Document:

EXHIBIT 4.6

 

NEITHER THESE SECURITIES
NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, (B) RULE
144 UNDER THE SECURITIES ACT OR (C) IN ANOTHER TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

 

WORLD HEART CORPORATION

WARRANT TO PURCHASE COMMON STOCK

 

	
  Warrant No.      

  	
  Original Issue Date:
  January    , 2010

  

 

WORLD HEART CORPORATION, a Delaware corporation (the “Company”), hereby
certifies that, for value received,                      
or its permitted registered assigns (the “Holder”), is entitled to purchase from the
Company up to a total of                      
 shares of common stock (the “Common Stock”),
of the Company (each such share, a “Warrant
Share” and all
such shares, the “Warrant
Shares”) at an
exercise price per share equal to $4.90 (as adjusted from time to time as
provided in Section 10 herein, the “Exercise
Price”), at any
time and from time to time on or after the date hereof (the “Trigger Date”) and through and including 5:30 P.M.,
New York City time, on April    , 2011, (the “Expiration Date”), and subject to the following terms and
conditions:

 

1.             Series of Warrants. This Warrant (this “Warrant”) is one
of a series of similar warrants issued pursuant to that certain Securities
Purchase Agreement, dated January 21, 2010, by and among the Company and
the Purchasers identified therein (the “Purchase
Agreement”). All such warrants are referred to herein,
collectively, as the “Warrants.”

 

2.             Definitions. In addition to the terms defined
elsewhere in this Warrant, capitalized terms that are not otherwise defined
herein have the meanings given to such terms in the Purchase Agreement.

 

3.             Registration of Warrants. The Company shall register this
Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”),
in the name of the record Holder (which shall include the initial Holder or, as
the case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

 

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4.             Registration of Transfers. Subject to the restrictions on transfer
set forth in Section 4.1 of the Purchase Agreement and compliance with all
applicable securities laws, the Company shall register the transfer of all or
any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached as Schedule 2  hereto duly completed and signed, to the
Company’s transfer agent or to the Company at its address specified in the
Purchase Agreement. Upon any such registration or transfer, a new warrant to
purchase Common Stock in substantially the form of this Warrant (any such new
warrant, a “New Warrant”) evidencing the portion of this Warrant
so transferred shall be issued to the transferee, and a New Warrant evidencing
the remaining portion of this Warrant not so transferred, if any, shall be
issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations of a Holder of a Warrant.

 

5.             Exercise and Duration of Warrants.

 

(a)           All or any part of this Warrant shall be exercisable
by the registered Holder at any time and from time to time on or after the
Trigger Date and through and including 5:30 P.M., New York City time, on
the Expiration Date. At 5:30 P.M., New York City time, on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value and this Warrant shall be terminated and no longer
outstanding; provided, however, that if on the
Expiration Date there is no effective Registration Statement covering the
resale of the Warrant Shares, then this Warrant shall be deemed to have been
exercised in full (to the extent not previously exercised) on a “cashless
exercise” basis at 5:30 p.m. New York City time on the Expiration Date.

 

(b)           The Holder may exercise this Warrant by delivering to
the Company (i) this Warrant and an exercise notice, in the form attached
as Schedule 1  hereto (the “Exercise Notice”), appropriately completed and duly signed and (ii) payment
of the Exercise Price for the number of Warrant Shares as to which this Warrant
is being exercised (which may take the form of a “cashless exercise” if so
indicated in the Exercise Notice and if a “cashless exercise” may occur at such
time pursuant to Section 11 below), and the date such items are delivered
to the Company (as determined in accordance with the notice provisions hereof)
is an “Exercise Date.”
The delivery by (or on behalf of) the Holder of the Exercise Notice and the applicable
Exercise Price as provided above shall constitute the Holder’s certification to
the Company that its representations contained in Section 3.2(b), (c) and
(d) of the Purchase Agreement are true and correct as of the Exercise Date
as if remade in their entirety (or, in the case of any transferee Holder that
is not a party to the Purchase Agreement, such transferee Holder’s
certification to the Company that such representations are true and correct as
to such assignee Holder as of the Exercise Date). If the Warrant Shares are to
be issued free of all restrictive legends, the Company shall, upon the written
request of the Holder, use its best efforts to deliver, or cause to be
delivered, Warrant Shares hereunder electronically through The Depository Trust
Company or another established clearing corporation performing similar
functions, if available; provided, that, the Company may, but will not be
required to, change its transfer agent if its current transfer agent cannot
deliver Warrant Shares electronically through such a clearing corporation.

 

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6.             Delivery of Warrant Shares.

 

(a)           Upon exercise of this Warrant, the Company shall
promptly (but in no event later than three (3) Trading Days after the Exercise
Date) issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate (provided that, if the Holder directs the Company to deliver a
certificate for the Warrant Shares in a name other than that of the Holder or
an Affiliate of the Holder, it shall deliver to the Company on the Exercise
Date (i) if the Registration Statement is not effective, an opinion of
counsel reasonably satisfactory to the Company to the effect that the issuance
of such Warrant Shares in such other name may be made pursuant to an available
exemption from the registration requirements of the Securities Act and all
applicable state securities or blue sky laws or (ii) if the Registration
Statement is effective, either an opinion of counsel reasonably satisfactory to
the Company to the effect that the issuance of such Warrant Shares in such
other name may be made pursuant to an available exemption from the registration
requirements of the Securities Act and all applicable state securities or blue
sky laws or a Certificate of Subsequent Sale in substantially the form attached
as Exhibit I to the Purchase Agreement), a certificate for the Warrant
Shares issuable upon such exercise. The Holder, or any Person permissibly so
designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise Date. If
the Warrant Shares are to be issued free of all restrictive legends, the
Company shall, upon the written request of the Holder, use its best efforts to
deliver, or cause to be delivered, Warrant Shares hereunder electronically
through The Depository Trust Company or another established clearing
corporation performing similar functions, if available; provided, that, the
Company may, but will not be required to, change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through
such a clearing corporation.  If (1) a
certificate representing the Warrant Shares is not delivered to the Holder
within three (3) Trading Days of the due exercise of this Warrant by the
Holder and (2) prior to the time such certificate is received by the
Holder, the Holder, or any third party on behalf of the Holder or for the
Holder’s account, purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of shares
represented by such certificate (a “Buy-In”), then the Company shall pay in cash
to the Holder (for costs incurred either directly by such Holder or on behalf
of a third party) the amount by which the total purchase price paid for Common
Stock as a result of the Buy-In (including brokerage commissions, if any)
exceeds the proceeds received by such Holder as a result of the sale to which
such Buy-In relates.  The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In.

 

(b)           The Company’s obligations to issue and deliver Warrant
Shares in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or
any violation or alleged violation of law by the Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver Common Stock upon
exercise of this Warrant as required pursuant to the terms hereof.

 

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7.             Charges, Taxes and Expenses. Issuance and delivery of certificates
for shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;  provided,
however , that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the registration of
any certificates for Warrant Shares or Warrants in a name other than that of
the Holder or an Affiliate thereof. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.

 

8.             Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction (in
such case) and, in each case, a customary and reasonable indemnity agreement.
If a New Warrant is requested as a result of a mutilation of this Warrant, then
the Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.

 

9.             Reservation of Warrant Shares. The Company covenants that it will
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are initially issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 10). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such action as may be reasonably
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon
which the Common Stock may be listed.

 

10.          Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section 10.

 

(a)           Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides its outstanding shares of Common
Stock into a larger number of shares, or (iii) combines its outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the Exercise Price shall be multiplied by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately before
such event and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to 

 

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receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of
this paragraph shall become effective immediately after the effective date of
such subdivision or combination.

 

(b)           Pro Rata Distributions. If the Company, at any time while this
Warrant is outstanding, distributes to all holders of Common Stock (i) evidences
of its indebtedness, (ii) any security (other than a distribution of
Common Stock covered by the preceding paragraph), or (iii) any other asset
(in each case, “Distributed
Property”), then, upon any exercise of this Warrant that occurs
after the record date fixed for determination of stockholders entitled to
receive such distribution, the Holder shall be entitled to receive, in addition
to the Warrant Shares otherwise issuable upon such exercise (if applicable),
the Distributed Property that such Holder would have been entitled to receive
in respect of such number of Warrant Shares had the Holder been the record
holder of such Warrant Shares immediately prior to such record date.

 

(c)           Fundamental Transactions. If any capital reorganization,
reclassification of the capital stock of the Company, consolidation or merger
of the Company with another corporation in which the Company is not the
survivor, or sale, transfer or other disposition of all or substantially all of
the Company’s assets to another corporation shall be effected (Each a “Fundamental Transaction”),
then, as a condition of such Fundamental Transaction, lawful and adequate
provision shall be made whereby each Holder shall thereafter have the right to
purchase and receive upon the basis and upon the terms and conditions herein
specified and in lieu of the Warrant Shares immediately theretofore issuable
upon exercise of the Warrant, such shares of stock, securities or assets as
would have been issuable or payable with respect to or in exchange for a number
of Warrant Shares equal to the number of Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, had such Fundamental Transaction not
taken place, and in any such case appropriate provision shall be made with
respect to the rights and interests of each Holder to the end that the
provisions hereof (including, without limitation, provision for adjustment of
the Exercise Price) shall thereafter be applicable, as nearly equivalent as may
be practicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.  The Company shall not effect any such
Fundamental Transaction unless prior to or simultaneously with the consummation
thereof the successor corporation (if other than the Company) resulting from
such consolidation or merger, or the corporation purchasing or otherwise
acquiring such assets or other appropriate corporation or entity shall assume
the obligation to deliver to the Holder, at the last address of the Holder
appearing on the books of the Company, such shares of stock, securities or
assets as, in accordance with the foregoing provisions, the Holder may be
entitled to purchase, and the other obligations under this Warrant.  The provisions of this paragraph (c) shall
similarly apply to successive Fundamental Transactions.

 

(d)           Number of Warrant Shares. Simultaneously with any adjustment to
the Exercise Price pursuant to paragraph (a) of this Section, the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.

 

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(e)           Calculations. All calculations under this Section 10
shall be made to the nearest cent or the nearest share, as applicable.

 

(f)            Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 10, the Company at its expense will promptly
compute such adjustment, in good faith, in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Warrant
Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.

 

(g)           Notice of Corporate Events. If, while this Warrant is outstanding,
the Company (i) declares a dividend or any other distribution of cash,
securities or other property in respect of its Common Stock, including, without
limitation, any granting of rights or warrants to subscribe for or purchase any
capital stock of the Company or any subsidiary, (ii) authorizes or
approves, enters into any agreement contemplating or solicits stockholder
approval for any Fundamental Transaction or (iii) authorizes the voluntary
dissolution, liquidation or winding up of the affairs of the Company, then,
except if such notice and the contents thereof shall be deemed to constitute
material non-public information, the Company shall deliver to the Holder a
notice of such transaction at least ten (10) Trading Days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction;  provided, however,
that the failure to deliver such notice or any defect therein shall not affect
the validity of the corporate action required to be described in such notice.

 

11.          Payment of Exercise Price. The Holder shall pay the Exercise Price in
immediately available funds; provided,
however, that the Holder may, in its sole discretion, satisfy its
obligation to pay the Exercise Price through a “cashless exercise”, in which
event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:

 

 

where:

 

X            =               the number of Warrant Shares to be issued
to the Holder.

 

Y                                    =               the total number of Warrant Shares with respect to which this Warrant
is being exercised.

 

A                                    =               the Closing Sale Price of the shares of Common Stock (as reported by
Bloomberg Financial Markets) on the date immediately preceding the Exercise
Date.

 

B                                    =               the Exercise Price then in effect for the applicable Warrant Shares at
the time of such exercise.

 

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For purposes of this Warrant, “Closing Sale Price” means, for any security
as of any date, the last trade price for such security on the principal
securities exchange or trading market for such security, as reported by
Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00 P.M., New York
City time, as reported by Bloomberg Financial Markets, or if the foregoing do
not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg
Financial Markets, or, if no last trade price is reported for such security by
Bloomberg Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are
unable to agree upon the fair market value of such security, then the Board of
Directors of the Company shall use its good faith judgment to determine the
fair market value. The Board of Directors’ determination shall be binding upon
all parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination
or other similar transaction during the applicable calculation period.

 

For purposes of Rule 144 promulgated under the
Securities Act, it is intended, understood and acknowledged that the Warrant
Shares issued in a cashless exercise transaction shall be deemed to have been
acquired by the Holder, and the holding period for the Warrant Shares shall be
deemed to have commenced, on the date this Warrant was originally issued
pursuant to the Purchase Agreement (provided that the Commission continues to
take the position that such treatment is proper at the time of such exercise).

 

12.          No Fractional Shares. No fractional Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares
which would otherwise be issuable, the number of Warrant Shares to be issued
shall be rounded down to the next whole number and the Company shall pay the
Holder in cash the fair market value (based on the Closing Sale Price) for any such
fractional shares.

 

13.          Notices.
Any and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in the Purchase Agreement prior to 5:30 P.M., New York
City time, on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in the Purchase Agreement on a day that is not a
Trading Day or later than 5:30 P.M., New York City time, on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service specifying next business day
delivery, or (iv) upon actual receipt by the party to whom such notice is
required to be given, if by hand delivery. The address and facsimile number of
a party for such notices or communications shall be as set forth in the
Purchase Agreement unless changed by such party by two (2) Trading Days’
prior notice to the other party in accordance with this Section 13.

 

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14.          Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon
thirty (30) days’ notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s
last address as shown on the Warrant Register.

 

15.          Miscellaneous.

 

(a)           No Rights as a Stockholder. The Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends (subject to the effect of such dividends as set forth in Section 10(a) hereof)
or be deemed the holder of share capital of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the
Holder, solely in such Person’s capacity as the Holder of this Warrant, any of
the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, amalgamation,
conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors of the Company.

 

(b)           Successors and Assigns. Subject to the restrictions on transfer
set forth in this Warrant and in Section 4.1 of the Purchase Agreement,
and compliance with applicable securities laws, this Warrant may be assigned by
the Holder. This Warrant may not be assigned by the Company without the written
consent of the Holder except to a successor in the event of a Fundamental
Transaction. This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. Subject to the
preceding sentence, nothing in this Warrant shall be construed to give to any
Person other than the Company and the Holder any legal or equitable right,
remedy or cause of action under this Warrant. This Warrant may be amended only
in writing signed by the Company and the Holder, or their successors and
assigns.

 

(c)           Governing Law; Jurisdiction. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH
PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND
FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF 

 

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ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL
SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL
OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THE PURCHASE AGREEMENT AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY.

 

(d)           Headings. The headings herein are for convenience
only, do not constitute a part of this Warrant and shall not be deemed to limit
or affect any of the provisions hereof.

 

(e)           Severability. In case any one or more of the
provisions of this Warrant shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining terms and provisions of this
Warrant shall not in any way be affected or impaired thereby, and the parties
will attempt in good faith to agree upon a valid and enforceable provision
which shall be a commercially reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Warrant.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

 

 

	
   

  	
  WORLD
  HEART CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

SCHEDULE 1

FORM OF EXERCISE NOTICE

 

(To be executed by the Holder to purchase shares of Common Stock under
the foregoing Warrant)

 

Ladies and Gentlemen:

 

(1)           The undersigned is the Holder of Warrant No.                     
(the “Warrant”) issued by World
Heart Corporation, a Delaware corporation (the “Company”).
Capitalized terms used herein and not otherwise defined herein have the
respective meanings set forth in the Warrant.

 

(2)           The undersigned hereby exercises its
right to purchase                    
Warrant Shares pursuant to the Warrant.

 

(3)           The Holder intends that payment of the
Exercise Price shall be made as (check one):

 

o            Cash Exercise

 

o            “Cashless Exercise” under Section 11

 

(4)           If the Holder has elected a Cash Exercise,
the Holder shall pay the sum of $                    
in immediately available funds to the Company in accordance with the terms of
the Warrant.

 

(5)           Pursuant to this Exercise Notice, the
Company shall deliver to the Holder                     
Warrant Shares in accordance with the terms of the Warrant.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name of Holder:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

(Signature must conform
in all respects to name of Holder as specified on the face of the Warrant)

 

 

SCHEDULE 2

WORLD HEART CORPORATION

FORM OF ASSIGNMENT

 

[To be completed and
signed only upon transfer of Warrant]

 

FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto         
(the “Transferee”) the right
represented by the within Warrant to purchase 
              shares of Common Stock of World Heart
Corporation (the “Company”) to which the within
Warrant relates and appoints 
             attorney to transfer said right on the books
of the Company with full power of substitution in the premises.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature
  must conform in all respects to name of

  holder as specified on the face of the Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address
  of Transferee

  
	
   

  	
   

  	
   

  
	
  In the presence of:EXHIBIT 10.1

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of January 21,
2010, by and among World Heart Corporation, a Delaware corporation (the “Company”), and each purchaser identified on
the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

A.                                    The Company and each Purchaser is
executing and delivering this Agreement in reliance upon the exemption from
securities registration afforded by Section 4(2) of the Securities
Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “Commission”)
under the Securities Act.

 

B.                                    Each Purchaser, severally and not
jointly, wishes to purchase, and the Company wishes to sell, upon the terms and
conditions stated in this Agreement, (i) that aggregate number of shares
of the common stock (the “Common
Stock”) of the Company, set forth below such Purchaser’s name on
the signature page of this Agreement (which aggregate amount for all
Purchasers together shall be 1,418,726 shares of Common Stock and shall be
collectively referred to herein as the “Shares”),
(ii) warrants, in substantially the form attached hereto as Exhibit A-1 (the “First
Warrants”), to acquire up to that number of additional shares of
Common Stock equal to 100% of the number of Shares purchased by such Purchaser
on the Closing Date, set forth below such Purchaser’s on the signature page of
this Agreement, and (iii) warrants, in substantially the form attached
hereto as Exhibit A-2 (the “Second Warrants”, together with the
First Warrants referred to herein as the “Warrants”),
to acquire up to that number of additional shares of Common Stock equal to 100%
of the number of shares purchased by such Purchaser on the Closing Date, set
forth below such Purchaser’s name on the signature page of this Agreement
(the shares of Common Stock issuable upon exercise of or otherwise pursuant to
the Warrants collectively are referred to herein as the “Warrant Shares”).

 

C.                                    The Shares, the Warrants and the Warrant
Shares collectively are referred to herein as the “Securities”.

 

D.                                    Contemporaneously with the execution and
delivery of this Agreement, the parties hereto are executing and delivering a
Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “Registration
Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Shares and the Warrant Shares under the Securities Act and the rules and
regulations promulgated thereunder and applicable state securities laws.

 

NOW, THEREFORE, in consideration  of the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchasers hereby agree as follows:

 

 

ARTICLE 1

DEFINITIONS

 

1.1                               Definitions. In addition to the terms defined
elsewhere in this Agreement, for all purposes of this Agreement, the following
terms shall have the meanings indicated in this Section 1.1:

 

“Action” means any action, suit, inquiry,
notice of violation, proceeding (including any partial proceeding such as a
deposition) or investigation pending or, to the Company’s Knowledge, threatened
in writing (or otherwise) against the Company or any of their respective
properties or any officer, director or employee of the Company acting in his or
her capacity as an officer, director or employee before or by any federal,
state, county, local or foreign court, arbitrator, governmental or
administrative agency, regulatory authority, stock market, stock exchange or
trading facility.

 

“Affiliate”
means, with respect to any Person, any other Person that, directly or
indirectly through one or more intermediaries, Controls, is controlled by or is
under common control with such Person, as such terms are used in and construed
under Rule 144. With respect to a Purchaser, any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

 

“Agreement”
shall have the meaning ascribed to such term in the Preamble.

 

“Business
Day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.

 

“Closing”
means the closing of the purchase by the Purchasers listed on Annex A hereto
and sale by the Company of Shares and Warrants to such Purchasers pursuant to
this Agreement on the Closing Date as provided in Section 2.1(a) hereof.

 

“Closing Bid Price” means, for any security as of any date, the last
closing price for such security on the Principal Trading Market, as reported by
Bloomberg.

 

“Closing Date” means the third (3rd) Trading Day after the date on
which this Agreement has been executed and delivered by all parties hereto,
unless on such date the conditions set forth in Sections 2.1, 2.2, 5.1 and
5.2 (other than those to be satisfied at the Closing) shall not have been
satisfied or waived, in which case the Closing Date shall be on the third (3rd)
Trading Day after the date on which the last to be satisfied or waived of the
conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 (other than those
to be satisfied at the Closing) shall have been satisfied or waived.

 

“Common
Stock” has the meaning set forth in the Recitals, and also
includes any securities into which the Common Stock may hereafter be reclassified
or changed.

 

“Common
Stock Equivalents” means any securities of the Company which
would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, 

 

 

preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock or other securities that entitle the holder to receive, directly or
indirectly, Common Stock.

 

“Company
Counsel” means Cooley Godward Kronish LLP.

 

“Company
Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company’s
Knowledge” means the actual knowledge of the executive officers
(as defined in Rule 405 under the Securities Act) of the Company, after
due inquiry.

 

“Control”
(including the terms “controlling”,
“controlled” by or “under common control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership
of voting securities, by contract or otherwise.

 

“Disclosure
Materials” has the meaning set forth in Section 3.1(h).

 

“Effective
Date” means the date on which the initial Registration Statement
required by Section 2(a) of the Registration Rights Agreement is
first declared effective by the Commission.

 

“Effectiveness
Deadline” means the date on which the initial Registration
Statement is required to be declared effective by the Commission under the
terms of the Registration Rights Agreement.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or
any successor statute, and the rules and regulations promulgated
thereunder.

 

“GAAP”
means U.S. generally accepted accounting principles, as applied by the Company.

 

“Intellectual
Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii) copyrights
and copyrightable works; (iv) registrations, applications and renewals for
any of the foregoing; and (v) proprietary computer software (including but
not limited to data, data bases and documentation).

 

“Irrevocable
Transfer Agent Instructions” means, with respect to the Company,
the Irrevocable Transfer Agent Instructions, in the form of Exhibit D, executed by the Company and delivered to and
acknowledged in writing by the Transfer Agent.

 

“Lien”
means any lien, charge, claim, encumbrance, security interest, right of first
refusal, preemptive right or other restrictions of any kind.

 

“Material
Adverse Effect” means a material adverse effect on (a) the
results of operations, assets, liabilities, business, or financial condition of
the Company and its 

 

 

Subsidiaries, taken as a
whole, or (b) the ability of the Company to perform its obligations under
the Transaction Documents, except that any of the following, either alone or in
combination, shall not be deemed a Material Adverse Effect:   (i) effects caused by changes or
circumstances affecting general market conditions in the U.S. economy or which
are generally applicable to the industry in which the Company operates, (ii) effects
resulting from or relating to the announcement or disclosure of the sale of the
Securities or other transactions contemplated by this Agreement, or (iii) effects
caused by any event, occurrence or condition resulting from or relating to the
taking of any action in accordance with this Agreement.

 

“Material
Contract” means any contract of the Company or any of its
Subsidiaries that has been filed or was required to have been filed as an
exhibit to the SEC Reports pursuant to Item 601(b)(4) or
Item 601(b)(10) of Regulation S-K.

 

“Material
Permits” has the meaning set forth in Section 3.1(m).

 

“New York
Courts” means the state and federal courts sitting in the City
of New York, Borough of Manhattan.

 

“Outside
Date” means February 21, 2010.

 

“Person”
means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Principal
Trading Market” means the Trading Market on which the Common
Stock is primarily listed on and quoted for trading, which, as of the date of
this Agreement and the Closing Date, shall be the Nasdaq Capital Market.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

“Purchase
Price” means $5.15 per unit.

 

“Purchaser
Deliverables” has the meaning set forth in Section 2.2(b).

 

“Registration
Rights Agreement” has the meaning set forth in the Recitals.

 

“Registration
Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Registrable Securities (as defined in the
Registration Rights Agreement).

 

“Required
Approvals” has the meaning set forth in Section 3.1(e).

 

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

 

 

“SEC
Reports” has the meaning set forth in Section 3.1(h).

 

“Officer’s
Certificate” has the meaning set forth in Section 2.2(a)(vii).

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Short
Sales” include, without limitation, (i) all “short sales”
as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act, whether or not against the box, and all types of direct and
indirect stock pledges, forward sale contracts, options, puts, calls, short
sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under
the Exchange Act) and similar arrangements (including on a total return basis),
and (ii) sales and other transactions through non-U.S. broker dealers or
foreign regulated brokers.

 

“Subscription
Amount” means with respect to each Purchaser, the aggregate amount
to be paid for the Shares and the related Warrants purchased hereunder as
indicated on such Purchaser’s signature page to this Agreement next to the
heading “Aggregate Purchase Price (Subscription Amount)”.

 

“Subsidiary”
means another Person, an amount of the voting securities, other voting
ownership or voting partnership interests of which is sufficient to elect at
least a majority of its board of directors or other governing body or, if there
are no such voting interests, 50% or more of the equity interests of which is
owned directly or indirectly by the Company.

 

“Trading
Affiliate” has the meaning set forth in Section 3.2(h).

 

“Trading
Day” means a day on which the Common Stock is listed or quoted
and traded on its Principal Trading Market.

 

“Trading Market”
means whichever of the New York Stock Exchange, the American Stock Exchange,
the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market or the OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.

 

“Transaction
Documents” means this Agreement, the schedules and exhibits
attached hereto, the Warrants, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions and any other documents or agreements
executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means Mellon Investor Services LLC, or any successor
transfer agent for the Company.

 

“Warrants”
has the meaning set forth in the Recitals to this Agreement.

 

 

ARTICLE 2

PURCHASE AND SALE

 

2.1                               Closing.

 

(a)                          Amount. Subject to the terms and conditions set
forth in this Agreement, at the Closing, the Company shall issue and sell to
each Purchaser listed on Annex A hereto, and each Purchaser listed on Annex A
hereto shall, severally and not jointly, purchase from the Company, such number
of Shares of Common Stock equal to the quotient resulting from dividing (i) the
aggregate purchase price for such Purchaser, as indicated below such Purchaser’s
name on the signature page of this Agreement (the “Subscription Amount”) by (ii) the
Purchase Price. In addition, each Purchaser listed on Annex A hereto shall
receive a First Warrant to purchase a number of Warrant Shares equal to 100% of
the number of Shares purchased by such Purchaser on the Closing Date and a
Second Warrant to purchase a number of Warrant Shares equal to 100% of the
number of Shares purchased by the Purchaser on the Closing Date, as indicated
below such Purchaser’s name on the signature page to this Agreement. The
First Warrants shall have an exercise price equal to $4.90 per Warrant Share,
and the Second Warrants shall have an exercise price equal to $4.90 per Warrant
Share.

 

(b)                          Closing. The Closing of the purchase and sale of
the Shares and Warrants shall take place at the offices of Company Counsel,
3175 Hanover Street, Palo Alto, California on the Closing Date or at such other
locations or remotely by facsimile transmission or other electronic means as
the parties may mutually agree.

 

(c)                          Form of Payment. Unless alternative arrangements are
agreed to with a particular Purchaser, on the Closing Date, (i) each
Purchaser listed on Annex A hereto shall wire its Subscription Amount, in
United States dollars and in immediately available funds, in the amount set
forth as the “Aggregate Purchase Price (Subscription Amount)” indicated below
such Purchaser’s name on the applicable signature page hereto by wire
transfer to the Company’s account, as set forth in instructions previously
provided to the Purchasers, (ii) the Company shall irrevocably instruct
the Transfer Agent to deliver to each Purchaser listed on Annex A hereto one or
more stock certificates, free and clear of all restrictive and other legends
except as expressly provided in Section 4.1(b) hereof, evidencing the
number of Shares such Purchaser is purchasing as is set forth on such Purchaser’s
signature page to this Agreement next to the heading “Number of Shares to
be Acquired”, within three (3) Business Days after the Closing, (iii) the
Company shall issue to each Purchaser listed on Annex A hereto a First Warrant
pursuant to which such Purchaser shall have the right to acquire such number of
Warrant Shares as is set forth on such Purchaser’s signature page to this
Agreement next to the heading “Underlying Shares Subject to First Warrant”, and
(iv) the Company shall issue to each Purchaser listed on Annex A hereto a
Second Warrant pursuant to which such Purchaser shall have the right to acquire
such number of Warrant Shares as is set forth on such Purchaser’s signature page to
this Agreement next to the heading “Underlying Shares Subject to Second Warrant”,
in the case of clauses (ii), (iii) and (iv), duly executed on behalf of
the Company and registered in the name of such Purchaser.

 

2.2                               Closing Deliveries. (a) On or prior to the Closing
with respect to the Purchasers listed on Annex A hereto the Company shall
issue, deliver or cause to be delivered to each such Purchaser the following
(the “Company Deliverables”):

 

(i)                                    this Agreement, duly executed by the
Company;

 

(ii)                                unless alternative arrangements are
agreed to with a particular Purchaser, facsimile copies of one or more
stock certificates, free and clear of all restrictive and 

 

 

other legends except as
provided in Section 4.1(b) hereof, evidencing the Shares subscribed
for by such Purchaser hereunder, registered in the name of such Purchaser as
set forth on the Stock Certificate Questionnaire included as Exhibit C-2 hereto (the “Stock Certificates”), with the original Stock
Certificates delivered within three (3) Business Days of Closing;

 

(iii)                            a First Warrant, executed by the Company
and registered in the name of such Purchaser as set forth on the Stock
Certificate Questionnaire included as Exhibit C-2 hereto,
pursuant to which such Purchaser shall have the right to acquire such number of
Warrant Shares equal to 100% of the number of Shares purchased by such
Purchaser on the Closing Date, on the terms set forth therein;

 

(iv)                               a Second Warrant, executed by the Company
and registered in the name of such Purchaser as set forth on the Stock
Certificate Questionnaire included as Exhibit C-2 hereto,
pursuant to which such Purchaser shall have the right to acquire such number of
Warrant Shares equal to 100% of the number of Shares purchased by such
Purchaser on the Closing Date, on the terms set forth therein;

 

(v)                                   the Registration Rights Agreement, duly
executed by the Company;

 

(vi)                               duly executed Irrevocable Transfer Agent
Instructions acknowledged in writing by the Transfer Agent;

 

(vii)                           a certificate of the Company (the “Officer’s Certificate”),
dated as of the Closing Date, (a) certifying the resolutions adopted by
the Board of Directors of the Company or a duly authorized committee thereof
approving the transactions contemplated by this Agreement and the other Transaction
Documents and the issuance of the Securities and the reservation for issuance
of the Warrant Shares, (b) certifying the current versions of the
Certificate of Incorporation, as amended, and bylaws of the Company (c) certifying
as to the signatures and authority of persons signing the Transaction Documents
and related documents on behalf of the Company, in the form attached hereto as Exhibit E and (d) certifying good standing
certificates with respect to the Company and its Subsidiary World Hearts Inc. from
the Secretary of State of the State of Delaware, dated a recent date before the
Closing Date;

 

(viii)                       the Compliance Certificate referred to in
Section 5.1(g).

 

(b)                          On or prior to the Closing with respect
to the Purchasers listed on Annex A hereto each such Purchaser shall deliver or
cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

(i)                                    this Agreement, duly executed by such
Purchaser;

 

(ii)                                its Subscription Amount, in United States
dollars and in immediately available funds, in the amount set forth as the “Aggregate
Purchase Price (Subscription Amount)” indicated below such Purchaser’s name on
the applicable signature page hereto by wire transfer to the Company’s
account as previously provided to the Purchasers;

 

 

(iii)                            the Registration Rights Agreement, duly
executed by such Purchaser;

 

(iv)                               a fully completed and duly executed
Selling Stockholder Questionnaire in the form attached as Annex B to the
Registration Rights Agreement; and

 

(v)                                   a fully completed and duly executed
Accredited Investor Questionnaire and Stock Certificate Questionnaire in the
forms attached hereto as Exhibits C-1
and C-2, respectively.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations and Warranties of
the Company. The
Company hereby represents and warrants as of the date hereof and the Closing
Date (except for the representations and warranties that speak as of a specific
date, which shall be made as of such date), to each of the Purchasers that,
except as set forth in the Schedules delivered herewith or disclosed in the SEC
Reports:

 

(a)                          Subsidiaries. Except as disclosed in the SEC Reports,
the Company does not have any direct and indirect Subsidiaries.

 

(b)                          Organization and Qualification. The Company and each Subsidiary is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its respective incorporation,
with the requisite corporate power and authority to own or lease and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any of its Subsidiaries is in violation of any of the
provisions of its respective Certificate of Incorporation or bylaws, or other
organizational documents, as applicable. The Company and each Subsidiary is
duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case
may be, would not have a Material Adverse Effect.

 

(c)                          Authorization; Enforcement;
Validity. The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction Documents
to which it is a party and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction Documents to
which the Company is a party and the consummation by it of the transactions
contemplated hereby and thereby (including, but not limited to, the sale and
delivery of the Shares and the Warrants and the reservation for issuance and
the subsequent issuance of the Warrant Shares upon exercise of the Warrants)
have been duly authorized by all necessary corporate action on the part of the
Company, and no further corporate action is required by the Company, its Board
of Directors or its stockholders in connection therewith, other than in connection
with the Required Approvals to be obtained, made, filed or given by the Company
after the Closing pursuant to Section 4 hereof or the Registration Rights
Agreement. Each of the Transaction Documents to 

 

 

which it is a party has
been (or upon delivery will have been) duly executed by the Company and is, or
when delivered in accordance with the terms hereof, will constitute the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general
application.  Except as disclosed in the
SEC Reports, there are no stockholder agreements, voting agreements, or other
similar arrangements with respect to the Company’s capital stock to which the
Company is a party or, to the Company’s Knowledge, between or among any of the
Company’s stockholders.

 

(d)                          No Conflicts. The execution, delivery and performance
by the Company of the Transaction Documents to which it is a party and the
consummation by the Company of the transactions contemplated hereby or thereby
(including, without limitation, the issuance of the Shares and Warrants and the
reservation for issuance and issuance of the Warrant Shares pursuant to the
Warrants) do not and will not (i) conflict with or violate any provisions
of the Company’s Certificate of Incorporation or bylaws or otherwise result in
a violation of the organizational documents of the Company or any Subsidiary, (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any Lien upon any
of the properties or assets of the Company or any of its Subsidiaries or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract or (iii) result
in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or any of its Subsidiaries is subject (including federal, state and
applicable foreign securities laws and regulations and the rules and
regulations, assuming the correctness of the representations and warranties
made by the Purchasers herein, of any self regulatory organization to which the
Company or its securities are subject, including all applicable Trading
Markets), or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except in the case of clause (iii) such
as would not, individually or in the aggregate, be reasonably expected to have
a Material Adverse Effect.

 

(e)                          Filings, Consents and Approvals. The Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents (including
the issuance of the Securities and reservation for issuance of the Warrant
Shares pursuant to the Warrants), other than (i) the filing with the
Commission of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required
by applicable state securities laws, (iii) the filing of a Notice of Sale
of Securities on Form D with the Commission under Regulation D of the
Securities Act, (iv) the filing of any requisite notices and/or
application(s) to the Principal Trading Market for the issuance and sale
of the Shares and the Warrants, and the issuance of the Warrant Shares upon
exercise of the Warrants, and the listing of the Shares and the Warrant Shares
for trading or quotation, as the case may be, thereon in the time and manner
required thereby and (v) those that have been made or obtained prior to
the date of this Agreement (collectively, the “Required Approvals”).

 

 

(f)                            Issuance of the Securities. The Shares have been duly authorized
and, when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable and
free and clear of all Liens, other than restrictions on transfer provided for
in the Transaction Documents or imposed by applicable securities laws, and
shall not be subject to preemptive or similar rights. The Warrants have been
duly authorized and, when issued and paid for in accordance with the terms of
the Transaction Documents, will be duly and validly issued, free and clear of
all Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of stockholders. The Warrant Shares issuable upon
exercise of the Warrants have been duly authorized and, when issued and paid
for in accordance with the terms of the Transaction Documents and the Warrants
will be duly and validly issued, fully paid and nonassessable, free and clear
of all Liens, other than restrictions on transfer provided for in the
Transaction Documents or imposed by applicable securities laws, and shall not
be subject to preemptive or similar rights of stockholders. Assuming the
accuracy of the representations and warranties of the Purchasers in this
Agreement, the Warrants, the Shares and the Warrant Shares will be issued in
compliance with all applicable federal and state securities laws. As of the
Closing Date, the Company shall have reserved from its duly authorized capital
stock not less than the maximum number of shares of Common Stock issuable upon
exercise of the Warrants (without taking into account any limitations on the
exercise of the Warrants set forth in the Warrants). The Company shall, so long
as any of the Warrants are outstanding, take all action necessary to reserve
and keep available out of its authorized and unissued capital stock, solely for
the purpose of effecting the exercise of the Warrants, the number of shares of
Common Stock issuable upon exercise of the Warrants (without taking into
account any limitations on the exercise of the Warrants set forth in the
Warrants).

 

(g)                         Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock, options and other securities
of the Company (whether or not presently convertible into or exercisable or exchangeable
for shares of capital stock of the Company) has been set forth in the SEC
Reports and has changed since the date set forth in such SEC Reports only to
reflect stock option exercises and grants and warrant exercises that have not,
individually or in the aggregate, had a material effect on the issued and
outstanding capital stock, options and other securities and have not otherwise
been required to be reported by the Company under the Exchange Act. All of the
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and non-assessable, have been issued in compliance in all
material respects with all applicable federal and state securities laws, and
none of such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase any capital stock of the
Company.  Except as set forth in the SEC
Reports: (i) no shares of the Company’s capital stock are subject to
preemptive rights or any other similar rights or any Liens or encumbrances
suffered or permitted by the Company; (ii) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any shares of capital stock of the Company, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of capital stock of the Company
or options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any shares of capital stock of the Company;
(iii) there are no outstanding debt securities, notes, credit agreements,
credit facilities or other agreements, documents or instruments evidencing

 

 

indebtedness of the
Company or by which the Company is or may become bound; (iv) there are no
financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company; (v) there
are no agreements or arrangements under which the Company is obligated to
register the sale of any of their securities under the Securities Act (except
the Registration Rights Agreement); (vi) there are no outstanding
securities or instruments of the Company or which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company is or may become bound to redeem a security
of the Company; (vii) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities;
(viii) the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement; and (ix) the
Company has no liabilities or obligations required to be disclosed in the SEC
Reports but not so disclosed in the SEC Reports, other than those incurred in
the ordinary course of the Company’s business and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect.

 

(h)                         SEC Reports and Disclosure. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it
under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for twelve (12) months preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports” and together with this Agreement and the
Schedules to this Agreement (if any), the “Disclosure
Materials”), on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension. To the Company’s Knowledge, no event or
circumstance has occurred or information exists with respect to the Company or
any of its Subsidiaries or its or their business, properties, operations or financial
condition, which, under applicable law, rule or regulation requires the
filing of a Form 8-K after the Closing, or otherwise requires public
disclosure or announcement by the Company but which has not been so publicly
announced or disclosed (other than the transactions contemplated by the
Transaction Documents). As of their respective filing dates, or to the extent
corrected by a subsequent amendment, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  None of the representations, warranties, or
covenants in this Agreement, the Warrants or any other Transaction Documents,
or other disclosures made to the Purchasers in connection with the transactions
contemplated by this Agreement, the Warrants and the other Transaction
Documents, when taken together, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading.

 

(i)                            Financial Statements. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis during the periods involved, except as may be otherwise specified in such
financial 

 

 

statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries taken as a
whole as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, year-end audit adjustments. Each of the Material Contracts to which
the Company or any of its Subsidiaries is a party or to which the property or
assets of the Company or any of its Subsidiaries is subject has been filed as
an exhibit to the SEC Reports.

 

(j)                            Tax Matters. The Company and its Subsidiaries (i) have
prepared and filed all foreign, federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which they
are subject, (ii) have paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith,
with respect to which adequate reserves have been set aside on the books of the
Company and its Subsidiaries and (iii) have set aside on the books of the
Company and its Subsidiaries provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply, except, in the case of clauses (i) and (ii) above,
where the failure to so pay or file any such tax, assessment, charge or return
would not have a Material Adverse Effect.

 

(k)                        Material Changes. Since the date of the latest financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there have been no events, occurrences or
developments that have had or would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, (ii) the
Company and its Subsidiaries have not incurred any material liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses
and other liabilities incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or to be disclosed in filings
made with the Commission, (iii) the Company has not materially altered its
method of accounting or the manner in which it keeps its accounting books and
records, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock (other than in connection with repurchases of unvested stock issued to
employees of the Company), (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except Common Stock issued in
the ordinary course as dividends pursuant to existing Company stock option or
stock purchase plans or executive and director corporate arrangements disclosed
in the SEC Reports and (vi) there has not been any material change or
amendment to, or any waiver of any material right under, any Material Contract
under which the Company or any of its assets is bound or subject. Except for
the issuance of the Securities contemplated by this Agreement, no event,
liability or development has occurred or exists with respect to the Company or
its business, properties, operations or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the
time this representation is made that has not been publicly disclosed at least
one Trading Day prior to the date that this representation is made.

 

(l)                            Litigation. Except as disclosed in the SEC Reports,
there is no Action which (i) adversely affects or challenges the legality,
validity or enforceability of any of the Transaction Documents or the
Securities, (ii) involves a claim of material violation of or material 

 

 

liability under any
federal, state, local or foreign laws governing the Company’s and its
Subsidiaries operations, including without limiting the generality of the
foregoing, laws regulating the protection of human health, including without
limiting the generality of the foregoing, laws relating to the manufacture,
processing, packaging, labeling, marketing, distribution, use, inspection,
treatment, storage, disposal, transport or handling of the Company’s and its
Subsidiaries’ products, and regulated or hazardous substances, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder, all as may be
in effect from time to time and all successors, replacements and expansions
thereof, (iii) involves injury to or death of any person arising from or
relating to any of the Company’s or its Subsidiaries’ products, or (iv) could,
if there were an unfavorable decision, individually or in the aggregate, have a
Material Adverse Effect. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company under the Exchange Act or the Securities Act.

 

(m)                      Regulatory Matters.

 

(i)                                    The Company and its Subsidiaries are in
compliance, in all material respects, with all applicable laws administered or
issued by the United States Food and Drug Administration (the “FDA”) or the similar governmental
entity in any applicable jurisdiction (together with the FDA, the “Regulating Authority”).

 

(ii)                                The Company and its Subsidiaries have
obtained all necessary and applicable exemptions, approvals, clearances, authorizations,
licenses and registrations required by Regulating Authorities to permit the
development, manufacture, pre-clinical and clinical testing of its products, if
any, as presently conducted in jurisdictions where the Company and its
Subsidiaries currently conduct such activities.   The Company and its Subsidiaries have
properly registered any human clinical trials to the extent required by
applicable law.

 

(iii)                            All preclinical and clinical studies
conducted by or (to the Company’s Knowledge) for the Company and its
Subsidiaries (i) have been conducted in accordance with recognized good
clinical and good laboratory practices in all material respects, and (ii) are
in compliance with applicable laws administered or promulgated by the
Regulating Authority regarding preclinical and clinical studies in all material
respects.

 

(iv)                               There have been no recalls ordered or
adverse regulatory actions taken (or, to the Company’s Knowledge, threatened)
by the FDA or any other Regulating Authority with respect to any of the
products of the Company and its Subsidiaries, if any, including any facilities
where any such products are manufactured, processed, packaged or stored by the
Company and its Subsidiaries.

 

(v)                                   No false information or significant
omission has been made in any products application or products-related
submission to the Regulating Authority by or, to the Company’s Knowledge, on
behalf of the Company and its Subsidiaries.

 

(n)                         Title to Assets. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property owned by them as
set forth in the SEC Reports. 

 

 

The Company and its
Subsidiaries have good and marketable title to all tangible personal property
owned by them which is material to the business of the Company and its
Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except such as do not materially affect the value of such property and
do not interfere with the use made and proposed to be made of such property by
the Company and its Subsidiaries. Any real property and facilities held under
lease by the Company or its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its Subsidiaries.

 

(o)                          Intellectual Property.

 

(i)                                    All Intellectual Property of the Company
and its Subsidiaries is currently in compliance with all legal requirements
(including timely filings, proofs and payments of fees).  No Intellectual Property of the Company or
its Subsidiaries which is necessary for the conduct of the Company’s and each
of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted has been or is now involved in any
cancellation, dispute or litigation, and, to the Company’s Knowledge, no such
action is threatened.  No patent of the
Company or its Subsidiaries has been or is now involved in any interference,
reissue, re-examination or opposition proceeding.

 

(ii)                                All of the licenses and sublicenses and
consent, royalty or other agreements concerning Intellectual Property which are
necessary for the conduct of the Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted to which the Company or any Subsidiary is a party or by which any of
their assets are bound (other than generally commercially available,
non-custom, off-the-shelf software application programs having a retail
acquisition price of less than $10,000 per license) (collectively, “License Agreements”) are valid and
binding obligations of the Company or its Subsidiaries that are parties thereto
and, to the Company’s Knowledge, the other parties thereto, enforceable in
accordance with their terms, except to the extent that enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting the enforcement of creditors’ rights
generally, and there exists no event or condition which will result in a
material violation or breach of or constitute (with or without due notice or
lapse of time or both) a default by the Company or any of its Subsidiaries
under any such License Agreement.

 

(iii)                            To the Company’s Knowledge, the Company
and its Subsidiaries own or have the valid right to use all of the Intellectual
Property that is necessary for the conduct of the Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently
proposed to be conducted and for the ownership, maintenance and operation of
the Company’s and its Subsidiaries’ properties and assets, free and clear of
all liens, encumbrances, adverse claims or obligations to license all such
owned Intellectual Property, other than licenses entered into in the ordinary
course of the Company’s and its Subsidiaries’ businesses.  To the Company’s Knowledge, the Company and
its Subsidiaries have a valid and enforceable right to use all third party
Intellectual Property used or held for use in the respective businesses of the
Company and its Subsidiaries.

 

 

(iv)                               To the Company’s Knowledge, the conduct
of the Company’s and its Subsidiaries’ businesses as currently conducted does
not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third
party, and, to the Company’s Knowledge, the Intellectual Property of the
Company and its Subsidiaries which are necessary for the conduct of the Company’s
and each of its Subsidiaries’ respective businesses as currently conducted or
as currently proposed to be conducted are not being Infringed by any third
party.  There is no litigation or order
pending or outstanding or, to the Company’s Knowledge, threatened or imminent,
that seeks to limit or challenge or that concerns the ownership, use, validity
or enforceability of any Intellectual Property of the Company and its
Subsidiaries and the Company’s and its Subsidiaries’ use of any Intellectual
Property owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.

 

(v)                                   The consummation of the transactions
contemplated hereby and by the other Transaction Documents will not result in
the alteration, loss, impairment of or restriction on the Company’s or any of
its Subsidiaries’ ownership or right to use any of the Intellectual Property
which is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted.

 

(vi)                               The Company and its Subsidiaries have
taken reasonable steps to protect the Company’s and its Subsidiaries’ rights in
their Intellectual Property.  Each
employee, consultant and contractor who has had access to confidential
information which is necessary for the conduct of Company’s and each of its
Subsidiaries’ respective businesses as currently conducted or as currently
proposed to be conducted has executed an agreement to maintain the
confidentiality of such confidential information and has executed appropriate
agreements that are substantially consistent with the Company’s standard forms
thereof.  Except under confidentiality
obligations, there has been no material disclosure of any of the Company’s or
its Subsidiaries’ confidential information to any third party.

 

(p)                          Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2 of this Agreement
and the accuracy of the information disclosed in the Accredited Investor
Questionnaires, no registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the Purchasers under the
Transaction Documents.

 

(q)                          Registration Rights. Other than each of the Purchasers, no
Person has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company other than those securities
which are currently registered on an effective registration statement on file
with the Commission.

 

(r)                          No Directed Selling Efforts or
General Solicitation.
Neither the Company, nor any Person acting on behalf of the Company has
conducted any “general solicitation” or “general advertising” (as those terms
are used in Regulation D) in connection with the offer or sale of any of
the Securities.

 

 

(s)                          No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the
Company nor any Person acting on its behalf has, directly or indirectly, made
any offers or sales of any Company security or solicited any offers to buy any
security under circumstances that would (i) eliminate the availability of
the exemption from registration under Regulation D under the Securities
Act in connection with the offer and sale by the Company of the Securities as
contemplated hereby or (ii) cause the offering of the Securities pursuant
to the Transaction Documents to be integrated with prior offerings by the
Company or aggregated with prior offerings by the Company for purposes of any
applicable law, regulation or stockholder approval provisions, including,
without limitation, under the rules and regulations of any Trading Market
on which any of the securities of the Company are listed or designated.

 

(t)                            Listing and Maintenance
Requirements. The
Company’s Common Stock is registered pursuant to Section 12(b) of the
Exchange Act, and the Company has taken no action designed to terminate the
registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the Commission is contemplating terminating such
registration. Except as set forth in the SEC Reports, the Company has not, in
the 12 months preceding the date hereof, received written or oral notice
from any Trading Market on which the Common Stock is or has been listed or
quoted or from the Financial Industry Regulatory Authority to the effect that
the Company is not in compliance with the listing or maintenance requirements
of any such Trading Market. Except as set forth in the SEC Reports, the Company
is in compliance in all material respects with the listing and maintenance
requirements for continued trading of the Common Stock on the Principal Trading
Market.  The issuance and sale of the
Securities under this Agreement does not contravene the rules and
regulations of the Principal Trading Market, and no approval of the
stockholders of the Company thereunder is required for the Company to issue and
deliver the Securities to the Purchasers.

 

(u)                         Investment Company. The Company is not required to be
registered as, and is not an Affiliate of, and immediately following the
Closing will not be required to register as, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

(v)                           Transactions with Affiliates. 
Except as disclosed in the SEC Reports or as contemplated by this
Agreement, none of the officers or directors of the Company and, to the Company’s
Knowledge, none of the employees of the Company or any Subsidiary or stockholders
of the Company holding 5% or more of the outstanding voting securities of the
Company is presently a party to any material transaction with the Company or
any Subsidiary (other than, in the case of officers, directors and employees of
the Company, as holders of stock options or warrants in consideration for
services as employees, officers or directors, as applicable), including,
without limitation, any material contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
officer, director or employee or, to the Company’s Knowledge, any entity in
which any officer, director or any employee has a substantial interest or is an
officer, director, trustee or partner.

 

 

(w)                        Sarbanes-Oxley Act. 
The Company is in compliance in all material respects with applicable
requirements of the Sarbanes-Oxley Act of 2002 and applicable rules and
regulations promulgated by the Commission thereunder.

 

(x)                          Disclosure Controls and
Procedures.  The Company has established and maintains
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) that are effective in all material respects to ensure that material
information relating to the Company, including its Subsidiaries, is made known
to its chief executive officer and chief financial officer by others within
those entities.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s controls and
procedures as of December 31, 2008. 
The Company presented in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of December 31, 2008.  Since December 31, 2008, there have been
no significant changes in the Company’s internal controls (as such term is
defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to
the Company’s Knowledge, in other factors that could significantly affect the
Company’s internal controls, except as disclosed in the SEC Reports.

 

3.2                               Representations and Warranties of
the Purchasers.
Each Purchaser hereby, for itself and for no other Purchaser, represents and
warrants as of the date hereof and as of the Closing Date in the case of the
Purchasers listed on Annex A hereto to the Company as follows:

 

(a)                          Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents to which it is a party and otherwise
to carry out its obligations hereunder and thereunder. The execution, delivery
and performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or, if such
Purchaser is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Purchaser. Each of this
Agreement and the Registration Rights Agreement has been (or upon delivery will
have been) duly executed by such Purchaser, and when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.

 

(b)                          No Conflicts. The execution, delivery and performance
by such Purchaser of this Agreement and the Registration Rights Agreement and
the consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents
of such Purchaser, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which such Purchaser
is a party, or (iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities laws)
applicable to such Purchaser, except in the case of clauses (ii) and (iii) above,
for such conflicts, defaults, rights 

 

 

or violations which would
not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the ability of such Purchaser to perform its
obligations hereunder.

 

(c)                          Investment Intent. Such Purchaser understands that the
Securities are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the
Securities and, upon exercise of the Warrants, will acquire the Warrant Shares
issuable upon exercise thereof as principal for its own account and not with a
view to, or for distributing or reselling such Securities or any part thereof
in violation of the Securities Act or any applicable state securities laws,  provided,
however, that by making the representations herein, such Purchaser
does not agree to hold any of the Securities for any minimum period of time and
reserves the right, subject to the provisions of this Agreement and the Registration
Rights Agreement, at all times to sell or otherwise dispose of all or any part
of such Securities, including, without limitation, the Warrant Shares, pursuant
to an effective registration statement under the Securities Act or under an
exemption from such registration and in compliance with applicable federal and
state securities laws. Such Purchaser is acquiring the Securities hereunder in
the ordinary course of its business. Such Purchaser does not presently have any
agreement, plan or understanding, directly or indirectly, with any Person to
distribute or effect any distribution of any of the Securities (or any
securities which are derivatives thereof) to or through any person or entity;
such Purchaser is not a registered broker-dealer under Section 15 of the
Exchange Act or an entity engaged in a business that would require it to be so
registered as a broker-dealer.

 

(d)                          Purchaser Status. At the time such Purchaser was offered
the Securities, it was, and at the date hereof it is, and on each date on which
it exercises the Warrants it will be, an “accredited investor” as defined in Rule 501(a) under
the Securities Act.

 

(e)                          General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general advertisement.

 

(f)                            Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has
so evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.

 

(g)                         Access to Information. Such Purchaser acknowledges that it has
had the opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its
respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information that the
Company possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to the
investment. Neither such inquiries nor any other investigation conducted by or
on behalf of such Purchaser or its 

 

 

representatives or
counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Securities.

 

(h)                         Certain Trading Activities. Other than with respect to the
transactions contemplated herein, since the time that such Purchaser was first
contacted by the Company or any other Person regarding the transactions
contemplated hereby, neither the Purchaser nor, to the knowledge of such
Purchaser, any Affiliate of such Purchaser which (x) had knowledge of the
transactions contemplated hereby, (y) has knowledge or shares discretion
relating to such Purchaser’s investments or trading or information concerning
such Purchaser’s investments, including in respect of the Securities, and (z) is
subject to such Purchaser’s review or input concerning such Affiliate’s
investments or trading (collectively, “Trading
Affiliates”) has directly or indirectly, nor has any Person
acting on behalf of or pursuant to any understanding with such Purchaser or
Trading Affiliate, effected or agreed to effect any transactions in the
securities of the Company (including, without limitation, any Short Sales
involving the Company’s securities). Notwithstanding the foregoing, in the case
of a Purchaser and/or Trading Affiliate that is, individually or collectively,
a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s or Trading Affiliate’s assets and the
portfolio managers have no direct knowledge of the investment decisions made by
the portfolio managers managing other portions of such Purchaser’s or Trading
Affiliate’s assets, the representation set forth above shall apply only with
respect to the portion of assets managed by the portfolio manager that have
knowledge about the financing transaction contemplated by this Agreement. Other
than to other Persons (a) party to this Agreement or (b) advising
such Purchaser in relation to the Transaction Documents and the transactions
contemplated herein and therein, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).

 

(i)                            Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.

 

(j)                            Independent Investment Decision. Such Purchaser has independently
evaluated the merits of its decision to purchase Securities pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on
the advice of any other Purchaser’s business and/or legal counsel in making
such decision. Such Purchaser understands that nothing in this Agreement or any
other materials presented by or on behalf of the Company to the Purchaser in
connection with the purchase of the Securities constitutes legal, tax or
investment advice. Such Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Securities.

 

(k)                        Reliance on Exemptions. Such Purchaser understands that the
Securities being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of,
and such Purchaser’s compliance with, the representations, warranties, 

 

 

agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities.

 

(l)                            No Governmental Review. Such Purchaser understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the
Securities or the fairness or suitability of the investment in the Securities
nor have such authorities passed upon or endorsed the merits of the offering of
the Securities.

 

(m)                      Regulation M. Such Purchaser is aware that the
anti-manipulation rules of Regulation M under the Exchange Act may
apply to sales of Common Stock and other activities with respect to the Common
Stock by the Purchasers.

 

(n)                         Residency. Such Purchaser’s principal executive
offices are in the jurisdiction set forth immediately below such Purchaser’s
name on the applicable signature page attached hereto.

 

The Company and each of the Purchasers acknowledge and
agree that no party to this Agreement has made or makes any representations or
warranties with respect to the transactions contemplated hereby other than
those specifically set forth in this Article III and the Transaction
Documents.

 

ARTICLE 4

OTHER AGREEMENTS OF THE PARTIES

 

4.1                               Transfer Restrictions.

 

(a)                          Compliance with Laws. Notwithstanding any other provision of
this Article 4, each Purchaser covenants that the Securities may be
disposed of only pursuant to an effective registration statement under, and in
compliance with the requirements of, the Securities Act, or pursuant to an
available exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and in compliance with any applicable state
and federal securities laws. In connection with any transfer of the Securities
other than (i) pursuant to an effective registration statement, (ii) to
the Company, (iii) to an Affiliate of a Purchaser, (iv) pursuant to Rule 144
(provided that the Purchaser
provides the Company with reasonable assurances (in the form of seller and
broker representation letters) that the securities may be sold pursuant to such
rule) or Rule 144A, (v) pursuant to Rule 144 without restriction
following the applicable holding period or (vi) in connection with a bona
fide pledge, the Company may require an opinion of counsel reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act (the reasonable fees of such counsel to be borne by the Company). As a
condition of any such transfer, any such transferee shall agree in writing to
be bound by the terms of this Agreement and shall have the rights of a
Purchaser under this Agreement and the Registration Rights Agreement.

 

 

(b)                          Legends. Certificates evidencing the Securities
shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form until such time as they
are not required under Section 4.1(c) (and a stock transfer order may
be placed against transfer of the certificates for the Securities in violation
of this Agreement):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS PROVIDED BY SECTION 4 OF
THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS OF JANUARY 21, 2010, BY
AND AMONG WORLD HEART CORPORATION AND EACH PURCHASER IDENTIFIED ON THE
SIGNATURE PAGES THERETO.

 

In addition, if any Purchaser is an Affiliate of the
Company, certificates evidencing the Securities issued to such Purchaser shall
bear a customary “affiliates” legend.

 

(c)                          Removal of Legends. The legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such legend
or any other legend to the holder of the applicable Securities upon which it is
stamped or issue the applicable Securities without such a legend or any other
legend to such holder by electronic delivery at the applicable balance account
at DTC, if (i) such Securities are sold pursuant to an effective
Registration Statement and the Purchaser has delivered a signed and completed
Purchaser’s Certificate of Subsequent Sale in substantially the form of Exhibit G attached hereto (the “Certificate of Sale”
) with respect to such Securities, (ii) such Securities are sold or
transferred pursuant to Rule 144 (if the transferor is not an Affiliate of
the Company), or (iii) such Securities are eligible for sale under Rule 144
without restriction. Any fees (with respect to the Transfer Agent, Company
Counsel or otherwise) associated with the removal of such legend shall be borne
by the Company. Following such time as a legend is no longer required for
certain Securities, the Company will no later than three (3) Trading Days
following the delivery by a Purchaser to the Company or the Transfer Agent
(with notice to the Company) of a legended certificate representing such Securities
(endorsed or with stock powers attached, signatures guaranteed, and otherwise
in form necessary to affect the reissuance and/or transfer), deliver or cause
to be delivered to the transferee of such Purchaser or such Purchaser, as
applicable, a certificate representing such Securities that is free from all
restrictive and other legends. The Company may not make any notation on its
records or give instructions to the Transfer Agent that enlarge the
restrictions on transfer set forth in this Section 4.1. Certificates for
Shares or Warrant Shares subject to legend removal hereunder may be transmitted
by the Transfer Agent to the Purchasers, as applicable, by crediting the
account of the transferee’s Purchaser’s prime broker with DTC.  If (1) a certificate representing the
Shares or Warrant Shares is not delivered to the Purchaser within three (3) Trading
Days after receipt by the Company or the Transfer Agent of all documents
necessary for the removal of the legend set forth above, including, but not limited
to the signed and completed Certificate of Sale and (2) prior to the time
such certificate is received by the Purchaser, the Purchaser, or any third
party on behalf of the Purchaser or for the Purchaser’s account, purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in
satisfaction of a sale by the Purchaser of shares represented by such
certificate (a “Buy-In”),
then the Company shall pay in cash to the Purchaser (for costs incurred either
directly by such Purchaser or on behalf of a third party) the amount by which
the total purchase price paid for Common Stock as a result of the Buy-In
(including 

 

 

brokerage commissions, if
any) exceeds the proceeds received by such Purchase as a result of the sale to
which such Buy-In relates.  The Purchaser
shall provide the Company written notice indicating the amounts payable to the
Purchaser in respect of the Buy-In.

 

(d)                          Irrevocable Transfer Agent
Instructions. The
Company shall issue irrevocable instructions to its Transfer Agent, and any
subsequent transfer agent, in the form of Exhibit D
attached hereto (the “Irrevocable
Transfer Agent Instructions”). The Company represents and
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions or instructions consistent therewith will be given by the Company
to its transfer agent in connection with this Agreement, and that the
Securities shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement, the other
Transaction Documents and applicable law. The Company acknowledges that a
breach by it of its obligations under this Section 4.1(d) will cause
irreparable harm to a Purchaser. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 4.1(d) will
be inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 4.1(d), that a Purchaser shall
be entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond
or other security being required.

 

(e)                          Acknowledgement. Each Purchaser hereunder acknowledges
its primary responsibilities under the Securities Act and accordingly will not
sell or otherwise transfer the Warrants, Shares, the Warrant Shares or any
interest therein without complying with the requirements of the Securities Act.
While the Registration Statement remains effective, each Purchaser hereunder
may sell the Shares and Warrant Shares in accordance with the plan of
distribution contained in the Registration Statement and, if it does so, it
will comply therewith and with the related prospectus delivery requirements
unless an exemption therefrom is available. Each Purchaser, severally and not
jointly with the other Purchasers, agrees that if it is notified by the Company
in writing at any time that the Registration Statement registering the resale
of the Shares or the Warrant Shares is not effective or that the prospectus
included in such Registration Statement no longer complies with the
requirements of Section 10 of the Securities Act, the Purchaser will
refrain from selling such Shares and Warrant Shares until such time as the
Purchaser is notified by the Company that such Registration Statement is
effective or such prospectus is compliant with Section 10 of the
Securities Act, unless such Purchaser is able to, and does, sell such Shares or
Warrant Shares pursuant to an available exemption from the registration
requirements of Section 5 of the Securities Act.

 

4.2                               Reservation of Common Stock. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance from and after the Closing Date, no less than the maximum number of
shares of Common Stock issuable upon exercise of the Warrants issued at the
Closing.  On the Closing Date, the Company
will notify the Transfer Agent of the reservation of the Warrant Shares as
required by this Section 4.2.

 

4.3                               Furnishing of Information. In order to enable the Purchasers to
sell the Securities under Rule 144 of the Securities Act, for a period of
one (1) year from the Closing Date, the Company shall use its commercially
reasonable efforts to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be 

 

 

filed by the Company
after the date hereof pursuant to the Exchange Act. During such one (1) year
period, if the Company is not required to file reports pursuant to such laws,
it will prepare and furnish to the Purchasers and make publicly available in
accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Securities under Rule 144.

 

4.4                               Form D and Blue Sky. The Company agrees to timely file a Form D
with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Purchaser who requests a copy in writing promptly
after such filing. The Company, on or before the Closing Date, shall take such
action as the Company shall reasonably determine is necessary in order to
obtain an exemption for or to qualify the Securities for sale to the Purchasers
at the Closing pursuant to this Agreement under applicable securities or “Blue
Sky” laws of the states of the United States (or to obtain an exemption from
such qualification), and shall provide evidence of any such action so taken to
the Purchasers who request in writing such evidence on or prior to the Closing
Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or “Blue Sky” laws
of the states of the United States following the Closing Date.

 

4.5                               No Integration. The Company shall not, and shall use
its commercially reasonable efforts to ensure that no Affiliate of the Company
shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities Act)
that will be integrated with the offer or sale of the Securities in a manner
that would require the registration under the Securities Act of the sale of the
Securities to the Purchasers, or that will be integrated or aggregated with the
offer or sale of the Securities for purposes of the rules and regulations
of any Trading Market such that it would require stockholder approval prior to
the closing of such other transaction unless stockholder approval is obtained
before the closing of such subsequent transaction.

 

4.6                               Listing of Securities. In the time and manner required by the
Principal Trading Market, the Company shall prepare and file with such Trading
Market an additional shares listing application covering all of the Shares and
Warrant Shares and shall use its commercially reasonable efforts to take all
steps necessary to maintain, so long as any other shares of Common Stock shall
be so listed, such listing.

 

4.7                               Use of Proceeds. The Company intends to use the net proceeds
from the sale of the Securities hereunder for working capital and general
corporate purposes.

 

4.8                               Dispositions and Confidentiality
After The Date Hereof. Each Purchaser shall not, and shall cause its Trading Affiliates not
to, prior to the effectiveness of the Registration Statement:   (a) sell, offer to sell, solicit offers
to buy, dispose of, loan, pledge or grant any right with respect to
(collectively, a  “Disposition”)
the Securities; or (b) engage in any hedging or other transaction which is
designed or could reasonably be expected to lead to or result in a Disposition
of the Securities by such Purchaser or an Affiliate. In addition, Purchaser
agrees that for so long as it owns any Common Stock, it will not enter into any
short sale of Shares executed at a time when the Purchaser has no equivalent
offsetting long position in the Common Stock. For purposes of determining
whether the Purchaser has an equivalent offsetting long position in the Common
Stock, shares that the Purchaser is entitled to receive within sixty
(60) days (whether pursuant to contract or upon conversion or exercise of
convertible securities) will be 

 

 

included as if held long
by the Purchaser. Such Purchaser covenants that neither it nor any Person
acting on its behalf or pursuant to any understanding with it will engage in
any transactions in the Company’s securities (including, without limitation,
any Short Sales involving the Company’s securities) during the period from the
date hereof until the earlier of such time as (i) the transactions
contemplated by this Agreement are first publicly announced or (ii) this
Agreement is terminated in full pursuant to Section 6.17. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such
Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the representation set forth above shall apply only
with respect to the portion of assets managed by the portfolio managers that
have knowledge about the financing transaction contemplated by this Agreement.
Each Purchaser understands and acknowledges, severally and not jointly with any
other Purchaser, that the Commission currently takes the position that covering
a short position established prior to effectiveness of a resale registration
statement with shares included in such registration statement would be a violation
of Section 5 of the Securities Act, as set forth in Item 65, Section 5
under Section A, of the Manual of Publicly Available Telephone
Interpretations, dated July 1997, compiled by the Office of Chief Counsel,
Division of Corporation Finance.

 

ARTICLE 5

CONDITIONS PRECEDENT TO CLOSING

 

5.1                               Conditions Precedent to the
Obligations of the Purchasers to Purchase Securities at the Closing. The obligation of each Purchaser listed
on Annex A hereto to acquire Securities at the Closing is subject to the fulfillment
to such Purchaser’s satisfaction, on or prior to the Closing Date, of each of
the following conditions, any of which may be waived by such Purchaser (as to
itself only):

 

(a)                          Representations and Warranties. The representations and warranties of
the Company contained herein shall be true and correct in all material respects
(except for those representations and warranties which are qualified as to
materiality, in which case such representations and warranties shall be true
and correct in all respects) as of the date of this Agreement and as of the
Closing Date, as though made on and as of the Closing Date, except for such
representations and warranties that speak as of a specific date.

 

(b)                          Performance. The Company shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by it at or prior to the Closing.

 

(c)                          No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(d)                          Consents. The Company shall have obtained in a
timely fashion any and all consents, permits, approvals, registrations and
waivers necessary for consummation of the 

 

 

purchase, sale and
issuance of the Securities at the Closing (including all Required Approvals and
any consents, permits, approvals, registrations and waivers required under
applicable Canadian law), all of which shall be and remain so long as necessary
in full force and effect.  The Company shall
have filed with the Principal Trading Market an additional shares listing
application covering all of the Shares and the Warrants Shares.

 

(e)                          No Suspensions of Trading in
Common Stock; Listing. The Common Stock (i) shall be designated for quotation or listed
on the Principal Trading Market and (ii) shall not have been suspended, as
of the Closing Date, by the Commission or the Principal Trading Market from
trading on the Principal Trading Market.

 

(f)                            Company Deliverables. The Company shall have delivered the
Company Deliverables in accordance with Section 2.2(a).

 

(g)                         Compliance Certificate. The Company shall have delivered to
each Purchaser a certificate, dated as of the Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, dated as of the Closing
Date, certifying to the fulfillment of the conditions specified in
Sections 5.1(a), (b) and (d) in the form attached hereto as Exhibit F.

 

(h)                         Termination. This Agreement shall not have been
terminated as to any Purchaser in accordance with Section 6.17 herein, and
the Company shall have received aggregate proceeds at the Closing of not less
than Six Million Dollars ($6,000,000).

 

(i)                            Legal Opinion. The Purchasers shall have received an
opinion of Company Counsel to the Company in a customary form reasonably acceptable
to the Purchasers.

 

5.2                               Conditions Precedent to the
Obligations of the Company to sell Securities at the Closing. The Company’s obligation to sell and
issue the Securities to each Purchaser listed on Annex A hereto at the Closing
is subject to the fulfillment to the satisfaction of the Company on or prior to
the Closing Date of the following conditions, any of which may be waived by the
Company:

 

(a)                          Representations and Warranties. The representations and warranties made
by such Purchaser in Section 3.2 hereof shall be true and correct in all
material respects as of the date of this Agreement, and as of the Closing Date
as though made on and as of the Closing Date, except for representations and
warranties that speak as of a specific date.

 

(b)                          Performance. Such Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing Date.

 

(c)                          No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

 

(d)                          Consents. The Company shall have obtained in a
timely fashion any and all consents, permits, approvals, registrations and
waivers necessary for consummation of the purchase and sale of the Securities,
all of which shall be and remain so long as necessary in full force and effect,
provided that the Company shall use best efforts to obtain in a timely fashion
any and all such consents, permits, approvals, registrations and waivers.

 

(e)                          Purchasers Deliverables. Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b).

 

(f)                            Termination. This Agreement shall not have been
terminated as to such Purchaser in accordance with Section 6.17 herein.

 

ARTICLE 6

MISCELLANEOUS

 

6.1                               Fees and Expenses. Except as set forth in this Section 6.1,
the Company and the Purchasers shall each pay the fees and expenses of their
respective advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and duties
levied, and the reasonable fees of O’Melveny & Myers LLP, special
counsel to certain of the Purchasers in connection with the sale and issuance
of the Securities to the Purchasers.

 

6.2                               Entire Agreement. The Transaction Documents, together
with the Exhibits and Schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements, understandings, discussions and representations, oral or written,
with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules. At or after the Closing, and
without further consideration, the Company and the Purchasers will execute and
deliver to the other such further documents as may be reasonably requested in
order to give practical effect to the intention of the parties under the
Transaction Documents.

 

6.3                               Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile (provided the sender receives a machine-generated confirmation of
successful transmission) at the facsimile number specified in this Section prior
to 5:00 p.m., New York City time, on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on
a day that is not a Trading Day or later than 5:00 p.m., New York City
time, on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service with
next day delivery specified, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as follows:

 

 

	
  If
  to the Company:

  	
   

  	
  World
  Heart Corporation

  
	
   

  	
   

  	
  4750
  Wiley Post Way, Suite 120

  
	
   

  	
   

  	
  Salt
  Lake City, UT 84116

  
	
   

  	
   

  	
  Telephone
  No.:   (801) 303-4361

  
	
   

  	
   

  	
  Facsimile
  No.:   (801) 355-7622

  
	
   

  	
   

  	
  Attention:   Morgan R. Brown

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
  Cooley
  Godward Kronish LLP

  
	
   

  	
   

  	
  Five Palo Alto Square

  
	
   

  	
   

  	
  3000 El Camino Real

  
	
   

  	
   

  	
  Palo Alto, California 94306-2155

  
	
   

  	
   

  	
  Telephone No.:  
  (650) 843-5180

  
	
   

  	
   

  	
  Facsimile No.:  
  (650) 849-7400

  
	
   

  	
   

  	
  Attention:  
  Mark Weeks

  
	
   

  	
   

  	
   

  
	
  If
  to a Purchaser:

  	
   

  	
  To
  the address set forth under such Purchaser’s name on the signature
  page hereof;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  or such other address as may be designated in
  writing hereafter, in the same manner, by such Person.

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  O’Melveny &
  Myers LLP

  
	
   

  	
   

  	
  2765 Sand Hill Road

  
	
   

  	
   

  	
  Menlo Park, California 94025

  
	
   

  	
   

  	
  Telephone No.:  
  (650) 473-2638

  
	
   

  	
   

  	
  Facsimile No.:  
  (650) 473-2601

  
	
   

  	
   

  	
  Attention:   Sam Zucker

  

 

6.4                               Amendments; Waivers; No
Additional Consideration. No provision of this Agreement may be waived or amended except in a
written instrument signed, in the case of an amendment, by the Company and the
Purchasers holding or having the right to acquire a majority of the Shares and
the Warrant Shares on a fully-diluted basis at the time of such amendment or,
in the case of a waiver, by the party against whom enforcement of any such
waiver is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right. No consideration shall be offered or paid to
any Purchaser to amend or consent to a waiver or modification of any provision
of any Transaction Document unless the same consideration is also offered to
all Purchasers who then hold Securities.

 

6.5                               Construction. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party. 

 

 

This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction Documents.

 

6.6                               Successors and Assigns. The provisions of this Agreement shall
inure to the benefit of and be binding upon the parties and their successors
and permitted assigns. This Agreement, or any rights or obligations hereunder,
may not be assigned by the Company without the prior written consent of the
Purchasers. Any Purchaser may assign its rights hereunder in whole or in part
to any Person to whom such Purchaser assigns or transfers any Securities in
compliance with the Transaction Documents and applicable law, provided such
transferee shall agree in writing to be bound, with respect to the transferred
Securities, by the terms and conditions of this Agreement that apply to the “Purchasers”.

 

6.7                               No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

6.8                               Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective Affiliates, employees or agents) shall be commenced exclusively in
the New York Courts. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law.  EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

6.9                               Survival. The representations and warranties
contained herein shall survive the Closing and the delivery of the Securities
for a period of one (1) year from the Closing Date. The agreements and
covenants contained herein shall survive for the applicable statute of
limitations.

 

6.10                        Execution. This Agreement may be executed in two
or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become 

 

 

effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission, or by
e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile signature page were an original
thereof.

 

6.11                        Severability. If any provision of this Agreement is
held to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall
not in any way be affected or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision that is a reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Agreement.

 

6.12                        Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company and the Transfer Agent of such loss, theft or
destruction and the execution by the holder thereof of a customary lost
certificate affidavit of that fact and an agreement to indemnify and hold
harmless the Company and the Transfer Agent for any losses in connection
therewith or, if required by the Transfer Agent, a bond in such form and amount
as is required by the Transfer Agent. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party
costs associated with the issuance of such replacement Securities. If a
replacement certificate or instrument evidencing any Securities is requested
due to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.

 

6.13                        Remedies. In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in
any action for specific performance of any such obligation (other than in
connection with any action for a temporary restraining order) the defense that
a remedy at law would be adequate.

 

6.14                        Payment Set Aside. To the extent that the Company makes a
payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside, recovered from, disgorged by or are required to be refunded, repaid or
otherwise restored to the Company, by a trustee, receiver or any other person
under any law (including, without limitation, any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of
any such restoration the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.

 

 

6.15                        Adjustments in Share Numbers and
Prices. In the
event of any stock split, subdivision, dividend or distribution payable in
shares of Common Stock (or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly shares of Common
Stock), combination or other similar recapitalization or event occurring after
the date hereof, each reference in any Transaction Document to a number of
shares or a price per share shall be deemed to be amended to appropriately
account for such event.

 

6.16                        Independent Nature of Purchasers’
Obligations and Rights. The obligations of each Purchaser under any Transaction Document are
several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The decision
of each Purchaser to purchase Securities pursuant to the Transaction Documents
has been made by such Purchaser independently of any other Purchaser and
independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of
operations, condition (financial or otherwise) or prospects of the Company
which may have been made or given by any other Purchaser or by any agent or
employee of any other Purchaser, and no Purchaser and any of its agents or
employees shall have any liability to any other Purchaser (or any other Person)
relating to or arising from any such information, materials, statement or
opinions. Nothing contained herein or in any Transaction Document, and no
action taken by any Purchaser pursuant thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making
its investment hereunder and that no Purchaser will be acting as agent of such
Purchaser in connection with monitoring its investment in the Securities or
enforcing its rights under the Transaction Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose. The
Company acknowledges that each of the Purchasers has been provided with the
same Transaction Documents for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to do so by
any Purchaser. The Company’s obligations to each Purchaser under this Agreement
are identical to its obligations to each other Purchaser other than such
differences resulting solely from the number of Securities purchased by such
Purchaser, but regardless of whether such obligations are memorialized herein
or in another agreement between the Company and a Purchaser.

 

6.17                        Termination. This Agreement may be terminated and
the sale and purchase of the Shares and the Warrants abandoned at any time
prior to the Closing by either the Company or any Purchaser listed on Annex A
hereto (with respect to itself only), upon written notice to the other, if the
Closing has not been consummated on or prior to 5:00 p.m., New York City
time, on the Outside Date;  provided, however, that the right
to terminate this Agreement under this Section 6.17 shall not be available
to any Person whose failure to comply with its obligations under this Agreement
has been the cause of or resulted in the failure of the Closing to occur on or
before such time. Nothing in this Section 6.17 shall be deemed to release
any party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other

 

 

Transaction Documents or
to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction
Documents. In the event of a termination pursuant to this Section, the Company
shall promptly notify all non-terminating Purchasers. Upon a termination in
accordance with this Section, the Company and the terminating Purchaser(s) shall
not have any further obligation or liability (including arising from such
termination) to the other, and no Purchaser will have any liability to any
other Purchaser under the Transaction Documents as a result therefrom.

 

6.18        Rescission and Withdrawal Right. 
Notwithstanding anything to the contrary contained in (and without
limiting any similar provisions of) the Transaction Documents, whenever any
Purchaser exercises a right, election, demand or option owed to such Purchaser
by the Company under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then,
prior to the performance by the Company of the Company’s related obligation,
such Purchaser may rescind or withdraw, in its sole discretion from time to
time upon written notice to the Company, any relevant notice, demand or
election in whole or in part without prejudice to its future actions and
rights.

 

6.19        Conflict Waiver.  Each party to this Agreement acknowledges that Cooley
Godward Kronish LLP (“Cooley”),
outside general counsel to the Company, has in the past performed and is or may
now or in the future represent one or more Purchasers or their affiliates in
matters unrelated to the transactions contemplated by this Agreement (the “Financing”), including
representation of such Purchasers or their affiliates in matters of a similar nature
to the Financing.  The applicable rules of
professional conduct require that Cooley inform the parties hereunder of this
representation and obtain their consent. 
Cooley has served as outside general counsel to the Company and has
negotiated the terms of the Financing solely on behalf of the Company.  The Company and each Purchaser hereby (a) acknowledge
that they have had an opportunity to ask for and have obtained information
relevant to such representation, including disclosure of the reasonably foreseeable
adverse consequences of such representation; (b) acknowledge that with
respect to the Financing, Cooley has represented solely the Company, and not
any Purchaser or any stockholder, director or employee of the Company or any
Purchaser; and (c) gives its informed consent to Cooley’s representation
of the Company in the Financing.

 

IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated above.

 

	
   

  	
  WORLD
  HEART CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Morgan R. Brown

  
	
   

  	
  Name:

  	
  Morgan
  R. Brown

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  

 

 

	
  THE
  PURCHASERS:

  	
   

  
	
   

  	
  NAME OF PURCHASER: Special Situations Fund III
  QP, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
  Name: Austin Marxe

  
	
   

  	
  Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $860,153.00

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 167,020

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 334,040

  
	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 13-3737427

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  527
  Madison Avenue, Suite 2600

  

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-319-6625

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Austin Marxe / Marianne Kelly

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  
				

 

 

	
   

  	
  NAME OF PURCHASER: Special Situations Cayman
  Fund, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
   

  	
  Name: Austin Marxe

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $312,424.75

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 60,665

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 121,300

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 98-0132442

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  527
  Madison Avenue, Suite 2600

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-319-6625

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Austin Marxe / Marianne Kelly

  
	
   

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  

 

 

	
   

  	
  NAME OF PURCHASER: 

  	
  Special Situations Private Equity Fund, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
   

  	
  Name: Austin Marxe

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $312,424.75

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 60,665

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 121,300

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 13-3916551

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  527
  Madison Avenue, Suite 2600

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-319-6625

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Austin Marxe / Marianne Kelly

  
	
   

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  
					

 

 

	
   

  	
  NAME OF PURCHASER: 

  	
  Special Situations Life Sciences Fund, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Austin Marxe

  
	
   

  	
   

  	
  Name: Austin Marxe

  
	
   

  	
   

  	
  Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $515,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 100,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 200,000

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 56-2514791

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  527
  Madison Avenue, Suite 2600

  

  
	
   

  	
   

  	
  New
  York, New York 10022

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-319-6670

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Austin Marxe / Marianne Kelly

  
	
   

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  
					

 

 

	
   

  	
  NAME
  OF PURCHASER

  
	
   

  	
   

  
	
   

  	
  VENROCK ASSOCIATES V.
  L.P.

  
	
   

  	
  By: Venrock Management V, LLC

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  VENROCK PARTNERS V, L.P.

  
	
   

  	
  By: Venrock Partners Management V, LLC

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  VENROCK ENTREPRENEURS
  FUND V, L.P.

  
	
   

  	
  By: VEF Management V, LLC

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David L. Stepp

  
	
   

  	
   

  	
  David L. Stepp

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDRESS FOR NOTICE

  
	
   

  	
   

  
	
   

  	
  Venrock

  
	
   

  	
  3340 Hillview Avenue

  
	
   

  	
  Palo Alto, CA 94304

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  David L. Stepp

  
	
   

  	
  Tel: 650-475-3734

  
	
   

  	
   

  
	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  $2,000,002.5.

  
	
   

  	
   

  
	
   

  	
  Number
  of Shares to be Acquired: 388,350

  
	
   

  	
   

  
	
   

  	
  Underlying
  Shares Subject to Warrants: 776,700

  (the number of Shares to be acquired)

  
	
   

  	
   

  
	
   

  	
  Tax
  ID Numbers:

  
	
   

  	
   

  
	
   

  	
  Venrock
  Associates V

  	
  41-2236453

  
	
   

  	
  Venrock
  Partners V

  	
  20-8536996

  
	
   

  	
  Venrock
  Entrepreneurs Fund V

  	
  20-8536980

  
					

 

 

	
   

  	
  NAME OF PURCHASER: 
  NEW LEAF VENTURES II, L.P.

  
	
   

  	
   

  
	
   

  	
  By: New Leaf Venture Associates II, L.P.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By: New Leaf Venture Management II, L.L.C.

  
	
   

  	
  Its: General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig L. Slutzkin

  
	
   

  	
  Name:

  	
  Craig L. Slutzkin

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Aggregate
  Purchase Price (Subscription Amount): 

  
	
   

  	
  $2,000,002.50

  
	
   

  	
   

  
	
   

  	
  Number
  of Shares to be Acquired: 388,350

  
	
   

  	
   

  
	
   

  	
  Underlying
  Shares Subject to Warrants: 776,700

  
	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  
	
   

  	
  Tax
  ID No.: 32-0214549

  
	
   

  	
   

  
	
   

  	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
  New Leaf Vnetures II, L.P.

  
	
   

  	
  c/o
  New Leaf Venture Partners, L.L.C.

  
	
   

  	
  7
  Times Square, Suite 3502

  
	
   

  	
  New
  York, NY 10036

  
	
   

  	
   

  
	
   

  	
  Telephone
  No.: 646-871-6420

  
	
   

  	
   

  
	
   

  	
  Email:  craig@nlvpartners.com

  
	
   

  	
   

  
	
   

  	
  Attention:  Craig L. Slutzkin

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  
				

 

 

	
   

  	
  NAME OF PURCHASER:

  	
  SRB Greenway Opportunity Fund, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: SRB Management, L.P., General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: BC Advisors, L.L.C., General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven R. Becker

  
	
   

  	
   

  	
   

  	
  Steven R. Becker, Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  $44,001.60

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 8,544

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 17,088

  (the number of Shares to be acquired)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 26-3495172

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SRB Greenway Opportunity Fund, L.P.

  
	
   

  	
   

  	
  300 Crescent Court, Suite 1111

  
	
   

  	
   

  	
  Dallas, TX 75201

  
	
   

  	
   

  	
  Tel: 214-756-6016

  
	
   

  	
   

  	
  Fax: 214-756-6079

  
	
   

  	
   

  	
  Attention: Steve Becker
  (steve@greenwaycapital.com)

  
	
  (if different than above)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  c/o

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Street:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  City/State/Zip:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Telephone No.:

  	
   

  	
   

  	
   

  
						

 

 

	
   

  	
  NAME OF PURCHASER:

  	
  SRB Greenway Opportunity Fund (QP), L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: SRB Management, L.P., General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: BC Advisors, L.L.C., General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven R. Becker

  
	
   

  	
   

  	
   

  	
  Steven R. Becker, Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  $355,998.90

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 69,126

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 138,252

  (the number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 26-3604733

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SRB Greenway Opportunity Fund (QP), L.P.

  
	
   

  	
   

  	
  300 Crescent Court,Suite 1111

  
	
   

  	
   

  	
  Dallas, TX 75201

  
	
   

  	
   

  	
  Tel: 214-756-6016

  
	
   

  	
   

  	
  Fax: 214-756-6079

  
	
   

  	
   

  	
  Attention: Steve Becker
  (steve@greenwaycapital.com)

  
	
   

  	
   

  	
   

  
	
  (if different than above)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  c/o

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Street:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  City/State/Zip:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  	
   

  
					

 

 

	
   

  	
  NAME OF PURCHASER: Solar Group S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Evelyn Todd

  
	
   

  	
   

  	
  Name: Evelyn Todd

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $500,003.20

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 97,088

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 194,176

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14
  Cam Den North Road

  
	
   

  	
   

  	
  Paget,
  Bermuda DV-03

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 441-234-2326

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:
  jjtodd@northrock.bm

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  JJ Todd

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  

 

 

	
   

  	
  NAME OF PURCHASER:

  	
  Richard H. & Catherine F. Osgood

  
	
   

  	
   

  	
  TTEES FOR THE OSGOOD FAMILY

  
	
   

  	
   

  	
  TRUST UAD 4/14/2000

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Richard H. Osgood

  
	
   

  	
   

  	
  Name: Richard H. Osgood

  
	
   

  	
   

  	
  Title: Richard H. Osgood, Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $100,002.70

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 19,418

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 38,836

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  One
  Bush Street #1700

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  San
  Francisco, CA 94104

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 415-274-6833

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email: rick.osgood@wedbush.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Rick Osgood

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  
					

 

 

	
   

  	
  NAME OF PURCHASER: Cougar Trading LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Emanuel E. Geduld

  
	
   

  	
   

  	
  Name: Emanuel E. Geduld

  
	
   

  	
   

  	
  Title: Sr. Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  

  
	
   

  	
   

  	
  $100,425.00

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 19,500

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 39,000

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 26-0040893

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Carl J. Bennett

  
	
   

  	
   

  	
  Cougar
  Trading LLC

  
	
   

  	
   

  	
  1370
  Avenues of the Americas

  
	
   

  	
   

  	
  New
  York, NY 10019

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-702-0693

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:
  cbennett@cougartrading.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Carl J. Bennett

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  

 

 

	
   

  	
  NAME OF PURCHASER: Iroquois Master Fund Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joshua Silverman

  
	
   

  	
   

  	
  Name: Joshua Silverman

  
	
   

  	
   

  	
  Title: Authorized Signer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aggregate
  Purchase Price (Subscription Amount):

  
	
   

  	
   

  	
  $206,000.00

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number
  of Shares to be Acquired: 40,000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Underlying
  Shares Subject to Warrants: 80,000

  
	
   

  	
   

  	
  (the
  number of Shares to be acquired)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax
  ID No.: 98-0445485

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address for Notice:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  641
  Lexington Avenue, 26th Floor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  New
  York, NY 10022

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone
  No.: 212-924-3070

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Email:
  jsilvermant@icfund.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:
  Josh Silverman

  
	
   

  	
   

  
	
  Delivery Instructions:

  	
   

  
	
  (if different than above)

  	
   

  
	
   

  	
   

  
	
  c/o

  	
   

  
	
   

  	
   

  
	
  Street:

  	
   

  
	
   

  	
   

  
	
  City/State/Zip:

  	
   

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Telephone
  No.:

  	
   

  

 

 

	
  Name

  	
   

  	
  Aggregate

  Purchase Price

  (Subscription

  Amount)

  	
   

  	
  Number of 

  Shares to be

  Acquired

  	
   

  	
  Underlying

  Shares

  Subject to

  First Warrant

  	
   

  	
  Underlying

  Shares

  Subject to

  Second

  Warrant

  	
   

  
	
  COUGAR TRADING LLC

  	
   

  	
  $

  	
  100,425.00

  	
   

  	
  19,500

  	
   

  	
  19,500

  	
   

  	
  19,500

  	
   

  
	
  IROQUOIS MASTER FUND LTD.

  	
   

  	
  $

  	
  206,000.00

  	
   

  	
  40,000

  	
   

  	
  40,000

  	
   

  	
  40,000

  	
   

  
	
  NEW LEAF VENTURES II, L.P.

  	
   

  	
  $

  	
  2,000,002.50

  	
   

  	
  388,350

  	
   

  	
  388,350

  	
   

  	
  388,350

  	
   

  
	
  OSGOOD FAMILY TRUST UAD 4/14/2000

  	
   

  	
  $

  	
  100,002.70

  	
   

  	
  19,418

  	
   

  	
  19,418

  	
   

  	
  19,418

  	
   

  
	
  SOLAR GROUP S.A.

  	
   

  	
  $

  	
  500,003.20

  	
   

  	
  97,088

  	
   

  	
  97,088

  	
   

  	
  97,088

  	
   

  
	
  SPECIAL SITUATIONS FUND III QP, L.P.

  	
   

  	
  $

  	
  860,153.00

  	
   

  	
  167,020

  	
   

  	
  167,020

  	
   

  	
  167,020

  	
   

  
	
  SPECIAL SITUATIONS CAYMAN FUND, L.P.

  	
   

  	
  $

  	
  312,424.75

  	
   

  	
  60,665

  	
   

  	
  60,665

  	
   

  	
  60,665

  	
   

  
	
  SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P.

  	
   

  	
  $

  	
  312,424.75

  	
   

  	
  60,665

  	
   

  	
  60,665

  	
   

  	
  60,665

  	
   

  
	
  SPECIAL SITUATIONS LIFE SCIENCES FUND, L.P.

  	
   

  	
  $

  	
  515,000.00

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  
	
  SRB GREENWAY OPPORTUNITY FUND, L.P.

  	
   

  	
  $

  	
  44,001.60

  	
   

  	
  8,544

  	
   

  	
  8,544

  	
   

  	
  8,544

  	
   

  
	
  SRB GREENWAY OPPORTUNITY FUND (QP), L.P.

  	
   

  	
  $

  	
  355,998.90

  	
   

  	
  69,126

  	
   

  	
  69,126

  	
   

  	
  69,126

  	
   

  
	
  VENROCK ASSOCIATES V, L.P.

  	
   

  	
  $

  	
  1,804,601.20

  	
   

  	
  350,408

  	
   

  	
  350,408

  	
   

  	
  350,408

  	
   

  
	
  VENROCK PARTNERS V, L.P.

  	
   

  	
  $

  	
  153,001.35

  	
   

  	
  29,709

  	
   

  	
  29,709

  	
   

  	
  29,709

  	
   

  
	
  VENROCK ENTREPRENEURS FUND V, L.P.

  	
   

  	
  $

  	
  42,399.95

  	
   

  	
  8,233

  	
   

  	
  8,233

  	
   

  	
  8,233

  	
   

  
	
  Total

  	
   

  	
  $

  	
  7,306,438.90

  	
   

  	
  1,418,726

  	
   

  	
  1,418,726

  	
   

  	
  1,418,726

  	
   

  

 

 

EXHIBITS:

 

	
  A-1:

  	
   

  	
  Form of
  First Warrant

  
	
  A-1:

  	
   

  	
  Form of
  Second Warrant

  
	
  B:

  	
   

  	
  Form of
  Registration Rights Agreement

  
	
  C-1:

  	
   

  	
  Accredited
  Investor Questionnaire

  
	
  C-2:

  	
   

  	
  Stock
  Certificate Questionnaire

  
	
  D:

  	
   

  	
  Irrevocable
  Transfer Agent Instructions

  
	
  E:

  	
   

  	
  Form of
  Officer’s Certificate

  
	
  F:

  	
   

  	
  Form of
  Compliance Certificate

  
	
  G:

  	
   

  	
  Purchaser’s Certificate of
  Subsequent Sale

  

 

 

EXHIBIT A-1

FORM OF FIRST WARRANT

 

 

EXHIBIT A-2

 

FORM OF SECOND WARRANT

 

 

EXHIBIT B

FORM OF REGISTRATION RIGHTS
AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]