  exchangeable  securities and
          other rights to acquire Common Shares;

     (c)  the  Corporation  proposes  to issue  and sell up to an  aggregate  of
          2,343,750 (the "Offered  Units") Offered Units at a price of $1.28 per
          Offered Unit for aggregate  gross proceeds to the Corporation of up to
          $3,000,000  on the  terms  and  subject  to the  conditions  contained
          hereinafter; and

     (d)  we understand that each Offered Unit is to consist of one Common Share
          and  one  Common  Share  purchase   warrant  (the  "Warrant")  of  the
          Corporation and that each Warrant  entitles the holder to purchase one
          Common  Share at an  exercise  price of $1.60 per  Common  Share for a
          period of five years from the Closing Date.

     Based upon our  understanding  set out above and upon the terms and subject
to the  conditions  contained  hereinafter,  upon the  acceptance  hereof by the
Corporation,  the Corporation hereby appoints the Agent (as hereinafter defined)
to act as the agent of the  Corporation to solicit,  on a "best efforts"  basis,
offers to purchase the Offered Units, and the Agent hereby agrees to act as such
agent.  It is  understood  and agreed that the Agent is under no  obligation  to
purchase any Offered Units,  although it may subscribe for and purchase  Offered
Units if it so desires.
<PAGE>

                                      -2-

The  "Closing"  whenever  used herein,  shall be a reference to a Closing of the
transaction herein contemplated  related to the offering of the Units. The first
Closing  shall be at 10:00 a.m.  (EST) on December  30, 2002 or such  earlier or
later date as we and the Corporation  may agree upon in writing.  Subject to the
first Closing taking place as aforesaid,  subsequent  Closings may take place at
such time or times as we and the Corporation may agree.

The terms and conditions of this Agreement are as follows:

1.   Definitions and Interpretation:

     (a)  Definitions: Whenever used in this Agreement:

          (i)  "1933 Act" means the United  States  Securities  Act of 1933,  as
               amended;

         (ii)  "Agent" means Northern Securities Inc.;

        (iii)  "Agreement" means the agreement  resulting from the acceptance by
               the Corporation of the offer made by the Agent herein, as amended
               or supplemented from time to time;

         (iv)  "Ancillary  Documents"  means all  agreements and documents to be
               executed and delivered by the  Corporation in connection with the
               transactions contemplated by this Agreement;

          (v)  "Auditors"   means    PriceWaterhouseCoopers    LLP,    Chartered
               Accountants, the auditors of the Corporation;

         (vi)  "Broker's  Shares"  means the  Common  Shares to be issued on the
               exercise of the Broker's Warrants;

        (vii)  "Broker's  Warrants" means the broker's  warrants,  each Broker's
               Warrant entitling the Agent to acquire one Broker's Share and one
               Compensation  Warrant  at any time  prior to 5:00  p.m.  (Toronto
               time) on the date which is 24 months after the Closing Date at an
               exercise price of $1.60 per Broker's Warrant;

       (viii)  "Business"  means the business of the  Corporation as a medical
               device  company   currently   focused  on  the   development  and
               commercialization of pulsatile ventricular assist devices;

         (ix)  "Business Day" means a day which is not a Saturday, a Sunday or a
               statutory or civic holiday in Toronto, Ontario;

          (x)  "Closing"  means  the  purchase  and  sale of the  Offered  Units
               subscribed for under the Subscription Agreements;

         (xi)  "Closing Date" means, in the first  instance,  December 30, 2002,
               but the parties acknowledge that Closing may take place in two or
               more tranches on or after the date of Closing  providing that the
               final tranche will take place on or before  January  10th,  2003.
               the date of Closing of each such tranche shall
<PAGE>

                                      -3-

               be deemed to be the Closing Date in respect to the securities
               issued on such date;

        (xii)  "Closing  Time"  means 10:00 a.m.  (Toronto  time) on the Closing
               Date or at such other  earlier  or later time as the  Corporation
               and the Agent may mutually agree upon;

       (xiii)  "Common  Shares" means the common shares which the  Corporation
               is authorized to issue as constituted on the date hereof;

        (xiv)  "Compensation  Warrants" means the  compensation  warrants,  each
               Compensation  Warrant  entitling the holder to acquire one Common
               Share at a price of $1.60  for a period  of five  years  from the
               Closing Date;

         (xv)  "Compensation  Warrant  Shares" means the Common Shares  issuable
               upon the exercise of the Compensation Warrants;

        (xvi)  "Copyright"  means  any  copyright  whether   registered  or  not
               relating to or used in connection  with the Business  owned by or
               licensed (expressly or implied) to the Corporation;

       (xvii)  "Corporation"  means World Heart  Corporation,  a  corporation
               incorporated under the Business Corporations Act (Ontario);

      (xviii)  "Engagement Letter" means the engagement letter dated December
               13, 2002, between the Corporation and the Agent;

        (xix)  "Industrial  Designs"  means any  industrial  design  or  similar
               rights,  whether  registered or subject to pending  applications,
               relating  to the  Business,  owned by or licensed  (expressly  or
               implied) to the Corporation;

         (xx)  "Information"  means all  information  regarding the  Corporation
               that  is,  or  becomes,  publicly  available  together  with  all
               information prepared by the Corporation and provided to the Agent
               or to potential purchasers of Offered Units;

        (xxi)  "Intellectual   Property   Rights"   means  all  Patent   Rights,
               Trade-marks,   Copyrights,   Industrial  Designs,  and  Technical
               Information  (including  any  claims  or  rights  to sue for past
               infringement  of  same),  relating  to the  Business  owned by or
               licensed to the Corporation;

       (xxii)  "Offered Units" means the units,  each consisting of one Common
               Share and one  Warrant,  which  the Agent has  agreed to offer to
               sell on a best  efforts  agency  basis  in  accordance  with  the
               provisions of this Agreement;

      (xxiii)  "Offering"  means the offering for sale by the Corporation on a
               private  placement  basis  of  up to an  aggregate  of  2,343,750
               Offered Units at a price of $1.28 per Offered Unit;
<PAGE>
                                      -4-

       (xxiv)  "Offering   Jurisdictions"  means  the  Provinces  of  British
               Columbia  and  Ontario  and such other  jurisdictions  outside of
               Canada as may be determined by the Corporation and the Agent;

        (xxv)  "Patent Rights" means all patents and inventions  relating to the
               Business, and pending applications thereon, and patents which may
               be  issued  out of  pending  applications  (including  divisions,
               reissues,     renewals,      re-examinations,      continuations,
               continuations-in-part  and extensions),  which may be applied for
               or registered  in any  jurisdiction,  owned or controlled  by, or
               licensed (expressly or implied) to, the Corporation;

       (xxvi)  "Person" means an individual, a partnership,  a corporation,  a
               trust, an unincorporated  organization, a government or an agency
               or  political  subdivision  thereof  or any  other  entity of any
               nature or kind whatsoever;

      (xxvii)  "Principal  Subsidiaries"  means World  Heart Inc.  and 2007262
               Ontario  Inc.(50%  of  the  shares  of  which  are  owned  by the
               Corporation and New Generation Biotech (Equity) Fund Inc.;

     (xxviii)  "Purchasers"   means   the   purchasers   of   Offered   Units
               collectively;

       (xxix)  "Securities   Laws"  means  the   securities   legislation   and
               regulations   of,   and   the   policies,   rules,   orders   and
               interpretation  notes  of the  applicable  securities  regulatory
               authorities of the Offering Jurisdictions;

        (xxx)  "Subscription  Agreement" means the subscription  agreement to be
               entered into by the  Corporation  and each of the Purchasers with
               respect to the purchase of Offered Units;

       (xxxi)  "Subscription  Price"  means  the  price  to be  paid  by  the
               Purchasers for each Offered Unit under the Offering,  being $1.28
               per Offered Unit;

      (xxxii)  "Technical Information" means all know-how, trade secrets, and
               related  technical  knowledge owned by or licensed  (expressly or
               implied),  to the Corporation relating to the Business or arising
               from  the  projects  of  the  Corporation,   including,   without
               limitation:

               (A)  all  trade   secrets,   know-how,   show-how,   confidential
                    information  or  information  with  respect  to  inventions,
                    processes and business methods;

               (B)  all  information  of a  scientific,  technical  or  business
                    nature, regardless of its form;

               (C)  all  documentation  with respect to  research,  development,
                    demonstration or engineering work;

               (D)  all information that can be or is used to define a design or
                    process,  or  to  procure,   produce,   support  or  operate
                    materials or equipment;
<PAGE>

                                      -5-

               (E)  all information regarding methods of production;

               (F)  all  other  drawings,  blueprints,   patterns,  plans,  flow
                    charts,   equipment  part  lists,   computer   software  and
                    procedures,  specifications,   protocols,  data  structures,
                    formulas,  designs,  technical data,  descriptions,  related
                    instruction manuals, records, passwords, and procedures; and

               (G)  all data and databases, whether registered or unregistered;

 (xxxiii) "Trade-marks"  means the  trade-marks,  trade-names,  domain names,
          designs,  logos and other commercial  symbols,  whether  registered or
          not, and including the goodwill associated therewith,  which are owned
          by or licensed to the Corporation in connection with the Business;

 (xxxiv)  "Warrant"  means a Common Share purchase  warrant of the Corporation
          entitling  the holder to purchase  one Common Share at Cdn $1.60 for a
          period of five years from the date of issue;

  (xxxv)  "Warrant Share" means the Common Shares issuable upon the exercise of
          the Warrants.

     (b)  Other Defined Terms:  Whenever used in this  Agreement,  the words and
          terms "affiliate", "associate", "misrepresentation",  "material fact",
          "material  change",  "senior officer" and "subsidiary"  shall have the
          meaning  given to such word or term in the  Securities  Act  (Ontario)
          unless specifically provided otherwise herein.

     (c)  Plural and Gender:  Whenever used in this  Agreement,  words importing
          the singular  number only shall  include the plural and vice versa and
          words importing the masculine gender shall include the feminine gender
          and neuter.

     (d)  Currency:  All references to monetary amounts in this Agreement are to
          lawful money of Canada.

     (e)  Knowledge:  "to the best  knowledge  of the  Corporation"  (or similar
          expressions)  means  the  knowledge  of  the  senior  officers  of the
          Corporation  after having made and caused to be made such enquiries of
          the  records  and  management  employees  of the  Corporation  and its
          Principal  Subsidiaries who are reasonably likely to have knowledge of
          the relevant matter, as may be necessary to obtain informed knowledge.

2.   The Offering:

     (a)  Sale on Exempt  Basis:  The Agent will use its best efforts to arrange
          for  Purchasers in the Offering  Jurisdictions.  The Agent shall offer
          for sale on behalf of the Corporation the Offered Units:

          (i)  in the Province of Ontario; and

         (ii)  outside of Canada and of the United States in compliance with all
               of the laws of the jurisdictions in which the relevant Purchasers
               are resident, provided
<PAGE>
                                      -6-

               that  the  laws  of  the   jurisdiction  in  which  the  relevant
               Purchasers  are resident do not require the  Corporation  to make
               any filings or seek any approval of any kind  whatsoever from any
               regulatory authority of any kind whatsoever; and

          only to such  Purchasers  and in such manner so that,  pursuant to the
          provisions of all such applicable laws, no prospectus or other similar
          document  need  be  filed  or  delivered  and  no  ongoing   reporting
          obligations  of any kind are imposed on the  Corporation in connection
          therewith.

     (b)  Appointment of Co-agents and Sub-agents.  The Corporation agrees that,
          subject to the  consent of the  Corporation,  such  consent  not to be
          unreasonably  withheld,  the Agent has the right to invite one or more
          investment  dealers  to form an  agency  group to  participate  in the
          soliciting of offers to purchase  Offered Units.  The Agent shall have
          the exclusive right to control all compensation  arrangements  between
          the members of the agency group.

     (c)  Covenants of the Agent. The Agent covenants with the Corporation that:
          (i) it  will  comply  with  all  applicable  Securities  Laws  of each
          Offering  Jurisdiction in which it solicits or procures  subscriptions
          for Offered  Units in connection  with the Offering;  (ii) it will not
          solicit or procure  subscriptions  for Offered  Units so as to require
          the  registration  thereof  or the filing of a  prospectus  or similar
          document with respect thereto under the laws of any jurisdiction;  and
          (iii) it will obtain  from each  Purchaser  an  executed  Subscription
          Agreement in a form  reasonably  acceptable to the  Corporation and to
          the Agent. The Agent represents and warrants that it and all co-agents
          and sub-agents  are qualified to so act in the Offering  Jurisdictions
          in which it solicits or procures subscriptions for the Offered Units.

3.   Due  Diligence:  The  Corporation  shall allow the Agent to conduct all due
     diligence   investigations  which  the  Agent  may  reasonably   determine,
     including  meeting  with  senior  management  of the  Corporation  and  the
     Auditors, as is appropriate in connection with the Offering.

4.   Deliveries By Closing Time:

     (a)  Deliveries: By or at the Closing Time:

          (i)  all  actions  required  to  be  taken  by  or on  behalf  of  the
               Corporation  including,  without  limitation,  the passing of all
               required  resolutions of the directors of the Corporation,  shall
               have  occurred  in  order  to  complete  all of the  transactions
               contemplated by this Agreement, including, without limitation, to
               create and issue the Offered Units and the Broker's  Warrants and
               to reserve  for issue the  Warrant  Shares,  Broker's  Shares and
               Compensation   Warrants,   and  a  certified  copy  of  all  such
               resolutions  shall have been delivered by the  Corporation to the
               Agent;
<PAGE>

                                      -7-

         (ii)  the Corporation shall have delivered or caused to be delivered to
               the Agent (all in form and substance satisfactory to the Agent):

               (A)  favourable  legal  opinions  of counsel  to the  Corporation
                    addressed  to, among  others,  the Agent and the  Purchasers
                    with  respect to the laws of the  Province of Ontario in the
                    form attached hereto as schedule A;

               (B)  certificates   dated  the   Closing   Date,   signed  by  an
                    appropriate officer of the Corporation,  addressed to, among
                    others,  the Agent and the  Purchasers,  with respect to the
                    articles and by-laws of the Corporation,  the resolutions of
                    the  directors of the  Corporation  and any other  corporate
                    action taken relating to this Agreement and to the creation,
                    allotment,  issue and sale of the Offered Units and specimen
                    signatures of signing  officers of the  Corporation and with
                    respect  to such other  matters as the Agent may  reasonably
                    request;

               (C)  a certificate  dated the Closing  Date,  addressed to, among
                    others,  the  Agent  and  the  Purchasers,   signed  by  the
                    President and Chief Executive  Officer of the Corporation or
                    any other senior  officer of the  Corporation  acceptable to
                    the  Agent  substantially  in the form  attached  hereto  as
                    Schedule B;

               (D)  definitive  certificates  representing the Common Shares and
                    Warrants  comprising  the Offered  Units  registered  in the
                    names  of the  Purchasers  or in  such  other  names  as the
                    Purchasers or the Agent may direct;

               (E)  a definitive certificate  representing the Broker's Warrants
                    in the form attached hereto as Schedule C, registered in the
                    name of the  Agent  or such  other  name  as the  Agent  may
                    direct;

               (F)  payment of the fee payable by the  Corporation  to the Agent
                    in accordance with section 6 hereof and the expenses payable
                    by the Corporation in accordance with section 11 hereof by a
                    direction to the Agent to withhold from the certified cheque
                    or bank  draft  referred  to  below in  paragraph  4(a)(iii)
                    hereof,  (i) the fee payable by the Corporation to the Agent
                    as provided in section 6 of this Agreement  against delivery
                    from the Agent to the Corporation of a receipt for such fee,
                    (ii) the expenses  (excluding legal expenses) payable by the
                    Corporation  to the Agent as  provided in section 11 of this
                    Agreement against delivery from the Agent to the Corporation
                    of a receipt for such expenses, and (iii) the legal expenses
                    payable  by the  Corporation  to  counsel  for the  Agent as
                    provided in section 11 of this  Agreement  against  delivery
                    from such legal counsel to the  Corporation of a receipt for
                    such legal expenses;

               (G)  such  further  documents  as may  be  contemplated  by  this
                    Agreement or as the Agent may reasonably require; and
<PAGE>

                                      -8-

        (iii)  the Agent shall have  delivered  or cause to be  delivered to the
               Corporation  (all  in  form  and  substance  satisfactory  to the
               Corporation):

               (A)  payment of the purchase price for the Offered Units less the
                    amount withheld for the fee payable to the Agent pursuant to
                    section  6  hereof  and the  expenses  payable  pursuant  to
                    section 11 hereof, by certified cheque or bank draft payable
                    to the  Corporation  or as  the  Corporation  may  otherwise
                    direct in writing  against  delivery from the Corporation to
                    the  Agent  of a  receipt  for the  purchase  price  for the
                    Offered Units; and

               (B)  such  further  documents  as may  be  contemplated  by  this
                    Agreement or as the Corporation may reasonably require.

5.   Closing:

     (a)  Closing: The Closing provided for in this Agreement shall be completed
          at the office of counsel for the Corporation,  McCarthy  Tetrault LLP,
          Suite 1400, 40 Elgin Street,  Ottawa  Ontario,  K1P 5K6 at the Closing
          Time on the  Closing  Date or at such  other  time  and  place  on the
          Closing Date as the parties may agree.

     (b)  Conditions of Closing:  The following are conditions  precedent to the
          obligations of the Agent to complete the Closing and of the Purchasers
          to purchase  the  Offered  Units,  which  conditions  the  Corporation
          covenants  and  agrees to use its best  efforts  to fulfil  within the
          times set out herein  therefor,  and which conditions may be waived in
          writing in whole or in part by the Agent:

          (i)  receipt  by the Agent of the  documents  set  forth in  paragraph
               4(a)(ii) of this Agreement; and

         (ii)  the  Agent  not  having  previously  terminated  its  obligations
               pursuant to this Agreement.

6.   Fees:

     (a)  Fee: In consideration of the agreement of the Agent to act as agent in
          respect of the Offering,  and in  consideration  of the services to be
          rendered  by the Agent in  connection  therewith,  including,  without
          limitation:

          (i)  acting as agent of the Corporation to solicit,  on a best efforts
               basis, offers to purchase the Offered Units;

         (ii)  participating  in the  preparation  of the  form of  Subscription
               Agreement; and

        (iii)  advising the Corporation with respect to the private placement of
               the Offered Units;

          the  Corporation  shall pay to the Agent at the Closing  Time  against
          receipt of payment of the  aggregate  purchase  price for the  Offered
          Units,  a fee equal to eight per cent (8%) of the  aggregate  purchase
          price for the Offered Units.
<PAGE>

                                      -9-

     (b)  Broker's Warrants: In addition to the fee, as additional consideration
          for the  performance of its  obligations  hereunder,  the  Corporation
          shall issue to the Agent at Closing,  that number of Broker's Warrants
          as is equal to ten per cent (10%) of the number of Offered Units sold,
          in form and substance satisfactory to the Agent.

7.   Representations  and  Warranties:  The  Corporation  hereby  represents and
     warrants to the Agent and the  Purchasers and  acknowledges  that the Agent
     and the Purchasers are relying upon such  representations and warranties in
     completing the Closing, as follows:

     (a)  the  Corporation and each of the Principal  Subsidiaries  (i) has been
          incorporated  and organized and are validly  subsisting under the laws
          of their respective  jurisdictions  of incorporation  and (ii) has all
          requisite   corporate   power  and  authority  and  are  qualified  or
          authorized  to carry on their  respective  businesses as now conducted
          and to own, lease and operate their respective  property and assets in
          all  jurisdictions   where  such  qualification  or  authorization  is
          required and (iii) the Corporation  has the requisite  corporate power
          and authority to enter into, execute and deliver under this Agreement,
          the  Broker's  Warrants and each of the  Ancillary  Documents to which
          they  are a  party  and to  carry  out  their  respective  obligations
          hereunder and thereunder;

     (b)  the  Corporation is authorized to issue an unlimited  number of Common
          Shares and an unlimited number of preferred shares issuable in series,
          of  which,  as of  the  date  hereof,  17,970,127  Common  Shares  and
          1,374,570  Series  A  convertible  preferred  shares  are  issued  and
          outstanding as fully paid and non-assessable shares;

     (c)  no Person  has any  agreement,  option,  right or  privilege  (whether
          pre-emptive,   contractual  or  otherwise)   capable  of  becoming  an
          agreement for the purchase, acquisition,  subscription for or issue of
          any of the unissued  shares or other  securities  of the  Corporation,
          except as set out in Schedule 7(c) hereto;

     (d)  all of the outstanding shares of the Principal  Subsidiaries are fully
          paid  and  non-assessable  and  the  Corporation   beneficially  owns,
          directly or indirectly,  all of the issued and  outstanding  shares in
          the capital of such companies, free and clear of all mortgages, liens,
          charges, pledges, security interests,  encumbrances, claims or demands
          of any kind  whatsoever,  except  with  respect to a general  security
          agreement in favour of The Rose  Corporation,  which is not in default
          at the date hereof and no Person has any agreement,  option,  right or
          privilege (whether  pre-emptive,  contractual or otherwise) capable of
          becoming an agreement for the purchase, acquisition,  subscription for
          or issue of any of the  unissued  shares or other  securities  of such
          companies;

     (e)  the minute books of the Corporation, which have been made available to
          the Agent or their counsel,  are complete and accurate in all material
          respects  and the  excerpts  of the  corporate  records of each of the
          Principal  Subsidiaries which have been made available to the Agent or
          their counsel are accurate in all material respects;

     (f)  the issue of the Offered Units will not be subject to any  pre-emptive
          right or other contractual right to purchase securities granted by the
          Corporation except for a pre-
<PAGE>

                                      -10-

          emptive right by Edwards  Lifesciences LLC which has waived such right
          and consented to the transactions contemplated herein;

     (g)  all necessary  corporate  action has been taken to authorize the issue
          and  sale of,  and the  delivery  of  certificates  representing,  the
          Offered  Units  and,  upon  payment  of  the  requisite  consideration
          therefor,  the Offered Units will be validly  issued as fully paid and
          non-assessable;

     (h)  by the Closing Time, the Offered Units and the Broker's  Warrants will
          be created  and issued and the  Warrant  Shares,  Broker's  Shares and
          Compensation  Warrant  Shares will be allotted  and reserved for issue
          upon the exercise of the Warrants,  Broker's Warrants and Compensation
          Warrant  Shares and when issued will be fully paid and  non-assessable
          shares of the Corporation;

     (i)  the  offering and sale of the Offered  Units,  the  compliance  by the
          Corporation with the provisions of this Agreement and the consummation
          of the  transactions  contemplated  herein  do  not  (i)  require  the
          consent,   approval   or   authorization   of,  or   registration   or
          qualification with, any governmental authority,  securities regulatory
          authority or other Person,  except (A) such as have been obtained,  or
          (B) such as may be required (and shall be obtained as provided in this
          Agreement) under the Securities Laws of the Offering Jurisdictions, or
          (ii)  conflict with or result in any breach or violation of any of the
          provisions of, or constitute a default under, any indenture, mortgage,
          deed of trust,  lease or other  agreement or  instrument  to which the
          Corporation  or any  of the  Principal  Subsidiaries  or any of  their
          respective  properties  is bound,  or the articles or by-laws or other
          applicable  incorporating  documents of the  Corporation or any of the
          Principal Subsidiaries, or any statute or any judgment, decree, order,
          rule or regulation of any court or other governmental authority or any
          arbitrator,   stock  exchange  or  securities   regulatory   authority
          applicable to the Corporation or any of the Principal  Subsidiaries or
          any of their  respective  properties  or  assets  which  could  have a
          material  adverse  effect on the condition  (financial or  otherwise),
          business,  properties or results of operations of the  Corporation  or
          any of the Principal Subsidiaries;

     (j)  each of this  Agreement,  the  certificates  representing  the Offered
          Units and the Broker's Warrants and the Ancillary  Documents has been,
          or will  be  prior  to the  Closing  Time,  authorized,  executed  and
          delivered by the  Corporation  and each of them  constitutes,  or will
          constitute,  a  valid  and  binding  obligation  of  the  Corporation,
          enforceable  against  the  Corporation  in  accordance  with the terms
          thereof,  except  that (i) the  enforcement  thereof may be limited by
          bankruptcy,  insolvency,  reorganization,  moratorium  or similar laws
          affecting the rights of creditors generally,  (ii) equitable remedies,
          including,  without limitation,  specific  performance and injunction,
          may be  granted  only  in  the  discretion  of a  court  of  competent
          jurisdiction,  and (iii)  rights of  indemnity,  contribution  and the
          waiver of  contribution  provided  for  herein  may be  limited  under
          applicable law;

     (k)  each of the  documents  comprising  the  Information  are, as of their
          respective   dates,  in  compliance  in  all  material  respects  with
          applicable  securities laws and do not contain any untrue statement of
          a material fact or omit to state a material fact required to be stated
          therein or necessary to make the statements  therein,  in light of the
<PAGE>

                                      -11-

          circumstances  under  which they were  made,  not  misleading  and the
          documents  comprising  the  Information  were true and  correct in all
          material respects as of the date thereof;

     (l)  no order  preventing  or suspending  trading in any  securities of the
          Corporation  or  prohibiting  the issue and sale of  securities by the
          Corporation has been issued and no such proceedings for either of such
          purposes  are  pending  or,  to  the  best  of  the  knowledge  of the
          Corporation, threatened;

     (m)  except as  disclosed  in the  Information,  there has not occurred any
          material  adverse  change,  financial  or  otherwise,  in the  assets,
          liabilities (contingent or otherwise),  business,  financial condition
          or prospects of the  Corporation or any of the Principal  Subsidiaries
          or in  the  capital  of  the  Corporation  or  any  of  the  Principal
          Subsidiaries since December 31, 2001;

     (n)  the Corporation and each of the Principal  Subsidiaries  has conducted
          and are conducting  their  respective  businesses in compliance in all
          material  respects  with  all  applicable  laws,  rules,  regulations,
          tariffs,  orders and  directives  of each  jurisdiction  in which they
          carry on business and possess all material certificates,  authorities,
          permits  or  licences  issued by the  appropriate  provincial,  state,
          municipal,  federal or other  regulatory  agency or body  necessary to
          carry  on  the  respective   businesses   currently   carried  on,  or
          contemplated  to be  carried  on, by them,  are in  compliance  in all
          material  respects with such  certificates,  authorities,  permits and
          licences and with all laws,  regulations,  tariffs,  rules, orders and
          directives  material to their  respective  operations  and none of the
          Corporation  or any of the  Principal  Subsidiaries  have received any
          notice of proceedings  relating to the revocation or  modification  of
          any such certificates,  authorities, permits or licences which, singly
          or in the  aggregate,  if the  subject  of an  unfavourable  decision,
          order,  ruling or finding,  would  materially and adversely affect the
          conduct of the respective businesses,  operations, financial condition
          or income of the Corporation or any of the Principal  Subsidiaries and
          none of them have received  notice of the  revocation or  cancellation
          of, or any intention to revoke or cancel,  any such  licence,  permit,
          approval, consent, certificate, registration or authorization;

     (o)  the Corporation and the Principal  Subsidiaries are the absolute legal
          and beneficial owner of, and have good and marketable title to, all of
          their  respective  interests in their  respective  material  assets as
          described in the Information,  free of all mortgages,  liens, charges,
          pledges,   security   interests,   encumbrances,   claims  or  demands
          whatsoever  except for the security  interest of The Rose  Corporation
          and the  security  interest of Edwards  Lifesciences  LLC,  neither of
          which is in  default  as at the  date  hereof,  and no other  property
          rights  are   necessary  for  the  conduct  of  the  business  of  the
          Corporation or any of the Principal Subsidiaries,  the Corporation and
          the  Principal  Subsidiaries  do not know of any  claim or basis for a
          claim that might or could adversely affect their respective  rights to
          use,  transfer or otherwise  exploit such property  rights and none of
          the  Corporation  or  any  of  the  Principal  Subsidiaries  have  any
          responsibility or obligation to pay any commission,  royalty,  licence
          fee or  similar  payment to any Person  with  respect to the  property
          rights thereof;
<PAGE>

                                      -12-

     (p)  any and all agreements pursuant to which the Corporation or any of the
          Principal  Subsidiaries  holds their  respective  assets are valid and
          subsisting  agreements  in  full  force  and  effect,  enforceable  in
          accordance with their respective terms, none of the Corporation or any
          of the  Principal  Subsidiaries  is in material  default of any of the
          provisions of any such  agreements  nor has any such material  default
          been alleged and such assets are in good standing under the applicable
          statutes  and  regulations  of the  jurisdictions  in  which  they are
          situate,  all leases and licences pursuant to which the Corporation or
          any of the Principal  Subsidiaries  derives their respective interests
          in such assets are in good  standing  and except as  disclosed  in the
          Information  there has been no material  default under any such leases
          and all taxes  required to be paid with  respect to such assets to the
          date hereof have been paid;

     (q)  the audited annual  financial  statements of the  Corporation  for the
          year ended  December  31, 2001,  together  with the  auditors'  report
          thereon and the notes  thereto,  and the unaudited  interim  financial
          statements of the Corporation for the quarterly period ended September
          30, 2002, and the notes thereto, have been prepared in accordance with
          Canadian generally accepted  accounting  principles applied on a basis
          consistent  with prior periods  (except as disclosed in such financial
          statements), are substantially correct in every particular and present
          fairly the financial  condition and position of the  Corporation as at
          their respective dates and such financial statements contain no direct
          or implied statement of a material fact which is untrue on the date of
          such  financial  statements and do not omit to state any material fact
          which is required by Canadian generally accepted accounting principles
          or by  applicable  law to be stated or  reflected  therein or which is
          necessary to make the statements contained therein not misleading;

     (r)  since December 31, 2001, none of:

          (i)  the Corporation or any of the Principal  Subsidiaries has paid or
               declared  any   dividends   or  incurred  any  material   capital
               expenditure or made any commitment therefor,

         (ii)  the  Corporation  or  any  of  the  Principal  Subsidiaries  have
               incurred  any  obligation  or  liability,   direct  or  indirect,
               contingent  or  otherwise,  except  in  the  ordinary  course  of
               business  and which is not, and which in the  aggregate  are not,
               material, and

        (iii)  the  Corporation  or  any  of  the  Principal  Subsidiaries  have
               entered into any material  transaction except as disclosed in the
               Information;

     (s)  none  of the  Corporation  or any of the  Principal  Subsidiaries  has
          approved, is contemplating,  has entered into any agreement in respect
          of, or has any knowledge of:

          (i)  the purchase of any assets or any  interest  therein or the sale,
               transfer or other  disposition  of any  property or any  interest
               therein   currently  owned,   directly  or  indirectly,   by  the
               Corporation or any of the Principal Subsidiaries whether by asset
               sale, transfer of shares or otherwise,
<PAGE>

                                      -13-

         (ii)  the change of control  (by sale or  transfer of shares or sale of
               all or substantially  all of the assets of the Corporation or any
               of the Principal Subsidiaries or otherwise) of the Corporation or
               any of the Principal Subsidiaries, or

        (iii)  a proposed or planned  disposition  of shares by any  shareholder
               who owns,  directly or  indirectly,  five per cent or more of the
               outstanding  shares of the  Corporation  or any of the  Principal
               Subsidiaries  excepting  only  dealings  with the  holdings  of a
               significant  shareholder  in  respect  of the  completion  of the
               transactions contemplated herein;

     (t)  the properties and the  operations of the  Corporation  and of each of
          the Principal  Subsidiaries  comply in all material  respects with all
          applicable federal, state, provincial and local environmental,  health
          and safety statutes,  regulations and permits, none of such properties
          or operations is subject to any judicial or administrative  proceeding
          alleging  the  violation of any federal,  state,  provincial  or local
          environmental, health or safety statute or regulation or is subject to
          any investigation;

     (u)  to the best of the knowledge of the Corporation, none of the directors
          or officers of the Corporation or any of the Principal Subsidiaries or
          any associate or affiliate of any of the foregoing had, has or intends
          to have any material interest, direct or indirect, in the transactions
          contemplated by this Agreement or in any proposed material transaction
          with the  Corporation or any of the Principal  Subsidiaries  which, as
          the case may be,  materially  affects,  is  material to or will or may
          materially affect the Corporation or any of the Principal Subsidiaries
          except for dealings with the holdings of a significant  shareholder in
          respect of the completion of the transactions  contemplated  herein or
          as disclosed in the Information;

     (v)  no  federal,  provincial,   state,  municipal  or  other  governmental
          department,  commission,  board,  bureau,  agency or  instrumentality,
          domestic or foreign,  has given  written  notice or has  threatened in
          writing  to  modify  or  remove  any  licence,   permit  or  operating
          certificate  necessary in order for the  Corporation and the Principal
          Subsidiaries  to carry on the  respective  businesses  thereof and the
          Corporation  and the Principal  Subsidiaries  are in compliance in all
          material  respects  with the terms  and  conditions  of all  licences,
          permits and operating certificates held by them;

     (w)  the Corporation and each of the Principal  Subsidiaries has filed in a
          timely  manner all  necessary tax returns and notices and has paid all
          applicable  taxes of  whatsoever  nature for all tax years to the date
          hereof to the  extent  that such  taxes  have  become due or have been
          alleged to be due and none of the  Corporation or any of the Principal
          Subsidiaries is aware of any tax deficiencies or interest or penalties
          accrued or  accruing,  or alleged to be accrued or  accruing,  thereon
          where, in any of the above cases,  it might  reasonably be expected to
          result in any material  adverse change in the condition,  financial or
          otherwise, or in the earnings,  business affairs or business prospects
          of the Corporation or any of the Principal Subsidiaries;

     (x)  except as disclosed in the Information or orally by the Corporation to
          the Agent,  there are no  actions,  suits,  proceedings  or  enquiries
          pending or, to the best of the
<PAGE>

                                      -14-

          knowledge of the  Corporation,  threatened,  against or affecting  the
          Corporation  or any of the  Principal  Subsidiaries  or to  which  any
          property of the  Corporation or any of the Principal  Subsidiaries  is
          subject, at law or in equity, or before or by any federal, provincial,
          state, municipal or other governmental department,  commission, board,
          bureau, agency or instrumentality,  domestic or foreign,  which may in
          any way materially and adversely  affect the Corporation or any of the
          Principal Subsidiaries;

     (y)  Except  as  disclosed  in  the   Information,   to  the  best  of  the
          Corporation's knowledge the business carried on by the Corporation and
          each of the Principal  Subsidiaries complies with and has at all times
          complied   with  all  federal,   state,   provincial  or  local  laws,
          regulations  directives,  orders,  policies or guidelines or licenses,
          certificates  of approval  or permits  issued  thereunder  relating to
          pollution or protection of health, safety or the environment;

     (z)  the assets of the  Corporation  and its  business and  operations  are
          insured  against loss or damage with  responsible  insurers on a basis
          consistent with insurance obtained by reasonably prudent  participants
          in  comparable  businesses,  and such  coverage  is in full  force and
          effect, and the Corporation has not failed to promptly give any notice
          or present any claim thereunder;

     (aa) except with respect to the security  interest of The Rose Corporation,
          the  Corporation  has all  right,  title  and  interest  in and to the
          Intellectual  Property  Rights to the extent  necessary to conduct the
          Business as currently conducted;

     (bb) with  respect  to  Intellectual  Property  Rights  not  owned  by  the
          Corporation,  to the  best  knowledge  of  the  Corporation,  no  such
          Intellectual  Property Rights are used by the  Corporation  other than
          with the consent of or licence from the rightful owner thereof;

     (cc) the Intellectual  Property Rights owned by the Corporation are in full
          force and effect,  all required  registration  or other fees have been
          paid to maintain the Intellectual  Property Rights in good standing in
          those jurisdictions where the Intellectual Property Rights are used;

     (dd) with respect to  Intellectual  Property Rights created or developed by
          the  Corporation,  to the  best  knowledge  of the  Corporation,  such
          Intellectual  Property Rights are new and original to the Corporation,
          use of such rights does not infringe any third party rights,  and such
          rights  have only been  created by persons who have an  obligation  to
          assign all of their rights therein to the Corporation;

     (ee) the Intellectual  Property Rights are complete to the extent necessary
          to enable the  Business to be carried on in all  material  respects in
          the manner in which it is carried  on by the  Corporation  at the date
          hereof;

     (ff) to the best knowledge of the Corporation:

          (i)  there  is  no  claim  of  adverse  ownership,   non-inventorship,
               invalidity   or  other   opposition   to  or  conflict  with  any
               Intellectual  Property  Rights,  nor of any pending or threatened
               suit,  proceeding,  claim, demand, action or investigation
<PAGE>

                                      -15-

               of any nature or kind  against  the  Corporation  relating to the
               Intellectual Property Rights;

         (ii)  there are no outstanding orders, rulings,  decrees,  judgments or
               stipulations by or with any court,  arbitrator or  administrative
               agency relating to the Intellectual Property Rights and there has
               been  no  public  dedication  or  expropriation  of  any  of  the
               Intellectual Property Rights;

        (iii)  the  Corporation is not a licensee of, nor is making  payments or
               is  obligated  to  make  payments  for  the  use of  any  patent,
               trade-name,   technology,  trade-mark,  copyright  or  industrial
               design of another Person that is material to the Business; and

         (iv)  there  is no claim  that  the  Business,  or any  product  of the
               Business which the  Corporation  manufactures,  uses or sells, or
               any process, method, packaging, advertising, or material that the
               Corporation employs in the manufacture,  marketing or sale of any
               such  product,  or the  use of any of the  Intellectual  Property
               Rights,  breaches,  violates,  infringes or  interferes  with any
               rights of any third party; and

     (gg) the Corporation and the Principal Subsidiaries are in compliance with
          the continuous disclosure obligations of all applicable securities
          laws.

8.   Covenants of the Corporation:

     (a)  Consents and Approvals:  Immediately  following the acceptance hereof,
          the  Corporation  will  make all  necessary  filings  and use its best
          efforts to obtain all  necessary  regulatory  and other  consents  and
          approvals required in connection with the transactions contemplated by
          this Agreement.

     (b)  General:  The Corporation  hereby  covenants and agrees with the Agent
          that:

          (i)  The Corporation will fulfil all legal  requirements to permit the
               creation,  issue,  offering  and sale of the Offered  Units,  the
               Broker's Warrants and the Broker's Shares as contemplated in this
               Agreement  including,  without  limitation,  compliance  with the
               Securities  Laws of the  Offering  Jurisdictions  to  enable  the
               Offered  Units to be offered for sale and sold to the  Purchasers
               without the necessity of filing a prospectus or similar  document
               in the Offering Jurisdictions.

         (ii)  The  Corporation  will  forthwith  after the  Closing,  file such
               documents  as may be required  under the  Securities  Laws of the
               Offering  Jurisdictions  relating to the private placement of the
               Offered Units.

        (iii)  Proceeds of the offering will be used: to fund  pre-clinical  and
               clinical trials for the  Corporation's  HeartSaver VADTM; (ii) to
               fund  clinical  trials  and  marketing  expenses  related  to the
               Corporation's  Novacor LVAS(R);  and (iii) for general  corporate
               purposes.
<PAGE>

                                      -16-

         (iv)  The Corporation  will notify the Agent in writing of the terms of
               any further equity or debt financings  (whether public or private
               and  whether or not an  investment  dealer is or  proposes  to be
               involved) that it requires or proposes to obtain in Canada during
               the 6 months following the Closing Date (except for those pending
               transactions   already  identified  with  Argosy,   Apotex,  Rose
               Corporation  and  Technology  Partnerships  Canada) and the Agent
               will  have the  right of first  refusal  to act as lead  agent or
               underwriter on such  financings.  The right of first refusal must
               be exercised by the Agent within five business days following the
               receipt of the notice by  notifying  the  Corporation  in writing
               that it will act on such  financing  on the  terms set out in the
               notice.  If the  Agent  fails  to give  notice  within  the  five
               business days that it will act on such  financing  upon the terms
               set out in the notice,  the Corporation will then be free to make
               other  arrangements  on  the  same  terms  or on  terms  no  less
               favourable  to the  Corporation.  The right of first refusal will
               not terminate  if, on receipt of any notice form the  Corporation
               under this subsection, the Agent fails to exercise the right.

          (v)  If at any time during the 6 months following the Closing Date the
               Corporation  enters into any type of  understanding  or agreement
               (including,  without limitation,  a binding or non-binding letter
               of intent) whether written or oral, with any party (a "Party") in
               Canada  introduced to the Corporation by the Agent, in regards to
               any transaction (the "Transaction")  falling outside of the scope
               of this Offering and clause 8(b)(iv) (including,  but not limited
               to,  a  possible   business   combination,   direct  or  indirect
               acquisition of issued shares of the Corporation, a joint venture,
               the sale of equipment or services by the  Corporation to a Party,
               or other business  relationship).  The  Corporation and the Agent
               agree,  acting  reasonably  to determine  any fees payable to the
               Agent at the time of the  Transaction.  The Transaction Fee shall
               be paid by the  Corporation  to the Agent on the  closing  of the
               Transaction or, if no closing is held, on the commencement of the
               Transaction.  If the Transaction  involves ongoing payments,  the
               Corporation  shall  pay to the  Agent  three per cent on all such
               ongoing payments until completion of the Transaction.

9.   Termination:

     (a)  Right of Termination:  The Agent shall be entitled, at the sole option
          thereof,  to terminate  and cancel,  without any liability on the part
          thereof,   all  of  its  obligations  under  this  Agreement  and  the
          obligations of any Person who has executed a  Subscription  Agreement,
          by notice in writing to that effect delivered to the Corporation prior
          to the Closing Time if:

          (i)  the  Agent  is not  satisfied  in  its  sole  discretion,  acting
               reasonably,  with the  results  of the due  diligence  review and
               investigation of the Corporation;

         (ii)  there is in the sole opinion of the Agent,  acting reasonably,  a
               material change or change in a material fact or new material fact
               or an undisclosed material fact or material change which might be
               expected  to have an  adverse  effect on the  business,  affairs,
               profitability or prospects of the Corporation or on the
<PAGE>

                                      -17-

          market price or value of the Common Shares or any other securities of
          the Corporation;

        (iii)  there should  develop,  occur or come into effect any  occurrence
               of national or international  consequence,  or any event, action,
               condition,   law,  governmental  regulation,   enquiry  or  other
               development  or  occurrence,  whether in any financial  market or
               otherwise,  of any nature whatsoever which, in the opinion of the
               Agent,  acting reasonably,  materially  adversely affects or will
               materially adversely affect the Canadian financial markets or the
               business, operations or affairs of the Corporation;

         (iv)  the  state  of the  financial  markets  is such  that in the sole
               opinion   of  the   Agent,   acting   reasonably,   it  would  be
               impracticable  to  offer,  or  continue  to  offer,  for sale the
               Offered Units;

          (v)  any inquiry, investigation or other proceeding (whether formal or
               informal) is  threatened,  announced or commenced or any order or
               ruling is issued in  relation  to the  Corporation  or any of the
               directors, officers or principal shareholders of the Corporation,
               or there is  announced  or  enacted  any  change  of law,  or the
               interpretation or administration thereof, which in the reasonable
               opinion of the Agent  would be  expected to operate to prevent or
               restrict  trading in the Offered Units,  the Common Shares or any
               other  securities of the  Corporation or the  distribution of the
               Offered Units,  the Common Shares or any other  securities of the
               Corporation;

         (vi)  any order to cease or suspend  trading in any  securities  of the
               Corporation  is made,  threatened or announced by any  securities
               regulatory authority; or

        (vii)  the  Corporation  is in breach of any material  term,  condition,
               covenant  or  agreement   contained  in  this  Agreement  or  any
               representation  or  warranty  given  by the  Corporation  in this
               Agreement is or becomes untrue, false or misleading.

     (b)  Rights  on  Termination:  Any  termination  by the Agent  pursuant  to
          subsection  9(a)  hereof  shall  be  effected  by  notice  in  writing
          delivered  to the  Corporation  at the address  therefor as set out in
          section  13  hereof.  The  right  of the  Agent  to so  terminate  its
          obligations under this Agreement is in addition to such other remedies
          as the Agent may have in respect of any default, act or failure to act
          of the  Corporation in respect of any of the matters  contemplated  by
          this Agreement. In the event of a termination by the Agent pursuant to
          subsection 9(a) hereof there shall be no further liability on the part
          of the Agent to the  Corporation  or of the  Corporation  to the Agent
          except any  liability  which may have arisen or may  thereafter  arise
          under sections 10 and 11 hereof.

10.  Indemnity and Contribution:  The indemnity and contribution  provisions set
     out at Schedule B to the  Engagement  Letter are hereby  incorporated  into
     this Agreement by reference.

11.  Expenses:  Whether or not the purchase and sale of the Offered  Units shall
     be completed as contemplated by this Agreement,  all reasonable expenses of
     or incidental to the allotment,
<PAGE>

                                      -18-

     issue,  sale and delivery of the Offered  Units and of or incidental to all
     matters in connection with the  transactions  herein set out shall be borne
     by the Corporation including,  without limitation,  the reasonable fees and
     disbursements  (including  applicable taxes) of legal counsel for the Agent
     and the reasonable  out-of-pocket  expenses (including applicable taxes) of
     the Agent,  which, to the extent that they are then determinable,  shall be
     paid to the Agent at the Closing Time.

12.  Conditions:  The  obligation  of the Agent to complete the Closing shall be
     subject  to the  accuracy  of the  representations  and  warranties  of the
     Corporation  contained  herein as of the Closing Time and to the fulfilment
     and compliance by the Corporation  with all of the covenants and agreements
     given by it  herein.  All of the terms  and  conditions  contained  in this
     Agreement  to be  satisfied  by the  Corporation  prior to the Closing Time
     shall  be  construed  as  conditions,  and any  breach  or  failure  by the
     Corporation to comply with any of such terms and  conditions  shall entitle
     the Agent to terminate  its  obligation  to complete the Closing by written
     notice to that effect given to the  Corporation  prior to the Closing Time.
     It is  understood  and agreed that the Agent may waive in whole or in part,
     or extend the time for  compliance  with,  any of such terms and conditions
     without prejudice to its rights in respect of any such terms and conditions
     or any other or subsequent  breach or  non-compliance;  provided that to be
     binding on the Agent any such waiver or  extension  must be in writing.  If
     the Agent shall elect to terminate its  obligations to complete the Closing
     as aforesaid,  whether the reason for such  termination is within or beyond
     the control of the  Corporation,  the liability of the  Corporation  to the
     Agent  hereunder  shall be  limited to the  indemnity  and  referred  to in
     subsection 10 hereof,  the right to contribution  referred to in section 10
     hereof and the payment of expenses referred to in section 11 hereof.

13.  Notices:  Any notice or other  communication  required or  permitted  to be
     given  hereunder  shall be in writing and shall be personally  delivered or
     sent by telecopier on a Business Day to the following addresses:

     (a)  in the case of the Corporation:

          World Heart Corporation
          1 Laser Street
          Ottawa, Ontario
          Canada
          K2E 7V1

          Attention:  Roderick Bryden, President and CEO

          Telecopier Number:  (613) 226-1008

          with a copy to:

          McCarthy Tetrault
          Suite 1400, 40 Elgin Street
          Ottawa, Ontario
          Canada
          K1P 5K6
<PAGE>

                                      -19-

          Attention:  Virginia K. Schweitzer

          Telecopier Number:  (613) 563-9386

     (b)  in the case of the Agent:

          Northern Securities Inc.
          150 York Street
          Suite 1814
          Toronto, ON
          M5N 3S5

          Attention:  David M. Slater, Vice-President, Investment Banking

          Telecopier Number:  (416) 644-0270

          with a copy to:

          Gowling Lafleur Henderson LLP
          Suite 5800, Scotia Plaza
          40 King Street West
          Toronto, ON
          M5H 3Z7

          Attention:  Neil J. F. Steenberg

          Telecopier Number: (416) 863-3540

     The  Corporation or the Agent may change their address for notice by notice
     given in the manner aforesaid. Any such notice or other communication shall
     be in  writing,  and  unless  delivered  to a  responsible  officer  of the
     addressee,  shall be given by telecopier,  and shall be deemed to have been
     given on the day on which it was delivered or sent by telecopier.

14.  Miscellaneous:

     (a)  Governing Law: This Agreement  shall be governed by and be interpreted
          in accordance with the laws of the Province of Ontario and the federal
          laws of Canada applicable therein.

     (b)  Time of Essence: Time shall be of the essence of this Agreement.

     (c)  Survival: All representations, warranties, covenants and agreements of
          the  Corporation  herein  contained  or  contained  in  any  documents
          contemplated  by, or  delivered  pursuant  to,  this  Agreement  or in
          connection  with the  purchase  and sale of the  Offered  Units  shall
          survive the purchase and sale of the Offered Units and the termination
          of this  Agreement and shall continue in full force and effect for the
          benefit of the Agent in accordance with applicable law,  regardless of
          any subsequent  disposition of the Offered Units or any  investigation
          by or on behalf of the Agent with respect thereto.
<PAGE>

                                      -20-

     (d)  Counterparts:  This  Agreement  may  be  executed  in  any  number  of
          counterparts,  each of which when so executed shall be deemed to be an
          original and all of which when taken together shall constitute one and
          the same agreement.

     (e)  Entire  Agreement:  This Agreement  constitutes  the entire  agreement
          between the Corporation and the Agent in connection with the issue and
          sale of the Offered Units by the  Corporation and supersedes all prior
          agreements, understandings, negotiations and discussions, whether oral
          or written,  including,  but not limited  to, the  Engagement  Letter,
          except for Schedule "B" thereto containing  indemnity and contribution
          provisions.

     (f)  Severability:  If any provision of this  Agreement is determined to be
          void or  unenforceable  in whole or in part, it shall be deemed not to
          affect or impair the validity of any other provision of this Agreement
          and such void or  unenforceable  provision  shall be severed from this
          Agreement.

     Would you kindly confirm the agreement of the  Corporation to the foregoing
by executing four duplicate  copies of this letter and thereafter  returning two
such executed copies to the Agent.

                                        Yours truly,

                                        NORTHERN SECURITIES INC.

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:

     The  undersigned  hereby accepts and agrees to the foregoing as of the 30th
day of December, 2002.

                                        WORLD HEART CORPORATION

                                        By:
                                           ------------------------------------
                                           Name:
                                           Title:
<PAGE>

                                   Schedule A
                              Form of Legal Opinion

Omitted pursuant to Item 601(b)(2) of Regulation S-K.

<PAGE>

                                   Schedule B

                          Form of Officer's Certificate

Pursuant to subparagraph 4(a)(ii)(C) of the agency agreement dated December 30,
2002 (the "Agency Agreement") between World Heart Corporation and Northern
Securities Inc.

TO:       NORTHERN SECURITIES INC.

AND TO:   THE PURCHASERS OF COMMON SHARES OF
          WORLD HEART CORPORATION

AND TO:   GOWLING LAFLEUR HENDERSON LLP

                                   CERTIFICATE

     The undersigned,  Ian W. Malone, signing in his capacity as Vice President,
Finance  and  Chief   Financial   Officer  of  World  Heart   Corporation   (the
"Corporation"),  and not in a personal capacity, hereby certifies to the best of
his  knowledge,  information  and belief,  after having made due  inquiry,  that
(capitalized  words and phrases  used herein have the same  meaning  ascribed to
such words and phrases in the Agency Agreement):

1.   The facts, matters and information  certified to herein are based on one or
     more of knowledge and information available or provided to me and my honest
     belief and all statements made in this certificate  represent my reasonably
     held  honest  belief  as to the  facts,  matters,  information  and  belief
     possessed  by me. I have used my best  efforts  to become  informed  of and
     about the  facts,  matters  and  information  certified  to herein and have
     sought the advice of counsel for the Corporation on those matters certified
     to herein which involve matters of laws and have relied upon such advice to
     the extent that those matters involve matters of law.

2.   The  Corporation  has complied with all covenants and agreements  contained
     in,  and has  satisfied  all of the terms and  conditions  of,  the  Agency
     Agreement to be complied with and satisfied by the  Corporation at or prior
     to the Closing Time.

3.   The  representations  and  warranties of the  Corporation  contained in the
     Agency  Agreement are true and correct as of the Closing Time with the same
     force and  effect as if made at and as of the  Closing  Time  after  giving
     effect to the transactions contemplated thereby.

4.   Since December 31, 2001, except as disclosed in the Information,  there has
     been no material  adverse change (whether  actual,  anticipated,  proposed,
     prospective or threatened) in the financial condition,  assets, liabilities
     (contingent or otherwise),  business,  affairs,  operations or prospects of
     the  Corporation or any of the Principal  Subsidiaries or in the capital of
     the Corporation.

5.   Since  December  31,  2001,  no  transaction  of a nature  material  to the
     Corporation or any of the Principal  Subsidiaries  has been entered into by
     the Corporation or any of the Principal  Subsidiaries,  except as disclosed
     in the Information.

<PAGE>

6.   No  order,  ruling  or  determination  having  the  effect  of  ceasing  or
     suspending  trading in the Common  Shares,  the Offered  Units or any other
     securities  of the  Corporation  has been issued or made by any  securities
     commission or other regulatory authority and is continuing in effect and no
     proceedings  for such purpose have been  instituted or are pending,  or are
     contemplated or threatened by any securities commission or other regulatory
     authority.

7.   Except  as  disclosed  in the  Information  or to the  Agent,  there are no
     actions,  suits,  proceedings or enquiries pending or, to the best of their
     knowledge,  threatened  against or affecting the  Corporation or any of the
     Subsidiaries  or to which any  property  of the  Corporation  or any of the
     Principal Subsidiaries is subject, at law or in equity, or before or by any
     federal,  provincial,  state,  municipal or other governmental  department,
     commission, board, bureau, agency or instrumentality,  domestic or foreign,
     which may, in any way,  materially and adversely  affect the Corporation or
     any of the Principal Subsidiaries.

8.   Except as  disclosed  in the  Information  or to the  Agent,  no failure or
     default on the part of the Corporation or any Principal  Subsidiary  exists
     under any law or regulation applicable to the Corporation or any Subsidiary
     or under any licence,  permit,  contract,  agreement or other instrument to
     which the  Corporation  or any Principal  Subsidiary is a party or by which
     the Corporation or any Principal  Subsidiary is bound, which may in any way
     materially and adversely  affect the  Corporation or any Subsidiary and the
     execution,  delivery  and  performance  of the  Agency  Agreement  and  the
     performance  by the  Corporation  of its  obligations  thereunder  will not
     result in any such default.

     IN WITNESS WHEREOF the undersigned has executed this  certificate as of the
30th day of December, 2002.

                                    By:
                                       -----------------------------------
                                       Ian Malone, Vice President, Finance and
                                       Chief Financial Officer, World Heart
                                       Corporation

                                       2.
<PAGE>

                                   Schedule C

                            Form of Broker's Warrant

UNLESS  PERMITTED  UNDER  SECURITIES  LEGISLATION,  THE HOLDER OF THE SECURITIES
REPRESENTED BY THIS  CERTIFICATE  SHALL NOT TRADE THE  SECURITIES  BEFORE MAY 1,
2003.

THE SECURITIES  REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE
THEREOF HAVE NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR UNDER ANY STATE SECURITIES LAWS.
THE HOLDER  HEREOF  AGREES FOR THE  BENEFIT OF THE COMPANY  THAT THE  SECURITIES
REPRESENTED  HEREBY AND THE  SECURITIES  ISSUABLE UPON  EXERCISE  THEREOF MAY BE
OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO THE COMPANY,  (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE  WITH RULE 904 OF REGULATION S UNDER THE
U.S.  SECURITIES ACT, IF APPLICABLE (C) INSIDE THE UNITED STATES (1) PURSUANT TO
THE EXEMPTION FROM THE REGISTRATION  REQUIREMENTS UNDER THE U.S.  SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE
STATE  SECURITIES  LAW OR (2) IN A TRANSACTION  THAT DOES NOT OTHERWISE  REQUIRE
REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY APPLICABLE  STATE SECURITIES
LAW,  PROVIDED THE HOLDER HAS  FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF
RECOGNIZED  STANDING TO THE EFFECT  REASONABLE  SATISFACTORY TO THE COMPANY.  AS
USED  HEREIN,  THE TERMS  "UNITED  STATES" AND "U.S.  PERSON"  HAVE THE MEANINGS
ASCRIBED TO THEM IN REGULATION S UNDER THE U.S. SECURITIES ACT.

      his warrant expires at 5:00 p.m., Ottawa time, on December 30, 2004.

                                BROKER'S WARRANT

          to purchase up to 163,152 common shares and 163,152 warrants

                                       of

                             WORLD HEART CORPORATION
            (Incorporated under the laws of the Province of Ontario)

THIS IS TO CERTIFY THAT, for valuable  consideration,  NORTHERN  SECURITIES INC.
(the  "Agent") is  entitled,  at any time prior to 5:00 p.m.,  Ottawa  time,  on
December 30, 2004, upon and subject to the terms and conditions set forth herein
and in the  schedules  attached  hereto  which form an integral  part hereof and
shall be deemed to be  incorporated  herein (the whole being referred to as
<PAGE>

                                      -2-

this  "Broker's  Warrant"),  to subscribe in whole or in part for 163,152 common
shares ("Common Shares") and 163,152 compensation warrants, the form of which is
attached  hereto as  Schedule C  ("Warrants")  of World Heart  Corporation  (the
"Corporation"),  by delivering to the Corporation at its registered  office this
Broker's  Warrant,  with the form of subscription  attached hereto as schedule B
duly completed and executed, together with a certified cheque, bank draft, money
order or good same day funds transmitted by wire or other similar  transfer,  in
lawful money of Canada,  payable to or to the order of the Corporation at par in
Toronto,  in an  amount  equal to the  purchase  price of the  Common  Shares so
subscribed for.

The  purchase  price  payable  for each  Common  Share  subscribed  for upon the
exercise of this Broker's  Warrant shall be $1.60,  subject to adjustment in the
events and in the manner set forth herein.

This Broker's  Warrant shall become wholly void and the  unexercised  portion of
the subscription rights evidenced hereby will expire and terminate at 5:00 p.m.,
Ottawa time, on December 30, 2004.

This Broker's Warrant is non-transferable.

All Common  Shares and Warrants  which shall be issued upon the exercise of this
Broker's  Warrant  shall be issued to the Agent,  upon  payment  therefor of the
amount  at  which  the  Common  Shares  and  Warrants  which  may at the time be
purchased  pursuant to the provisions  hereof,  and the Agent shall be deemed to
have become the holder of record of such Common  Shares and Warrants on the date
of delivery  of this  Broker's  Warrant,  together  with  payment for the Common
Shares and Warrants subscribed for, unless the transfer books of the Corporation
shall be closed on such date,  in which event the Common  Shares and Warrants so
subscribed  for shall be deemed  to be issued  and the Agent  shall be deemed to
have become the holder of record of such Common Shares on the date on which such
transfer  books are reopened and such Common Shares and Warrants shall be issued
at the  purchase  price in  effect  on the  date of  delivery  of this  Broker's
Warrant,  together  with payment for the Common  Shares and Warrants  subscribed
for.

The Agent may purchase less than the number of Common Shares and Warrants  which
the Agent is  entitled  to  purchase  hereunder  on  delivery  of this  Broker's
Warrant,  in which  event a new  broker's  warrant,  in form  identical  hereto,
representing the Common Shares not purchased, will be issued to the Agent.

This  Broker's  Warrant  does not  entitle  the Agent to any rights or  interest
whatsoever as a shareholder  of the  Corporation or any other rights or interest
except as expressly provided in this Broker's Warrant.

If this  Broker's  Warrant  or any  replacement  hereof  becomes  stolen,  lost,
mutilated or destroyed,  the  Corporation  shall, on such terms as it may in its
discretion impose, acting reasonably,  issue and deliver a new broker's warrant,
in form identical hereto, evidencing any unexercised portion of the subscription
rights  evidenced  hereby to replace  the  Broker's  Warrant  so  stolen,  lost,
mutilated or destroyed.

By  acceptance   hereof,  the  Agent  hereby  represents  and  warrants  to  the
Corporation  that the Agent is acquiring this Broker's  Warrant as principal for
its own account, and not for the benefit of any other person.

All amounts of money  referred to in this  Broker's  Warrant  are  expressed  in
lawful money of Canada.
<PAGE>

                                      -3-

This  Broker's  Warrant  shall enure to the benefit of and shall be binding upon
the Agent and the Corporation and their respective successors.

This  Broker's  Warrant shall be governed by the laws of the Province of Ontario
and the laws of Canada applicable therein.

IN WITNESS WHEREOF the Corporation has caused this Broker's Warrant to be issued
in its name by the signature of its duly authorized officer in that behalf.

     DATED as of the 30th day of December, 2002.

                                        WORLD HEART CORPORATION
                                        By:

                                        --------------------------------------
                                        Name: Ian Malone
                                        Title: Chief Financial Officer
<PAGE>

                                   SCHEDULE A

            Additional Terms and Conditions of this Broker's Warrant

Common Shares Reserved for Issuance.  The Corporation  covenants and agrees that
     so long as the within this Broker's Warrant (hereinafter in this schedule A
     referred to as the "Broker's Warrant") is outstanding, it will at all times
     reserve out of its  unissued  common  shares  against  the  exercise by the
     Subscriber of the Broker's Warrant, a sufficient number of common shares to
     enable the Subscriber to exercise in full its subscription  rights upon the
     basis and upon the  terms  and  conditions  provided  for by this  Broker's
     Warrant.

Adjustments

2.1  The rights of the holder of the Broker's  Warrant,  shall be adjusted  from
     time to time in the events and in the manner  provided in and in accordance
     with this Section 2 and for such purposes:

     "Adjustment Period" means in respect of each Broker's  Warrant,  the period
          commencing  on the Issue Date  thereof  and ending at the Expiry  Time
          thereof;

     "Current Market Price",  on any date, means the average,  during the period
          of 20 consecutive Trading Days ending on the second Trading Day before
          such  date,  of the  average  of the high and low  prices per share at
          which the Common Shares have traded on the principal stock exchange or
          quotation  system on which the  Common  Shares  are  listed or, if the
          Common  Shares have not been listed on a stock  exchange of  quotation
          system for such number of Trading  Days,  then such  lesser  number of
          Trading  Days as the Common  Shares  have been so  listed,  or, if the
          Common  Shares  are not  listed on any  stock  exchange  or  quotation
          system, then in the over-the-counter  market as reported by such other
          stock  exchange  or as quoted by the most  commonly  quoted or carried
          source of quotations for shares traded in the over-the-counter market,
          provided that if, on any such Trading Day,  there are no such reported
          or quoted  high and low  prices,  the  average of the  closing bid and
          asked prices per share for board lots of the Common Shares reported by
          such  stock  exchange  or as  quoted  by the most  commonly  quoted or
          carried source of quotations for shares traded in the over-the-counter
          market,  for such  Trading  Day shall be utilized  in  computing  such
          average, and provided further that if the Common Shares are not listed
          on any stock exchange or traded in any  over-the-counter  market, then
          the Current  Market Price of the Common  Shares shall be determined by
          the directors;

     "Exchange Rate" means the rate at which Common Shares are issuable upon the
          exercise of this Broker's Warrant,  which rate,  subject to adjustment
          in  accordance  with this  Section is one Common Share and one Warrant
          for each Broker's Warrant as of date hereof;

     "Trading Day",  with  respect  to any stock  exchange  or  over-the-counter
          market,  means  a day on  which  shares  may  be  traded  through  the
          facilities of such stock exchange or in such over-the-counter  market,
          and, otherwise,  means a day on which shares may be traded through the
          facilities of the principal  stock exchange on which the Common
<PAGE>

                                      -2-

          Shares are  listed  (or,  if the  Common  Shares are not listed on any
          stock exchange, then in the over-the-counter market).

     For greater certainty,  notwithstanding any other provision of this Section
     2, the  holders  of this  Broker's  Warrant  shall not be  entitled  to any
     adjustment  upon the conversion or exercise of (i) any Series A convertible
     preferred  shares of the  Corporation  and (ii) any Series A  participating
     preferred shares of World Heart Inc., a subsidiary of the Corporation.

2.2  The Exchange Rate in effect at any date will be subject to adjustment  from
     time to time and  whenever at any time during the  Adjustment  Period,  the
     Corporation shall (i) subdivide,  or redivide its outstanding Common Shares
     into a greater number of Common  Shares,  or (ii)  consolidate,  combine or
     reduce its outstanding Common Shares into a lesser number of Common Shares,
     or (iii) issue Common Shares or other  securities of the  Corporation  that
     are  convertible  into Common Shares  ("convertible  securities") to all or
     substantially all of the holders of Common Shares or convertible securities
     (as the case may be) by way of a stock dividend or other  distribution.  In
     any such event,  the Exchange  Rate shall,  on the  effective  date of such
     event, be adjusted so that it will equal the rate determined by multiplying
     the Exchange Rate in effect  immediately  prior to such date by a fraction,
     of which  the  denominator  shall be the  total  number  of  Common  Shares
     outstanding  on such date before giving effect to such event,  and of which
     the  numerator  shall be the total number of Common Shares  outstanding  on
     such date after giving effect to such event.  Such  adjustment will be made
     successively  whenever  any such  event  shall  occur and any such issue of
     Common  Shares or  convertible  securities  by way of a stock  dividend  is
     deemed to have  occurred on the record date for the stock  dividend for the
     purpose of calculating  the number of outstanding  Common Shares under this
     Subsection  2.2(a).  To the extent that this  Subsection  2.2(a) has become
     operative  because of an issue of  convertible  securities  referred  to in
     clause  (iii)  above,  the number of Common  Shares or Warrants  obtainable
     under this  Broker's  Warrant  shall be  readjusted  based on the number of
     Common Shares issuable upon  conversion or exchange of such  convertible or
     exchangeable securities.

     If   and whenever at any time during the  Adjustment  Period,  there is (i)
          any reclassification of the Common Shares at any time outstanding, any
          change of the Common  Shares  into other  shares or any other  capital
          reorganization  of  the  Corporation   (other  than  as  described  in
          Subsection 2.2(a)), (ii) any consolidation, amalgamation, arrangement,
          merger or other form of business  combination of the Corporation  with
          or into any other  corporation,  trust,  partnership,  or other entity
          resulting in any  reclassification  of the outstanding  Common Shares,
          any change of the Common Shares into other shares or any other capital
          reorganization   of  the  Corporation,   (iii)  any  triggering  of  a
          shareholders  rights  plan,  or (iv)  any  sale,  lease,  exchange  or
          transfer  of  the  undertaking  or  assets  of the  Corporation  as an
          entirety  or  substantially  as an  entirety  to another  corporation,
          trust,  partnership  or other entity,  then, in each such event,  each
          holder of this Broker's  Warrant  which is thereafter  exercised on or
          after the  effective  date of such event will be  entitled to receive,
          and shall accept, in lieu of the number of Common Shares to which such
          holder was theretofore entitled upon such
<PAGE>

                                      -3-

          exercise,  the kind and number or amount of shares or other securities
          or property which such holder would have been entitled to receive as a
          result of such event if, on the effective  date  thereof,  such holder
          had been the registered holder of the number of Common Shares to which
          such holder was theretofore entitled upon such exercise.  If necessary
          as a result of any such event, appropriate adjustments will be made in
          the  application  of the  provisions  set forth in this Section 2 with
          respect to the rights and  interests  thereafter of the holder of this
          Broker's  Warrant  to the end that the  provisions  set  forth in this
          Section  2 will  thereafter  correspondingly  be made  applicable,  as
          nearly as may reasonably be possible, in the relation to any shares or
          other securities or property thereafter  deliverable upon the exercise
          or deemed exercise of this Broker's Warrant. Any such adjustments will
          be  made by and set  forth  in a  supplement  hereto  approved  by the
          directors   of  the   Corporation   and  shall  for  all  purposes  be
          conclusively deemed to be an appropriate adjustment.

2.3  The Exercise Price in effect at any date will be subject to adjustment from
     time to time if and whenever at any time during the Adjustment  Period, the
     Corporation shall (i) subdivide,  or redivide its outstanding Common Shares
     into a greater number of Common  Shares,  or (ii)  consolidate,  combine or
     reduce its outstanding Common Shares into a lesser number of Common Shares,
     or (iii) issue Common Shares to all or substantially  all of the holders of
     Common Shares by way of a stock dividend or other distribution. In any such
     event,  the Exercise Price shall,  on the effective date of such event,  be
     adjusted  so that it will equal the price  determined  by  multiplying  the
     Exercise Price in effect immediately prior to such date by a fraction,  the
     numerator of which shall be the total number of Common  Shares  outstanding
     on such  effective  date or record date before  giving effect to such event
     and the  denominator  of which shall be the total  number of Common  Shares
     outstanding  immediately after giving effect to such event. Such adjustment
     will be made successively whenever any such event shall occur.

     If   and whenever at any time during the Adjustment Period, the Corporation
          shall fix a record  date for the  making of a  distribution  to all or
          substantially all of the holders of Common Shares of:

          shares  of  any  class  other  than  Common  Shares   whether  of  the
               Corporation or any other corporation;

          rights, options or warrants  (other than  rights,  options or warrants
               exercisable by the holders  thereof within a period  expiring not
               more than 45 days after the date of issue thereof);

          evidences of indebtedness; or

          cash, securities or other property or assets;

     then, in each such case,  the Exercise  Price will be adjusted  immediately
     after  such  record  date so that it will  equal  the price  determined  by
     multiplying the Exercise price in effect on
<PAGE>

                                      -4-

     such record date by a fraction, of which the numerator shall be the total
     number of Common Shares outstanding on such record date multiplied by the
     Current Market Price on the earlier of such record date and the date on
     which the Corporation announces its intention to make such distribution,
     less the excess, if any, aggregate fair market value on such record date
     (as determined by the directors at the time such distribution is
     authorized) of such shares or rights, options or warrants or evidences of
     indebtedness or cash, securities or other property or assets so distributed
     over the fair market value of the consideration received therefor by the
     Corporation from the holders of the Common Shares (as determined by the
     directors), and of which the denominator shall be the total number of
     Common Shares outstanding on such record date multiplied by such Current
     Market Price. Any Common Shares owned by or held for the account of the
     Corporation or any subsidiary of the Corporation shall be deemed not to be
     outstanding for the purpose of such computation. Such adjustment will be
     made successively whenever such a record date is fixed, provided that if
     two or more such record dates or record dates referred to in paragraph
     2.3(b) are fixed within a period of 25 Trading Days, such adjustment will
     be made successively as if each of such record dates occurred on the
     earliest of such record dates. To the extent that such distribution is not
     so made or to the extent that any such rights, options or warrants so
     distributed are not exercised prior to the expiration thereof, the Exercise
     Price will then be readjusted to the Exercise Price which would then be in
     effect if such record date had not been fixed or to the Exercise Price
     which would then be in effect based upon such shares or rights, options or
     warrants or evidences of indebtedness or cash, securities or other property
     or assets actually distributed or based upon the number or amount of
     securities or the property or assets actually issued or distributed upon
     the exercise of such rights, options or Warrants, as the case may be.

     If   and whenever at anytime during the Adjustment  Period, the Corporation
          shall fix a record  date for the issue of rights,  options or warrants
          to all or  substantially  all of the  holders of Common  Shares  under
          which such  holders are  entitled,  during a period  expiring not more
          than 45 days after the record date for such issue  ("Rights  Period"),
          to subscribe  for and purchase  Common  Shares at a price per share to
          the holder of less than 95% of the Current Market Price for the Common
          Shares on such record date (any of such events  being called a "Rights
          Offering"),  then  the  Exercise  Price  shall be  adjusted  effective
          immediately  after the end of the Rights Period to a price  determined
          by multiplying the Exercise Price in effect  immediately  prior to the
          end of the Rights Period by a fraction:

          the numerator of which shall be the aggregate of:

               the  number of Common  Shares  outstanding  as of the record date
                    for the Rights Offering, and

               a    number  determined by dividing (1) the product of the number
                    of Common Shares issued or subscribed  for during the Rights
                    Period upon the exercise of the rights, warrants, or options
                    under the Rights Offering and the price at which such Common
                    Shares are  offered by (2) the Current  Market  Price of the
                    Common Shares as of the record date for the Rights Offering;
                    and
<PAGE>

                                      -5-

               the  denominator  of which  shall be the number of Common  Shares
                    outstanding  after giving effect to the Rights  Offering and
                    including  the number of Common  Shares  actually  issued or
                    subscribed for during the Rights Period upon exercise of the
                    rights, warrants or options under the Rights Offering.

The  holder of this  Broker's  Warrant  who shall  have  exercised  his right to
purchase  Common  Shares and Warrants in accordance  with this Broker's  Warrant
Certificate during the period beginning  immediately after the record date for a
Rights  Offering and ending on the last day of the Rights Period therefor shall,
in addition to the Common  Shares to which he is  otherwise  entitled  upon such
exercise in accordance with this Broker's  Warrant  Certificate,  be entitled to
that number of additional  Common  Shares equal to the result  obtained when the
difference,  if any,  resulting  from the  subtraction  of the Exercise Price as
adjusted for such Rights Offering  pursuant to this  Subsection  2.3(c) from the
Exercise Price in effect immediately prior to the end of such Rights Offering is
multiplied  by the  number of Common  Shares  purchased  upon  exercise  of this
Broker's  Warrant  held by such  holder of this  Broker's  Warrant  during  such
period,  and the resulting  product is divided by the Exercise Price as adjusted
for such Rights Offering pursuant to this Subsection  2.3(c);  provided that the
provisions  of this  Broker's  Warrant  Certificate  shall be  applicable to any
fractional  interest in any Common  Share to which such holder of this  Broker's
Warrant  might  otherwise be entitled  under the  foregoing  provisions  of this
Subsection  2.3(c).  Such additional  Common Shares shall be deemed to have been
issued to the holder of this Broker's Warrant  immediately  following the end of
the Rights Period and a certificate for such  additional  Common Shares shall be
delivered  to such holder of this  Broker's  Warrant  within ten  business  days
following  the end of the Rights  Period.  To the extent  that any such  rights,
options or warrants are not so exercised  on or before the expiry  thereof,  the
Exercise  Price will be readjusted to the Exercise  Price which would then be in
effect based on the number of Common Shares (or the  securities  convertible  or
exchangeable  for Common  Shares)  actually  delivered  on the  exercise of such
rights, options or warrants.

2.4       In any case in which this section 2 shall  require that an  adjustment
          shall
     become effective  immediately  after a record date for or effective date of
     an  event  referred  to  herein,  the  Corporation  may  defer,  until  the
     occurrence and  consummation  of such event,  issuing to the holder of this
     Broker's  Warrant  exercised  after such record date or effective  date and
     before the occurrence and consummation of such event the additional  Common
     Shares or other  securities  or  property  issuable  upon such  exercise by
     reason of the adjustment required by such event,  provided,  however,  that
     the   Corporation  or  successor  to  the  undertaking  or  assets  of  the
     Corporation, will deliver to such holder, as soon as reasonably practicable
     after such record date or effective  dates,  as applicable,  an appropriate
     instrument evidencing such holder's right to receive such additional Common
     Shares or other securities or property upon the occurrence and consummation
     of such event and the right to receive any  dividend or other  distribution
     in respect of such additional Common Shares or other securities or property
     declared  in favour of the  holders  of record of Common  Shares or of such
     other  securities or property on or after the Exercise  Date, or such later
     date as such holder would, but for the provisions of this Section 2.4, have
     become the holder of
<PAGE>

                                      -6-

     record  of  such  additional  Common  Shares,  warrants  or of  such  other
     securities or property.

     If   the  Corporation  shall set a record date to determine  the holders of
          the Common  Shares or other  securities  for the purpose of  entitling
          them to receive any dividend or  distribution  or any  subscription or
          exercise rights and shall,  thereafter and before the  distribution to
          such   securityholders   of  any  such   dividend,   distribution   or
          subscription  or exercise  rights,  legally abandon its plan to pay or
          deliver  such  dividend,  distribution  or  subscription  or  exercise
          rights,  then no adjustment in the Exercise Price or the Exchange Rate
          shall be required by reason of the setting of such record date.

     The  adjustments provided for in this Section 2 are cumulative,  and shall,
          in the case of any  adjustment  to the  Exchange  Rate or the Exercise
          Price, be computed to the nearest one  one-hundredth of a Common Share
          and will  apply  (without  duplication)  to  successive  subdivisions,
          consolidations,  distributions, issuances or other events resulting in
          any adjustment  under the provisions of this Section 2, provided that,
          notwithstanding any other provision of this Section 2.4, no adjustment
          of the Exchange Rate or the Exercise Price will be required (i) unless
          such  adjustment  would require an increase or decrease of at least 1%
          in the Exchange Rate or the Exercise  Price then in effect  (provided,
          however, that any adjustment which by reason of this Subsection 2.4(c)
          is not  required  to be made will be  carried  forward  and taken into
          account  in any  subsequent  adjustment),  or (ii) in  respect  of any
          Common  Shares  issuable or issued  pursuant  to any option,  warrant,
          share option or share  purchase plan of the  Corporation  as otherwise
          specified in the Agency  Agreement,  or (iii) in respect of any Common
          Shares  issuable or issued  pursuant to the exercise of this  Broker's
          Warrant.

     If   any question arises with respect to the  adjustments  provided in this
          Section  2, such  question  shall be  conclusively  determined  by the
          Corporation's  auditors or, if they are unable or unwilling to act, by
          such firm of chartered accountants as is appointed by the Corporation.
          Such  accountants  shall have access to all  necessary  records of the
          Corporation  and  such   determination   shall  be  binding  upon  the
          Corporation, and the holder of Warrants.

     All  shares of any class or other  securities or property which a holder of
          Warrants  is at the time in  question  entitled to receive on the full
          exercise of his  Warrants,  whether or not as a result of  adjustments
          made  pursuant  to this  Section  2  shall,  for the  purposes  of the
          interpretation  of this  Warrant  Certificate,  be deemed to be Common
          Shares  which such holder of Warrants  is  entitled to  subscribe  for
          pursuant to the exercise of this Broker's Warrant.

     If   and whenever at any time during the Adjustment Period, the Corporation
          shall take any action  affecting  or  relating  to the Common  Shares,
          other than any and all action  described  in this  Section 2, which in
          the  opinion of the  directors  of the  Corporation,  would  adversely
          affect the rights of the holder of this Broker's Warrant, the Exchange
          Rate and/or the Exercise  Price shall be adjusted by the  directors in
          such manner, if
<PAGE>

                                      -7-

          any, and at such time, as the directors, may in their sole discretion
          determine to be equitable in the circumstances to such holders.

     As   a condition  precedent to the taking of any action which would require
          an adjustment in any of the rights under this  Broker's  Warrant,  the
          Corporation  will take any and all action which may, in the opinion of
          counsel  to  the   Corporation,   be   necessary  in  order  that  the
          Corporation,  or any successor to the  Corporation or successor to the
          undertaking  or assets of the  Corporation,  shall be obligated to and
          may  validly  and  legally  issue  all  the  Common  Shares  or  other
          securities or property which the holder of this Broker's Warrant would
          be  entitled  to  receive   thereafter  on  the  exercise  thereof  in
          accordance with the provisions hereof.

     At   least seven days before the earlier of the effective date of or record
          date for any event  referred  to in this  Section 2 that  requires  or
          might  require an  adjustment in any of the rights under this Broker's
          Warrant or such longer  notice  period as may be applicable in respect
          of notices  required to be delivered by the  Corporation to holders of
          its Common Shares,  the Corporation  will give notice to the holder of
          this  Broker's  Warrant of the  particulars  of such event and, to the
          extent determinable,  any adjustment required and a description of how
          such adjustment will be calculated.

          Such  notice  need  only  set  forth  such  particulars  as have  been
          determined  at the date such notice is given.  If any  adjustment  for
          which such notice is given is not then  determinable,  promptly  after
          such  adjustment is determinable  the Corporation  will give notice to
          the holder of this Broker'sWarrant of such adjustment.

Legends

     Any  certificate representing Common Shares issued upon the exercise of the
          this  Broker's  Warrant prior to the date which is four months and one
          day after the date hereof will bear the following legend:

          "UNLESS  PERMITTED  UNDER  SECURITIES  LEGISLATION,  THE HOLDER OF THE
          SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  SHALL  NOT  TRADE  THE
          SECURITIES BEFORE MAY 1, 2003."

     All  certificates issued in exchange for or in substitution of, the Warrant
          Certificates, shall bear the following legend (the "US Legend"):

          THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE
          EXERCISE  THEREOF HAVE NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE
          SECURITIES  ACT OF 1933,  AS AMENDED  (THE "U.S.  SECURITIES  ACT") OR
          UNDER ANY STATE  SECURITIES  LAWS.  THE HOLDER  HEREOF  AGREES FOR THE
          BENEFIT OF THE COMPANY THAT THE SECURITIES  REPRESENTED HEREBY AND THE
          SECURITIES  ISSUABLE  UPON  EXERCISE  THEREOF  MAY BE  OFFERED,  SOLD,
          PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE
          THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF REGULATION S UNDER
          THE U.S.
<PAGE>

                                      -8-

          SECURITIES  ACT,  IF  APPLICABLE  (C)  INSIDE  THE  UNITED  STATES (1)
          PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
          U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
          IN  ACCORDANCE  WITH  APPLICABLE  STATE  SECURITIES  LAW  OR  (2) IN A
          TRANSACTION  THAT DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE
          U.S.  SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW,  PROVIDED
          THE  HOLDER  HAS  FURNISHED  TO THE  COMPANY  AN OPINION OF COUNSEL OF
          RECOGNIZED  STANDING  TO THE  EFFECT  REASONABLE  SATISFACTORY  TO THE
          COMPANY.  AS USED HEREIN,  THE TERMS "UNITED STATES" AND "U.S. PERSON"
          HAVE THE  MEANINGS  ASCRIBED  TO THEM IN  REGULATION  S UNDER THE U.S.
          SECURITIES ACT.

     In   the event that the Broker's  Warrant is exercised by the Subscriber at
          any time, the certificates  evidencing the Common Shares will bear the
          US Legend.

Notices

     Unless herein otherwise expressly provided,  a notice to be given hereunder
          to a holder of this  Broker's  Warrant  will be  deemed to be  validly
          given if the notice is sent by ordinary  surface or air mail,  postage
          prepaid, addressed to the holder of this Broker's Warrant or delivered
          (or so mailed to  certain  holders  of this  Broker's  Warrant  and so
          delivered  to the other  holders of this  Broker's  Warrant)  at their
          respective  addresses  appearing  on any of the  registers  of holders
          described in this Broker's Warrant Certificate provided, however, that
          if, by reason of a strike,  lockout or other work stoppage,  actual or
          threatened,  involving  Canadian  postal  employers,  the notice could
          reasonably be considered  unlikely to reach or likely to be delayed in
          reaching its destination,  the notice will be valid and effective only
          if it is so delivered or is given by  publication  twice in the Report
          on  Business  section  in the  national  edition of The Globe and Mail
          newspaper.

     A    notice  so given by mail or so  delivered  will be deemed to have been
          given on the fifth business day after it has been mailed or on the day
          which it has been delivered, as the case may be, and a notice so given
          by  publication  will be deemed to have been given on the day on which
          it has been published as required.  In determining under any provision
          hereof the date when notice of a meeting or other event must be given,
          the date of giving notice will be included and the date of the meeting
          or other  event will be  excluded.  Accidental  error or  omission  in
          giving  notice or  accidental  failure to mail notice to any holder of
          this  Broker's  Warrant will not  invalidate  any action or proceeding
          founded thereon.

     Any  notice  to be  given  hereunder  may  be  given  by  delivery  to  the
          Corporation, shall be at the following address:
<PAGE>

                                      -9-

                  To World Heart Corporation
                  1 Laser Street
                  Ottawa, Ontario
                  K2E 7V1

                  Attention: Chief Financial Officer

                  with a copy to:
                  McCarthy Tetrault LLP
                  40 Elgin Street, Suite 1400
                  Ottawa, Ontario
                  K1P 5K6

                  Attention:  Virginia K. Schweitzer

          or to such other  address as the  Subscriber  may from time to time in
          writing notify the Corporation.
<PAGE>

                                   SCHEDULE B

                   Subscription Form for the Broker's Warrants

TO:      WORLD HEART CORPORATION

The  undersigned  Agent hereby  subscribes for common shares of the  Corporation
("Common Shares") and  ______________  compensation  warrants of the Corporation
("Warrants") (or such number of Common Shares or Warrants or other securities to
which such subscription entitles it in lieu thereof or in addition thereto under
the provisions of the broker's warrant (the "Broker's  Warrant") dated as of the
30th day of December,  2002) at the purchase price per Common Share of $1.60 (or
at such purchase price per share as may be in effect under the provisions of the
Broker's Warrant) and on and subject to the other terms and conditions specified
in the  Broker's  Warrant and  hereunder  and encloses  herewith  the  certified
cheque, bank draft or money order or has transmitted good same day funds by wire
or other similar  transfer in lawful money of Canada  payable to or to the order
of World Heart Corporation in payment of the subscription price.

The undersigned hereby directs that the said Common Shares and Warrants
subscribed for be issued and delivered as follows:

--------------------------------------------------------------------------------
                         Address                         Number of
Name in Full      (include Postal Code)          Common Shares and Warrants
--------------------------------------------------------------------------------
Northern Securities Inc.
--------------------------------------------------------------------------------

DATED this         day of                     , 200    .
           -------        --------------------     ----

                                              NORTHERN SECURITIES INC.

                                              By:
                                                 -------------------------------
<PAGE>

                                   SCHEDULE C

UNLESS  PERMITTED  UNDER  SECURITIES  LEGISLATION,  THE HOLDER OF THE SECURITIES
REPRESENTED BY THIS  CERTIFICATE  SHALL NOT TRADE THE  SECURITIES  BEFORE MAY 1,
2003.

THE SECURITIES  REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE EXERCISE
THEREOF HAVE NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR UNDER ANY STATE SECURITIES LAWS.
THE HOLDER  HEREOF  AGREES FOR THE  BENEFIT OF THE COMPANY  THAT THE  SECURITIES
REPRESENTED  HEREBY AND THE  SECURITIES  ISSUABLE UPON  EXERCISE  THEREOF MAY BE
OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO THE COMPANY,  (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE  WITH RULE 904 OF REGULATION S UNDER THE
U.S.  SECURITIES ACT, IF APPLICABLE (C) INSIDE THE UNITED STATES (1) PURSUANT TO
THE EXEMPTION FROM THE REGISTRATION  REQUIREMENTS UNDER THE U.S.  SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE
STATE  SECURITIES  LAW OR (2) IN A TRANSACTION  THAT DOES NOT OTHERWISE  REQUIRE
REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY APPLICABLE  STATE SECURITIES
LAW,  PROVIDED THE HOLDER HAS  FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF
RECOGNIZED  STANDING TO THE EFFECT  REASONABLE  SATISFACTORY TO THE COMPANY.  AS
USED  HEREIN,  THE TERMS  "UNITED  STATES" AND "U.S.  PERSON"  HAVE THE MEANINGS
ASCRIBED TO THEM IN REGULATION S UNDER THE U.S. SECURITIES ACT.

THE WARRANTS  EVIDENCED  HEREBY ARE  EXERCISABLE ON OR BEFORE 5:00 P.M.  (OTTAWA
TIME) ON DECEMBER 30, 2007 AFTER WHICH TIME THE WARRANTS  EVIDENCED HEREBY SHALL
BE VOID AND OF NO FURTHER FORCE OR EFFECT.

163,525 Warrants                                             Certificate No.   1
-------                                                                    -----

                        COMPENSATION WARRANT CERTIFICATE
                            WORLD HEART CORPORATION
            (incorporated under the laws of the Province of Ontario)

THIS IS TO  CERTIFY  THAT,  for  valuable  consideration,  _____________________
Northern   Securities  Inc. ____________________________ (the  "Subscriber")  is
entitled,  at any time prior to 5:00 p.m.,  Ottawa  time,  on December 30, 2007,
upon and  subject  to the  terms and  conditions  set  forth  herein  and in the
schedules attached hereto which form an integral part hereof and shall be deemed
to be incorporated  herein (the whole being referred to as this  "Warrant"),  to
subscribe in whole or in part for that number of common shares
<PAGE>

                                      -2-

("Common Shares") of World Heart Corporation (the "Corporation"),specified above
by delivering to the Corporation at its registered office this Warrant, with the
form of subscription  attached hereto as schedule B duly completed and executed,
together with a certified cheque, bank draft, money order or good same day funds
transmitted  by wire or other  similar  transfer,  in  lawful  money of  Canada,
payable to or to the order of the  Corporation  at par in  Ottawa,  in an amount
equal to the purchase price of the Common Shares so subscribed for.

The  purchase  price  payable  for each  Common  Share  subscribed  for upon the
exercise of this Warrant shall be $1.60, subject to adjustment in the events and
in the manner set forth herein (the "Exercise Price").

This  Warrant  shall  become  wholly  void and the  unexercised  portion  of the
subscription  rights  evidenced  hereby will expire and  terminate at 5:00 p.m.,
Ottawa time, on December 30, 2007 (the "Expiry Time").

Surrender of this Warrant will be deemed to have been  effected only on personal
delivery  thereof  to, or , if sent by mail or other means of  transmission,  on
actual receipt  thereof by, the Corporation at the offices of the Corporation at
1 Laser Street,  Ottawa,  Ontario, K2E 7V1 (the "Date of Delivery").  All Common
Shares shall be issued upon the exercise of this Warrant  shall be issued to the
Subscriber, upon payment therefor of the Exercise Price and the Subscriber shall
be deemed to have become the holder of record of such Common  Shares on the Date
of  Delivery  of this  Warrant,  together  with  payment  for the Common  Shares
subscribed for, unless the transfer books of the Corporation  shall be closed on
such date, in which event the Common Shares and Warrants so subscribed for shall
be deemed to be issued  and the  Subscriber  shall be deemed to have  become the
holder of record of such Common Shares on the date on which such transfer  books
are  reopened and such Common  Shares  shall be issued at the purchase  price in
effect on the Date of Delivery of this  Warrant,  together  with payment for the
Common Shares subscribed for.

The Corporation will not be obligated to issue any fraction of a Common Share on
the  exercise of any  Warrant.  To the extent  that a holder of  Warrants  would
otherwise  have been  entitled to receive,  on the exercise of the  Warrants,  a
fraction of a Common  Share such right may only be  exercised in respect of such
fraction in connection with another  Warrant which in the aggregate  entitle the
holder to receive a whole  number of Common  Shares.  If a holder of Warrants is
not able to combine  Warrants so as to be entitled to acquire a whole  number of
Common Shares the number Common Shares which such holder of Warrants is entitled
to receive shall be rounded down to the nearest whole number.

The  Subscriber  may  purchase  less than the number of Common  Shares which the
Subscriber  is entitled to purchase  hereunder on delivery of this  Warrant,  in
which event a new Warrant, in form identical hereto, entitling the Subscriber to
purchase  the  number  of Common  Shares  not  purchased,  will be issued to the
Subscriber.

This  Warrant  does  not  entitle  the  Subscriber  to any  rights  or  interest
whatsoever as a shareholder  of the  Corporation or any other rights or interest
except as expressly provided in this Warrant.

No Common  Share will be issued  pursuant to any Warrant if the issuance of such
security would  constitute a violation of the securities  laws of any applicable
jurisdiction.
<PAGE>

                                      -3-

If this Warrant or any  replacement  hereof becomes stolen,  lost,  mutilated or
destroyed,  the  Corporation  shall,  on such terms as it may in its  discretion
impose,  acting reasonably,  issue and deliver a new Warrant,  in form identical
hereto,  evidencing any unexercised portion of the subscription rights evidenced
hereby to replace the Warrant so stolen, lost, mutilated or destroyed.

On presentation at the principal  office of the Corporation in Ottawa,  Ontario,
subject to the  provisions of the Warrant and on compliance  with the reasonable
requirements of the  Corporation,  one or more  certificates for Warrants may be
exchanged for one or more  certificates for Warrants of different  denominations
evidencing in the aggregate the same number of Warrants as the  certificates for
Warrants being exchanged, and such holder shall pay the reasonable cost thereof.

All amounts of money  referred to in this Warrant are  expressed in lawful money
of Canada.

The  Warrants  evidenced  by this  certificate  may  only be  transferred,  upon
compliance  with the  conditions  set forth in this  Warrant and  schedules  and
appendices  hereto,  on the  register of  transfer  to be kept at the  principal
office of the  Corporation  in  Ottawa,  Ontario,  Canada  by the  holder or the
holder's executors,  administrators or other legal representatives or the holder
or the holder's  attorney duly appointed by an instrument in writing in form and
execution  satisfactory  to the  Corporation  and subject to the compliance with
certain other terms of the Warrant,  and upon compliance  with the  requirements
and such other  reasonable  requirements as the Corporation may prescribe,  such
transfer  will be duly noted on such  register of  transfer by the  Corporation.
Notwithstanding  the foregoing,  the  Corporation  will be entitled to refuse to
record any  transfer of any  Warrant on such  register  if such  transfer  would
constitute a violation of securities laws of any jurisdiction.

This  Warrant  shall  enure to the  benefit  of and  shall be  binding  upon the
Subscriber and the Corporation and their respective successors.

This  Warrant  shall be governed by the laws of the  Province of Ontario and the
laws of Canada applicable therein.

IN WITNESS  WHEREOF the  Corporation has caused this Warrant to be issued in its
name by the signature of its duly authorized officer in that behalf.

     DATED as of the 30th day of December, 2002.

                                                 WORLD HEART CORPORATION
                                                 By:

                                                 ----------------------------
                                                 Name: Ian W. Malone
                                                 Title: Chief Financial Officer
<PAGE>

                                   SCHEDULE A

                 Additional Terms and Conditions of the Warrant

Common Shares Reserved for Issuance.  The Corporation  covenants and agrees that
     so long as the within Warrant  (hereinafter  in this schedule A referred to
     as the "Warrant") is  outstanding,  it will at all times reserve out of its
     unissued  common  shares  against  the  exercise by the  Subscriber  of the
     Warrant,  a sufficient  number of common shares to enable the Subscriber to
     exercise in full its subscription  rights upon the basis and upon the terms
     and conditions provided for by the Warrant.

Adjustments

2.1  The rights of the  holder of any  Warrant,  including  the number of Common
     Shares  issuable  upon the exercise of such Warrant and the Exercise  Price
     payable on exercise of such Warrant, shall be adjusted from time to time in
     the events  and in the manner  provided  in,  and in  accordance  with this
     Section 2 and for such purposes:

     Adjustment Period" means in respect of each Warrant,  the period commencing
          on the Issue Date thereof and ending at the Expiry Time thereof;

     "Current Market Price",  on any date, means the average,  during the period
          of 20 consecutive Trading Days ending on the second Trading Day before
          such  date,  of the  average  of the high and low  prices per share at
          which the Common Shares have traded on the principal stock exchange or
          quotation  system on which the  Common  Shares  are  listed or, if the
          Common  Shares have not been listed on a stock  exchange of  quotation
          system for such number of Trading  Days,  then such  lesser  number of
          Trading  Days as the Common  Shares  have been so  listed,  or, if the
          Common  Shares  are not  listed on any  stock  exchange  or  quotation
          system, then in the over-the-counter  market as reported by such other
          stock  exchange  or as quoted by the most  commonly  quoted or carried
          source of quotations for shares traded in the over-the-counter market,
          provided that if, on any such Trading Day,  there are no such reported
          or quoted  high and low  prices,  the  average of the  closing bid and
          asked prices per share for board lots of the Common Shares reported by
          such  stock  exchange  or as  quoted  by the most  commonly  quoted or
          carried source of quotations for shares traded in the over-the-counter
          market,  for such  Trading  Day shall be utilized  in  computing  such
          average, and provided further that if the Common Shares are not listed
          on any stock exchange or traded in any  over-the-counter  market, then
          the Current  Market Price of the Common  Shares shall be determined by
          the directors;

     "Exchange Rate" means the rate at which Common Shares are issuable upon the
          exercise  of  any  Warrant,  which  rate,  subject  to  adjustment  in
          accordance  with this  Section is one Common Share for each Warrant as
          of date hereof;

     "Trading Day",  with  respect  to any stock  exchange  or  over-the-counter
          market,  means  a day on  which  shares  may  be  traded  through  the
          facilities of such stock exchange or in such over-the-counter  market,
          and, otherwise,  means a day on which shares may be traded through the
          facilities of the principal stock exchange on which the Common
<PAGE>

                                      -2-

          Shares are  listed  (or,  if the  Common  Shares are not listed on any
          stock exchange, then in the over-the-counter market).

     For greater certainty,  notwithstanding any other provision of this Section
     2, the holders of Warrants shall not be entitled to any adjustment upon the
     conversion or exercise of (i) any Series A convertible  preferred shares of
     the  Corporation and (ii) any Series A  participating  preferred  shares of
     World Heart Inc., a subsidiary of the Corporation.

2.2  The Exchange Rate in effect at any date will be subject to adjustment from
     time to time and whenever at any time during the Adjustment Period, the
     Corporation shall (i) subdivide, or redivide its outstanding Common Shares
     into a greater number of Common Shares, or (ii) consolidate, combine or
     reduce its outstanding Common Shares into a lesser number of Common Shares,
     or (iii) issue Common Shares or other securities of the Corporation that
     are convertible into Common Shares ("convertible securities") to all or
     substantially all of the holders of Common Shares or convertible securities
     (as the case may be) by way of a stock dividend or other distribution. In
     any such event, the Exchange Rate shall, on the effective date of such
     event, be adjusted so that it will equal the rate determined by multiplying
     the Exchange Rate in effect immediately prior to such date by a fraction,
     of which the denominator shall be the total number of Common Shares
     outstanding on such date before giving effect to such event, and of which
     the numerator shall be the total number of Common Shares outstanding on
     such date after giving effect to such event. Such adjustment will be made
     successively whenever any such event shall occur and any such issue of
     Common Shares or convertible securities by way of a stock dividend is
     deemed to have occurred on the record date for the stock dividend for the
     purpose of calculating the number of outstanding Common Shares under this
     Subsection 2.2(a). To the extent that this Subsection 2.2(a) has become
     operative because of an issue of convertible securities referred to in
     clause (iii) above, the number of Common Shares obtainable under each
     Warrant shall be readjusted based on the number of Common Shares issuable
     upon conversion or exchange of such convertible or exchangeable securities.

     If and whenever at any time during the  Adjustment  Period,  there is (i)
          any reclassification of the Common Shares at any time outstanding, any
          change of the Common  Shares  into other  shares or any other  capital
          reorganization  of  the  Corporation   (other  than  as  described  in
          Subsection 2.2(a)), (ii) any consolidation, amalgamation, arrangement,
          merger or other form of business  combination of the Corporation  with
          or into any other  corporation,  trust,  partnership,  or other entity
          resulting in any  reclassification  of the outstanding  Common Shares,
          any change of the Common Shares into other shares or any other capital
          reorganization   of  the  Corporation,   (iii)  any  triggering  of  a
          shareholders  rights  plan,  or (iv)  any  sale,  lease,  exchange  or
          transfer  of  the  undertaking  or  assets  of the  Corporation  as an
          entirety  or  substantially  as an  entirety  to another  corporation,
          trust,  partnership  or other entity,  then, in each such event,  each
          holder of any Warrant  which is  thereafter  exercised on or after the
          effective  date of such event will be entitled  to receive,  and shall
          accept,  in lieu of the number of Common  Shares to which such  holder
          was  theretofore  entitled upon such exercise,
<PAGE>

                                      -3-

          the kind and  number  or  amount  of  shares  or other  securities  or
          property  which such holder  would have been  entitled to receive as a
          result of such event if, on the effective  date  thereof,  such holder
          had been the registered holder of the number of Common Shares to which
          such holder was theretofore entitled upon such exercise.  If necessary
          as a result of any such event, appropriate adjustments will be made in
          the  application  of the  provisions  set forth in this Section 2 with
          respect to the  rights  and  interests  thereafter  of the  holders of
          Warrants to the end that the  provisions  set forth in this  Section 2
          will thereafter  correspondingly be made applicable,  as nearly as may
          reasonably  be  possible,  in the  relation  to any  shares  or  other
          securities  or property  thereafter  deliverable  upon the exercise or
          deemed exercise of any Warrant.  Any such  adjustments will be made by
          and set forth in a supplement  hereto approved by the directors of the
          Corporation and shall for all purposes be conclusively deemed to be an
          appropriate adjustment.

2.3  The Exercise Price in effect at any date will be subject to adjustment from
     time to time if and whenever at any time during the Adjustment Period, the
     Corporation shall (i) subdivide, or redivide its outstanding Common Shares
     into a greater number of Common Shares, or (ii) consolidate, combine or
     reduce its outstanding Common Shares into a lesser number of Common Shares,
     or (iii) issue Common Shares to all or substantially all of the holders of
     Common Shares by way of a stock dividend or other distribution. In any such
     event, the Exercise Price shall, on the effective date of such event, be
     adjusted so that it will equal the price determined by multiplying the
     Exercise Price in effect immediately prior to such date by a fraction, the
     numerator of which shall be the total number of Common Shares outstanding
     on such effective date or record date before giving effect to such event
     and the denominator of which shall be the total number of Common Shares
     outstanding immediately after giving effect to such event. Such adjustment
     will be made successively whenever any such event shall occur.

     If and whenever at any time during the  Adjustment  Period, the Corporation
          shall fix a record  date for the  making of a  distribution  to all or
          substantially all of the holders of Common Shares of:

          shares  of  any  class  other  than  Common  Shares   whether  of  the
               Corporation or any other corporation;

          rights, options or warrants  (other than  rights,  options or warrants
               exercisable by the holders  thereof within a period  expiring not
               more than 45 days after the date of issue thereof);

          evidences of indebtedness; or

          cash, securities or other property or assets;

     then, in each such case,  the Exercise  Price will be adjusted  immediately
     after  such  record  date so that it will  equal  the price  determined  by
     multiplying the Exercise price in effect on
<PAGE>

                                      -4-

     such record date by a fraction,  of which the numerator  shall be the total
     number of Common Shares  outstanding on such record date  multiplied by the
     Current  Market  Price on the  earlier of such  record date and the date on
     which the  Corporation  announces its intention to make such  distribution,
     less the excess,  if any,  aggregate  fair market value on such record date
     (as  determined  by  the  directors  at  the  time  such   distribution  is
     authorized)  of such shares or rights,  options or warrants or evidences of
     indebtedness or cash, securities or other property or assets so distributed
     over the fair market value of the  consideration  received  therefor by the
     Corporation  from the holders of the Common  Shares (as  determined  by the
     directors),  and of which  the  denominator  shall be the  total  number of
     Common Shares  outstanding  on such record date  multiplied by such Current
     Market  Price.  Any Common  Shares  owned by or held for the account of the
     Corporation or any subsidiary of the Corporation  shall be deemed not to be
     outstanding  for the purpose of such  computation.  Such adjustment will be
     made  successively  whenever such a record date is fixed,  provided that if
     two or more such record  dates or record  dates  referred  to in  paragraph
     2.3(b) are fixed within a period of 25 Trading Days,  such  adjustment will
     be  made  successively  as if each of such  record  dates  occurred  on the
     earliest of such record dates. To the extent that such  distribution is not
     so made or to the  extent  that any such  rights,  options or  warrants  so
     distributed are not exercised prior to the expiration thereof, the Exercise
     Price will then be readjusted to the Exercise  Price which would then be in
     effect if such  record  date had not been  fixed or to the  Exercise  Price
     which would then be in effect based upon such shares or rights,  options or
     warrants or evidences of indebtedness or cash, securities or other property
     or  assets  actually  distributed  or based  upon the  number  or amount of
     securities or the property or assets  actually  issued or distributed  upon
     the exercise of such rights, options or Warrants, as the case may be.

     If and whenever at anytime  during the  Adjustment  Period, the Corporation
          shall fix a record  date for the issue of rights,  options or warrants
          to all or  substantially  all of the  holders of Common  Shares  under
          which such  holders are  entitled,  during a period  expiring not more
          than 45 days after the record date for such issue  ("Rights  Period"),
          to subscribe  for and purchase  Common  Shares at a price per share to
          the holder of less than 95% of the Current Market Price for the Common
          Shares on such record date (any of such events  being called a "Rights
          Offering"),  then  the  Exercise  Price  shall be  adjusted  effective
          immediately  after the end of the Rights Period to a price  determined
          by multiplying the Exercise Price in effect  immediately  prior to the
          end of the Rights Period by a fraction:

          the numerator of which shall be the aggregate of:

               the number of Common Shares outstanding as of the record date for
                    the Rights Offering, and

               a number  determined by dividing (1) the product of the number of
                    Common  Shares  issued or  subscribed  for during the Rights
                    Period upon the exercise of the rights, warrants, or options
                    under the Rights Offering and the price at which such Common
                    Shares are  offered by (2) the Current  Market  Price of the
                    Common Shares as of the record date for the Rights Offering;
                    and
<PAGE>

                                      -5-

               the denominator of which  shall be the  number of  Common  Shares
                    outstanding  after giving effect to the Rights  Offering and
                    including  the number of Common  Shares  actually  issued or
                    subscribed for during the Rights Period upon exercise of the
                    rights, warrants or options under the Rights Offering.

     Any holder of  Warrants  who shall  have  exercised  his right to  purchase
     Common Shares in accordance with this Warrant Certificate during the period
     beginning  immediately  after the  record  date for a Rights  Offering  and
     ending on the last day of the Rights Period  therefor shall, in addition to
     the Common  Shares to which he is otherwise  entitled upon such exercise in
     accordance  with this  Warrant  Certificate,  be entitled to that number of
     additional  Common Shares equal to the result obtained when the difference,
     if any,  resulting  from the  subtraction of the Exercise Price as adjusted
     for such  Rights  Offering  pursuant  to this  Subsection  2.3(c)  from the
     Exercise  Price  in  effect  immediately  prior  to the end of such  Rights
     Offering  is  multiplied  by the  number of Common  Shares  purchased  upon
     exercise  of the  Warrants  held by such  holder of  Warrants  during  such
     period,  and the  resulting  product is divided  by the  Exercise  Price as
     adjusted  for such  Rights  Offering  pursuant to this  Subsection  2.3(c);
     provided  that  the  provisions  of  this  Warrant   Certificate  shall  be
     applicable  to any  fractional  interest in any Common  Share to which such
     holder  of  Warrants  might  otherwise  be  entitled  under  the  foregoing
     provisions of this Subsection  2.3(c).  Such additional Common Shares shall
     be deemed  to have  been  issued  to the  holder  of  Warrants  immediately
     following  the  end  of  the  Rights  Period  and a  certificate  for  such
     additional  Common  Shares  shall be  delivered  to such holder of Warrants
     within ten business  days  following the end of the Rights  Period.  To the
     extent that any such rights, options or warrants are not so exercised on or
     before the expiry  thereof,  the Exercise  Price will be  readjusted to the
     Exercise  Price which would then be in effect based on the number of Common
     Shares (or the securities  convertible or  exchangeable  for Common Shares)
     actually delivered on the exercise of such rights, options or warrants.

2.4  In any case in which this section 2 shall require that an adjustment  shall
     become effective  immediately  after a record date for or effective date of
     an  event  referred  to  herein,  the  Corporation  may  defer,  until  the
     occurrence  and  consummation  of such event,  issuing to the holder of any
     Warrant  exercised  after such record date or effective date and before the
     occurrence and  consummation of such event the additional  Common Shares or
     other  securities or property  issuable upon such exercise by reason of the
     adjustment required by such event, provided,  however, that the Corporation
     or successor to the undertaking or assets of the Corporation,  will deliver
     to such holder, as soon as reasonably practicable after such record date or
     effective dates, as applicable,  an appropriate  instrument evidencing such
     holder's right to receive such additional Common Shares or other securities
     or property  upon the  occurrence  and  consummation  of such event and the
     right to receive  any  dividend  or other  distribution  in respect of such
     additional Common Shares or other securities or property declared in favour
     of the holders of record of Common  Shares or of such other  securities  or
     property on or after the Exercise  Date,  or such later date as such holder
     would,  but for the  provisions of this Section 2.4, have become the holder
     of record of such  additional  Common  Shares,  warrants  or of such  other
     securities or property.
<PAGE>

                                      -6-

     If the Corporation  shall set a record date to determine the holders of the
          Common Shares or other securities for the purpose of entitling them to
          receive any dividend or distribution  or any  subscription or exercise
          rights and shall,  thereafter  and  before  the  distribution  to such
          securityholders of any such dividend,  distribution or subscription or
          exercise  rights,  legally  abandon  its plan to pay or  deliver  such
          dividend,  distribution or subscription  or exercise  rights,  then no
          adjustment  in the  Exercise  Price  or the  Exchange  Rate  shall  be
          required by reason of the setting of such record date.

     The  adjustments provided for in this Section 2 are cumulative,  and shall,
          in the case of any  adjustment  to the  Exchange  Rate or the Exercise
          Price, be computed to the nearest one  one-hundredth of a Common Share
          and will  apply  (without  duplication)  to  successive  subdivisions,
          consolidations,  distributions, issuances or other events resulting in
          any adjustment  under the provisions of this Section 2, provided that,
          notwithstanding any other provision of this Section 2.4, no adjustment
          of the Exchange Rate or the Exercise Price will be required (i) unless
          such  adjustment  would require an increase or decrease of at least 1%
          in the Exchange Rate or the Exercise  Price then in effect  (provided,
          however, that any adjustment which by reason of this Subsection 2.4(c)
          is not  required  to be made will be  carried  forward  and taken into
          account  in any  subsequent  adjustment),  or (ii) in  respect  of any
          Common  Shares  issuable or issued  pursuant  to any option,  warrant,
          share option or share  purchase plan of the  Corporation  as otherwise
          specified in the  Underwriting  Agreement,  or (iii) in respect of any
          Common Shares issuable or issued  pursuant to the Special  Warrants or
          upon exercise of the Warrants.

     If any question  arises  with respect to the adjustments  provided  in this
          Section  2, such  question  shall be  conclusively  determined  by the
          Corporation's  auditors or, if they are unable or unwilling to act, by
          such firm of chartered accountants as is appointed by the Corporation.
          Such  accountants  shall have access to all  necessary  records of the
          Corporation  and  such   determination   shall  be  binding  upon  the
          Corporation, and the holder of Warrants.

     All shares of any class or other securities  or property  which a holder of
          Warrants  is at the time in  question  entitled to receive on the full
          exercise of his  Warrants,  whether or not as a result of  adjustments
          made  pursuant  to this  Section  2  shall,  for the  purposes  of the
          interpretation  of this  Warrant  Certificate,  be deemed to be Common
          Shares  which such holder of Warrants  is  entitled to  subscribe  for
          pursuant to the exercise of such Warrants.

     If and whenever at any time during the  Adjustment Period,  the Corporation
          shall take any action  affecting  or  relating  to the Common  Shares,
          other than any and all action  described  in this  Section 2, which in
          the  opinion of the  directors  of the  Corporation,  would  adversely
          affect the rights of any holders of Warrants, the Exchange Rate and/or
          the Exercise  Price shall be adjusted by the directors in such manner,
          if  any,  and at  such  time,  as the  directors,  may in  their  sole
          discretion  determine  to be equitable  in the  circumstances  to such
          holders.
<PAGE>

                                      -7-

     As a condition precedent to the taking of any action which would require an
          adjustment  in any of the rights under the Warrants,  the  Corporation
          will take any and all action  which may,  in the opinion of counsel to
          the Corporation,  be necessary in order that the  Corporation,  or any
          successor to the Corporation or successor to the undertaking or assets
          of the Corporation,  shall be obligated to and may validly and legally
          issue all the Common Shares or other  securities or property which the
          holders of Warrants  would be entitled  to receive  thereafter  on the
          exercise thereof in accordance with the provisions hereof.

     At least seven days before the earlier of the  effective  date of or record
          date for any event  referred  to in this  Section 2 that  requires  or
          might require an adjustment in any of the rights under the Warrants or
          such longer  notice  period as may be applicable in respect of notices
          required to be delivered by the  Corporation  to holders of its Common
          Shares,  the Corporation will give notice to the holder of Warrants of
          the  particulars  of such event and, to the extent  determinable,  any
          adjustment  required and a description of how such  adjustment will be
          calculated.

          Such  notice  need  only  set  forth  such  particulars  as have  been
          determined  at the date such notice is given.  If any  adjustment  for
          which such notice is given is not then  determinable,  promptly  after
          such  adjustment is determinable  the Corporation  will give notice to
          the holder of Warrants of such adjustment.

Legends

     Any certificate representing  Common Shares issued upon the exercise of the
          Warrants  prior to the date which is four months and one day after the
          date hereof will bear the following legend:

          "UNLESS  PERMITTED  UNDER  SECURITIES  LEGISLATION,  THE HOLDER OF THE
          SECURITIES  REPRESENTED  BY  THIS  CERTIFICATE  SHALL  NOT  TRADE  THE
          SECURITIES BEFORE MAY 1, 2003."

     All certificates issued in exchange for or in substitution  of, the Warrant
          Certificates, shall bear the following legend (the "US Legend"):

          THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON THE
          EXERCISE  THEREOF HAVE NOT BEEN AND WILL NOT BE  REGISTERED  UNDER THE
          SECURITIES  ACT OF 1933,  AS AMENDED  (THE "U.S.  SECURITIES  ACT") OR
          UNDER ANY STATE  SECURITIES  LAWS.  THE HOLDER  HEREOF  AGREES FOR THE
          BENEFIT OF THE COMPANY THAT THE SECURITIES  REPRESENTED HEREBY AND THE
          SECURITIES  ISSUABLE  UPON  EXERCISE  THEREOF  MAY BE  OFFERED,  SOLD,
          PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE
          THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF REGULATION S UNDER
          THE U.S.  SECURITIES  ACT, IF APPLICABLE  (C) INSIDE THE UNITED STATES
          (1) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
          THE U.S. SECURITIES ACT PROVIDED BY
<PAGE>

                                      -8-

          RULE 144 THEREUNDER,  IF AVAILABLE,  AND IN ACCORDANCE WITH APPLICABLE
          STATE  SECURITIES LAW OR (2) IN A TRANSACTION  THAT DOES NOT OTHERWISE
          REQUIRE  REGISTRATION UNDER THE U.S.  SECURITIES ACT OR ANY APPLICABLE
          STATE SECURITIES LAW, PROVIDED THE HOLDER HAS FURNISHED TO THE COMPANY
          AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THE EFFECT REASONABLE
          SATISFACTORY TO THE COMPANY. AS USED HEREIN, THE TERMS "UNITED STATES"
          AND "U.S.  PERSON" HAVE THE MEANINGS  ASCRIBED TO THEM IN REGULATION S
          UNDER THE U.S. SECURITIES ACT.

     In the event  that the Warrants  are  exercised  by the  Subscriber  or any
          transferee at any time, the certificates  evidencing the Common Shares
          will bear the US Legend.

     The Common Shares issued upon the exercise of the  Warrants, may be sold or
          transferred  to a  Canadian  resident  without  bearing  the US Legend
          provided  the Shares  have been sold  through  the  facilities  of the
          Toronto Stock Exchange or such other  Canadian  exchange as the Common
          Shares may be listed on from time to time. A  declaration  in the form
          of  Schedule  C to  this  Certificate  must be  delivered  with to the
          Corporation  or such  person  as the  Corporation  directs,  with  the
          certificates for the Shares.

Meetings of Holders of Warrants

4.1  The Corporation may at any time and from time to time to call and convene a
     meeting of the holders of Warrants,  and will do so on receipt of a written
     request of the holders of Warrants and on being funded and  indemnified  to
     its  reasonable  satisfaction  by the  Corporation or by one or more of the
     holders of Warrants  signing  such  request  against the costs which it may
     incur in connection with calling and holding the meeting.

     If the Corporation fails, within five  business  days after receipt of such
          written request of the request and indemnity, to give notice convening
          a meeting,  any of such holders of  Warrants,  as the case may be, may
          convene such meeting.

     Every such  meeting will be held in Ottawa,  Ontario or such other place as
          is approved or determined by the Corporation.  However, if the meeting
          is   convened   by  the  holders  of  Warrants  as  a  result  of  the
          Corporation's  failure or refusal to convene such meeting, the meeting
          must be held in Ottawa.

     At least 21 days' notice of any  meeting  must be given by the  holders  of
          Warrants,  to the  Corporation  (unless the meeting has been called by
          it).

     The notice to be delivered in accordance with  paragraph (d) must state the
          time when and the  place  where  the  meeting  is to be held and shall
          describe  (with  sufficient  detail to permit a holder of  Warrants to
          make  a  reasoned   decision   with   respect  to  the   matters   for
          consideration)  the general  nature of the  business to be  transacted
          thereat,  but it
<PAGE>

                                      -9-

          will  not be  necessary  for the  notice  to set out the  terms of any
          resolution to be proposed or any of the provisions of this Section 4.

     Some individual  (who  need  not be a holder  of  Warrants)  designated  in
          writing  will be chair  of the  meeting  or,  if no  individual  is so
          designated or the  individual  so designated is not present  within 15
          minutes  after the time  fixed for the  holding  of the  meeting,  the
          holder of  Warrants  present  in person  or by proxy may  choose  some
          person present to be chair.

     At any meeting of holder of  Warrants a quorum  will consist of two or more
          holder of Warrants  present in person or by proxy at the  commencement
          of business  holding in the  aggregate  not less than 50% of the total
          number of Warrants then outstanding provided however that in the event
          there  are two or more  holder  of  Warrants,  at  least  two  persons
          entitled to vote there at are personally present.

     If a quorum of holder of Warrants is not  present  within 30 minutes  after
          the time fixed for  holding a meeting,  the  meeting,  if  summoned by
          holder  of  Warrants  or on a holder  of  Warrants'  Request,  will be
          dissolved,  but,  subject  to Section  4.2,  in any other case will be
          adjourned to the seventh  calendar day following  the meeting  (unless
          such day is not a business  day,  in which case it shall be  adjourned
          tot he next  business  day),  at the same time of day and place and no
          notice of the adjournment need be given.

     At the adjourned meeting the  holder of  Warrants  present  in person or by
          proxy will form a quorum and may  transact  any business for which the
          meeting was originally convened notwithstanding the number of Warrants
          that they hold.

     The chairman of a meeting at which a quorum of the  holder of  Warrants  is
          present may, with the consent of the meeting, adjourn the meeting, and
          no  notice of such  adjournment  need be given  except as the  meeting
          prescribes.

     Every question  submitted  to  a  meeting,   other  than  an  Extraordinary
          Resolution,  will be decided in the first  place by a majority  of the
          votes given on a show of hands and,  unless a poll is duly demanded as
          herein  provided,  a declaration by the chairman that a resolution has
          been carried or carried  unanimously  or by a  particular  majority or
          lost or not  carried  by a  particular  majority  will  be  conclusive
          evidence of the fact

     On every Extraordinary Resolution, and on every other question submitted to
          a meeting on which a poll is directed by the  chairman or requested by
          one or more  holder of Warrants  acting in person or by proxy,  a poll
          will be taken in such manner as the chairman directs.

     Questions other than  those  required  to be  determined  by  Extraordinary
          Resolution  will be  decided  by a  majority  of the votes cast on the
          poll.

     On a show of hands each person  present and entitled to vote,  whether as a
          holder  of  Warrants  or as proxy  for one or more  absent  holder  of
          Warrants,  or both,  will have one vote,  and on a poll each holder of
          Warrants present in person or represented by a proxy
<PAGE>

                                      -10-

          duly  appointed by  instrument in writing will be entitled to one vote
          in respect of each Warrant held by such holder.

     A proxy need not be a holder of Warrants. The Chair of any meeting shall be
          entitled  both on a show of hands and on a poll, to vote in respect of
          the Warrants, if any held or represented by the Chair.

4.2  The Corporation may from time to time make or vary such regulations as it
     thinks fit:

          for  the issue of voting  certificates  by any bank,  trust company or
               other depository satisfactory to the Corporation stating that the
               Warrants specified therein have been deposited with it by a named
               person and will remain on deposit until a specified  date,  which
               voting  certificates will entitle the persons named therein to be
               present and vote at any meeting of holder of Warrants  and at any
               adjournment  thereof  held before that date or to appoint a proxy
               or  proxies  to  represent  them  and  vote  for them at any such
               meeting and at any  adjournment  thereof held before that date in
               the same manner and with the same effect as though the persons so
               named in such voting  certificates were the actual holders of the
               Warrants specified therein;

          for  the form of instrument appointing a proxy, the manner in which it
               must be executed,  and  verification of the authority of a person
               who executes it on behalf of a holder of Warrants;

          governing  the  places  at  which  and  the  times  by  which   voting
               certificates or instruments appointing proxies must be deposited;

          for  the  deposit of voting  certificates  or  instruments  appointing
               proxies at some approved  place or places other than the place at
               which the meeting is to be held and enabling  particulars of such
               voting certificates or instruments  appointing proxies to be sent
               by mail,  cable,  telex or other means of  prepaid,  transmitted,
               recorded  communication  before the meeting to the Corporation at
               the place where the meeting is to be held and for voting pursuant
               to  instruments  appointing  proxies so  deposited  as though the
               instruments themselves were produced at the meeting; and

          generally for the calling of  meetings  of holder of Warrants  and the
               conduct of business thereat.

     Any  regulations  so made will be binding and effective and the votes given
          in accordance therewith will be valid and will be counted.

     Except as such regulations provide, the only persons who will be recognized
          at a meeting as the holders of any  Warrants,  or as entitled to vote,
          be present at the meeting in respect  thereof,  will be the registered
          holders of such Warrants or their duly appointed proxies.
<PAGE>

                                      -11-

     The  Corporation by its respective  employees,  officers or directors,  and
          the counsel of the  Corporation  and counsel of the holder of Warrants
          may attend any meeting of holder of Warrants, but will have no vote as
          such.

4.3  In addition to all other powers  conferred on them by the other  provisions
     of this  Warrant  Certificate,  by the  Warrants  or by law,  the holder of
     Warrants at a meeting  will,  subject to the  provisions of this Article 4,
     have the power, exercisable from time to time by Extraordinary Resolution:

     (a)  subject to the agreement of the  Corporation  to assent to or sanction
          any amendment,  modification,  abrogation,  alteration,  compromise or
          arrangement of any right of the holders of Warrants;

     (b)  to amend,  alter or repeal  any  Extraordinary  Resolution  previously
          passed  subject to the approval of the  Corporation  if the rights and
          duties of the Corporation are affected;

     (c)  to enforce any right of the holder of Warrants in any manner specified
          in the Extraordinary Resolution;

     (d)  to refrain  from  enforcing  any  obligation  or right  referred to in
          paragraph (c);

     (e)  to  waive  any  default  by the  Corporation  in  complying  with  any
          provision of this Warrant  Certificate,  either  unconditionally or on
          any condition specified in the Extraordinary Resolution;

     (f)  to appoint a committee  with power and authority to exercise,  such of
          the  powers  of  the  holder  of  Warrants  as  are   exercisable   by
          Extraordinary Resolution;

     (g)  to restrain  any holder of Warrants  from  taking or  instituting  any
          suit, action or proceeding against the Corporation for the enforcement
          of any obligation of the Corporation under this Warrant Certificate or
          to enforce any right of the holder of Warrants;

     (h)  to direct any holder of Warrants  who, as such,  has brought any suit,
          action  or  proceeding,  to  stay or  discontinue  or  otherwise  deal
          therewith on payment of the costs, charges and expenses reasonably and
          properly incurred by him in connection therewith; and

     (i)  to  assent to any  compromise  or  arrangement  with any  creditor  or
          creditors  or any class or classes of  creditors,  whether  secured or
          otherwise,  and with holders of any shares or other  securities of the
          Corporation.

4.4  The  expression  "Extraordinary  Resolution"  when  used  in  this  Warrant
     Certificate  means,  subject  to  the  provisions  of  this  Section  4,  a
     resolution  proposed at a meeting of holder of Warrants  duly  convened for
     that purpose and held in accordance  with the  provisions of this Section 4
     at which there are present in person or by proxy holder of Warrants holding
     in the  aggregate  not less than 50% of the total  number of Warrants  then
     outstanding and passed by the  affirmative  votes of holder of Warrants who
     hold in the aggregate not less than 66 2/3% of the total number of Warrants
     then  outstanding  represented  at the meeting and voted on the poll on the
     resolution.

     If,  at a meeting  called  for the  purpose  of  passing  an  Extraordinary
          Resolution,  the  quorum  required  by this  Section 4 is not  present
          within 30 minutes after the time appointed
<PAGE>

                                      -12-

          for the meeting,  the meeting, if convened by holder of Warrants or on
          a holder of Warrants'  Request,  will be  dissolved,  but in any other
          case will stand  adjourned to such day,  being not less than seventeen
          calendar days or more than 30 calendar  days later,  and to such place
          and time, as is appointed by the chairman.

     Not  less than seven calendar days' notice must be given to the holder of
          Warrants of the time and place of such adjourned meeting.

     The  notice must state that at the adjourned meeting the holder of Warrants
          present  in person or by proxy  will form a quorum  but it will not be
          necessary  to set  forth  the  purposes  for  which  the  meeting  was
          originally called or any other particulars.

     At   the adjourned  meeting the holder of Warrants  present in person or by
          proxy will form a quorum and may  transact  any business for which the
          meeting was  originally  convened,  and a resolution  proposed at such
          adjourned meeting and passed by the requisite vote as provided in this
          Section 4 will be an  Extraordinary  Resolution  within the meaning of
          this  Warrant  Certificate  notwithstanding  that  holder of  Warrants
          holding in the  aggregate  of not less than 50% of the total number of
          Warrants outstanding may not be present.

     Votes on an Extraordinary  Resolution must always be given on a poll and no
          demand for a poll on an Extraordinary Resolution will be necessary.

4.5  Minutes of all resolutions passed and proceedings taken at every meeting of
     the holder of Warrants  will be made and duly entered in books from time to
     time provided for such purpose at the expense of the  Corporation,  and any
     such  minutes,  if signed by the  chairman  of the  meeting  at which  such
     resolutions were passed or such proceedings were taken, will be prima facie
     evidence of the matters therein stated,  and, until the contrary is proved,
     every such meeting in respect of the proceedings of which minutes have been
     so made,  entered and signed will be deemed to have been duly  convened and
     held, and all resolutions passed and proceedings taken thereat to have been
     duly passed and taken.

     The  Corporation  shall be provided with, in a timely manner and at its own
          expense,  copies of any and all  resolutions  passed at any meeting of
          the holder of Warrants pursuant to this Section 4

     Any  action that may be taken and any power that may be exercised by holder
          of Warrants at a meeting  held as provided in this Article 8 by way of
          an Extraordinary  Resolution may also be taken and exercised by holder
          of  Warrants  who hold in the  aggregate  not less than 66 2/3% of the
          total number of Warrants at the time  outstanding,  by their  signing,
          each in person or by attorney duly appointed in writing, an instrument
          in  writing  in  one  or  more   counterparts,   and  the   expression
          "Extraordinary  Resolution"  when  used  in this  Warrant  Certificate
          includes a resolution embodied in an instrument so signed.
<PAGE>

                                      -13-

     The  Corporation  shall be provided with, in a timely manner and at its own
          expense,  copies of any and all  instruments  in writing signed by the
          holder of Warrants.

     Everyresolution  and every  Extraordinary  Resolution  passed in accordance
          with the provisions of this Article at a meeting of holder of Warrants
          will be  binding  on all  holder of  Warrants,  whether  present at or
          absent  from  the  meeting  and  whether  voting  for or  against  the
          resolution or  abstaining,  and every  instrument in writing signed by
          holder of Warrants in accordance with Section 4 will be binding on all
          holder of  Warrants,  whether  signatories  thereto or not,  and every
          holder of Warrants will be bound to give effect  accordingly  to every
          such resolution and instrument in writing.

     In   determining  whether  holder of Warrants  holding the  required  total
          number of  Warrants  are present in person or by proxy for the purpose
          of constituting a quorum,  or have voted or consented to a resolution,
          Extraordinary Resolution, consent, waiver, holder of Warrants' Request
          or other action under this Warrant Certificate,  a Warrant held by the
          Corporation or by any Affiliate of the  Corporation  will be deemed to
          be not  outstanding.  Upon a request in writing the Corporation  shall
          provide a certificate of the  Corporation  detailing the  registration
          and  denomination  of any Warrants held by the  Corporation  or by any
          affiliate of the Corporation.

Notices

     Unless herein otherwise expressly provided,  a notice to be given hereunder
          to a holder of  Warrants  will be deemed  to be  validly  given if the
          notice  is sent by  ordinary  surface  or air mail,  postage  prepaid,
          addressed  to the holder of  Warrants  or  delivered  (or so mailed to
          certain  holders of Warrants and so delivered to the other  holders of
          Warrants)  at  their  respective  addresses  appearing  on  any of the
          registers of holders described in this Warrant  Certificate  provided,
          however,  that if,  by  reason  of a  strike,  lockout  or other  work
          stoppage,  actual or threatened,  involving Canadian postal employers,
          the notice could reasonably be considered  unlikely to reach or likely
          to be delayed in reaching  its  destination,  the notice will be valid
          and  effective  only if it is so delivered or is given by  publication
          twice in the Report on Business section in the national edition of The
          Globe and Mail newspaper.

     A    notice  so given by mail or so  delivered  will be deemed to have been
          given on the fifth business day after it has been mailed or on the day
          which it has been delivered, as the case may be, and a notice so given
          by  publication  will be deemed to have been given on the day on which
          it has been published as required.  In determining under any provision
          hereof the date when notice of a meeting or other event must be given,
          the date of giving notice will be included and the date of the meeting
          or other  event will be  excluded.  Accidental  error or  omission  in
          giving  notice or  accidental  failure to mail notice to any holder of
          Warrants will not invalidate any action or proceeding founded thereon.

     Any  notice  to be  given  hereunder  may  be  given  by  delivery  to  the
          Corporation, shall be at the following address:
<PAGE>

                                      -14-

               To World Heart Corporation
               1 Laser Street
               Ottawa, Ontario
               K2E 7V1

               Attention: Chief Financial Officer

               with a copy to:
               McCarthy Tetrault LLP
               40 Elgin Street, Suite 1400
               Ottawa, Ontario
               K1P 5K6

               Attention:  Virginia K. Schweitzer

          or to such other  address as the  Subscriber  may from time to time in
          writing notify the Corporation.
<PAGE>

                                   SCHEDULE B

                               NOTICE OF EXERCISE
                               ------------------

To:      WORLD HEART CORPORATION

The undersigned holder of the Warrants evidenced by this Warrant Certificate
hereby exercises its right to be issued Common Shares of World Heart Corporation
(or such other securities or property to which such exercise entitles him in
lieu thereof or in addition thereto under the provisions of the Warrant
Certificate) that are issuable upon the exercise of such Warrants, on the terms
specified in such Warrant Certificate and in connection therewith was enclosed a
certified cheque or bank draft payable to the Corporation in an amount equal to
$1.60 (or price as adjusted) in respect of each Common Share to be issued.

The undersigned hereby acknowledges that it is aware that the Common Shares
received on exercise may be subject to restrictions on resale under applicable
securities legislation.

The undersigned hereby irrevocably directs that the said Common Shares be
issued, registered and delivered as follows:

Name(s) in Full    Address(es) in Full, Account No., S.I.N.  Number(s) of Common
                                                             Shares

---------------   ----------------------------------------   -------------------

---------------   ----------------------------------------   -------------------

(Please print full name in which certificates for Common Shares are to be
issued. If any securities are to be issued to a person or persons other than the
holder, the holder must pay to the Corporation all exigible transfer taxes or
other government charges and sign the Form of Transfer.)

DATED this                  day of                   ,                 .
           ----------------        ------------------  -----------------

                                   )
                                   )    ---------------------------------------
                                   )    Signature of Registered Holder
                                   )
-----------------------------------     ---------------------------------------
Witness                            )    Name of Registered Holder

Note:     The name of the Registered Holder of this Notice of Exercise must be
          the same as the name appearing on the face page of the Warrant
          Certificate to which this Schedule is attached.

[ ]       Please check if the Common Share certificates are to be delivered at
          the office where this Warrant Certificate is surrendered, failing
          which such certificates will be mailed.

          Certificates will be delivered or mailed as soon as practicable after
          the due surrender of this Warrant Certificate to which this Appendix
          is attached.

If this Notice of Exercise is delivered by hand or by mail: World Heart
Corporation, 1 Laser Street, Ottawa, Ontario, K2E 7V1, Attention: Chief
Financial Officer.

DATED this     day of            , 200    .
<PAGE>

                                   APPENDIX 1

                                FORM OF TRANSFER

Any transfer of Warrants  will require  compliance  with  applicable  securities
legislation.  Transferors  and  transferees  are urged to contact  legal counsel
before effecting any such transfers.

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to

               Name: -----------------------------------

               Address: -----------------------------------

                        -----------------------------------

(such person,  the  "Transferee"-----------------------------  Warrants of World
Heart Corporation ("the Corporation")  registered in the name of the undersigned
on the records of the Corporation  maintained by the Corporation  represented by
the attached  Warrant  Certificate  and does hereby appoint as its attorney with
full  power of a  substitution  to  transfer  the  Warrants  on the  appropriate
register of the Corporation.

The  undersigned  confirms that the  transfers  are made in compliance  with all
applicable  securities  legislation and  requirements of regulatory  authorities
including  without  limitation  any  undertaking  given  to  the  Toronto  Stock
Exchange.

If the sale  evidenced  hereby is being  made to a U.S.  Person (as such term is
defined in Regulation S to the United States  Securities  Act of 1933 (the "1933
Act"),  the  undersigned  by the  execution  of  this  form of  transfer  hereby
certifies  that such sale does not require  registration  of the Warrants  being
transferred hereby under the 1933 Act and tenders herewith evidence satisfactory
to the Corporation to such effect.

DATED this                 day of                             ,        .
           ----------------       ----------------------------  -------

                                      )     -----------------------------------
                                      )     Signature of Transferor
--------------------------------------)
                                      )     -----------------------------------
                                      )     Name of Transferor

Signature of Transferor must be guaranteed by a Canadian chartered bank, a major
Canadian trust company or by a Medallion  signature guarantee from a member of a
recognized signature Medallion program
<PAGE>

                                   Schedule C

                  FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:       World Heart Corporation
          1 Laser Street
          Ottawa, Ontario K2E 7V1

The undersigned (a) acknowledges that the sale of the securities of World Heart
Corporation (the "Corporation") to which this declaration relates is being made
in reliance on Rule 904 of Regulation S under the United States Securities Act
of 1933, as amended (the "1933 Act") and (b) certifies that (1) it is not an
affiliate of the Corporation as that term is defined in the 1933 Act, (2) the
offer of such securities was not made to a person in the United States and
either (A) at the time the buy order was originated, the buyer was outside the
United States, or the seller and any person acting on its behalf reasonably
believe that the buyer was outside the United States; or (B) the transaction is
being executed on or through the facilities of the Toronto Stock Exchange, the
TSX Venture Exchange or any other designated offshore securities market and
neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States, (3) neither
the seller nor any affiliate of the seller nor any person acting on any of their
behalf has engaged or will engage in any directed selling efforts in the United
States in connection with the offer and sale of such securities, (4) the sale is
bona fide and not for the purpose of "washing off" the resale restrictions
imposed because the securities are "restricted securities" (as such term is
defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not intend to
replace the securities sold in reliance on Rule 904 of the 1933 Act with
fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S.

Dated:
        -------------------------

                                                 By:
                                                    ----------------------------
                                                    Name:
                                                    Title:

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