Document:

WORLD HEART CORPORATION

                                       and

                            CIBC MELLON TRUST COMPANY

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                                WARRANT INDENTURE

                     Providing for the Creation and Issue of
                                    Warrants

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                         Dated as of September 22, 2003
<PAGE>

                                WARRANT INDENTURE

     THIS INDENTURE dated as of September 22, 2003

B E T W E E N:

          WORLD    HEART    CORPORATION,    a    corporation
          incorporated  under  the laws of the  Province  of
          Ontario ("WorldHeart" or "the Corporation")

                              - and -

          CIBC  MELLON  TRUST   COMPANY,   a  trust  company
          organized  under the laws of Canada (the  "Warrant
          Agent")

     WHEREAS:

A.   WorldHeart  wishes to raise money for  repayment of  indebtedness,  working
     capital and general corporate purposes and therefore proposes to create and
     issue up to an aggregate of 74,700,000  units,  each unit consisting of (i)
     one Common Share and (ii) one Warrant (a "Unit");

B.   WorldHeart  is duly  authorized  to create and issue the Warrants as herein
     provided and complete the transactions contemplated herein;

C.   All things  necessary  have been or will be done and  performed to make the
     Warrant  Certificates,  when  certified by the Warrant Agent and issued and
     delivered as herein provided,  legal,  valid and binding on WorldHeart with
     the benefits of and subject to the terms of this Indenture; and

D.   The Warrant  Agent has agreed to enter into this  Indenture and to hold all
     rights,  interests and benefits contained herein for and on behalf of those
     persons who from time to time become holders of Warrants issued pursuant to
     this Indenture;

E.   The foregoing statements of fact are made by WorldHeart and not the Warrant
     Agent;

     NOW  THEREFORE  THIS  INDENTURE   WITNESSES  that  for  good  and  valuable
consideration  mutually given, the receipt and sufficiency of which are, by each
of WorldHeart  and the Warrant Agent,  hereby  acknowledged,  WorldHeart  hereby
appoints  the  Warrant  Agent as  trustee  for the  Warrantholders,  to hold all
rights,  interests  and  benefits  contained  herein  for and on behalf of those
persons who from time to time become holders of Warrants issued pursuant to this
Indenture, and the parties hereby covenant, agree and declare as follows:

<PAGE>
                                     - 2 -

                                   ARTICLE 1

                                 INTERPRETATION

1.1  Definitions

     In this  Indenture,  unless  there is  something  in the subject  matter or
context inconsistent therewith:

(1)  "affiliate"  shall have the meaning  ascribed to such term in the  Business
     Corporations  Act (Ontario),  as amended from time to time, and in the case
     of CIBC Mellon Trust Company shall be deemed to include  Canadian  Imperial
     Bank of Commerce, Mellon Bank N.A. and their affiliates;

(2)  "Agents'  Warrants"  means up to  7,470,000  warrants  to be issued to Roth
     Capital Partners and Research Capital Corporation;

(3)  "Applicable Legislation" means such provisions of any statute of Canada, of
     a province or territory thereof,  and of regulations under any such statute
     relating to corporate laws,  securities laws and trust indentures or to the
     rights,  duties and  obligations of  corporations  and of warrant  trustees
     under trust indentures, as are from time to time in force and applicable to
     this Indenture;

(4)  "business day" means any day that is not a Saturday, Sunday or statutory or
     civic holiday in Ontario or New York;

(5)  "Common  Shares"  means the common  shares in the  capital  of  WorldHeart,
     provided that in the event of any adjustment pursuant to Article 5, "Common
     Shares" will  thereafter  mean the shares or other  securities  or property
     resulting from such adjustment;

(6)  "counsel"  means a  barrister  or  solicitor  or a firm of  barristers  and
     solicitors  (who may be counsel for  WorldHeart)  acceptable to the Warrant
     Agent, acting reasonably;

(7)  "director" means a director of WorldHeart for the time being, and reference
     to action by the directors means action by the directors of WorldHeart as a
     board or, to the extent  empowered,  by a committee  of the board,  in each
     case by resolution duly passed;

(8)  "Edwards  Warrants"  means the  7,000,000  warrants to be issued to Edwards
     Lifesciences (U.S.) Inc.

(9)  "Effective  Date"  means  September  22,  2003,  the date as of which  this
     Indenture is effective;

(10) "Exercise Date" means,  with respect to any Warrant exercised by the holder
     thereof,  the day on which the Warrant is exercised in accordance  with the
     provisions of Section 4.1;
<PAGE>

                                     - 3 -

(11) "Exercise  Price" means the price per Common Share,  being  Cdn.$1.15 as at
     the  Effective  Date,  unless  such price  shall have been  adjusted  under
     Article 5 in which case it shall mean the  adjusted  price in effect at the
     applicable time;

(12) "Expiry Time" means 5:00 p.m.  (Toronto time) on the date that is 60 months
     from the Effective Date.

(13) "Legend  Date"  means  the date  that is four  months  and one day from the
     Effective Date;

(14) "Nasdaq" means the The Nasdaq Stock Market, Inc.

(15) "person"  means an  individual,  corporation,  limited  liability  company,
     partnership,  trustee or unincorporated  organization,  and words importing
     persons have a similar extended meaning;

(16) "Qualifying Jurisdictions" means Ontario and Quebec and the United States;

(17) "Registration Rights Agreement" means a registration rights agreement dated
     as of the date hereof between WorldHeart and the purchasers of Units in the
     United States;

(18) "Regulatory Approval" in respect of any transaction or proposed transaction
     means  all  material  approvals,  rulings,   authorizations,   permissions,
     filings,  consents,  orders  and  sanctions  (including  the lapse  without
     objection of a prescribed time under a statute,  regulation,  by-law, rule,
     or  other  legislative  or  regulatory   requirement  that  states  that  a
     transaction  may be implemented if a prescribed  time lapses  following the
     giving or filing of notice without an objection  being made) required to be
     obtained from or made to any governmental  authority having jurisdiction or
     authority  over  any of the  parties  to such  transaction  to  permit  the
     completion of such transaction;

(19) "Series A Shares"  means the  Series A  Convertible  Cumulative  Redeemable
     Preferred Shares of the Corporation;

(20) "this  Warrant  Indenture",   "this  Indenture",   "hereto",   "hereunder",
     "hereof",  "herein", "hereby" and similar expressions mean or refer to this
     Warrant  Indenture and any indenture,  deed or instrument  supplemental  or
     ancillary hereto, and the expressions  "Article",  "Section",  "Subsection"
     and "paragraph"  followed by a number mean the specified Article,  Section,
     Subsection or paragraph of this Warrant Indenture;

(21) "Trading  Day" means a day during  which the TSX is open for trading and at
     least one board lot of the Common Shares has traded on the TSX;

(22) "TSX" means the Toronto Stock Exchange;

(23) "voting shares" of any  corporation  means shares of one or more classes or
     series of a class of shares in the  capital  of such  corporation  carrying
     voting rights under all  circumstances  (and not by reason of the happening
     of a contingency)  sufficient if exercised to elect all of the directors of
     such corporation,  provided that such shares will
<PAGE>

                                     - 4 -

     be deemed not to cease to be voting  shares  solely by reason of a right to
     vote for the election of one or more of the  directors of such  corporation
     accruing to shares of another  class or series of a class of shares of such
     corporation by reason of the happening of a contingency;

(24) "Warrant  Agent" means CIBC Mellon Trust Company and includes any successor
     or permitted assigns for the time being in the trusts created hereby;

(25) "Warrant Certificate" means a certificate  evidencing one or more Warrants,
     substantially in the form set out in Schedule A;

(26) "Warrants"  means the up to 74,700,000  Warrants of WorldHeart  created and
     authorized  for issue  pursuant to Section 2.1  hereof,  each such  Warrant
     entitling  the  holder  thereof  to acquire  one  Common  Share,  as may be
     adjusted, at the Exercise Price at any time prior to the Expiry Time;

(27) "Warrantholders"  or "holders" means the persons for the time being entered
     in a register of holders described in Section 3.1 as holders of Warrants;

(28) "Warrantholders'  Request"  means  an  instrument,  signed  in one or  more
     counterparts by Warrantholders  who hold in the aggregate not less than 10%
     of the total number of Warrants outstanding for the time being,  requesting
     the Warrant Agent to take some action or proceeding specified therein;

(29) "WorldHeart" or "Corporation"  means World Heart Corporation,  and includes
     any  successor  corporation  to or of such party which shall have  complied
     with the provisions of Section 9.2;

(30) "WorldHeart's  auditors"  means  PricewaterhouseCoopers  LLP,  the  firm of
     chartered accountants duly appointed as auditors of WorldHeart for the time
     being or any other firm appointed to replace such firm; and

(31) "written order of WorldHeart",  "written  request of WorldHeart",  "written
     consent of WorldHeart",  "written direction of WorldHeart" and "certificate
     of  WorldHeart"  mean,  respectively,  a written order,  request,  consent,
     direction and certificate  signed in the name of WorldHeart by any director
     or officer of  WorldHeart  or by any other  individual to whom such signing
     authority is delegated by the directors  from time to time, and may consist
     of one or more instruments so executed.

1.2  Meaning of Outstanding

     Each  Warrant  certified  and  delivered  by the  Warrant  Agent under this
Indenture will be deemed to be outstanding until it is cancelled or delivered to
the Warrant  Agent for  cancellation  as the case may be, or until the  Warrants
have been exercised pursuant to the terms of this Indenture, provided that:
<PAGE>

                                     - 5 -

     (a)  when a new Warrant  Certificate has been issued in substitution  for a
          Warrant  Certificate  which  has  been  mutilated,   lost,  stolen  or
          destroyed,  only one of such Warrant  Certificates will be counted for
          the purposes of determining the number of Warrants outstanding; and

     (b)  for the purposes of any provision of this Indenture  entitling holders
          of outstanding Warrants to vote, sign consents,  requisitions or other
          instruments  or take any other action under this  Indenture,  Warrants
          owned,  directly or indirectly,  legally or beneficially by WorldHeart
          or an affiliate of WorldHeart will be disregarded except that:

          (i)  for the purposes of determining whether the Warrant Agent will be
               protected  in  acting  or  relying  on any  such  vote,  consent,
               requisition  or other  instrument  or action,  only the  Warrants
               which have been  certified  by  WorldHeart  in a  certificate  of
               WorldHeart   to  the  Warrant  Agent  as  so  owned  will  be  so
               disregarded; and

          (ii) Warrants  so owned which have been  pledged in good faith,  other
               than  to  WorldHeart  or an  affiliate  thereof,  will  not be so
               disregarded if the pledgee establishes to the satisfaction of the
               Warrant  Agent the  pledgee's  right to vote such Warrants in its
               discretion  free from the control of  WorldHeart  or an affiliate
               thereof.

1.3  Words Importing the Singular and Gender

     Words  importing  the singular  include the plural and vice versa and words
importing a particular gender include all genders.

1.4  Interpretation Not Affected by Headings, Etc.

     The  division  of this  Indenture  into  Articles,  Sections,  Subsections,
paragraphs,  subparagraphs, clauses and subclauses and the insertion of headings
are for  convenience of reference only and will not affect the  construction  or
interpretation of this Indenture.

1.5  Day Not a Business Day

     If the day on or before  which any action that would  otherwise be required
to be taken  hereunder  is not a business  day in the place  where the action is
required to be taken,  that action will be required to be taken on or before the
requisite  time on the next  succeeding day that is a business day with the same
force and effect as if taken within the period for the taking of such action.

1.6  Time of the Essence

     Time will be of the  essence  in all  respects  in this  Indenture  and the
Warrant Certificates.
<PAGE>

                                      - 6 -

1.7  Currency

     Except as otherwise  stated,  all dollar  amounts  herein are  expressed in
Canadian dollars.

1.8  Governing Law

     This Indenture and the Warrant  Certificates issued pursuant hereto will be
construed  and enforced in  accordance  with the laws in the Province of Ontario
and with the federal  laws of Canada  applicable  therein and will be treated in
all respects as Ontario contracts.  The parties irrevocably attorn and submit to
the  non-exclusive  jurisdiction  of the courts of the  Province of Ontario with
respect to any matter arising under or related to this Indenture.

1.9  Beneficiaries

     This  Indenture is entered into by the Warrant Agent for the benefit of all
such  persons  who are  issued  Warrants  in  accordance  with the terms of this
Indenture and each of them shall, upon such issuance, be entered in the register
as  Warrantholders.  The Warrant Agent hereby declares that it holds all rights,
interest  and  benefits  to be derived  therefrom  for and on behalf of all such
persons in accordance with the terms and restrictions contained herein.

                                   ARTICLE 2

                                  THE WARRANTS

2.1  Creation and Authorization of Warrants

(1) Up to 74,700,000  Warrants,  each whole Warrant entitling the holder thereof
to be issued one Common Share (subject to adjustment as provided  herein) on the
terms and subject to the  conditions  herein  provided,  are hereby  created and
authorized  for  issuance by the Warrant  Agent on behalf of  WorldHeart  on the
Effective Date and thereafter.

(2) Warrant  Certificates  shall be executed by WorldHeart  and delivered to the
Warrant  Agent,  certified by or on behalf of the Warrant Agent upon the written
order of  WorldHeart  and delivered by the Warrant Agent to WorldHeart or to the
order of WorldHeart  pursuant to a written direction of WorldHeart,  without any
further act of or  formality on the part of  WorldHeart  and without the Warrant
Agent receiving any consideration therefor.

2.2  Terms of Warrants

(1) Subject to Subsection  2.2(2)  hereof,  each Warrant  issued  hereunder will
entitle  the  holder  thereof,  upon the  exercise  thereof  and  payment of the
Exercise  Price in accordance  with the  provisions  of Article 4 hereof,  to be
issued one Common Share.

(2) The Exercise Price and the number of Common Shares issuable on exercise of a
Warrant  pursuant  to  Subsection  2.2(1)  hereof,  will be  adjusted  upon  the
occurrence of the events and in the manner specified in Article 5.
<PAGE>

                                     - 7 -

2.3  Form of Warrant Certificates

(1) The Warrant  Certificates  (including  the  signature  of the Warrant  Agent
endorsed  thereon)  will be  substantially  in the  form set out in  Schedule  A
hereto,  will be dated as of the date hereof  (regardless of the actual dates of
their  issue),  will bear such  legends  (including  the  legends  described  in
Sections 2.7 or 2.8 below, as applicable) and distinguishing letters and numbers
as WorldHeart, with the approval of the Warrant Agent, may prescribe and will be
issuable in any whole number denomination. No fractional Warrants will be issued
or otherwise provided for hereunder.

Regardless of any adjustments  pursuant to Article 5 of this Indenture,  Warrant
Certificates representing Warrants shall continue to be in the form set forth in
Schedule A to this  Indenture and shall continue to express the number of Common
Shares which may be acquired upon the exercise of the Warrants evidenced thereby
prior to any such adjustments.

(2) The Warrant  Certificates  may be  engraved,  lithographed  or printed  (the
expression  "printed"  including for purposes  hereof both original  typewritten
material   as   well   as    mimeographed,    mechanically,    photographically,
photostatically  or  electronically  reproduced,  typewritten  or other  written
material),  or partly in one form and partly in another,  as WorldHeart may with
the approval of the Warrant Agent determine.

2.4  Signing of Warrant Certificates

(1) The  Warrant  Certificates  will be signed by any  director  or  officer  of
WorldHeart  or by any  other  individual  to  whom  such  signing  authority  is
delegated by the directors from time to time.

(2)  The  signatures  of any of  the  officers  or  individuals  referred  to in
Subsection 2.4(1) may be manual signatures, engraved, lithographed or printed in
facsimile and Warrant  Certificates  bearing such facsimile  signatures  will be
binding on WorldHeart  as if they had been  manually  signed by such officers or
individuals.

(3) Notwithstanding  that any person whose manual or facsimile signature appears
on a Warrant  Certificate as one of the officers or  individuals  referred to in
Subsection  2.4(1) no longer holds the same or any other office with  WorldHeart
at  the  date  of  issuance  of  any  Warrant  Certificate  or at  the  date  of
certification or delivery thereof,  such Warrant  Certificate  will,  subject to
Section 2.5, be valid and binding on  WorldHeart  and such fact shall not affect
in any way  the  entitlement  of the  holder  thereof  to the  benefits  of this
Indenture or the Warrant Certificate(s) in question.

2.5  Certification by Warrant Agent

(1) No Warrant  Certificate signed in accordance with Section 2.4 will be issued
or, if issued,  will be valid or entitle the holder to the benefits hereof until
it has been  certified by manual  signature by or on behalf of the Warrant Agent
substantially  in the form of the  certificate  set out in Schedule A or in such
other form approved by the Warrant Agent. The certification by the Warrant Agent
on a Warrant  Certificate will be conclusive evidence as against WorldHeart that
<PAGE>

                                     - 8 -

such  Warrant  Certificate  has been duly issued  hereunder  and that the holder
thereof is entitled to the benefits hereof.

(2) The  certification  by the Warrant Agent on any Warrant  Certificate  issued
hereunder will not be construed as a  representation  or warranty by the Warrant
Agent  as to the  validity  of this  Indenture  (except  in  respect  of its due
authorization,  execution  and  delivery  by, and  enforceability  against,  the
Warrant  Agent)  or such  Warrant  Certificate  (except  the  due  certification
thereof) or as to performance by WorldHeart of its  obligations  hereunder,  and
the Warrant Agent will in no respect be liable or answerable for the use made of
any Warrant  Certificate or of the consideration  therefor,  except as otherwise
specified herein.

2.6  Warrants to Rank Pari Passu

     All  Warrants  will rank pari passu,  whatever  may be the actual  dates of
issue of the Warrant Certificates by which they are evidenced.

2.7  Canadian Transfer Restrictions

(1) In order to ensure  compliance  with  Applicable  Legislation,  no direct or
indirect sale or transfer of Warrants or the  underlying  Common Shares shall be
permitted  from or by a  registered  holder  whose  address  is in  Canada  to a
purchaser  or  transferee  whose  address is in Canada (or who is a resident  of
Canada) or to a purchaser or  transferee  whose  address is in the United States
(or who is a resident of the United States) unless it is made in compliance with
Applicable  Legislation.  Each Warrantholder in Canada, by its acceptance of the
Warrants,  shall  be  deemed  to  have  acknowledged  and  agreed  that  if  the
Warrantholder  is a  resident  of  Canada  it shall  not  transfer  Warrants  or
underlying  Common  Shares  except  as  provided  in the  immediately  preceding
sentence.  Each Warrant Certificate  originally issued to a person within Canada
and all  Warrant  Certificates  issued in exchange  therefor or in  substitution
thereof or upon  transfer  thereof,  as well as  certificates  representing  the
Common Shares  issuable upon the exercise of any Warrants  evidenced by any such
Warrant  Certificate  shall bear the  legends  set forth  below  (the  "Canadian
Legend"):

"UNLESS  PERMITTED  UNDER  CANADIAN  SECURITIES  LEGISLATION,  THE HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.

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

                                     - 9 -

REASONABLY  SATISFACTORY  TO THE  COMPANY  OR  (3)  PURSUANT  TO A  REGISTRATION
STATEMENT PURSUANT TO THE U.S. SECURITIES ACT."

(2) In the event  that the  Common  Shares  issuable  upon the  exercise  of any
Warrants  evidenced  by any such Warrant  Certificate  are issued after the date
which is four  months  and one day after the date of issue,  the  Common  Shares
shall bear the legends set forth below (the "Modified Canadian Legend"):

"THE SECURITIES  REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE;  HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES
OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY  TRANSFERABLE,  AND  CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.

THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE UNITED
STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE "U.S.  SECURITIES  ACT") OR THE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES.  THE  HOLDER  HEREOF,  BY
PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE  COMPANY  THAT SUCH
SECURITIES MAY BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO
THE COMPANY,  OR (B) OUTSIDE THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES  ACT, IF  APPLICABLE,  OR (C) INSIDE THE
UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT."

(3) With  respect to the  Canadian  Legend  and the  Modified  Canadian  Legend,
provided,  the Common  Shares,  Warrants  and Common  Shares  issuable  upon the
exercise of the Warrants are being sold outside the United  States in accordance
with Rule 904 of  Regulation S, the legend in paragraph (2) above may be removed
by providing a declaration to WorldHeart's  registrar and transfer agent in such
form as WorldHeart may prescribe.

2.8  United States Transfer Restrictions

(1) In order to ensure  compliance  with  Applicable  Legislation and applicable
United  States  securities  laws,  no  direct  or  indirect  sale,  transfer  or
repurchase of Warrants or the  underlying  Common Shares shall be permitted from
or by a registered  holder whose  address is in the United States to a purchaser
or transferee whose address is in the United States (or who is a resident of the
United  States) or to a purchaser or  transferee  whose address is in Canada (or
who is a resident of Canada)  unless it is made in  compliance  with  Applicable
Legislation and applicable United States securities laws. Each  Warrantholder in
the United States,  by its  acceptance of the Warrants,  shall be deemed to have
acknowledged and agreed that if the Warrantholder is a resident of United States
it shall not transfer Warrants or underlying Common Shares except as provided in
the immediately preceding sentence.  Each Warrant Certificate  originally issued
to a person  within the United  States and all  Warrant  Certificates  issued in
exchange therefor or in
<PAGE>

                                     - 10 -

substitution   thereof  or  upon  transfer  thereof,  as  well  as  certificates
representing  the Common  Shares  issuable  upon the  exercise  of any  Warrants
evidenced by any such Warrant Certificate shall bear the legends set forth below
(the "U.S. Legend"):

"THE HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY,  REPRESENTS,  ACKNOWLEDGES, AND
AGREES THAT IT WILL NOT AND WILL NOT BE  ENTITLED  TO,  DIRECTLY OR  INDIRECTLY,
SELL OR TRANSFER THE SECURITIES INTO CANADA OR TO RESIDENTS OF CANADA, EXPECT IN
COMPLIANCE WITH APPLICABLE  CANADIAN  SECURITIES  LAWS. NO SALE OR TRANSFER INTO
CANADA OR TO A CANADIAN RESIDENT WILL BE REGISTERED BY WORLD HEART CORPORATION'S
TRANSFER  AGENT AND ANY ATTEMPT TO EFFECT SUCH A TRANSFER IS INVALID UNLESS MADE
IN COMPLIANCE WITH THE ABOVE-NOTED RESTRICTIONS.

UNLESS  PERMITTED  UNDER  CANADIAN  SECURITIES  LEGISLATION,  THE  HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.

THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE UNITED
STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE "U.S.  SECURITIES  ACT") OR THE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES.  THE  HOLDER  HEREOF,  BY
PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE  COMPANY  THAT SUCH
SECURITIES MAY BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO
THE COMPANY,  OR (B) OUTSIDE THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES  ACT, IF  APPLICABLE,  OR (C) INSIDE THE
UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S.  SECURITIES  ACT."

(2) In the event  that the  Common  Shares  issuable  upon the  exercise  of any
Warrants  evidenced  by any such Warrant  Certificate  are issued after the date
which is four months and one day after the date of issue the Common Shares shall
bear the legends set forth below (the "Modified U.S. Legend"):

"THE SECURITIES  REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE;  HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH THE FACILITIES
OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY  TRANSFERABLE,  AND  CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.

THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE UNITED
STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE "U.S.  SECURITIES  ACT") OR THE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES.  THE  HOLDER  HEREOF,  BY
PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE  COMPANY  THAT SUCH
SECURITIES MAY BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO
THE COMPANY,  OR (B) OUTSIDE THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES  ACT, IF  APPLICABLE,  OR (C) INSIDE THE
UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
<PAGE>

                                     - 11 -

IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT."

(3) With respect to the U.S. Legend and the Modified U.S. Legend,  provided, the
Common  Shares,  Warrants and Common  Shares  issuable  upon the exercise of the
Warrants are being sold outside the United States in accordance with Rule 904 of
Regulation  S, the legend in  paragraph  (2) above may be removed by providing a
declaration  to registrar and transfer agent for the Common Shares of WorldHeart
in such form as WorldHeart may prescribe.

(4) With respect to the U.S.  Legend and the Modified  U.S.  Legend,  provided a
Registration  Statement,  as defined in the Registration  Rights  Agreement,  is
declared effective by the United States Securities and Exchange  Commission with
respect to the Common Shares and the Common Shares issuable upon the exercise of
the Warrants, the legend in paragraph (2) above may be removed.

2.9  Registration Rights

The initial holder of a Warrant  purchased by a purchaser of Units in the United
States is entitled to the benefit of certain registration rights with respect to
the Common  Shares  issuable upon the exercise of the Warrant as provided in the
Registration  Rights Agreement,  and any subsequent holder of the Warrant may be
entitled to such rights.

2.10 Reliance by Warrant Agent

     The Warrant Agent shall have no  obligation to ensure or verify  compliance
with any applicable laws or regulatory  requirements  on the issue,  exercise or
transfer  of any  Warrants  or any Common  Shares.  The  Warrant  Agent shall be
entitled to process all  proffered  transfers and exercises of Warrants upon the
presumption  that such  transfers or exercises are  permissible  pursuant to all
applicable laws and regulatory  requirements and the terms of this Indenture and
the related Warrant Certificates,  provided that such transfers and exercises of
Warrants may only be processed by the Warrant Agent upon written  instruction of
WorldHeart to the Warrant Agent, which instruction may be based, in WorldHeart's
reasonable  discretion,  upon certificates,  opinions and other documentation of
the holders of such  Warrants  that such  transfer or exercise is in  accordance
with  Applicable  Legislation.  The Warrant Agent may assume for the purposes of
this  Indenture  that the  address  on the  register  of  Warrantholders  of any
Warrantholder is the Warrantholder's actual address and is also determinative of
the Warrantholder's residency and that the address of any transferee to whom any
Warrants  or  Common  Shares  are to be  registered,  as shown  on the  transfer
document,  is the transferee's  actual address and is also  determinative of the
transferee's residency.
<PAGE>

                                     - 12 -

2.11 Issue in Substitution for Lost Certificates, Etc.

(1) If any  Warrant  Certificate  becomes  mutilated  or is lost,  destroyed  or
stolen,  WorldHeart,  subject to applicable law and to Subsection 2.11(2), shall
issue,  and thereupon the Warrant Agent will certify and deliver,  a new Warrant
Certificate of like tenor and for the purchase of a like number of Common Shares
as the one mutilated,  lost, destroyed or stolen in exchange for and in place of
and on surrender and  cancellation of such mutilated  Warrant  Certificate or in
lieu  of  and in  substitution  for  such  lost,  destroyed  or  stolen  Warrant
Certificate and the substituted  Warrant Certificate shall be in a form approved
by the Warrant Agent and the Warrant  evidenced thereby shall entitle the holder
to the benefits hereof and rank pari passu in accordance with its terms and with
all other Warrants issued hereunder.

(2) The  applicant for the issue of a new Warrant  Certificate  pursuant to this
Section 2.11 will bear the  reasonable  cost of the issue thereof and in case of
loss, destruction or theft shall, as a condition precedent to the issue thereof:

     (a)  furnish  to  WorldHeart  and to the  Warrant  Agent such  evidence  of
          ownership  and  of the  loss,  destruction  or  theft  of the  Warrant
          Certificate to be replaced as is satisfactory to WorldHeart and to the
          Warrant Agent each in their discretion, acting reasonably;

     (b)  if so  required  by  WorldHeart  or  the  Warrant  Agent,  furnish  an
          indemnity or bond in amount and form satisfactory to WorldHeart and to
          the Warrant Agent each in their discretion, acting reasonably; and

     (c)  pay  the  reasonable  charges  of  the  Warrant  Agent  in  connection
          therewith.

2.12 Cancellation of Surrendered Warrants

     All  Warrant  Certificates  surrendered  to the Warrant  Agent  pursuant to
Sections  2.11,  3.1, 3.2 or 4.1 will be cancelled by the Warrant  Agent and, if
requested by WorldHeart in writing, the Warrant Agent will furnish to WorldHeart
a cancellation certificate identifying each Warrant Certificate so cancelled and
the number of Warrants evidenced thereby.

2.13 Warrantholder not a Shareholder

     Nothing in this  Indenture  or in the holding of a Warrant  evidenced  by a
Warrant Certificate, or otherwise, is intended or will confer or be construed as
conferring  on  any  Warrantholder  any  right  or  interest   whatsoever  as  a
shareholder of WorldHeart, including but not limited to any right to vote at, to
receive  notice  of, or to  attend  any  meeting  of  shareholders  or any other
proceeding  of  WorldHeart  or any  right  to  receive  any  dividend  or  other
distribution to which the shareholders of WorldHeart may be entitled.

                                   ARTICLE 3
<PAGE>
                                     - 13 -

                      REGISTRATION, TRANSFER, EXCHANGE AND
                              OWNERSHIP OF WARRANTS

3.1  Registration and Transfer of Warrants

(1) WorldHeart hereby appoints the Warrant Agent as registrar and transfer agent
of the Warrants.

(2) The Warrant Agent will cause to be kept, by and at the principal  offices in
Toronto, Ontario:

     (a)  a register  (or  registers)  of  holders in which  shall be entered in
          alphabetical  order the names and addresses of the holders of Warrants
          and particulars of the Warrants held by them; and

     (b)  a register of  transfers  in which all  transfers  of Warrants and the
          date and other particulars of each transfer shall be entered.

(3) No  transfer  of any  Warrant  will be  valid  unless  duly  entered  on the
appropriate  register of transfers  referred to in Subsection  3.1(2), or on any
branch registers maintained pursuant to Subsection 3.1(8), upon surrender to the
Warrant Agent of the Warrant Certificate  evidencing such Warrant, duly endorsed
by, or accompanied by a written instrument of transfer substantially in the form
of Appendix 2 to the Warrant  Certificate or otherwise in form  satisfactory  to
the  Warrant  Agent  executed  by  the  registered   holder  or  his  executors,
administrators  or other legal  representatives  or his or their  attorney  duly
appointed by an instrument in writing in form and execution  satisfactory to the
Warrant  Agent,   and,   subject  to  compliance  with  Sections  2.7,  2.8  and
4.6(a)(vii), and such requirements and such other reasonable requirements as the
Warrant  Agent may  prescribe,  such  transfer will be duly noted on one of such
registers  of transfers  by the Warrant  Agent  within two business  days of the
satisfaction of all such requirements.

(4) The transferee of any Warrant will,  after surrender to the Warrant Agent of
the Warrant Certificate evidencing such Warrant as required by Subsection 3.1(3)
and upon  compliance with all other  conditions in respect  thereof  required by
this  Indenture  or by law, be entitled to be entered on the register of holders
referred  to in  Subsection  3.1(2),  or on  any  branch  registers  of  holders
maintained pursuant to subsection 3.1(8), as the owner of such Warrant free from
all equities or rights of set-off or  counterclaim  between  WorldHeart  and the
transferor or any previous holder of such Warrant, except in respect of equities
of which WorldHeart is required to take notice by statute or by order of a court
of competent jurisdiction.

(5) WorldHeart will be entitled, and may direct the Warrant Agent in writing, to
refuse to recognize any transfer,  or enter the name of any  transferee,  of any
Warrant on the  registers  referred to in  Subsection  3.1(2),  or on any branch
registers  maintained  pursuant to Subsection  3.1(8),  if such  transfer  would
require  WorldHeart  to qualify  the Common  Shares  issuable on exercise of the
Warrants  for  distribution  in  any  jurisdiction  other  than  the  Qualifying
Jurisdictions.
<PAGE>

                                     - 14 -

(6) Neither  WorldHeart nor the Warrant Agent will be bound to take notice of or
see to the execution of any trust, whether express, implied or constructive,  in
respect of any Warrant, and may transfer any Warrant on the written direction of
the person  registered as the holder  thereof and  delivered in accordance  with
Subsection 3.1(3), whether named as trustee or otherwise,  as though that person
were the beneficial owner thereof.

(7) The registers  referred to in Subsection  3.1(2),  and any branch  registers
maintained  pursuant to Subsection 3.1(8),  will at all reasonable times be open
for inspection during normal business hours by WorldHeart and any Warrantholder.
The Warrant  Agent will from time to time when  requested to do so in writing by
WorldHeart or any Warrantholder  (upon payment of the Warrant Agent's reasonable
charges),  furnish WorldHeart or such Warrantholder with a list of the names and
addresses  of holders of  Warrants  entered on such  registers  and  showing the
number of Warrants held by each such holder.

(8) The Warrant Agent with the approval of WorldHeart,  may at any time and from
time to time change the place at which the  registers  referred to in Subsection
3.1(2) are kept,  cause  branch  registers of holders or transfers to be kept at
other  places and close such branch  registers or change the place at which such
branch  registers are kept.  Notice of any such change or closure shall be given
by the Warrant Agent to WorldHeart and the holders of Warrants.

(9) The Warrant  Agent shall  retain until the sixth  anniversary  of the Expiry
Time all instruments of transfer of Warrants which are tendered for registration
including  the details shown thereon of the persons by or through whom they were
lodged, all cancelled Warrants and other related documents.

3.2  Exchange of Warrant Certificates

(1) One or more Warrant  Certificates  may, on compliance by the holder with the
reasonable  requirements  of the Warrant  Agent,  be  exchanged  for one or more
Warrant Certificates of different  denomination  evidencing in the aggregate the
same number of Warrants as the Warrant Certificate or Warrant Certificates being
exchanged, and such holder shall pay the reasonable cost thereof.

(2)  Warrant  Certificates  may be  exchanged  only at the  principal  office in
Toronto,  Ontario  of the  Warrant  Agent or at any other  place  designated  by
WorldHeart with the approval of the Warrant Agent.

(3) Any Warrant  Certificate  tendered for exchange  shall be surrendered to the
Warrant Agent or its agent and cancelled.

(4)  WorldHeart  will  sign all  Warrant  Certificates  necessary  to carry  out
exchanges  pursuant to this Section 3.2 and the Warrant Agent shall certify such
Warrant Certificates.
<PAGE>

                                     - 15 -

3.3  Reasonable Charges for Transfer

     A presenter  of a Warrant  Certificate  pursuant to this  Indenture  may be
charged  the  reasonable  costs of the  Warrant  Agent for the  transfer  of any
Warrant or exchange of any Warrant Certificate.

3.4  Ownership of Warrants

(1) WorldHeart and the Warrant Agent may deem and treat the person in whose name
any  Warrant  is  registered  as the  absolute  owner  of such  Warrant  for all
purposes,  and such person will for all  purposes  of this  Indenture  be and be
deemed to be the absolute  owner  thereof,  and WorldHeart and the Warrant Agent
will not be  affected  by any  notice or  knowledge  to the  contrary  except as
required by statute or by order of a court of competent jurisdiction.

(2) The  registered  holder  of any  Warrant  will  be  entitled  to the  rights
evidenced  thereby free from all equities and rights of set-off or  counterclaim
between  WorldHeart and the original or any intermediate  holder thereof and all
persons may act accordingly,  and the delivery to any such registered  holder of
the Common Shares issued on exercise of such Warrant will be a good discharge to
WorldHeart and the Warrant Agent therefor and, unless  WorldHeart or the Warrant
Agent  are  required  by  statute  or  by  an  order  of a  court  of  competent
jurisdiction,  neither WorldHeart nor the Warrant Agent will be bound to inquire
into the title of any such registered holder.

3.5  Assumption by Transferee

     Upon becoming a  Warrantholder  in accordance  with the  provisions of this
Indenture,  the  transferee  thereof  shall be deemed to have  acknowledged  and
agreed to be bound by this Indenture. Upon the registration by the Warrant Agent
of such  transferee  as the holder of a Warrant,  the  transferor  thereof shall
cease to have any  further  rights  under this  Indenture  with  respect to such
Warrant or any Common Shares to be issued on exercise.

                                   ARTICLE 4

                              EXERCISE OF WARRANTS

4.1  Exercise

(1) Subject to the  limitation  set forth in Subsection  4.1(2) and Section 4.5,
holders of Warrants may at any time prior to the Expiry Time  exercise the right
thereby  conferred,  in  whole  or  in  part,  to be  issued  Common  Shares  by
surrendering to the Warrant Agent at its principal  offices in Toronto,  Ontario
or to any other person or at any other place  designated by WorldHeart  with the
approval of the Warrant Agent, during normal business hours on a business day at
such place the Warrant  Certificate  evidencing  such Warrants and by payment by
certified cheque or bank draft to WorldHeart in the amount of the Exercise Price
in respect of each Common Share to be issued and by delivering a duly  completed
and executed notice of exercise  substantially in the form set out in Appendix 1
to such Warrant Certificate, provided such notice is also given to WorldHeart
<PAGE>

                                     - 16 -

by either the  Warrantholder  or the Warrant Agent by delivering to WorldHeart a
copy of such documents.

(2) Any certified cheque, bank draft,  Warrant Certificate or notice of exercise
referred  to in  Subsection  4.1(1) will be deemed to have been  surrendered  or
delivered  only on  personal  delivery  thereof to, or, if sent by mail or other
means of transmission, on actual receipt thereof by, the Warrant Agent or one of
the  other  persons  at the  office  or one of the  other  places  specified  in
Subsection 4.1(1).

(3) Any notice of exercise  referred to in  Subsection  4.1(1) must be signed by
the  Warrantholder,   or  such  Warrantholder's  officers,  employees,  members,
partners, managers, executors,  administrators or other legal representatives or
his or their  attorney  duly  appointed by an  instrument in writing in form and
execution  satisfactory  to the Warrant Agent,  acting  reasonably,  and, if any
Common  Shares  thereby  issuable are to be issued to a person or persons  other
than the Warrantholder  such issuance must be in accordance with applicable laws
(as determined by WorldHeart) and must specify the name or names and the address
or addresses  of each such person or persons and the number of Common  Shares to
be issued to each such person if more than one is so specified.

(4) The holder of any Warrant  Certificate  who wishes to exercise  the Warrants
evidenced  by such  Warrant  Certificate  may  exercise  less  than  all of such
Warrants  and in the case of any such  partial  exercise  shall be  entitled  to
receive,  without charge therefor,  a Warrant  Certificate,  in form, signed and
certified in accordance  with the provisions of Article 2, evidencing the number
of Warrants held by the  Warrantholder  which remain  unexercised.  Such Warrant
Certificate  will be delivered by the Warrant  Agent to the holder  concurrently
with the certificates  representing the Common Shares issued on partial exercise
of such holder's Warrants.

4.2  Effect of Exercise

(1) Upon the exercise of any Warrant in accordance  with Section 4.1, the Common
Shares  thereby  issuable will be deemed to have been issued,  and the person or
persons  to whom such  Common  Shares  are to be  issued  will be deemed to have
become the holder or holders of record thereof on the Exercise Date,  unless the
transfer  registers for the Common Shares are closed on that date, in which case
such Common Shares will be deemed to have been issued and such person or persons
will be deemed to have  become the  holder or  holders of record  thereof on the
date on which such transfer registers are reopened,  but such Common Shares will
be issued on the basis of the number of Common  Shares to which  such  person or
persons were entitled on the Exercise Date.

(2) As soon as  practicable  and in any event not later than the fifth  business
day on which the transfer  registers  for the Common Shares have been open after
such exercise,  WorldHeart will cause the Warrant Agent to deliver to the person
or persons in whose name or names the Common  Shares  thereby  issued  have been
issued, at his or their respective addresses,  or, if so specified,  cause to be
delivered  to such person or persons at the place where the Warrant  Certificate
evidencing such Warrant was  surrendered,  certificates  representing the Common
Shares so issued.
<PAGE>

                                     - 17 -

(3) WorldHeart will pay any documentary stamp taxes  attributable to the initial
issuance of the Common  Shares  pursuant to any  Warrant.  If any Common  Shares
issuable  pursuant to any Warrant are to be issued to a person or persons  other
than the  Warrantholder,  the  Warrantholder  must pay to  WorldHeart  or to the
Warrant  Agent on its behalf an amount equal to all exigible  transfer  taxes or
other  government  charges,  and  WorldHeart  will not be  required  to issue or
deliver any  certificates  representing  any such Common  Shares unless or until
such  amount  has  been so  paid or the  Warrantholder  has  established  to the
satisfaction of WorldHeart that such taxes and charges have been paid or that no
such taxes or charges are owing.

4.3  No Fractional Common Shares

     WorldHeart   shall  not  be  required,   notwithstanding   the   adjustment
provisions,  to issue fractional Common Shares upon the exercise of Warrants. To
the extent  that a holder of  Warrants  would  otherwise  have been  entitled to
receive,  on the exercise of Warrants,  a fraction of a Common Share, such right
may only be exercised  in respect of such  fraction in  connection  with another
Warrant or Warrants which in the aggregate entitle the holder to receive a whole
number of Common Shares.  If a Warrantholder  is not able to combine Warrants so
as to be  entitled  to acquire a whole  number of Common  Shares,  the number of
Common Shares which such  Warrantholder  is entitled to receive upon exercise of
Warrants shall be rounded down to the prior whole number.

4.4  Recording

     The Warrant Agent will record  particulars of each Warrant  exercised which
will  include  the name and  address of each  person to whom  Common  Shares are
thereby  issued,  the number of Common Shares so issued and the Exercise Date in
respect thereof.  Within five business days after each Exercise Date the Warrant
Agent will provide such particulars in writing to WorldHeart.

4.5  Securities Restrictions

If the Exercise  Date in respect of any Warrant  occurs  before the Legend Date,
certificates representing Common Shares thereby issued will bear such legends as
may, in the opinion of counsel to WorldHeart, be necessary or advisable in order
to avoid a  violation  of any  applicable  securities  laws of any  province  or
territory of Canada,  of the United States of America or any  jurisdiction or to
comply with the  requirements  of any stock  exchange on which the Common Shares
are then  listed,  provided  that if, at any time,  in the opinion of counsel to
WorldHeart,  such legends are no longer necessary or advisable in order to avoid
a violation of any such laws or requirements, or the holder of any such legended
certificate,  at his expense,  provides WorldHeart with evidence satisfactory in
form and  substance  to  WorldHeart  (which  may  include  an opinion of counsel
satisfactory  to  WorldHeart) to the effect that such holder is entitled to sell
or otherwise  transfer such Common Shares in a transaction in which such legends
are not required, such legended certificate may thereafter be surrendered to the
Warrant Agent in exchange for a certificate which does not bear such legends.
<PAGE>

                                     - 18 -

4.6  Call Provisions

     (a)  Notwithstanding   any  other  provision   contained  in  this  Warrant
          Indenture or the Warrant Certificate to the contrary:

          (i)  subject to the provisions of clauses (ii) through (viii),  in the
               event that the  closing  price of the Common  Shares as traded on
               the TSX (or such  other  exchange  or stock  market  on which the
               Common  Shares  may then be listed or  quoted)  equals or exceeds
               Cdn$2.50  (appropriately  adjusted for any stock  split,  reverse
               stock  split,  stock  dividend  or  other   reclassification   or
               combination of the Common Shares occurring after the date hereof)
               for  20  consecutive  Trading  Days  (the  "Trading  Condition"),
               WorldHeart,  upon 30  days  prior  written  notice  (the  "Notice
               Period") given to all Warrantholders  immediately  following such
               20  Trading  Day  period,  may  demand  that  the  Warrantholders
               exercise  a  portion  of their  rights  under  the  Warrants,  as
               described  below in paragraph (ii), and the  Warrantholders  must
               exercise  their  rights  prior to the  expiration  of the  Notice
               Period  or if such  exercise  is not  made  or if only a  partial
               exercise is made, any and all rights to further  exercise  rights
               with respect to that portion of their  Warrants  shall cease upon
               the expiration of the Notice Period (the "Warrant Reduction");

          (ii) in any  three-month  period no more than the lesser of (i) 20% of
               the  aggregate   amount  of  Warrants   initially   issued  to  a
               Warrantholder  or  (ii)  the  number  of  Warrants  held  by  the
               Warrantholder, may be called by WorldHeart and WorldHeart may not
               call  additional  Warrants in any subsequent  three-month  period
               unless all the conditions specified in this Section 4.6 are again
               met (including without limitation,  the Trading Condition) at the
               time that any subsequent call notice is given;

         (iii) it is a condition of WorldHeart  exercising its rights under this
               Section 4.6 that (i) with  respect to the holders of Units in the
               United States,  that all of the Common Shares  issuable under the
               Warrants  issued to holders of Units in the United  States either
               (A)  are  registered   pursuant  to  an  effective   Registration
               Statement (as defined in the Registration Rights Agreement) which
               is available  for sales of Common Shares during the Notice Period
               or (B) no longer constitute Registrable Securities (as defined in
               the Registration Rights Agreement);

          (iv) with respect to all Warrantholders WorldHeart must simultaneously
               call all  Warrants  on the same  terms  and for the  purposes  of
               paragraphs 4.6(a)(i),  (ii), (iv) and (vii) such provisions shall
               be  deemed  to  apply to the  Edwards  Warrants  and the  Agents'
               Warrants;

          (v)  in the event that a Warrantholder  fails to exercise their rights
               with respect to the Warrants  which have been called  pursuant to
               clause (i) above,
<PAGE>

                                     - 19 -

               WorldHeart   shall  notify  the  Warrant  Agent  that  a  Warrant
               Reduction  has   occurred,   which  notice  shall  specify  those
               Warrantholders  who are subject to the Warrant  Reduction and the
               number of Warrants  subject to the Warrant  Reduction and Warrant
               Agent  shall  also  send  notice to the  affected  Warrantholders
               identifying  the  number  of  Warrants  subject  to  the  Warrant
               Reduction;

          (vi) the  Warrant  Agent  shall  maintain  a  register   showing  each
               Warrantholder  and any Warrant  Reduction  amount with respect to
               that  Warrantholder  and  in the  event  that  the  Warrantholder
               exercises  part of or transfers the  Warrants,  the Warrant Agent
               shall issue a new Warrant  Certificate  evidencing that number of
               Warrants  equal to the face amount  thereof less any such Warrant
               Reduction amount(s);

         (vii) it shall be a condition  to any  transfer or exchange of Warrants
               that the transferring  Warrantholder deliver to the Warrant Agent
               and  WorldHeart  an  agreement   executed  by  the   transferring
               Warrantholder  and the new  Warrantholder  pursuant to which they
               agree to  allocate  on a pro rata basis any call of  Warrants  by
               WorldHeart, such that WorldHeart shall have the right to call the
               same  number  of  Warrants  that it would  have  called as if the
               transfer or exchange has not occurred,  occurring  from and after
               the effective date of such transfer or exchange;

        (viii) where a notice pursuant to this  Section 4.6  has been given, the
               Warrant  Agent shall be entitled to act and rely on any direction
               of  WorldHeart  or  WorldHeart's  auditors and the Warrant  Agent
               shall not at any time be under any duty or  responsibility to any
               Warrantholder  to  determine  whether  any facts  exist which may
               require  any  adjustment  in the  holdings  of any  Warrantholder
               pursuant to this Section 4.6.

                                    ARTICLE 5

                                   ADJUSTMENTS

5.1  Adjustments

     The rights of the  holder of any  Warrant,  including  the number of Common
Shares issuable upon the exercise of such Warrant and the Exercise Price payable
on exercise of such  Warrant,  shall be adjusted from time to time in the events
and in the manner provided in, and in accordance with, this Article 5.

     (a)  If  WorldHeart  shall,  at any  time or from  time to time  while  any
          Warrant is  outstanding,  pay a dividend or make a distribution on its
          Common Shares,  subdivide its outstanding Common Shares into a greater
          number of shares,  or combine  its  outstanding  Common  Shares into a
          smaller  number  of  shares  or  issue,  by  reclassification  of  its
          outstanding  Common Shares, any shares of its capital
<PAGE>

                                     - 20 -

          stock  (including  any  such  reclassification  in  connection  with a
          consolidation   or  merger  in  which  WorldHeart  is  the  continuing
          corporation),  then the number of Common Shares issuable upon exercise
          of the Warrants and the Exercise Price in effect  immediately prior to
          the date upon which  such  change  shall  become  effective,  shall be
          adjusted by WorldHeart so that the Warrantholder thereafter exercising
          the Warrant  shall be entitled to receive the number of Common  Shares
          or other capital stock which the Warrantholder  would have received if
          the Warrant had been  exercised  immediately  prior to such event upon
          payment of an Exercise  Price that has been adjusted to reflect a fair
          allocation  of the  economics  of such event to the  Warrantholder  as
          determined  in  good  faith  by  the  directors  of  WorldHeart.  Such
          adjustments shall be made successively whenever any event listed above
          shall occur.

     (b)  If any capital  reorganization,  reclassification of the capital stock
          of  WorldHeart,  consolidation  or merger of  WorldHeart  with another
          corporation in which  WorldHeart is not the survivor,  or amalgamation
          with, or sale,  transfer or other  disposition of all or substantially
          all of WorldHeart's  assets to another  corporation shall be effected,
          then,  as  a  condition  of  such  reorganization,   reclassification,
          consolidation,   merger,   amalgamation,   sale,   transfer  or  other
          disposition,  lawful and adequate provision shall be made whereby each
          Warrantholder  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 Common  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  Common  Shares  equal to the  number  of  Common  Shares
          immediately  theretofore  issuable upon  exercise of the Warrant,  had
          such   reorganization,   reclassification,    consolidation,   merger,
          amalgamation, sale, transfer or other disposition not taken place, and
          in any such case  appropriate  provision shall be made with respect to
          the rights and  interests  of each  Warrantholder  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
          thereof.  WorldHeart shall not effect any such consolidation,  merger,
          sale,  transfer or other disposition unless prior to or simultaneously
          with the consummation thereof the successor corporation (if other than
          WorldHeart)  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 of the  Warrant,  at the last  address of such
          holder  appearing  on the books of the  Warrant  Agent,  such  shares,
          securities or assets as, in accordance with the foregoing  provisions,
          such  holder may be entitled to  purchase,  and the other  obligations
          under  the  Warrant.  The  provisions  of  this  paragraph  (b)  shall
          similarly  apply  to  successive  reorganizations,  reclassifications,
          consolidations,  mergers,  amalgamations,  sales,  transfers  or other
          dispositions.
<PAGE>

                                     - 21 -

     (c)  In case  WorldHeart  shall  fix a  payment  date for the  making  of a
          distribution  to all  holders  of Common  Shares  (including  any such
          distribution  made in  connection  with a  consolidation  or merger in
          which  WorldHeart  is the  continuing  corporation)  of  evidences  of
          indebtedness   or  assets   (other   than  cash   dividends   or  cash
          distributions  payable out of consolidated  earnings or earned surplus
          or  dividends  or  distributions  referred  to in  Section  5(a)),  or
          subscription  rights or warrants,  the Exercise  Price to be in effect
          after  such  payment  date  shall be  determined  by  multiplying  the
          Exercise Price in effect  immediately  prior to such payment date by a
          fraction,  the  numerator of which shall be the total number of Common
          Shares  outstanding  multiplied by the Market Price (as defined below)
          per Common Share immediately prior to such payment date, less the fair
          market value (as  determined  by the  directors of  WorldHeart in good
          faith) of said assets or evidences of indebtedness so distributed,  or
          of such subscription rights or warrants,  and the denominator of which
          shall be the total  number of  shares  of  Common  Shares  outstanding
          multiplied by such Market Price per share of Common Shares immediately
          prior to such payment  date.  "Market  Price" as of a particular  date
          (the  "Valuation  Date") shall mean the  following:  (a) if the Common
          Shares are then  listed on the TSX,  the  closing  price of one Common
          Share on the TSX on the last Trading Day prior to the Valuation  Date;
          (b) if the Common Shares are then quoted on Nasdaq,  the closing price
          of one  Common  Share on Nasdaq on the last  trading  day prior to the
          Valuation Date or, if no such closing price is available,  the average
          of the high bid and the low asked  price  quoted on Nasdaq on the last
          trading day prior to the  Valuation  Date; or (c) if the Common Shares
          are not then  listed on the TSX or quoted on Nasdaq,  the fair  market
          value  of  one  Common  Share  as of  the  Valuation  Date,  shall  be
          determined in good faith by the directors and the Warrantholders.  The
          directors of WorldHeart  shall  respond  promptly,  in writing,  to an
          inquiry by the Warrantholder prior to the exercise hereunder as to the
          Market  Value of a Common  Share as  determined  by the  directors  of
          WorldHeart. In the event that the directors and the Warrantholders are
          unable  to  agree  upon  the   Market   Value,   WorldHeart   and  the
          Warrantholders  shall jointly select an appraiser,  who is experienced
          in such  matters.  The decision of such  appraiser  shall be final and
          conclusive,  and the cost of such  appraiser  shall be borne evenly by
          WorldHeart  and the  Warrantholders.  Such  adjustment  shall  be made
          successively whenever such a payment date is fixed.

     (d)  For the term of the Warrants,  in addition to the provisions contained
          above,  the Exercise  Price shall be subject to adjustment as provided
          below.  An  adjustment  to the Exercise  Price shall become  effective
          immediately  after the  payment  date in the case of each  dividend or
          distribution  and  immediately  after the effective date of each other
          event which requires an adjustment.

     (e)  In the event that, as a result of an adjustment  made pursuant to this
          Section 5, the holder of the Warrant shall become  entitled to receive
          any shares of capital  stock of WorldHeart  other than Common  Shares,
          the number of such other  shares so
<PAGE>

                                     - 22 -

          receivable upon exercise of the Warrant shall be subject thereafter to
          adjustment  from  time to time in a  manner  and on  terms  as  nearly
          equivalent as practicable to the provisions with respect to the Common
          Shares contained in the Warrant.

     (f)  Except  as  provided  in  subsection  (g)  hereof,   if  and  whenever
          WorldHeart  shall  issue or sell,  or is,  in  accordance  with any of
          subsections  (f)(l) through  (f)(7)  hereof,  deemed to have issued or
          sold,  any  Additional  Common  Shares for no  consideration  or for a
          consideration  per  share  less  than the  Exercise  Price  in  effect
          immediately  prior to the time of such issue or sale, then and in each
          such case (a "Trigger  Issuance") the  then-existing  Exercise  Price,
          shall be reduced, as of the close of business on the effective date of
          the  Trigger  Issuance,  to the  lowest  price  per share at which any
          Common  Shares  were  issued  or sold or  deemed to be issued or sold,
          provided  that the  Exercise  Price  shall not be less  than  Cdn$1.06
          (appropriately  adjusted  for any stock  split,  reverse  stock split,
          stock dividend or other  reclassification or combination of the Common
          Shares occurring after the date hereof).

          For purposes of this subsection (f),  "Additional Common Shares" shall
          mean all the Common Shares issued by WorldHeart or deemed to be issued
          pursuant to this  subsection  (f),  other than Excluded  Issuances (as
          defined in subsection (g) hereof).

          For purposes of this subsection (f), the following  subsections (f)(l)
          to (f)(7) shall also be applicable:

               (f)(1)  Issuance  of  Rights  or  Options.  In case  at any  time
          WorldHeart  shall in any manner grant  (directly and not by assumption
          in a merger or  otherwise)  any  warrants or other rights to subscribe
          for or to purchase,  or any options for the purchase of, Common Shares
          or any stock or security  convertible  into or exchangeable for Common
          Shares (such  warrants,  rights or options being called  "Options" and
          such  convertible  or  exchangeable  stock or securities  being called
          "Convertible  Securities") whether or not such Options or the right to
          convert or exchange any such  Convertible  Securities are  immediately
          exercisable,  and the price per share  for  which  Common  Shares  are
          issuable  upon the exercise of such Options or upon the  conversion or
          exchange of such  Convertible  Securities  (determined by dividing (i)
          the sum (which sum shall constitute the applicable  consideration)  of
          (x) the total amount,  if any, received or receivable by WorldHeart as
          consideration for the granting of such Options, plus (y) the aggregate
          amount of  additional  consideration  payable to  WorldHeart  upon the
          exercise of all such  Options,  plus (z), in the case of such  Options
          which  relate  to  Convertible  Securities,  the  aggregate  amount of
          additional  consideration,  if any,  payable upon the issue or sale of
          such  Convertible  Securities  and upon  the  conversion  or  exchange
          thereof,  by (ii) the total  maximum  number of shares of Common Stock
          issuable  upon the exercise of such Options or upon the  conversion or
          exchange of all such Convertible Securities issuable upon the exercise
          of such
<PAGE>

                                     - 23 -

          Options) shall be less than the Exercise  Price in effect  immediately
          prior to the time of the  granting  of such  Options,  then the  total
          number of Common Shares  issuable upon the exercise of such Options or
          upon  conversion  or exchange of the total amount of such  Convertible
          Securities  issuable upon the exercise of such Options shall be deemed
          to have  been  issued  for  such  price  per  share  as of the date of
          granting  of  such  Options  or  the  issuance  of  such   Convertible
          Securities  and  thereafter  shall be  deemed  to be  outstanding  for
          purposes of adjusting the Exercise Price. Except as otherwise provided
          in subsection  5(f)(3),  no adjustment of the Exercise  Price shall be
          made  upon  the  actual  issue  of  such  Common  Shares  or  of  such
          Convertible  Securities  upon  exercise  of such  Options  or upon the
          actual issue of such Common Shares upon conversion or exchange of such
          Convertible Securities.

               (f)(2)  Issuance of Convertible  Securities.  In case  WorldHeart
          shall in any manner issue  (directly and not by assumption in a merger
          or otherwise) or sell any Convertible  Securities,  whether or not the
          rights to  exchange  or convert any such  Convertible  Securities  are
          immediately  exercisable,  and the price  per  share for which  Common
          Shares are issuable upon such  conversion or exchange  (determined  by
          dividing  (i) the sum  (which  sum  shall  constitute  the  applicable
          consideration)  of (x) the total  amount  received  or  receivable  by
          WorldHeart as consideration  for the issue or sale of such Convertible
          Securities, plus (y) the aggregate amount of additional consideration,
          if any, payable to WorldHeart upon the conversion or exchange thereof,
          by (ii) the total number of Common Shares issuable upon the conversion
          or exchange of all such Convertible Securities) shall be less than the
          Exercise Price in effect  immediately  prior to the time of such issue
          or sale,  then the total  maximum  number  of  shares of Common  Stock
          issuable  upon   conversion  or  exchange  of  all  such   Convertible
          Securities  shall be  deemed to have been  issued  for such  price per
          share  as of the  date  of the  issue  or  sale  of  such  Convertible
          Securities  and  thereafter  shall be  deemed  to be  outstanding  for
          purposes of adjusting the Exercise Price,  provided that (a) except as
          otherwise  provided  in  subsection  5(f)(3),  no  adjustment  of  the
          Exercise  Price shall be made upon the actual  issuance of such Common
          Shares upon conversion or exchange of such Convertible  Securities and
          (b) no  further  adjustment  of the  Exercise  Price  shall be made by
          reason of the issue or sale of Convertible Securities upon exercise of
          any  Options to purchase  any such  Convertible  Securities  for which
          adjustments of the Exercise Price have been made pursuant to the other
          provisions of subsection 5(f).

               (f)(3)  Change  in  Option  Price or  Conversion  Rate.  Upon the
          happening  of any of the  following  events,  namely,  if the purchase
          price  provided for in any Option  referred to in  subsection  5(f)(l)
          hereof,  the  additional  consideration,  if  any,  payable  upon  the
          conversion or exchange of any  Convertible  Securities  referred to in
          subsections 5(f)(l) or 5(f)(2), other than the Series A Shares, or the
          rate at which Convertible Securities,  other than the Series A Shares,
          referred to in subsections  5(f)(l) or 5(f)(2) are convertible into or
          exchangeable  for Common
<PAGE>

                                     - 24 -

          Shares  shall  change  at any time  (including,  but not  limited  to,
          changes under or by reason of provisions  designed to protect  against
          dilution),  the  Exercise  Price in effect  at the time of such  event
          shall  forthwith be readjusted to the Exercise  Price which would have
          been in effect at such time had such Options or Convertible Securities
          still outstanding provided for such changed purchase price, additional
          consideration  or  conversion  rate,  as the case may be,  at the time
          initially  granted,  issued or sold. On the  termination of any Option
          for which any adjustment was made pursuant to this  subsection 5(f) or
          any right to convert or exchange Convertible  Securities for which any
          adjustment  was  made  pursuant  to this  subsection  5(f)  (including
          without  limitation upon the redemption or purchase for  consideration
          of such Convertible Securities by WorldHeart), the Exercise Price then
          in effect  hereunder  shall forthwith be changed to the Exercise Price
          which  would have been in effect at the time of such  termination  had
          such  Option or  Convertible  Securities,  to the  extent  outstanding
          immediately prior to such termination, never been issued.

               (f)(4) Stock Dividends. Subject to the provisions of this Section
          5(f),  in case  WorldHeart  shall declare a dividend or make any other
          distribution  upon any  stock of  WorldHeart  (other  than the  Common
          Shares) payable in Common Shares,  Options or Convertible  Securities,
          then any Common Shares, Options or Convertible Securities, as the case
          may be, issuable in payment of such dividend or distribution  shall be
          deemed to have been issued or sold without consideration.

               (f)(5)  Consideration  for  Stock.  In case  any  Common  Shares,
          Options or  Convertible  Securities  shall be issued or sold for cash,
          the  consideration  received  therefor  shall be  deemed to be the net
          amount received by WorldHeart  therefor,  after deduction therefrom of
          any expenses  incurred or any underwriting  commissions or concessions
          paid or allowed by  WorldHeart in  connection  therewith.  In case any
          Common Shares,  Options or Convertible  Securities  shall be issued or
          sold  for  a  consideration   other  than  cash,  the  amount  of  the
          consideration  other than cash received by WorldHeart  shall be deemed
          to be the fair value of such consideration as determined in good faith
          by the  directors  of  WorldHeart,  after  deduction  of any  expenses
          incurred  or any  underwriting  commissions  or  concessions  paid  or
          allowed by  WorldHeart in  connection  therewith.  In case any Options
          shall  be  issued  in  connection  with  the  issue  and sale of other
          securities of WorldHeart, together comprising one integral transaction
          in which no specific consideration is allocated to such Options by the
          parties thereto,  such Options shall be deemed to have been issued for
          such  consideration  as  determined  in good faith by the directors of
          WorldHeart.  If Common Shares, Options or Convertible Securities shall
          be issued or sold by WorldHeart  and, in connection  therewith,  other
          Options  or  Convertible  Securities  (the  "Additional  Rights")  are
          issued,  then the  consideration  received or deemed to be received by
          WorldHeart shall be reduced by the fair market value of the Additional
          Rights (as determined using the Black-Scholes  option pricing model or
          another   method   mutually   agreed   to  by   WorldHeart   and   the
          Warrantholder). The
<PAGE>

                                     - 25 -

          directors of WorldHeart  shall  respond  promptly,  in writing,  to an
          inquiry  by the  Warrantholder  as to the  fair  market  value  of the
          Additional  Rights.  In the event that the directors of WorldHeart and
          the  Warrantholder  are unable to agree upon the fair market  value of
          the Additional Rights,  WorldHeart and the Warrantholder shall jointly
          select an appraiser,  who is experienced in such matters. The decision
          of such appraiser shall be final and conclusive,  and the cost of such
          appraiser shall be borne evenly by WorldHeart and the Warrantholder.

               (f)(6) Record Date. In case WorldHeart shall take a record of the
          holders of its Common Shares for the purpose of entitling  them (i) to
          receive a dividend  or other  distribution  payable in Common  Shares,
          Options or Convertible Securities or (ii) to subscribe for or purchase
          Common  Shares,  Options or Convertible  Securities,  then such record
          date shall be deemed to be the date of the issue or sale of the Common
          Shares deemed to have been issued or sold upon the declaration of such
          dividend or the making of such other  distribution  or the date of the
          granting of such right of  subscription  or purchase,  as the case may
          be.

               (f)(7) Treasury Shares.  The number of Common Shares  outstanding
          at any given time shall not include shares owned or held by or for the
          account of WorldHeart or any of its wholly-owned subsidiaries, and the
          disposition  of any  such  shares  (other  than  the  cancellation  or
          retirement  thereof)  shall be  considered  an issue or sale of Common
          Shares for the purpose of this subsection 5(f).

     (g)  Notwithstanding anything herein to the contrary,  WorldHeart shall not
          be required to make any  adjustment of the Exercise  Price in the case
          of  the  issuance  of  (A)  capital  stock,   Options  or  Convertible
          Securities issued to directors,  officers, employees or consultants of
          WorldHeart in  connection  with their service as directors or officers
          of WorldHeart,  their  employment by WorldHeart or their  retention as
          consultants by WorldHeart pursuant to an equity  compensation  program
          approved by the directors of WorldHeart or the compensation  committee
          of the  directors of  WorldHeart,  (B) Common  Shares  issued upon the
          conversion  or exercise of Options or  Convertible  Securities  issued
          prior to the date hereof,  (C) securities  issued to the purchasers of
          Units in Canada and the United States pursuant to purchase  agreements
          and  subscription  agreements,  dated  September 22, 2003,  securities
          issued pursuant to the Agents' Warrants and securities issued upon the
          conversion of the Series A Shares including the Edwards Warrants,  and
          securities issued upon the exercise or conversion of those securities,
          and (D) Common  Shares  issued or  issuable  by reason of a  dividend,
          stock split or other  distribution  on Common  Shares (but only to the
          extent  that such a  dividend,  split or  distribution  results  in an
          adjustment in the Exercise Price  pursuant to the other  provisions of
          the Warrants) (collectively, "Excluded Issuances").

     (h)  Upon any  adjustment  to the Exercise  Price  pursuant to Section 5(f)
          above, the number of Common Shares purchasable pursuant to the Warrant
          shall be  adjusted  by  multiplying  such  number by a  fraction,  the
          numerator of which shall be the
<PAGE>

                                     - 26 -

          Exercise Price in effect  immediately prior to such adjustment and the
          denominator of which shall be the Exercise Price in effect immediately
          thereafter.

(2) At least ten days before the earlier of the effective date of or record date
for any event  referred to in this Article 5 that  requires or might  require an
adjustment  in any of the rights under the Warrants or such longer notice period
as may  be  applicable  in  respect  of  notices  required  to be  delivered  by
WorldHeart to holders of its Common Shares, WorldHeart will:

     (a)  file with the Warrant Agent a certificate of WorldHeart specifying the
          particulars  of  such  event  and,  to the  extent  determinable,  any
          adjustment required and the computation of such adjustment; and

     (b)  give notice to the  Warrantholders  of the  particulars  of such event
          and,  to  the  extent  determinable,  any  adjustment  required  and a
          description of how such adjustment will be calculated.

Such notice need only set forth such  particulars as have been determined at the
date such notice is given.  If any  adjustment for which such notice is given is
not then determinable, promptly after such adjustment is determinable WorldHeart
will:

     (a)  file with the Warrant  Agent a certificate  of WorldHeart  showing the
          computation of such adjustment; and

     (b)  give notice to the Warrantholders of such adjustment.

Where a notice  pursuant to this  Subsection  5(2) has been  given,  the Warrant
Agent  shall  be  entitled  to act and  rely on any  adjustment  calculation  of
WorldHeart or WorldHeart's auditors.

(3) The Warrant Agent shall not:

     (a)  at any time be under any duty or  responsibility  to any Warrantholder
          to determine  whether any facts exist which may require any adjustment
          in the Exercise  Price, or with respect to the nature or extent of any
          such  adjustment  when made, or with respect to the method employed in
          making same;

     (b)  be  accountable  with respect to the validity or value (or the kind or
          amount) of any Common  Shares or of any shares or other  securities or
          property  which  may at any  time be  issued  or  delivered  upon  the
          exercise or deemed exercise of any Warrant; or

     (c)  be responsible  for any failure of WorldHeart to make any cash payment
          or to  issue,  transfer  or  deliver  Common  Shares  or  certificates
          representing  Common  Shares upon the surrender of any Warrant for the
          purpose of exercise,  or to comply with any of the covenants contained
          in this Article 5.
<PAGE>

                                     - 27 -

                                   ARTICLE 6

                          COVENANTS AND REPRESENTATIONS

6.1  General Covenants and Representations

     WorldHeart  represents,  warrants,  covenants  and agrees  with the Warrant
Agent that so long as any Warrant remains outstanding and may be exercised:

     (a)  WorldHeart  is duly  authorized  to create and issue the  Warrants and
          that the Warrant Certificates, when issued and countersigned as herein
          provided, will be valid and enforceable against WorldHeart;

     (b)  WorldHeart will at all times maintain its corporate  existence,  carry
          on and conduct its business in a proper and business-like manner, keep
          or cause  to be kept  proper  books  of  account  in  accordance  with
          generally accepted  accounting  principles and WorldHeart will send to
          Warrantholders  copies of all  financial  statements  furnished to its
          shareholders during the term of this Indenture;

     (c)  WorldHeart will reserve for the purpose and keep available  sufficient
          unissued  Common  Shares to enable it to satisfy  its  obligations  to
          issue Common Shares on the exercise of the Warrants;

     (d)  until the Expiry Time of the Warrants,  WorldHeart will not amend this
          Indenture without the approval of the holders of Warrants as set forth
          in  Article  8  hereof,  unless  such  amendment  would  otherwise  be
          permitted under Article 9 hereof;

     (e)  WorldHeart  will cause the Common  Shares from time to time to be duly
          issued pursuant to the exercise of the Warrants,  and the certificates
          representing  such Common  Shares,  to be duly issued and delivered in
          accordance with the Warrants and the terms hereof;

     (f)  all Common  Shares  that are issued on due  exercise  of the  Warrants
          shall be, at the time of delivery of the certificates therefore,  duly
          authorized, and validly issued as fully paid and non-assessable;

     (g)  WorldHeart  will cause the Warrant Agent to keep open on business days
          the  registers of holders and  registers  of transfers  referred to in
          Section  3.1 and will not take any  action or omit to take any  action
          which  would have the effect of  preventing  the  Warrantholders  from
          exercising  any of the Warrants or receiving  any of the Common Shares
          upon such exercise;

     (h)  WorldHeart  will make all requisite  filings,  including  filings with
          appropriate Canadian securities regulatory authorities,  in connection
          with the exercise of the Warrants and issue of the Common Shares; and
<PAGE>

                                     - 28 -

     (i)  generally,  WorldHeart  will well and truly  perform and carry out all
          acts and things to be done by it as  provided  in this  Indenture  and
          will not take any action which might reasonably be expected to deprive
          the  Warrantholders  of their rights to acquire Common Shares upon the
          exercise of the Warrants.

6.2  Warrant Agent's Remuneration and Expenses

     WorldHeart  will pay to the  Warrant  Agent  from  time to time  reasonable
remuneration  for its  services  hereunder  and  will,  on the  Warrant  Agent's
request,  pay to or reimburse  the Warrant Agent for all  reasonable  documented
expenses,  disbursements  and advances  made or incurred by the Warrant Agent in
the  administration  or execution  of the trusts  hereof  (including  reasonable
documented  compensation and disbursements of its counsel and other advisers and
assistants not regularly in its employ),  both before any default  hereunder and
thereafter until all duties of the Warrant Agent hereunder have been finally and
fully  performed,  except any such expense,  disbursement or advance that arises
out of or results from negligence, wilful misconduct or bad faith of the Warrant
Agent  or  of  persons  for  whom  the  Warrant   Agent  is   responsible.   The
Warrantholders  shall not be liable  for any  portion  of such fees or  expenses
except as otherwise specified herein.

6.3  Performance of Covenants by Warrant Agent

     If the Warrant  Agent is made aware of the failure of WorldHeart to perform
any of its obligations  under this  Indenture,  the Warrant Agent may notify the
Warrantholders  of such  failure or may itself  perform any of such  obligations
capable of being  performed  by it, but,  subject to Section  10.3,  will not be
bound to do so or to notify  the  Warrantholders  that it is so doing.  All sums
expended  or  advanced by the  Warrant  Agent in so doing will be  repayable  as
provided in Section  6.2.  No such  performance,  expenditure  or advance by the
Warrant  Agent will  relieve  WorldHeart  of any  default  or of its  continuing
obligations hereunder.

                                    ARTICLE 7

                                   ENFORCEMENT

7.1  Legal Proceedings by Warrantholders

     All or any of the rights conferred upon a Warrantholder by the terms of the
Warrant Certificates  evidencing the Warrants held by such Warrantholder or this
Indenture,  or both, may be enforced by the  Warrantholder by appropriate  legal
proceedings,  but without  prejudice to the right which is hereby conferred upon
the Warrant Agent under Section 7.2.

7.2  Warrant Agent May Institute All Proceedings

(1) The  Warrant  Agent  shall  also have the power at any time and from time to
time to  institute  and to  maintain  such  suits and  proceedings  as it may be
advised  shall be necessary  or advisable to preserve and protect its  interests
and the interests of the Warrantholders.
<PAGE>

                                     - 29 -

(2) Any such suit or  proceeding  instituted by the Warrant Agent may be brought
in the name of the  Warrant  Agent  as  trustee  of an  express  trust,  and any
recovery of  judgment  shall be for the  rateable  benefit of the holders of the
Warrants subject to the provisions of this Indenture.  In any proceeding brought
by the Warrant Agent (and also any proceeding in which a declaratory judgment of
a court may be sought as to the  interpretation or construction of any provision
of this  Indenture,  to which the  Warrant  Agent  shall be a party) the Warrant
Agent shall be held to represent all the holders of the  Warrants,  and it shall
not be  necessary  to make  any  holders  of the  Warrants  parties  to any such
proceeding.

                                   ARTICLE 8

                           MEETINGS OF WARRANTHOLDERS

8.1  Amendments

Any term of the  Warrants  may be amended or waived  (including  the  adjustment
provisions  including in this  Warrant  Indenture)  upon the written  consent of
WorldHeart and the holders of Warrants  representing  at least 50% of the number
of Common Shares then subject to all outstanding Warrants; provided that (a) any
such  amendment or waiver must apply to all the Warrants ; and (b) the number of
Common Shares issuable upon the exercise of the Warrants, the Exercise Price and
the Expiry Date may not be amended,  and the right to exercise  the Warrants may
not be altered or waived without the written consent of each Warrantholder.

                                   ARTICLE 9

               SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS

9.1  Provision for Supplemental Indentures for Certain Purposes

     From time to time  WorldHeart  (when  authorized by the  directors) and the
Warrant  Agent  may,  subject  to  the  provisions  hereof,   including  without
limitation  Article 8 hereof,  and will when so  directed  hereby,  execute  and
deliver by their proper officers, indentures or instruments supplemental hereto,
which  thereafter  will  form  part  hereof,  for  any or  all of the  following
purposes:

     (a)  setting forth any  adjustments  resulting from the  application of the
          provisions of Article 5;

     (b)  adding hereto such additional covenants and enforcement  provisions as
          in the opinion of counsel are necessary or  advisable,  and are not in
          the  opinion of the  Warrant  Agent  relying on the opinion of counsel
          prejudicial  to the rights or  interests  of the  Warrantholders  as a
          group;

     (c)  giving effect to any amendment or waiver passed as provided in Article
          8;
<PAGE>

                                     - 30 -

     (d)  making such  provisions  not  inconsistent  with this Indenture as are
          necessary  or desirable  with respect to matters or questions  arising
          hereunder,  and which are not,  in the  opinion of the  Warrant  Agent
          relying  on the  opinion  of  counsel,  prejudicial  to the  rights or
          interests of the Warrantholders as a group;

     (e)  adding to,  deleting or altering the  provisions  hereof in respect of
          the transfer of Warrants or the exchange of Warrant Certificates,  and
          making  any  modification  in the  form  of the  Warrant  Certificates
          provided that any such action in the opinion of counsel  acceptable to
          the  Warrant  Agent  does  not  adversely  affect  the  rights  of the
          Warrantholder;

     (f)  modifying any provision of this Indenture or relieving WorldHeart from
          any obligation, condition or restriction herein contained, except that
          no  such  modification  or  relief  will  be or  become  operative  or
          effective  if in the  opinion  of the  Warrant  Agent,  relying on the
          opinion of counsel,  it would impair any of the rights or interests of
          the  Warrantholders or of the Warrant Agent, and the Warrant Agent may
          in  its  uncontrolled  discretion  decline  to  enter  into  any  such
          supplemental  indenture  which in its opinion will not afford adequate
          protection to the Warrant Agent when it becomes operative; and

     (g)  for  any  other  purpose  not  inconsistent  with  the  terms  of this
          Indenture, including the correction or rectification of any ambiguity,
          defective or inconsistent  provision,  error or omission herein, if in
          the  opinion of the Warrant  Agent  relying on the opinion of counsel,
          the rights of the Warrant Agent and of the Warrantholders, as a group,
          are not prejudiced thereby.

9.2  Successor Corporations

     In the case of the  consolidation,  amalgamation,  arrangement,  merger  or
transfer  of  the  undertaking  or  assets  of  WorldHeart  as an  entirety,  or
substantially as an entirety, to another corporation,  the successor corporation
resulting from such consolidation, amalgamation, arrangement, merger or transfer
(if not WorldHeart)  will be bound by the provisions  hereof and for the due and
punctual  performance  and  observance of each and every covenant and obligation
contained  in this  Indenture  to be  performed  by  WorldHeart  and,  will as a
condition  precedent  to  any  such  transaction,  agree  to  succeed  to and be
substituted for WorldHeart by supplemental indenture in form satisfactory to the
Warrant  Agent and  executed and  delivered  to the Warrant  Agent with the same
effect as closely as may be possible as if it had been named herein.

                                   ARTICLE 10

                          CONCERNING THE WARRANT AGENT

10.1 Trust Indenture Legislation

(1) If and to the extent that any provision of this Indenture limits,  qualifies
or  conflicts  with a  mandatory  requirement  of  Applicable  Legislation,  the
mandatory requirement will prevail.
<PAGE>

                                     - 31 -

(2)  WorldHeart and the Warrant Agent each will at all times in relation to this
Indenture  and any action to be taken  hereunder  observe and comply with and be
entitled to the benefits of Applicable Legislation.

10.2 Warrant Agent's Authority to Carry on Business

The Warrant Agent  represents and warrants to WorldHeart that at the date hereof
it is  authorized  to carry  on the  business  of a trust  company  in  Toronto,
Ontario.  If,  notwithstanding the provisions of this Section 10.2, it ceases to
be authorized to carry on such business, the validity and enforceability of this
Indenture and the Warrants issued  hereunder shall not be affected in any manner
whatsoever by reason only of such event provided that the Warrant Agent,  within
30 days after ceasing to be authorized to carry on such business  either becomes
so authorized or resigns in the manner and with the effects specified in Section
10.8.

10.3 Rights and Duties of Warrant Agent

(1) In the  exercise of the rights and duties  prescribed  or  conferred  by the
terms of this  Indenture,  the Warrant Agent will act honestly and in good faith
with a view to the best interests of the Warrantholders,  and will exercise that
degree of care,  diligence and skill that a reasonably  prudent  warrant trustee
would  exercise  in  comparable  circumstances.  Subject to the  foregoing,  the
Warrant  Agent  shall  not be bound to give  any  notice  or do or take any act,
action or proceeding  by virtue of the powers  conferred on it hereby unless and
until it shall have been required so to do under the terms hereof; nor shall the
Warrant  Agent be required to take notice of any default  hereunder,  unless and
until notified in writing of such default, which notice shall distinctly specify
the default  desired to be brought to the  attention of the Warrant Agent and in
the absence of any such notice the  Warrant  Agent may for all  purposes of this
Indenture conclusively assume that no default has been made in the observance or
performance of any of the representations,  warranties, covenants, agreements or
conditions  contained  therein.  Any  such  notice  shall  in no way  limit  any
discretion  herein given to the Warrant  Agent to  determine  whether or not the
Warrant Agent shall take action with respect to any default.

(2) No  provision  of this  Indenture  will be  construed to relieve the Warrant
Agent from liability for its own negligent act, negligent failure to act, wilful
misconduct or bad faith.

(3) The obligation of the Warrant Agent to commence or continue any act,  action
or proceeding for the purpose of enforcing any right of the Warrant Agent or the
Warrantholders  hereunder is on the condition  that,  when required by notice to
the  Warrantholders  by the Warrant Agent, the Warrant Agent is furnished by one
or more  Warrantholders  with sufficient funds to commence or continue such act,
action or proceeding and indemnity reasonably  satisfactory to the Warrant Agent
to protect and hold it  harmless  against the costs,  charges and  expenses  and
liabilities  to be  incurred  thereby  and any loss and  damage it may suffer by
reason thereof.

(4) No provision of this  Indenture  will require the Warrant Agent to expend or
risk its own funds or otherwise incur financial  liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless it is
so funded and indemnified.
<PAGE>

                                     - 32 -

(5)  The  Warrant  Agent  may,  before  commencing  or at any  time  during  the
continuance of any such act, action or proceeding, require the Warrantholders at
whose  instance  it is acting to  deposit  with the  Warrant  Agent the  Warrant
Certificates  held by them, for which  certificates the Warrant Agent will issue
receipts.

(6) Every  provision  of this  Indenture  that  relieves  the  Warrant  Agent of
liability or entitles it to rely on any  evidence  submitted to it is subject to
the provisions of Applicable Legislation, and of this Section 10.3.

10.4 Evidence, Experts and Advisers

(1) In  addition  to the  reports,  certificates,  opinions  and other  evidence
required by this  Indenture,  WorldHeart  will furnish to the Warrant Agent such
additional  evidence of compliance with any provision hereof,  and in such form,
as is prescribed by Applicable  Legislation  or as the Warrant Agent  reasonably
requires by written notice to WorldHeart.

(2) In the exercise of any right or duty hereunder the Warrant  Agent,  if it is
acting in good faith, may rely, as to the truth of any statement or the accuracy
of any opinion expressed therein, on any statutory declaration, opinion, report,
certificate  or other  evidence  furnished  to the Warrant  Agent  pursuant to a
provision  hereof or of Applicable  Legislation  or pursuant to a request of the
Warrant Agent,  if such evidence  complies with  Applicable  Legislation and the
Warrant Agent  examines such evidence and  determines  that it complies with the
applicable requirements of this Indenture.

(3)  Whenever  Applicable  Legislation  requires  that  evidence  referred to in
Subsection 10.4(1) be in the form of a statutory declaration,  the Warrant Agent
may accept such  statutory  declaration  in lieu of a certificate  of WorldHeart
required by any provision hereof.

(4) Any such  statutory  declaration  may be made by any  director or officer of
WorldHeart.

(5) The  Warrant  Agent may act and rely and shall be  protected  in acting  and
relying  upon  any  resolution,  certificate,  statement,  instrument,  opinion,
report, notice, request,  consent, order, letter,  telegram,  cablegram or other
paper or document believed by it to be genuine and to have been signed,  sent or
presented by or on behalf of the proper party or parties.

(6) Proof of the execution of any document or instrument in writing, including a
Warrantholders'  Request, by a Warrantholder may be made by the certificate of a
notary  public,  or other officer with similar  powers,  that the person signing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such  execution,  or in any other  manner  that the  Warrant  Agent
considers adequate.

(7) The Warrant Agent may employ or retain such counsel, accountants, engineers,
appraisers,  or other  experts or advisers  as it  reasonably  requires  for the
purpose  of  determining  and  discharging  its  duties  hereunder  and  may pay
reasonable  remuneration  for all services so performed by any of them,  without
taxation of costs of any counsel, and will not be responsible for any misconduct
or  negligence on the part of any of them who has been selected with due care by
the Warrant

<PAGE>

                                     - 33 -

Agent.  Any  remuneration  so paid by the  Warrant  Agent shall be repaid to the
Warrant Agent in accordance with Section 6.2.

(8) The Warrant  Agent may act and shall be  protected  in acting and relying in
good faith on the opinion or advice of or information obtained from any counsel,
accountant  or  other  expert  or  advisor,  whether  retained  or  employed  by
WorldHeart  or by the Warrant  Agent,  in relation to any matter  arising in the
administration of the trusts hereof.

10.5 Documents, Money, Etc. held by Warrant Agent

(1) The Warrant Agent may retain any cash balance held in  connection  with this
Warrant Indenture and may, but need not, hold the same in its deposit department
or the deposit  department of one if its  Affiliates;  but the Warrant Agent and
its  Affiliates  shall not be liable to account for any profit to  WorldHeart or
any other person or entity other than at a rate, if any,  established  from time
to time by the Warrant Agent or its Affiliates.

(2) Interest,  if any, received by the Warrant Agent in respect of such deposits
will belong to WorldHeart.

10.6 Action by Warrant Agent to Protect Interests

     The Warrant Agent will have power to institute and to maintain such actions
and proceedings as it considers necessary or expedient to protect or enforce its
interests and the interests of the Warrantholders.

10.7 Warrant Agent not Required to Give Security

     The  Warrant  Agent will not be  required  to give any bond or  security in
respect of the  performance of the agency created  hereby,  the execution of the
trusts and powers of this Indenture or otherwise in respect of the premises.

10.8 Protection of Warrant Agent

(1) By way of  supplement  to the  provisions  of any  law for  the  time  being
relating to trustees or agents, it is expressly declared and agreed that:

     (a)  the Warrant  Agent will not be liable for or by reason of, or required
          to substantiate, any statement of fact or recital in this Indenture or
          in the Warrant  Certificates  (except the representation  contained in
          Section  10.10  or in the  certificate  of the  Warrant  Agent  on the
          Warrant  Certificates),  but all such  statements  or recitals are and
          will be deemed to be made by WorldHeart;

     (b)  nothing  herein  contained  will  impose  on  the  Warrant  Agent  any
          obligation to see to, or to require  evidence of, the  registration or
          filing  (or  renewal  thereof)  of this  Indenture  or any  instrument
          ancillary or supplemental hereto;
<PAGE>

                                     - 34 -

     (c)  subject to Section  10.10 the Warrant  Agent will not be bound to give
          notice to any person of the execution hereof;

     (d)  the  Warrant  Agent  will not incur any  liability  or  responsibility
          whatsoever or be in any way  responsible  for the  consequence  of any
          breach by WorldHeart of any obligation  herein contained or of any act
          of any director, officer, employee or agent of WorldHeart; and

     (e)  the Warrant Agent shall not be liable or  accountable  for any loss or
          damage  whatsoever to any person caused by the  performance or failure
          by it to perform its  responsibilities  under this Indenture save only
          to the  extent  that  such  loss  or  damage  is  attributable  to the
          negligence, wilful misconduct or bad faith of the Warrant Agent.

(2)  WorldHeart  indemnifies  the  Warrant  Agent and its  directors,  officers,
employees  and agents  and saves them  harmless  from all  liabilities,  losses,
claims,  demands, suits, damages, costs and actions which may be brought against
or suffered by it arising out of or connected with the  performance by it of its
duties hereunder  including any and all legal fees and  disbursements  except to
the  extent  that  such  liabilities,  suits,  damages,  costs and  actions  are
attributable  to the negligence,  wilful  misconduct or bad faith of the Warrant
Agent.  This provision shall survive the resignation or termination or discharge
of the Warrant Agent or the termination of this Indenture.

10.9 Replacement of Warrant Agent

(1) The Warrant Agent may resign its trust  hereunder and be discharged from all
further duties and liabilities hereunder, except as provided in this Section, by
giving to  WorldHeart  and the  Warrantholders  not less than 30 business  days'
notice in writing or, if a new Warrant  Agent has been  appointed,  such shorter
notice as WorldHeart accepts as sufficient.

(2) The Warrantholders pursuant to the provisions of Article 8 hereof may at any
time remove the Warrant Agent and appoint a new Warrant Agent.

(3) If the Warrant  Agent so resigns or is so removed or is  dissolved,  becomes
bankrupt,  goes  into  liquidation  or  otherwise  becomes  incapable  of acting
hereunder,  WorldHeart  will forthwith  appoint a new Warrant Agent unless a new
Warrant Agent has already been appointed by the Warrantholders.

(4) Failing such  appointment by WorldHeart,  the retiring  Warrant Agent or any
Warrantholder  at the expense of  WorldHeart  may apply to the Ontario  Superior
Court (the "Court") on such notice as the Court directs,  for the appointment of
a new Warrant Agent, at the expense of WorldHeart.

(5) Any new Warrant  Agent so  appointed by  WorldHeart  or by the Court will be
subject to removal as aforesaid by the Warrantholders.
<PAGE>

                                     - 35 -

(6) Any new Warrant Agent  appointed under any provision of this Section must be
a corporation  authorized to carry on the business of a trust company in Ontario
and, if required by the Applicable  Legislation of any other  province,  in such
other province.

(7) On any such  appointment  the new Warrant Agent will be vested with the same
powers,  rights,  duties and responsibilities as if it had been originally named
herein as Warrant Agent without any further assurance,  conveyance, act or deed,
but there will be immediately executed,  at the expense of WorldHeart,  all such
conveyances or other instruments as, in the opinion of counsel, are necessary or
advisable  for  the  purpose  of  assuring  such  powers,   rights,  duties  and
responsibilities   to  the  new  Warrant  Agent  and  provided  that,  upon  any
resignation or  termination of the Warrant Agent and  appointment of a successor
Warrant Agent,  such successor  Warrant Agent shall have executed an appropriate
instrument  accepting such  appointment  and, at the request of WorldHeart,  the
predecessor  Warrant Agent,  upon payment of its  outstanding  remuneration  and
expenses,   shall  execute  and  deliver  to  the  successor  Warrant  Agent  an
appropriate  instrument  transferring to such successor Warrant Agent all rights
and powers of the Warrant Agent hereunder.

(8) On the  appointment  of a new Warrant Agent,  WorldHeart  will promptly give
notice thereof to the Warrantholders.

(9) A corporation into or with which the Warrant Agent is merged or consolidated
or amalgamated, or a corporation succeeding to the trust business of the Warrant
Agent,  will be the successor to the Warrant Agent hereunder without any further
act on its part or on the part of any party hereto if such corporation  would be
eligible for appointment as a new Warrant Agent under Subsection 10.8(6).

(10) A Warrant Certificate  certified but not delivered by a predecessor Warrant
Agent may be delivered by the new or successor  Warrant Agent in the name of the
predecessor Warrant Agent or successor Warrant Agent.

10.10 Conflict of Interest

     The  Warrant  Agent  represents  to  WorldHeart  that  at the  time  of the
execution and delivery  hereof no material  conflict of interest  exists between
its role as a fiduciary  hereunder  and its role in any other  capacity and if a
material  conflict of interest arises hereafter it will, within 90 business days
after  ascertaining  that it has such  material  conflict  of  interest,  either
eliminate the conflict of interest or resign its trust hereunder.

     If any such material  conflict of interest exists or hereafter shall exist,
the validity and  enforceability of this Indenture and of the Warrants shall not
be affected in any manner whatsoever by reason thereof.

     The Warrant  Agent,  in its personal or any other  capacity,  may buy, lend
upon and deal in securities  of WorldHeart  and generally may contract and enter
into financial  transactions with WorldHeart without being liable to account for
any profit made thereby.
<PAGE>

                                     - 36 -

10.11 Acceptance of Trusts

     The Warrant Agent hereby accepts the trusts in this Indenture  declared and
provided for and agrees to perform them on the terms and  conditions  herein set
forth.

                                   ARTICLE 11

                                    GENERAL

11.1 Notice to WorldHeart and Warrant Agent

(1) Unless herein otherwise expressly  provided,  a notice to be given hereunder
to WorldHeart or the Warrant Agent will be validly given if delivered or if sent
by first class  mail,  postage  prepaid,  or if sent by  facsimile  transmission
(receipt of such transmission is confirmed in writing):

     (a)  If to WorldHeart:

                           World Heart Corporation
                           1 Laser Street
                           Ottawa, ON
                           K2E 7V1

                           Attention:  Chief Financial Officer

                           Facsimile:  (613) 723-8522

     (b)  If to the Warrant Agent:

                           CIBC Mellon Trust Company
                           320 Bay Street, P.O. Box 1
                           Toronto, ON
                           M5H 4A6

                           Attention:  Assistant Vice President, Client Services

                           Facsimile:  (416) 643-5570

and any such notice  delivered or sent in accordance  with the foregoing will be
deemed to have been  received on the date of delivery or facsimile  transmission
or, if mailed, on the fifth business day following the day of the mailing of the
notice.

(2) WorldHeart or the Warrant  Agent,  as the case may be, may from time to time
notify the other in the manner  provided  in  Subsection  11.1(1) of a change of
address which,  from the effective date of such notice and until changed by like
notice,  will be the address of WorldHeart or the Warrant Agent, as the case may
be, for all purposes of this Indenture.
<PAGE>

                                     - 37 -

(3) If, by  reason  of a  strike,  lockout  or other  work  stoppage,  actual or
threatened,  involving  Canadian postal  employees,  a notice to be given to the
Warrant Agent or to WorldHeart hereunder could reasonably be considered unlikely
to reach or likely to be delayed in reaching its destination, the notice will be
valid and effective  only if it is delivered to an officer of the party to which
it is addressed or if it is delivered to such party at the  appropriate  address
provided in  Subsection  11.1(1) by  confirmed  facsimile  transmission  and any
notice  deliver in  accordance  with the  foregoing  will be deemed to have been
received  on the  date of  delivery  to such  officer  or if  delivered  by such
facsimile,  on the first  business day  following the date of the sending of the
notice.

11.2 Notice to Warrantholders

(1) Unless herein otherwise expressly  provided,  a notice to be given hereunder
to  Warrantholders  will be deemed to be validly  given if the notice is sent by
ordinary surface or air mail,  postage prepaid,  addressed to the Warrantholders
or  delivered  (or so mailed to certain  Warrantholders  and so delivered to the
other  Warrantholders)  at their  respective  addresses  appearing on any of the
registers of holders  described in Section 3.1  provided,  however,  that if, by
reason  of a strike,  lockout  or other  work  stoppage,  actual or  threatened,
involving  Canadian postal employers,  the notice could reasonably be considered
unlikely  to reach or likely to be  delayed in  reaching  its  destination,  the
notice will be valid and  effective  only if it is so  delivered  or is given by
publication  twice in the Report on Business  section in the national edition of
The Globe and Mail newspaper.

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

11.3 Satisfaction and Discharge of Indenture

     On the earlier of:

     (a)  the date by which there has been  delivered  to the Warrant  Agent for
          exercise  or  surrender  for  cancellation  all  Warrant  Certificates
          theretofore certified hereunder; or

     (b)  the Expiry Time;

and if all  certificates  representing  Common  Shares  required to be issued in
compliance with the provisions  hereof have been issued and delivered  hereunder
or to the Warrant Agent in accordance with such provisions,  this Indenture will
cease to be of further  effect  and, on demand of and at the cost and expense of
WorldHeart  and on delivery to the Warrant Agent of a

<PAGE>

                                     - 38 -

certificate  of  WorldHeart  stating  that  all  conditions   precedent  to  the
satisfaction  and  discharge of this  Indenture  have been  complied with and on
payment to the Warrant Agent of the fees and other  remuneration  payable to the
Warrant Agent, the Warrant Agent will execute proper  instruments  acknowledging
satisfaction of and discharging this Indenture.

11.4 Sole Benefit of Parties and Warrantholders

     Nothing  in  this  Indenture  or the  Warrant  Certificates,  expressed  or
implied,  will give or be construed to give to any person other than the parties
hereto and the Warrantholders, as the case may be, any legal or equitable right,
remedy or claim under this Indenture or the Warrant  Certificates,  or under any
covenant  or  provision  herein or therein  contained,  all such  covenants  and
provisions   being  for  the  sole  benefit  of  the  parties   hereto  and  the
Warrantholders.

11.5 Discretion of Directors

     Any matter  provided herein to be determined by the directors of WorldHeart
will be  determined  by the  directors  of  WorldHeart  in their sole good faith
discretion, and a determination so made will be conclusive.

11.6 Counterparts and Formal Date

     This Indenture may be executed in several counterparts,  each of which when
so executed will be deemed to be an original and such counterparts together will
constitute  one and the same  instrument and  notwithstanding  the date of their
execution will be deemed to be dated as of the Effective Date.

11.7 Language

     The parties hereby request that this Indenture and any related documents be
drawn up and executed only in the English  language.  Les parties  demandent par
les  presentes  que la  presente  convention  ainsi  que  tous les  documents  y
afferents soient rediges et executes en langue anglaise seulement.

11.8 Assignment

     Subject  to Section  9.2  hereof,  neither  this  Indenture  nor any right,
interest or  obligation  hereunder  may be assigned by either party  without the
prior written  consent of the other party and any  purported  assignment of this
Indenture  which does not comply with this Section 11.8 shall be considered null
and void.

11.9 Benefit of the Agreement

     This  Indenture  will  enure  to the  benefit  of and be  binding  upon the
respective successors and permitted assigns of the parties hereto.
<PAGE>

                                     - 39 -

11.10 Further Assurances

     The parties  will from time to time  execute  and deliver all such  further
documents  and  instruments  and do all acts and things as the other  party may,
either before or after the Effective  Date,  reasonably  require to  effectively
carry out or better evidence the full intent or meaning of this Indenture.
<PAGE>

     IN  WITNESS  WHEREOF  the  parties  hereto  have  caused  their  respective
corporate seals to be hereunto affixed attested by their signatures.

                            WORLD HEART CORPORATION

                            By:   /s/ Ian W. Malone
                               -------------------------------------------------
                               Name:  Ian W. Malone
                               Title:

                            CIBC MELLON TRUST COMPANY

                            By:   /s/ Charito Librodo
                               -------------------------------------------------
                               Name:  Charito Librodo
                               Title:

                            By:   /s/ Bruce Cornish
                               -------------------------------------------------
                               Name:  Bruce Cornish
                               Title:
<PAGE>

SCHEDULE A

FORM OF WARRANT

[Legends for Warrants issued to US purchasers of Units]

THE HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY,  REPRESENTS,  ACKNOWLEDGES,  AND
AGREES THAT IT WILL NOT AND WILL NOT BE  ENTITLED  TO,  DIRECTLY OR  INDIRECTLY,
SELL OR TRANSFER THE SECURITIES INTO CANADA OR TO RESIDENTS OF CANADA, EXPECT IN
COMPLIANCE WITH APPLICABLE  CANADIAN  SECURITIES  LAWS. NO SALE OR TRANSFER INTO
CANADA OR TO A CANADIAN RESIDENT WILL BE REGISTERED BY WORLD HEART CORPORATION'S
TRANSFER  AGENT AND ANY ATTEMPT TO EFFECT SUCH A TRANSFER IS INVALID UNLESS MADE
IN COMPLIANCE WITH THE ABOVE-NOTED RESTRICTIONS.

UNLESS  PERMITTED  UNDER  CANADIAN  SECURITIES  LEGISLATION,  THE  HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.

THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE UNITED
STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE "U.S.  SECURITIES  ACT") OR THE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES.  THE  HOLDER  HEREOF,  BY
PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE  COMPANY  THAT SUCH
SECURITIES MAY BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO
THE COMPANY,  OR (B) OUTSIDE THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES  ACT, IF  APPLICABLE,  OR (C) INSIDE THE
UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT.

[Legends for Warrants issued to Canadian purchasers]

UNLESS  PERMITTED  UNDER  CANADIAN  SECURITIES  LEGISLATION,  THE  HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.

THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED  UNDER THE UNITED
STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE "U.S.  SECURITIES  ACT") OR THE
SECURITIES  LAWS OF ANY  STATE OF THE  UNITED  STATES.  THE  HOLDER  HEREOF,  BY
PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE  COMPANY  THAT SUCH
SECURITIES MAY BE OFFERED,  SOLD,  PLEDGED OR OTHERWISE  TRANSFERRED ONLY (A) TO
THE COMPANY,  OR (B) OUTSIDE THE UNITED  STATES IN  ACCORDANCE  WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES  ACT, IF  APPLICABLE,  OR (C) INSIDE THE
UNITED STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
IN ACCORDANCE WITH APPLICABLE  STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT.
<PAGE>

                                     - 2 -

Certificate No.:                               No. of Warrants:
                -----------                                    -----------------

                                    WARRANTS
                             Exercisable to Acquire
                                  Common Shares
                                       of
                             WORLD HEART CORPORATION
          (Incorporated under the Business Corporations Act (Ontario))

THIS IS TO CERTIFY THAT, for value received,
(the "holder") is the registered  holder of the number of Warrants  ("Warrants")
of World Heart Corporation  ("WorldHeart")  specified above and for each Warrant
held is thereby  entitled,  to be issued  fully paid and  non-assessable  common
shares  ("Common  Shares")  in the  capital of  WorldHeart,  on the basis of one
Common Share for each such Warrant, subject to the limitation referred to below,
by  surrendering  to CIBC Mellon  Trust  Company  (the  "Warrant  Agent") at its
principal  transfer  office in  Toronto,  Ontario  during  the  exercise  period
hereinafter  referred  to, a  certified  cheque or bank  draft  made  payable to
WorldHeart  in the amount of the Exercise  Price as  hereinafter  determined  in
respect of each Common Share to be issued, this Warrant Certificate and a notice
of exercise in the form set forth in  Appendix 1 annexed  hereto duly  completed
and executed.

Capitalized  terms which are not  otherwise  defined  herein shall have the same
meaning  as in  the  Warrant  Indenture  (which  indenture,  together  with  all
instruments  supplemental  or ancillary  thereto,  is herein  referred to as the
"Warrant  Indenture") dated as of September 22, 2003 between  WorldHeart and the
Warrant Agent, as warrant agent.

Surrender of this Warrant  Certificate will be deemed to have been effected only
on  personal  delivery  thereof  to,  or,  if sent by mail  or  other  means  of
transmission,  on actual  receipt  thereof by, the  Warrant  Agent at the office
specified above.

This Warrant  Certificate  evidences  Warrants of WorldHeart  issued or issuable
under the provisions of the Warrant Indenture.  Reference is made to the Warrant
Indenture  for  particulars  of the rights of the holders of the Warrants and of
WorldHeart  and of the  Warrant  Agent in respect  thereof  and of the terms and
conditions  upon which the Warrants are issued and held,  all to the same effect
as if the provisions of the Warrant  Indenture were herein set forth,  to all of
which  the  holder,  by  acceptance  hereof,  assents.  To  the  extent  of  any
inconsistency  between the terms of the Warrant  Indenture and the terms of this
Warrant  Certificate,   the  terms  of  the  Warrant  Indenture  shall  prevail.
WorldHeart  will  furnish  to the  holder,  on  request  and upon  payment  of a
reasonable charge for photocopying and postage, a copy of the Warrant Indenture.

The  Warrants  evidenced  by this  Warrant  Certificate  may be exercised by the
holder  until 5:00 p.m.  (Toronto  time) on the date that is 60 months  from the
Effective Date.
<PAGE>

                                     - 3 -

On and after the date of any exercise of the Warrants  evidenced by this Warrant
Certificate,  the  holder  will  have no  rights  hereunder  except  to  receive
certificates  representing the Common Shares thereby issued to him upon delivery
of: (i) a certified  cheque or bank draft payable to WorldHeart in the amount of
Cdn$1.15,  unless such price has been adjusted in accordance with the provisions
of the Warrant  Indenture in which case it shall be the adjusted price in effect
at the applicable time (the "Exercise Price") in respect of each Common Share to
be issued,  (ii) this Warrant  Certificate,  and (iii) duly completed  Notice of
Exercise as set out on Appendix 1 to the Warrant Agent at its  principal  office
in Toronto,  Ontario.  After the Expiry Time,  all rights under any  unexercised
Warrant  evidenced  hereby  will wholly  cease and  terminate  and this  Warrant
Certificate will be void.

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

The Warrant  Indenture  provides for  adjustments to the number of Common Shares
issuable and the Exercise Price in certain events set forth therein.

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

The  Warrant  Indenture  contains  provisions  making  binding on all holders of
Warrants outstanding thereunder certain amendments or waivers approved by 50% of
the holders of all Warrants and by WorldHeart.

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

The Warrants evidenced by this Warrant Certificate may only be transferred, upon
compliance  with the  conditions  prescribed  in the Warrant  Indenture,  on the
register of transfers to be kept at the principal office of the Warrant Agent in
Toronto, Ontario by the holder, or its officers,  employees,  members,  partners
and  managers,  or  the  holder's  executors,   administrators  or  other  legal
representatives or his or its or their respective  attorney duly appointed by an
instrument in writing in form and execution  satisfactory  to the Warrant Agent,
and a written  acknowledgement  by the transferee  substantially  in the form of
Appendix 3 annexed hereto or otherwise in form satisfactory to the Warrant Agent
executed by the transferee and subject to compliance with certain other terms of
the Warrant Indenture, and upon compliance with such requirements and

<PAGE>

                                     - 4 -

such other  reasonable  requirements  as the Warrant Agent may  prescribe,  such
transfer will be duly noted on such register of transfers by the Warrant  Agent.
Notwithstanding the foregoing,  WorldHeart will be entitled,  and may direct the
Warrant Agent,  to refuse to record any transfer of any Warrant on such register
if such  transfer  would  constitute a violation of the  securities  laws of any
applicable jurisdiction.

The holding of this  Warrant  Certificate  will not  constitute  the holder as a
shareholder  of  WorldHeart  or entitle  him or it to any right or interest as a
shareholder except as otherwise provided in the Warrant Indenture.

This  Warrant  Certificate  will not be valid for any purpose  until it has been
certified  by or on behalf of the  Warrant  Agent for the time  being  under the
Warrant Indenture. Time will be of the essence hereof.

The Warrants and the Common  Shares  issuable  upon the exercise of the Warrants
will be subject to statutory resale restrictions under the applicable securities
legislation in Canada and the United States.
<PAGE>

                                     - 5 -

IN WITNESS WHEREOF  WorldHeart has caused this Warrant  Certificate to be signed
by its officer duly authorized in that behalf as of September 22, 2003.

                                WORLD HEART CORPORATION

                                By:
                                   ---------------------------------------------
                                   Name:   Ian W. Malone
                                   Title:  Vice President, Finance,
                                           Chief Financial Officer and Secretary

This Warrant Certificate is one of the Warrant  Certificates  referred to in the
Warrant Indenture within mentioned.

                                CIBC MELLON TRUST COMPANY, as Warrant Agent

                                By:
                                   ---------------------------------------------
                                   Authorized Signing Officer
<PAGE>

                                   APPENDIX 1

                               NOTICE OF EXERCISE

To:            WORLD HEART CORPORATION
And To:        CIBC MELLON TRUST COMPANY

The  undersigned  holder  of  the  Warrants  evidenced  by  the  within  Warrant
Certificate hereby exercises its right to be issued Common Shares of World Heart
Corporation  (or such  other  securities  or  property  to which  such  exercise
entitles him in lieu thereof or in addition  thereto under the provisions of the
Warrant Indenture mentioned in such Warrant  Certificate) that are issuable upon
the  exercise  of  such  Warrants,  on  the  terms  specified  in  such  Warrant
Certificate  and Warrant  Indenture and in  connection  therewith has enclosed a
certified  cheque or bank draft  payable  to  WorldHeart  in an amount  equal to
Cdn$1.15 (or price as adjusted) in respect of each Common Share to be issued.

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

Name(s) in Full        Address(es) in full, Account        Number(s) of Common
                       No., S.I.N.                         Shares
                       [Note US residents must include
                       their Taxpayer Identification
                       Number]

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

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

This Notice of Exercise must be  accompanied by a Declaration  substantially  in
the form of Exhibit 1 to the Warrant  Certificate duly completed and executed by
the holder if the Warrant  Certificate is to be transferred to or exercised by a
non-U.S. Person.

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

DATED this      day of          ,     .

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

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

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

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

Manner of Delivery

If this Notice of Exercise is delivered by mail: CIBC Mellon Trust Company, P.O.
Box 1036 Adelaide St. Postal Station, Toronto, Ontario M5C 2K4.

If this Notice of Exercise is  delivered  by hand or courier:  CIBC Mellon Trust
Company, 199 Bay Street, Commerce Court West, Securities Level, Toronto Ontario,
M5L 1G9. Attention: Courier Window
<PAGE>

                                     - 2 -

EXHIBIT 1

DECLARATION

TO:        CIBC Mellon Trust Company

The  undersigned  (1)  acknowledges  that the  transfer  to the  undersigned  of
            Warrants  of World Heart  Corporation,  represented  by  certificate
number(s)
to which this declaration relates (the "Warrant Certificates"), is being made in
reliance on and in  compliance  with Rule 903 or 904 of  Regulation  S under the
United States  Securities Act of 1933, as amended (the "U.S.  Securities  Act"),
and (2)  certifies  that (a) it is not an  "affiliate"  (as  defined in Rule 405
under the U.S. Securities Act) of World Heart Corporation, (b) it is not a "U.S.
Person" as that term is defined in Regulation S under the U.S.  Securities  Act,
and (c) it is not a "dealer" as defined in section 2(12) of the U.S.  Securities
Act or a person  receiving a selling  concession,  fee or other  remuneration in
respect of the Warrant  Certificate(s);  or, in connection  with the exercise or
deemed exercise of the Warrant Certificate(s), the undersigned certifies that it
is not a "U.S.  Person",  nor is it  exercising  the Warrant  Certificate(s)  on
behalf of a "U.S.  Person",  as that term is defined in  Regulation  S under the
U.S. Securities Act.

DATED this      day of          , 200 .

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

Manner of Delivery

If this  Declaration is delivered by mail:  CIBC Mellon Trust Company,  P.O. Box
1036 Adelaide St. Postal Station, Toronto, Ontario M5C 2K4.

If this Declaration is delivered by hand or courier:  CIBC Mellon Trust Company,
199 Bay Street, Commerce Court West, Securities Level, Toronto Ontario, M5L 1G9.
Attention: Courier Window

<PAGE>

                                     - 3 -

                                   APPENDIX 2

                                FORM OF TRANSFER

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

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

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

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

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

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

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

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

DATED this                 day of                             ,        .

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

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

Manner of Delivery

If this Form of Transfer is delivered by mail:  CIBC Mellon Trust Company,  P.O.
Box 1036 Adelaide St. Postal Station, Toronto, Ontario M5C 2K4.

If this Form of Transfer is  delivered  by hand or  courier:  CIBC Mellon  Trust
Company, 199 Bay Street, Commerce Court West, Securities Level, Toronto Ontario,
M5L 1G9. Attention: Courier Window
<PAGE>

                                     - 4 -

                                   APPENDIX 3

                          ACKNOWLEDGEMENT OF TRANSFEREE

TO:          [Name of Transferor]

             - and -

             World Heart Corporation ("WorldHeart")

             - and -

             CIBC Mellon Trust Company (the "Warrant Agent")

The  undersigned  transferee  of            Warrants of World Heart  Corporation
hereby (i) acknowledges that such Warrants are subject to the terms,  conditions
and  provisions  of a  Warrant  Indenture  made as of  September  22,  2003 (the
"Indenture") between WorldHeart and the Warrant Agent.

DATED the      day of          ,     .

                                           -------------------------------------
                                           Print Name of Transferee

                                           By:
                                              ----------------------------------
                                              Signature

                                           -------------------------------------
                                           Office or Title

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

                                           -------------------------------------
                                           Address of Transferee

Manner of Delivery

If this  Acknowledgement  of Transferee is delivered by mail:  CIBC Mellon Trust
Company, P.O. Box 1036 Adelaide St. Postal Station, Toronto, Ontario M5C 2K4.

If this  Acknowledgement  of  Transferee  is delivered by hand or courier:  CIBC
Mellon Trust Company,  199 Bay Street,  Commerce Court West,  Securities  Level,
Toronto Ontario, M5L 1G9. Attention: Courier WindowPURCHASE AGREEMENT

          THIS PURCHASE  AGREEMENT  ("Agreement")  is made as of the 22nd day of
September, 2003 by and among World Heart Corporation, a corporation incorporated
under the laws of the  Province of  Ontario,  Canada  (the  "Company"),  and the
Investors  set forth on the signature  pages affixed  hereto (each an "Investor"
and collectively the "Investors").

                                    Recitals

          A. The Company and the Investors are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by the provisions of Regulation D  ("Regulation  D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended; and

          B. The Investors  wish to purchase  from the Company,  and the Company
wishes to sell and issue to the Investors,  upon the terms and conditions stated
in this Agreement,  units, at a price of US$0.62 per unit  (determined  based on
the Noon buying rate for Canadian dollars  published by the Federal Reserve Bank
of New York on September 11, 2003 and a purchase price of Cdn$0.85 per unit) for
(i) an  aggregate  of  38,943,549  shares of the  Company's  Common  Shares (the
"Common Stock"), and (ii) warrants to purchase an aggregate of 38,943,549 shares
of Common Stock in the form attached hereto as Exhibit A (the "Warrants"),  each
such unit consisting of one share of Common Stock and a warrant for one share of
Common Stock; and

          C. Contemporaneous with the sale of the Common Stock and Warrants, the
parties hereto will execute and deliver a Registration Rights Agreement,  in the
form  attached  hereto  as  Exhibit  B (the  "Registration  Rights  Agreement"),
pursuant to which the Company will agree to provide certain  registration rights
under the  Securities  Act of 1933,  as amended,  and the rules and  regulations
promulgated thereunder, and applicable state securities laws.

          In consideration of the mutual promises made herein and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto agree as follows:

     1.  Definitions.  In addition to those terms defined above and elsewhere in
this Agreement,  for the purposes of this  Agreement,  the following terms shall
have the meanings here set forth:

          "Affiliate"  means, with respect to any Person, any other Person which
directly or indirectly  Controls,  is controlled  by, or is under common control
with, such Person.

          "Business Day" means a day, other than a Saturday or Sunday,  on which
banks in New York City and Ottawa,  Ontario are open for the general transaction
of business.
<PAGE>

          "Common  Stock"  means  the  common  shares  of the  Company,  and any
securities into which the Common Stock may be reclassified.

          "Company's  Knowledge"  means the actual  knowledge of the officers of
the Company, after due inquiry.

          "Confidential   Information"   means   trade   secrets,   confidential
information  and  know-how  (including  but  not  limited  to  ideas,  formulae,
compositions,  processes,  procedures and  techniques,  research and development
information,   computer  program  code,  performance   specifications,   support
documentation, drawings, specifications,  designs, business and marketing plans,
and customer and supplier lists and related information).

          "Control"  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.

          "Dollars" or "$" means United States dollars.

          "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).

          "Material  Adverse Effect" means a material  adverse effect on (i) the
assets, liabilities,  results of operations, condition (financial or otherwise),
business,  or prospects of the Company and its Subsidiaries taken as a whole, or
(ii) the ability of the Company to perform its obligations under the Transaction
Documents.

          "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.

          "Purchase  Price"  means  Twenty-Four  Million One Hundred  Forty-Five
Thousand Dollars ($24,145,000).

          "SEC Filings" has the meaning set forth in Section 4.6.

          "Securities" means the Shares, the Warrants and the Warrant Shares.

          "Shares"  means the  shares of Common  Stock  being  purchased  by the
Investors hereunder.

                                      -2-
<PAGE>

          "Subsidiary" has the meaning set forth in Section 4.1.

          "Transaction  Documents"  means this  Agreement,  the Warrants and the
Registration Rights Agreement.

          "TSX" means the Toronto  Stock  Exchange,  Inc.,  its  successors  and
assigns.

          "Warrant  Shares"  means  the  shares of Common  Stock  issuable  upon
exercise of the Warrants.

          "1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

          "1934 Act" means the Securities Exchange Act of 1934, as amended,  and
the rules and regulations promulgated thereunder.

     2. Purchase and Sale of the Shares and  Warrants.  Subject to the terms and
conditions of this  Agreement,  on the Closing Date, each of the Investors shall
severally,  and not jointly,  purchase,  and the Company shall sell and issue to
the  Investors,  the Shares and  Warrants  in the  respective  amounts set forth
opposite the Investors' names on the signature pages attached hereto in exchange
for the Purchase Price as specified in Section 3 below.

     3.  Closing.  Upon  confirmation  that  the  other  conditions  to  closing
specified  herein have been  satisfied,  the Company shall deliver to Lowenstein
Sandler PC, in trust, a certificate or certificates,  registered in such name or
names as the Investors may designate, representing the Shares and Warrants, with
instructions  that such certificates are to be held for release to the Investors
only  upon  payment  of the  Purchase  Price to the  Company.  Upon  receipt  by
Lowenstein Sandler PC of the certificates,  each Investor shall promptly cause a
wire  transfer  in same day funds to be sent to the  account  of the  Company as
instructed in writing by the Company,  in an amount representing such Investor's
pro rata portion of the Purchase  Price as set forth on the  signature  pages to
this  Agreement.  On the date (the  "Closing  Date") the Company  receives  such
funds, the certificates  evidencing the Shares and Warrants shall be released to
the Investors (the "Closing").  The purchase and sale of the Shares and Warrants
shall take place at the  offices of  Lowenstein  Sandler  PC, 1330 Avenue of the
Americas,  21st Floor, New York, New York, or at such other location and on such
other date as the Company and the Investors shall mutually agree.

     4.  Representations  and  Warranties  of the  Company.  The Company  hereby
represents  and  warrants  to the  Investors  that,  except  as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):

          4.1 Organization, Good Standing and Qualification. Each of the Company
and its  Subsidiaries is a corporation  duly organized,  validly existing and in
good standing under the laws of the  jurisdiction of its  incorporation  and has
all  requisite  corporate  power and  authority  to carry on its business as now
conducted and to own its properties. Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign  corporation  and is in

                                      -3-
<PAGE>

good standing in each  jurisdiction  in which the conduct of its business or its
ownership or leasing of property makes such  qualification or leasing  necessary
unless the failure to so qualify has not and could not reasonably be expected to
have a Material  Adverse  Effect.  The Company's  subsidiaries  are reflected on
Schedule 4.1 hereto (the "Subsidiaries").

          4.2  Authorization.  The Company has full power and  authority and has
taken all requisite action on the part of the Company,  its officers,  directors
and shareholders necessary for (i) the authorization,  execution and delivery of
the  Transaction  Documents,  (ii)  authorization  of  the  performance  of  all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or  reservation  for  issuance)  and delivery of the  Securities.  The
Transaction Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer,  reorganization,  moratorium and
similar  laws of general  applicability,  relating  to or  affecting  creditors'
rights generally.

          4.3 Capitalization. Schedule 4.3 sets forth (a) the authorized capital
stock of the  Company  on the date  hereof;  (b) the number of shares of capital
stock issued and outstanding; (c) the number of shares of capital stock issuable
pursuant to the Company's  stock plans;  and (d) the number of shares of capital
stock issuable and reserved for issuance  pursuant to securities (other than the
Shares and the Warrants)  exercisable  for, or convertible  into or exchangeable
for  any  shares  of  capital  stock  of the  Company.  All of  the  issued  and
outstanding  shares of the Company's capital stock have been duly authorized and
validly issued and are fully paid,  nonassessable and free of pre-emptive rights
and were issued in full  compliance  with applicable law and any rights of third
parties.  All of the issued  and  outstanding  shares of  capital  stock of each
Subsidiary  have been duly  authorized  and  validly  issued and are fully paid,
nonassessable  and free of pre-emptive  rights,  were issued in full  compliance
with  applicable  law and any  rights  of  third  parties  and are  owned by the
Company,  beneficially and of record,  subject to no lien,  encumbrance or other
adverse  claim.  No Person is entitled to  pre-emptive  or similar  statutory or
contractual  rights with respect to any  securities  of the  Company.  Except as
described  on  Schedule  4.3,  there  are  no  outstanding  warrants,   options,
convertible  securities  or other  rights,  agreements  or  arrangements  of any
character  under  which  the  Company  or any of its  Subsidiaries  is or may be
obligated to issue any equity  securities of any kind and except as contemplated
by this Agreement,  neither the Company nor any of its Subsidiaries is currently
in negotiations for the issuance of any equity securities of any kind. Except as
described  on Schedule  4.3 and except for the  Registration  Rights  Agreement,
there are no voting agreements,  buy-sell  agreements,  option or right of first
purchase agreements or other agreements of any kind among the Company and any of
the  securityholders  of the Company  relating to the  securities of the Company
held by them.  The  Company  has not granted any Person the right to require the
Company to register any securities of the Company under the 1933 Act, whether on
a demand basis or in  connection  with the  registration  of  securities  of the
Company for its own account or for the account of any other Person.

          Schedule 4.3 sets forth a true and complete  table  setting  forth the
pro forma  capitalization  of the Company on a fully diluted basis giving effect
to (i) the  issuance of the Shares and the  Warrants,  (ii) any  adjustments  in
other securities resulting from the issuance of the Shares or the Warrants,  and
(iii) the  exercise  or  conversion  of all  outstanding  securities.

                                      -4-
<PAGE>

Except as  described on Schedule  4.3,  the issuance and sale of the  Securities
hereunder will not obligate the Company to issue shares of Common Stock or other
securities to any other Person (other than the Investors) and will not result in
the  adjustment  of the  exercise,  conversion,  exchange  or reset price of any
outstanding security.

          The Company does not have outstanding  shareholder  purchase rights or
any similar  arrangement  in effect  giving any Person the right to purchase any
equity interest in the Company upon the occurrence of certain events.

          4.4 Valid Issuance.  The Shares have been duly and validly  authorized
and,  when  issued  and paid for  pursuant  to this  Agreement,  will be validly
issued,  fully  paid and  nonassessable,  and  shall  be free  and  clear of all
encumbrances and restrictions,  except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws. The Warrants
have been duly and validly  authorized.  Upon the due exercise of the  Warrants,
the Warrant Shares will be validly issued,  fully paid and  non-assessable  free
and clear of all  encumbrances  and  restrictions,  except for  restrictions  on
transfer  set  forth in the  Transaction  Documents  or  imposed  by  applicable
securities  laws.  The Company  has  reserved a  sufficient  number of shares of
Common Stock for issuance upon the exercise of the  Warrants,  free and clear of
all encumbrances and restrictions, except for restrictions on transfer set forth
in the Transaction Documents or imposed by applicable securities laws.

          4.5 Consents.  The execution,  delivery and performance by the Company
of the Transaction  Documents and the offer, issuance and sale of the Securities
require no consent of,  action by or in respect of, or filing with,  any Person,
governmental  body,  agency, or official other than (i) approvals required to be
obtained by the TSX,  all of which shall be obtained  and shall be in full force
and effect prior to the Closing,  and (ii) filings that have been made  pursuant
to  applicable  securities  laws and  post-sale  filings  pursuant to applicable
state,  federal and provincial  securities laws which the Company  undertakes to
file  within the  applicable  time  periods.  The  Company  has taken all action
necessary  to  exempt  (i) the  issuance  and sale of the  Securities,  (ii) the
issuance of the Warrant Shares upon due exercise of the Warrants,  and (iii) the
other transactions contemplated by the Transaction Documents from the provisions
of any  anti-takeover,  business  combination  or  control  share law or statute
binding  on the  Company  or to  which  the  Company  or any of its  assets  and
properties  may  be  subject  or any  provision  of the  Company's  Articles  of
Incorporation,  By-laws or any  shareholder  rights  agreement  that is or could
become applicable to the Investors as a result of the transactions  contemplated
hereby,  including  without  limitation,  the issuance of the Securities and the
ownership,  disposition  or voting of the  Securities  by the  Investors  or the
exercise of any right granted to the Investors pursuant to this Agreement or the
other Transaction Documents.

          4.6  Delivery of SEC Filings;  Business.  The Company has provided the
Investors  with copies of the  Company's  most recent Annual Report on Form 20-F
for the fiscal year ended December 31, 2002 (the "20-F"),  and all other reports
filed by the  Company  pursuant to the 1934 Act since the filing of the 20-F and
prior to the date hereof (collectively,  the "SEC Filings"). The SEC Filings are
the only  filings  required  of the  Company  pursuant  to the 1934 Act for such
period.  The  Company and its  Subsidiaries  are  engaged  only in the  business

                                      -5-
<PAGE>

described in the SEC Filings and the SEC Filings contain a complete and accurate
description  in all  material  respects  of the  business of the Company and its
Subsidiaries, taken as a whole.

          4.7 Use of  Proceeds.  The  proceeds of the sale of the Shares and the
Warrants  hereunder shall be used by the Company to repay  indebtedness  and for
working capital and general corporate purposes.

          4.8 No Material  Adverse  Change.  Since December 31, 2002,  except as
identified  and  described in the SEC Filings or as  described on Schedule  4.8,
there has not been:

               (i) any change in the consolidated assets, liabilities, financial
condition  or  operating  results  of the  Company  from that  reflected  in the
financial  statements  included in the 20-F,  except for changes in the ordinary
course of business which have not and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;

               (ii)  any  declaration  or  payment  of  any  dividend,   or  any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;

               (iii) any material  damage,  destruction or loss,  whether or not
covered  by  insurance  to  any  assets  or  properties  of the  Company  or its
Subsidiaries;

               (iv) any waiver,  not in the ordinary course of business,  by the
Company or any Subsidiary of a material right or of a material debt owed to it;

               (v)  any   satisfaction  or  discharge  of  any  lien,  claim  or
encumbrance or payment of any obligation by the Company or a Subsidiary,  except
in the  ordinary  course of  business  and which is not  material to the assets,
properties,  financial  condition,  operating results or business of the Company
and its Subsidiaries  taken as a whole (as such business is presently  conducted
and as it is proposed to be conducted);

               (vi)  any  change  or  amendment  to the  Company's  Articles  of
Incorporation  or  by-laws,  or  material  change to any  material  contract  or
arrangement  by which the Company or any  Subsidiary is bound or to which any of
their respective assets or properties is subject;

               (vii) any material labor  difficulties or labor union  organizing
activities with respect to employees of the Company or any Subsidiary;

               (viii)  any  transaction   entered  into  by  the  Company  or  a
Subsidiary other than in the ordinary course of business;

               (ix) the loss of the  services of any key  employee,  or material
change in the  composition or duties of the senior  management of the Company or
any Subsidiary;

                                      -6-
<PAGE>

               (x) the loss or threatened  loss of any customer which has had or
could reasonably be expected to have a Material Adverse Effect; or

               (xi) any other event or condition of any  character  that has had
or could reasonably be expected to have a Material Adverse Effect.

          4.9 SEC Filings; F-3 Eligibility.

               (a) At the time of filing thereof, the SEC Filings complied as to
form in all material  respects with the requirements of the 1934 Act and did not
contain any untrue  statement  of a material  fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

               (b) Each  registration  statement and any amendment thereto filed
by the Company  since January 1, 2001 pursuant to the 1933 Act and the rules and
regulations  thereunder,  as of the date  such  statement  or  amendment  became
effective,  complied as to form in all material  respects  with the 1933 Act and
did not contain  any untrue  statement  of a material  fact or omit to state any
material  fact  required to be stated  therein or necessary in order to make the
statements  made therein,  in light of the  circumstances  under which they were
made, not misleading;  and each  prospectus  filed pursuant to Rule 424(b) under
the  1933  Act,  as of its  issue  date  and as of the  closing  of any  sale of
securities  pursuant  thereto did not contain any untrue statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary  in order to make the  statements  made  therein,  in the light of the
circumstances under which they were made, not misleading.

               (c) The  Company  is  eligible  to use Form F-3 to  register  the
Registrable  Securities  (as such term is  defined  in the  Registration  Rights
Agreement) for sale by the Investors as contemplated by the Registration  Rights
Agreement.

          4.10  No  Conflict,  Breach,  Violation  or  Default.  The  execution,
delivery and  performance  of the  Transaction  Documents by the Company and the
issuance and sale of the Securities will not conflict with or result in a breach
or  violation  of any of the terms and  provisions  of, or  constitute a default
under (i) the Company's Articles of Incorporation or the Company's Bylaws,  both
as in effect on the date  hereof  (copies  of which  have been  provided  to the
Investors before the date hereof), or (ii)(a) any statute,  rule,  regulation or
order of any  governmental  agency or body or any court,  domestic  or  foreign,
having jurisdiction over the Company,  any Subsidiary or any of their respective
assets or properties, or (b) any agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or a Subsidiary is bound or to
which any of their respective assets or properties is subject.

          4.11 Tax Matters.  The Company and each Subsidiary has timely prepared
and filed all material tax returns required to have been filed by the Company or
such Subsidiary with all appropriate  governmental  agencies and timely paid all
taxes shown thereon or otherwise owed by it. The charges,  accruals and reserves
on the books of the  Company  in respect  of taxes for all  fiscal  periods  are
adequate in all material respects,  and there are no material unpaid

                                      -7-
<PAGE>

assessments  against  the  Company  or any  Subsidiary  nor,  to  the  Company's
Knowledge,  any basis for the assessment of any additional  taxes,  penalties or
interest  for any  fiscal  period  or  audits by any  federal,  state,  local or
provincial  taxing  authority except for any assessment which is not material to
the Company and its Subsidiaries, taken as a whole. All material taxes and other
assessments  and  levies  that the  Company or any  Subsidiary  is  required  to
withhold or to collect for payment  have been duly  withheld and  collected  and
paid to the proper governmental entity or third party when due. There are no tax
liens or claims pending or, to the Company's  Knowledge,  threatened against the
Company or any Subsidiary or any of their respective assets or property.  Except
as described on Schedule 4.11,  there are no outstanding tax sharing  agreements
or other such  arrangements  between  the Company  and any  Subsidiary  or other
corporation or entity.

          4.12 Title to Properties. Except as disclosed in the SEC Filings or as
described  on  Schedule  4.12,  the  Company  and each  Subsidiary  has good and
marketable  title to all real  properties  and all other  properties  and assets
owned by it, in each case free from liens,  encumbrances  and defects that would
materially affect the value thereof or materially interfere with the use made or
currently planned to be made thereof by them; and except as disclosed in the SEC
Filings,  the  Company  and each  Subsidiary  holds any leased  real or personal
property  under  valid and  enforceable  leases  with no  exceptions  that would
materially  interfere with the use made or currently  planned to be made thereof
by them.

          4.13  Certificates,  Authorities  and  Permits.  The  Company and each
Subsidiary  possess  adequate  certificates,  authorities  or permits  issued by
appropriate  governmental  agencies or bodies  necessary to conduct the business
now operated by it, and neither the Company nor any  Subsidiary has received any
notice of  proceedings  relating to the revocation or  modification  of any such
certificate, authority or permit that, if determined adversely to the Company or
such Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.

          4.14 No Labor  Disputes.  No material labor dispute with the employees
of the  Company or any  Subsidiary  exists or, to the  Company's  Knowledge,  is
imminent.

          4.15 Intellectual Property.

               (a) 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) and is valid and  enforceable.  To the
Company's Knowledge, no Intellectual Property of the Company or its Subsidiaries
which is  material  to the conduct of  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.  To
the Company's  Knowledge,  no material patent of the Company or its Subsidiaries
has been or is now  involved in any  interference,  reissue,  re-examination  or
opposition proceeding.

               (b) All of the licenses and sublicenses  and consent,  royalty or
other  agreements  concerning  Intellectual  Property  which are material to the
conduct of the Company's

                                      -8-
<PAGE>

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.

               (c) The Company and its  Subsidiaries own or have the valid right
to use all of the  Intellectual  Property that is material to 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 and Confidential  Information,
other than licenses entered into in the ordinary course of the Company's and its
Subsidiaries'  businesses.  The  Company and its  Subsidiaries  have a valid and
enforceable right to use all third party Intellectual  Property and Confidential
Information used or held for use in the respective businesses of the Company and
its Subsidiaries.

               (d) 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 the Intellectual  Property and Confidential  Information of the
Company and its Subsidiaries  which are material to the conduct of 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 or Confidential Information of the Company and its Subsidiaries and the
Company's and its Subsidiaries' use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company's Knowledge, there is no
valid basis for the same.

               (e) The consummation of the transactions contemplated hereby 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  or  Confidential  Information  which is  material to the
conduct of the Company's and each of its Subsidiaries'  respective businesses as
currently conducted or as currently proposed to be conducted.

               (f) To the Company's  Knowledge,  as currently  used all software
owned by the Company or any of its Subsidiaries  and all software  licensed from
third  parties by

                                      -9-
<PAGE>

the Company or any of its  Subsidiaries,  (i) is free from any material  defect,
bug, virus, or programming,  design or  documentation  error;  (ii) operates and
runs in a reasonable and efficient  business  manner;  and (iii) conforms in all
material respects to the specifications and purposes thereof.

               (g) The Company and its Subsidiaries  have taken reasonable steps
to protect the  Company's  and its  Subsidiaries'  rights in their  Intellectual
Property and Confidential Information.  Each employee, consultant and contractor
who has had access to Confidential  Information which is material to the conduct
of  the  Company's  and  each  of its  Subsidiaries'  respective  businesses  as
currently  conducted  or as currently  proposed to be  conducted  has either (i)
executed an  agreement  to maintain  the  confidentiality  of such  Confidential
Information;   (ii)  executed  appropriate  agreements  that  are  substantially
consistent with the Company's standard forms thereof or (iii) undertaken similar
safeguards  to protect and  preserve  the  confidentiality  of all  Confidential
Information.   Except  under  confidentiality   obligations,  to  the  Company's
Knowledge  there has been no material  disclosure of any of the Company's or its
Subsidiaries' Confidential Information to any third party.

          4.16 Environmental Matters.  Neither the Company nor any Subsidiary is
in  violation  of any  statute,  rule,  regulation,  decision  or  order  of any
governmental agency or body or any court,  domestic or foreign,  relating to the
use,  disposal or release of  hazardous or toxic  substances  or relating to the
protection or restoration  of the  environment or human exposure to hazardous or
toxic substances (collectively, "Environmental Laws"), owns or operates any real
property  contaminated  with any substance that is subject to any  Environmental
Laws,  is liable for any  off-site  disposal  or  contamination  pursuant to any
Environmental  Laws, and is subject to any claim  relating to any  Environmental
Laws,  which  violation,  contamination,  liability  or  claim  has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate;  and to the  Company's  Knowledge  there is no pending or  threatened
investigation that might lead to such a claim.

          4.17  Litigation.  Except as described on Schedule 4.17,  there are no
pending  actions,  suits or  proceedings  against or affecting the Company,  its
Subsidiaries or any of its or their properties;  and to the Company's Knowledge,
no such actions, suits or proceedings are threatened or contemplated.

          4.18 Financial  Statements.  The financial statements included in each
SEC Filing present fairly, in all material respects,  the consolidated financial
position of the Company as of the dates  shown and its  consolidated  results of
operations and cash flows for the periods shown,  and such financial  statements
have been prepared in conformity  with Canadian  generally  accepted  accounting
principles  applied on a consistent basis (except as may be disclosed therein or
in the notes  thereto).  Except as set forth in the financial  statements of the
Company  included  in the SEC  Filings  filed  prior  to the date  hereof  or as
described on Schedule 4.18,  neither the Company nor any of its Subsidiaries has
incurred any liabilities,  contingent or otherwise, except those incurred in the
ordinary  course of  business,  consistent  (as to amount and nature)  with past
practices  since  the  date  of  such  financial  statements,   none  of  which,
individually  or in the aggregate,  have had or could  reasonably be expected to
have a Material Adverse Effect.

                                      -10-
<PAGE>

          4.19 Insurance Coverage.  The Company and each Subsidiary maintains in
full  force and effect  insurance  coverage  that is  customary  for  comparably
situated  companies for the business  being  conducted and  properties  owned or
leased by the Company and each Subsidiary,  and the Company reasonably  believes
such insurance coverage to be adequate against all liabilities, claims and risks
against which it is customary for comparably situated companies to insure.

          4.20  Compliance  with TSX Continued  Listing  Requirements.  Upon the
Closing, the Company will be in compliance with applicable TSX continued listing
requirements.  There are no proceedings pending or, to the Company's  Knowledge,
threatened  against  the  Company  relating  to  the  continued  listing  of the
Company's  Common  Stock on the TSX and the Company has not  received any notice
of, nor to the Company's  Knowledge is there any basis for, the delisting of the
Common Stock from the TSX.

          4.21  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,  any Subsidiary or an Investor for any  commission,
fee  or  other   compensation   pursuant  to  any   agreement,   arrangement  or
understanding  entered  into  by or on  behalf  of the  Company,  other  than as
described in Schedule 4.21.

          4.22 No Directed Selling Efforts or General Solicitation.  Neither the
Company  nor  any  Person  acting  on  its  behalf  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.

          4.23  No  Integrated  Offering.  Neither  the  Company  nor any of its
Affiliates,  nor any  Person  acting on its or their  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  adversely  affect
reliance by the Company on Section 4(2) for the exemption from  registration for
the  transactions  contemplated  hereby  or would  require  registration  of the
Securities under the 1933 Act.

          4.24 Private  Placement.  The offer and sale of the  Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.

          4.25  Questionable  Payments.  Neither  the  Company  nor  any  of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former shareholders,  directors,  officers,  employees,  agents or other Persons
acting on behalf of the Company or any Subsidiary,  has on behalf of the Company
or any Subsidiary or in connection with their  respective  businesses:  (a) used
any corporate funds for unlawful  contributions,  gifts,  entertainment or other
unlawful  expenses  relating  to  political  activity;  (b) made any  direct  or
indirect  unlawful  payments to any  governmental  officials or  employees  from
corporate  funds;  (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment,  kickback or other unlawful payment of
any nature.

                                      -11-
<PAGE>

          4.26 Transactions with Affiliates.  Except as disclosed in SEC Filings
made on or prior to the date hereof or as  disclosed on Schedule  4.26,  none of
the officers or  directors of the Company and, to the  knowledge of the Company,
none of the  employees  of the Company is  presently a party to any  transaction
with the  Company or any  Subsidiary  (other  than as  holders of stock  options
and/or  warrants,  and for  services  as  employees,  officers  and  directors),
including  any  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 such  employee or, to the  knowledge  of the Company,  any entity in
which any officer,  director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

          4.27 Internal  Controls.  The Company and the Subsidiaries  maintain a
system  of  internal   accounting  controls  sufficient  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization,  and (iv) the  recorded  accountability  for  assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

          4.28  Disclosures.  Neither the  Company nor any Person  acting on its
behalf  has  provided  the  Investors  or  their  agents  or  counsel  with  any
information   that  constitutes  or  might   constitute   material,   non-public
information. The written materials delivered to the Investors in connection with
the  transactions  contemplated by the Transaction  Documents do not 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.

     5.  Representations and Warranties of the Investors.  Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company that:

          5.1  Organization  and Existence.  The Investor is a validly  existing
corporation,  limited  partnership  or  limited  liability  company  and has all
requisite  corporate,   partnership  or  limited  liability  company  power  and
authority to invest in the Securities pursuant to this Agreement.

          5.2  Authorization.  The  execution,  delivery and  performance by the
Investor of the  Transaction  Documents  to which such  Investor is a party have
been duly  authorized  and will each  constitute  the valid and legally  binding
obligation of the Investor,  enforceable against the Investor in accordance with
their respective terms, subject to bankruptcy,  insolvency, fraudulent transfer,
reorganization,  moratorium and similar laws of general applicability,  relating
to or affecting creditors' rights generally.

          5.3 Purchase  Entirely for Own Account.  The Securities to be received
by the Investor  hereunder will be acquired for the Investor's own account,  not
as nominee or agent,  and

                                      -12-
<PAGE>

not with a view to the resale or  distribution  of any part thereof in violation
of the 1933 Act, and the Investor has no present intention of selling,  granting
any  participation  in, or otherwise  distributing  the same in violation of the
1933 Act. The Investor is not a registered broker dealer or an entity engaged in
the business of being a broker dealer.

          5.4 Investment Experience.  The Investor acknowledges that it can bear
the economic risk and complete loss of its  investment in the Securities and has
such  knowledge  and  experience  in  financial  or business  matters that it is
capable  of  evaluating  the  merits  and risks of the  investment  contemplated
hereby.

          5.5 Disclosure of Information.  The Investor has had an opportunity to
receive all additional information related to the Company requested by it and to
ask questions of and receive answers from the Company regarding the Company, its
business and the terms and  conditions  of the offering of the  Securities.  The
Investor  acknowledges  receipt  of  copies  of the SEC  Filings.  Neither  such
inquiries  nor any other due diligence  investigation  conducted by the Investor
shall  modify,  amend or affect the  Investor's  right to rely on the  Company's
representations and warranties contained in this Agreement.

          5.6  Restricted   Securities.   The  Investor   understands  that  the
Securities are  characterized as "restricted  securities" under the U.S. federal
securities  laws  inasmuch  as they are being  acquired  from the  Company  in a
transaction  not  involving  a public  offering  and that  under  such  laws and
applicable  regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.

          5.7  Legends.  It  is  understood  that,  except  as  provided  below,
certificates  evidencing  such  Securities may bear the following or any similar
legend:

               (a) THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR THE  SECURITIES  LAWS OF ANY STATE OF THE  UNITED  STATES.  THE  HOLDER
HEREOF,  BY PURCHASING  SUCH  SECURITIES,  AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S.  SECURITIES ACT, IF APPLICABLE (C) INSIDE THE UNITED
STATES (1) PURSUANT TO THE EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS  UNDER
THE U.S.  SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER,  IF AVAILABLE,  AND IN
ACCORDANCE WITH  APPLICABLE  STATE  SECURITIES LAW OR (2) IN A TRANSACTION  THAT
DOES NOT OTHERWISE  REQUIRE  REGISTRATION  UNDER THE U.S.  SECURITIES ACT OR ANY
APPLICABLE  STATE  SECURITIES  LAW,  PROVIDED  THE HOLDER HAS  FURNISHED  TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED  STANDING TO THAT EFFECT  REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT."

                                      -13-
<PAGE>

          THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  ARE  LISTED ON THE
TORONTO STOCK EXCHANGE;  HOWEVER,  THE SAID SECURITIES CAN NOT BE TRADED THROUGH
THE  FACILITIES OF SUCH  EXCHANGE  SINCE THEY ARE NOT FREELY  TRANSFERABLE,  AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY"
IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."

               (b) "THE HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY,  REPRESENTS,
ACKNOWLEDGES,  AND AGREES THAT IT WILL NOT AND WILL NOT BE ENTITLED TO, DIRECTLY
OR INDIRECTLY,  SELL OR TRANSFER THE  SECURITIES  INTO CANADA OR TO RESIDENTS OF
CANADA,  EXPECT IN COMPLIANCE WITH APPLICABLE  CANADIAN SECURITIES LAWS. NO SALE
OR TRANSFER  INTO CANADA OR TO A CANADIAN  RESIDENT  WILL BE REGISTERED BY WORLD
HEART CORPORATION'S  TRANSFER AGENT AND ANY ATTEMPT TO EFFECT SUCH A TRANSFER IS
INVALID  UNLESS MADE IN COMPLIANCE  WITH THE  ABOVE-NOTED  RESTRICTIONS.  UNLESS
PERMITTED UNDER CANADIAN  SECURITIES  LEGISLATION,  THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.

               (c) If required  by the  authorities  of any state in  connection
with the issuance of sale of the  Securities,  the legend required by such state
authority.

          Upon the  earlier  of (i)  registration  for  resale  pursuant  to the
Registration  Rights  Agreement  and  receipt by the  Company of the  Investor's
written  confirmation  that such  Securities  will not be  disposed of except in
compliance  with the prospectus  delivery  requirements  of the 1933 Act or (ii)
Rule 144(k)  becoming  available the Company shall,  upon an Investor's  written
request,  promptly cause  certificates  evidencing the Securities to be replaced
with certificates which do not the restrictive legend set forth in paragraph (a)
above, and Warrant Shares  subsequently issued upon due exercise of the Warrants
shall not bear such restrictive  legend provided the provisions of either clause
(i) or clause (ii) above,  as  applicable,  are  satisfied  with respect to such
Warrant Shares. From and after the anniversary of four months and one day of the
Closing,  the Company shall, upon an Investor's written request,  promptly cause
certificates evidencing the Securities to be replaced with certificates which do
not the restrictive  legend set forth in paragraph (b) above, and Warrant Shares
subsequently  issued  upon due  exercise  of the  Warrants  shall  not bear such
restrictive   legend.   When  the  Company  is  required  to  cause   unlegended
certificates to replace previously issued legended  certificates,  if unlegended
certificates  are not delivered to an Investor within three (3) Business Days of
submission by that Investor of legended certificate(s) to the Company's transfer
agent together with a representation letter in customary form, the Company shall
be liable to the Investor for a penalty equal to 1.5% of the aggregate  purchase
price of the Securities  evidenced by such  certificate(s)  for each thirty (30)
day period (or  portion  thereof)  beyond such three (3)  Business  Day that the
unlegended certificates have not been so delivered.

          5.8  Accredited  Investor.  The Investor is an accredited  investor as
defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

                                      -14-
<PAGE>

          5.9 Toronto Stock Exchange. The Investor has completed and duly signed
a copy of the Private Placement  Questionnaire  and Undertaking  required by the
TSX attached hereto as Exhibit C;

          5.10 No  General  Solicitation.  The  Investor  did not  learn  of the
investment in the  Securities as a result of any public  advertising  or general
solicitation.

          5.11  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,  any Subsidiary or an Investor for any  commission,
fee  or  other   compensation   pursuant  to  any   agreement,   arrangement  or
understanding entered into by or on behalf of the Investors.

     6. Conditions to Closing.

          6.1  Conditions to the Investors'  Obligations.  The obligation of the
Investors  to  purchase  the  Securities  at  the  Closing  is  subject  to  the
fulfillment to the Investors' satisfaction,  on or prior to the Closing Date, of
the following  conditions,  any of which may be waived by the Investors agreeing
hereunder  to  purchase a majority  of the Shares and  Warrants  (the  "Required
Investors"):

               (a) The  representations  and  warranties  made by the Company in
Section 4 hereof  qualified as to  materiality  shall be true and correct at all
times  prior  to and  on the  Closing  Date,  except  to  the  extent  any  such
representation or warranty expressly speaks as of an earlier date, in which case
such  representation  or warranty  shall be true and correct as of such  earlier
date, and, the  representations  and warranties made by the Company in Section 4
hereof not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such  representation  or warranty shall be true and correct in all material
respects as of such  earlier  date.  The  Company  shall have  performed  in all
material respects all obligations and conditions herein required to be performed
or observed by it on or prior to the Closing Date.

               (b) The Company shall have  obtained in a timely  fashion any and
all consents, permits, approvals,  registrations and waivers (including, without
limitation,  any  required  approval of the TSX)  necessary or  appropriate  for
consummation of the purchase and sale of the Securities and the  consummation of
the other transactions  contemplated hereby, all of which shall be in full force
and effect.

               (c)  The  Company   shall  have   executed  and   delivered   the
Registration Rights Agreement.

               (d) The Company shall have entered into one or more  subscription
agreements with investors located in Canada that contain terms no more favorable
to the subscriber than the terms of this Agreement (the "Other Agreements").

                                      -15-
<PAGE>

               (e) The Company shall have received  gross proceeds from the sale
of the Shares and Warrants as contemplated hereby and under the Other Agreements
of at least Forty Million Dollars ($40,000,000) (determined based on Noon buying
rate for Canadian  dollars  published by the Federal Reserve Bank of New York on
September 11, 2003).

               (f)  Edwards   Lifesciences  LLC  shall  have  (i)  converted  or
exchanged  all of the shares of  preferred  stock of the  Company's  subsidiary,
World Heart Inc., held by it and its Affiliates into 4,981,128  shares of Common
Stock of the Company,  and (ii) executed a definitive  agreement with respect to
the conversion or exchange of the shares of preferred  stock of the Company held
by it or its  Affiliates  into  3,500,000  share of Common  Stock and  7,000,000
warrants,  each warrant  exercisable for one share of Common Stock and otherwise
on terms and  conditions  no more  favorable  to the  holder  than the  Warrant,
subject to approval of the Company's shareholders.

               (g) The Board shall have duly adopted resolutions (i) approving a
reverse split of the Common Stock such that, after giving effect to such reverse
split and the transactions  contemplated  hereby and by the Other Agreements but
prior to the  exercise  of any  Warrants  or any other  securities  set forth in
Schedule 4.3, the number of shares of Common Stock  outstanding shall not exceed
15,000,000 (the "Reverse Split"); (ii) approving an amendment to the Articles of
Incorporation of the Company to amend the conversion  provisions of the Series A
participating  convertible  preferred  shares of the Company  ("Amendment")  and
(iii)  authorizing the Company and its officers to take all actions necessary or
appropriate  to effect the Reverse Split and the Amendment  (including,  without
limitation,  the calling of a special meeting of shareholders for the purpose of
approving  the Reverse  Split and the  Amendment but excluding the fixing of the
record  and  meeting  dates for the  meeting or  approving  a  management  proxy
circular  for use at the  meeting),  and such  resolutions  shall  not have been
amended, modified or rescinded and shall remain in full force and effect.

               (h) No judgment, writ, order,  injunction,  award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or  proceeding  shall  have been  instituted  by any  governmental
authority,   enjoining  or  preventing  the  consummation  of  the  transactions
contemplated hereby or in the other Transaction Documents.

               (i) The Company shall have delivered a  Certificate,  executed on
behalf of the  Company by its Chief  Executive  Officer  or its Chief  Financial
Officer,  dated as of the Closing  Date,  certifying  to the  fulfilment  of the
conditions specified in subsections (a), (b), (d), (e), (f), (g) and (h) of this
Section 6.1.

               (j) The Company shall have delivered a  Certificate,  executed on
behalf of the Company by its Secretary, dated as of the Closing Date, certifying
the resolutions  adopted by the Board of Directors of the Company  approving the
transactions  contemplated by this Agreement and the other Transaction Documents
and the  issuance of the  Securities,  certifying  the  current  versions of the
Articles of  Incorporation  and Bylaws of the Company and  certifying  as to the
signatures  and  authority  of persons  signing the  Transaction  Documents  and
related documents on behalf of the Company.

                                      -16-
<PAGE>

               (k) The Investors shall have received  opinions from White & Case
LLP and McCarthy  Tetrault LLP, the Company's  counsel,  dated as of the Closing
Date,  in  form  and  substance  reasonably  acceptable  to  the  Investors  and
addressing such legal matters as the Investors may reasonably request.

               (l) No stop  order or  suspension  of  trading  shall  have  been
imposed  by the TSX,  the SEC or any  other  governmental  regulatory  body with
respect to public trading in the Common Stock.

          6.2 Conditions to Obligations of the Company. The Company's obligation
to sell and issue the Securities 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) The  representations  and warranties made by the Investors in
Section 5 hereof,  other than the  representations  and warranties  contained in
Sections   5.3,   5.4,   5.5,   5.6,   5.7,   5.8  and  5.10  (the   "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material  respects on the Closing Date with
the same force and  effect as if they had been made on and as of said date.  The
Investment  Representations shall be true and correct in all respects when made,
and shall be true and correct in all  respects on the Closing Date with the same
force and effect as if they had been made on and as of said date.  The Investors
shall have  performed in all material  respects all  obligations  and conditions
herein  required to be  performed or observed by them on or prior to the Closing
Date.

               (b)  The   Investors   shall  have  executed  and  delivered  the
Registration Rights Agreement.

               (c) The Investors  shall have delivered the Purchase Price to the
Company.

          6.3   Termination   of  Obligations   to  Effect   Closing;   Effects.

               (a) The  obligations  of the  Company,  on the one hand,  and the
Investors, on the other hand, to effect the Closing shall terminate as follows:

                    (i) Upon the mutual  written  consent of the Company and the
Required Investors;

                    (ii) By the  Company if any of the  conditions  set forth in
Section 6.2 shall have become incapable of fulfillment,  and shall not have been
waived by the Company;

                                      -17-
<PAGE>

                    (iii) By the Required Investors if any of the conditions set
forth in Section 6.1 shall have become  incapable of fulfillment,  and shall not
have been waived by the Required Investors; or

                    (iv)  By the  Required  Investors  if the  Closing  has  not
occurred on or prior to September 30, 2003;

provided,  however,  that,  except in the case of clause  (i)  above,  the party
seeking to terminate  its  obligation to effect the Closing shall not then be in
breach  of any of  its  representations,  warranties,  covenants  or  agreements
contained in this  Agreement or the other  Transaction  Documents if such breach
has  resulted  in the  circumstances  giving  rise to such  party's  seeking  to
terminate its obligation to effect the Closing.

          (b)  In the  event  of  termination  by the  Company  or the  Required
Investors of their  obligations  to effect the Closing  pursuant to this Section
6.3, written notice thereof shall forthwith be given to the other parties hereto
and the  obligation  of all parties to effect the Closing  shall be  terminated,
without further action by any party. Nothing in this Section 6.3 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.

     7. Covenants and Agreements of the Company.

          7.1  Reservation  of  Common  Stock.  The  Company  shall at all times
reserve and keep available out of its  authorized but unissued  shares of Common
Stock,  solely for the purpose of providing  for the  exercise of the  Warrants,
such  number  of shares of  Common  Stock as shall  from time to time  equal the
number of shares  sufficient  to permit  the  exercise  of the  Warrants  issued
pursuant to this Agreement in accordance with their respective terms.

          7.2 Reports.  The Company will furnish to such Investors  and/or their
assignees such information  relating to the Company and its Subsidiaries as from
time to  time  may  reasonably  be  requested  by such  Investors  and/or  their
assignees;  provided,  however,  that the Company  shall not  disclose  material
nonpublic information to the Investors,  or to advisors to or representatives of
the  Investors,  unless  prior to  disclosure  of such  information  the Company
identifies such information as being material nonpublic information and provides
the Investors,  such advisors and representatives with the opportunity to accept
or refuse to accept  such  material  nonpublic  information  for  review and any
Investor  wishing  to  obtain  such  information   enters  into  an  appropriate
confidentiality agreement with the Company with respect thereto.

          7.3 No Conflicting  Agreements.  The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any  material  respect  with  the  obligations  to the  Investors  under  the
Transaction Documents.

          7.4 Insurance.  The Company shall not materially  reduce the insurance
coverages described in Section 4.19.

                                      -18-
<PAGE>

          7.5  Compliance  with Laws.  The Company  will comply in all  material
respects with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities.

          7.6  Listing  of  Underlying  Shares  and  Related  Matters.  Promptly
following the date hereof,  the Company shall take all necessary action to cause
the Shares and the Warrant Shares to be listed,  subject to issuance, on the TSX
no later than the Closing  Date.  Further,  if the  Company  applies to have its
Common Stock or other securities traded on any other principal stock exchange or
market,  it shall include in such  application the Shares and the Warrant Shares
and will take such other action as is necessary to cause such Common Stock to be
so listed. The Company will use commercially  reasonable efforts to continue the
listing  and  trading  of its  Common  Stock  on the  TSX  and,  in  accordance,
therewith,  will use commercially  reasonable  efforts to comply in all respects
with the Company's  reporting,  filing and other obligations under the bylaws or
rules of such market or exchange, as applicable.

          7.7  Termination of Covenants.  The provisions of Sections 7.2 through
7.5 shall  terminate  and be of no further  force and effect upon the earlier of
(i) the mutual  consent of the Company and the  Required  Investors  or (ii) the
date on which the Company's  obligations under the Registration Rights Agreement
to register or maintain  the  effectiveness  of any  registration  covering  the
Registrable  Securities  (as such term is  defined  in the  Registration  Rights
Agreement) shall terminate.

          7.8  Reconstitution  of the Board. No later than the Closing Date, the
Company  shall  have  taken all  action  necessary  to (i)  reduce the number of
directors constituting the Board of Directors of the Company (the "Board") to no
more than five and (ii)  effect the  resignation  or removal of all but three of
the existing directors of the Company.

          7.9 Director Designees.

               (a) So long as the Investors hold at least 25% of the Registrable
Securities (as such term is defined in the Registration  Rights Agreement),  the
Investors  shall have the right to  designate  two persons  for  election to the
board of  directors  of the  Company  (the  "Investor  Designees").  Each of the
Investors acknowledges that so long as Special Situations Fund III, L.P. ("SSF")
and/or one of its  Affiliates  hold any of such  securities,  SSF shall have the
right to appoint the Investor Designees.  The Company shall use its best efforts
to  cause  the  Investor  Designees  to be  elected  to the  Company's  board of
directors.  SSF and/or the  Investors  shall have the right to remove or replace
any  Investor  Designee  by giving  notice  to such  Investor  Designee  and the
Company.  The  Company  shall use its best  efforts  to effect  the  removal  or
replacement  of any such  Investor  Designee.  For the  avoidance of doubt,  Dr.
Richard L. Lesher shall not be deemed to be an Investor Designee.

               (b) Subject to any  limitations  imposed by  applicable  law, the
Investor  Designees shall be entitled to the same  perquisites,  including stock
options,  reimbursement  of expenses and other similar rights in connection with
such  person's  membership  on the Board of

                                      -19-
<PAGE>

Directors of the Company,  as every other  non-executive  member of the Board of
Directors of the Company.

               (c) So long as the Investors  have the right to appoint  Investor
Designees,  in the event  that the size of the Board is  increased  to more than
five  persons,  the  Investors  shall  have the right to  designate  one or more
additional  persons such that the Investors shall have the right to designate at
least 40% of the members of the Board.

          7.10 Proxy Statement; Shareholders Meeting. (a) Promptly following the
Closing,  the Company  shall take all action  necessary to call a meeting of its
shareholders (the "Shareholders Meeting") for the purpose of seeking approval of
the  Company's  shareholders  for  the  Reverse  Split  and the  Amendment  (the
"Proposals").  In connection  therewith,  the Company will promptly  prepare and
file proxy materials  (including a proxy statement and form of proxy) for use at
the  Shareholders  Meeting and, after  receiving and promptly  responding to any
comments of any applicable  securities  regulator  thereon,  shall promptly mail
such proxy  materials to the  shareholders  of the Company.  Each Investor shall
promptly  furnish in writing to the Company  such  information  relating to such
Investor and its investment in the Company as the Company may reasonably request
for inclusion in the Proxy  Statement.  The Company will comply with  applicable
Canadian and United States  securities  laws in relation to any proxy  statement
(as amended or supplemented,  the "Proxy Statement") and any form of proxy to be
sent to the  shareholders  of the Company in  connection  with the  Shareholders
Meeting,  and the Proxy  Statement shall not, on the date of the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to shareholders
or at the time of the  Shareholders  Meeting,  contain any untrue statement of a
material fact or omit to state any material fact  necessary in order to make the
statements  made therein not false or misleading,  or omit to state any material
fact  necessary  to correct  any  statement  in any earlier  communication  with
respect to the  solicitation  of proxies or the  Shareholders  Meeting which has
become false or misleading. If the Company should discover, at any time prior to
the Closing, any event relating to the Company or any of its Subsidiaries or any
of their respective affiliates, officers or directors that is required to be set
forth in a supplement  or amendment to the Proxy  Statement,  in addition to the
Company's  obligations  under applicable  Canadian and United States  securities
laws, the Company will promptly inform the Investors thereof.

          (b) Subject to their fiduciary  obligations  under  applicable law (as
determined in good faith by the Company's Board of Directors after  consultation
with the Company's  outside  counsel),  the Company's  Board of Directors  shall
recommend  to  the  Company's   shareholders  (and  not  revoke  or  amend  such
recommendation)  that the shareholders  vote in favor of the Proposals and shall
cause the Company to take all commercially reasonable action (including, without
limitation,  the hiring of a proxy  solicitation  firm of nationally  recognized
standing) to solicit the approval of the shareholders for the Proposals. Whether
or not the  Company's  Board of Directors  determines at any time after the date
hereof  that,  due  to its  fiduciary  duties,  it  must  revoke  or  amend  its
recommendation  to the Company's  shareholders,  the Company is required to, and
will take, in accordance with  applicable law and its Articles of  Incorporation
and Bylaws, all action necessary to convene the Shareholders Meeting as promptly
as practicable to consider and vote upon the approval of the Proposals.

                                      -20-
<PAGE>

          (c)  Subject to  applicable  law and the  requirements  of the TSX and
Nasdaq, each Investor shall vote or cause to be voted at the Special Meeting all
shares  of  Common  Stock  held by it or as to which it has the right to vote or
direct the vote in favor of the Proposals.

          7.11 Reverse Split.  Promptly  following  approval of the Proposals by
the Company's shareholders as contemplated by Section 7.10 (and in no event more
than five Business Days thereafter),  the Company shall effect the Reverse Split
and the Amendment.

          7.12 Nasdaq Listing. Promptly following the Closing, the Company shall
prepare and file with The Nasdaq Stock Market, Inc. ("Nasdaq") an application to
list the Common Stock on The Nasdaq SmallCap Market (the "SmallCap Market"). The
Company  shall  use  commercially  reasonable  efforts  to have the  application
approved  as  promptly  as   practicable.   The  Company  will   thereafter  use
commercially  reasonable  efforts to  continue  the  listing  and trading of its
Common  Stock on Nasdaq and, in  accordance,  therewith,  will use  commercially
reasonable  efforts  to comply in all  respects  with the  Company's  reporting,
filing and other obligations  under Nasdaq's bylaws or rules, as applicable.  If
the Common Stock is not listed on the  SmallCap  Market on or before May 1, 2004
(the  "Listing  Deadline"),  the  Company  will make pro rata  payments  to each
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate  amount invested by such Investor for each 30-day period or pro
rata for any portion  thereof  following the Listing  Deadline  until the Common
Stock is so  listed;  provided,  however,  that the  Listing  Deadline  shall be
extended,  if  necessary,  until four weeks after such time as the Company meets
the requirements of Nasdaq Marketplace Rules  4310(c)(2)(A)(ii)  and 4310(c)(4).
Such payments shall be in partial  compensation to the Investors,  and shall not
constitute the Investors'  exclusive remedy for such events. Such payments shall
be made to each Investor in cash

      8.  Survival and Indemnification.

          8.1  Survival.   All   representations,   warranties,   covenants  and
agreements  contained in this Agreement  shall be deemed to be  representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this  Agreement for a period of two (2) years from the
date of this  Agreement;  provided,  however,  that the provisions  contained in
Section 7 hereof shall survive in accordance therewith.

          8.2 Indemnification. The Company agrees to indemnify and hold harmless
each  Investor and its  Affiliates  and their  respective  directors,  officers,
employees  and agents  from and against  any and all  losses,  claims,  damages,
liabilities and expenses (including without limitation  reasonable attorney fees
and disbursements and other expenses incurred in connection with  investigating,
preparing or defending any action,  claim or  proceeding,  pending or threatened
and the costs of  enforcement  hereof)  (collectively,  "Losses")  to which such
Person may become subject as a result of any breach of representation, warranty,
covenant  or  agreement  made by or to be  performed  on the part of the Company
under the Transaction Documents, and will reimburse any such Person for all such
amounts as they are incurred by such Person.

          8.3 Conduct of Indemnification Proceedings.  Promptly after receipt by
any  Person  (the  "Indemnified  Person")  of  notice  of any  demand,  claim or
circumstances  which

                                      -21-
<PAGE>

would  or  might  give  rise  to a  claim  or the  commencement  of any  action,
proceeding or investigation in respect of which indemnity may be sought pursuant
to Section 8.2, such  Indemnified  Person shall  promptly  notify the Company in
writing  and the  Company  shall  assume  the  defense  thereof,  including  the
employment of counsel  reasonably  satisfactory to such Indemnified  Person, and
shall assume the payment of all fees and expenses;  provided,  however, that the
failure of any Indemnified Person so to notify the Company shall not relieve the
Company of its  obligations  hereunder  except to the extent that the Company is
materially  prejudiced by such failure to notify.  In any such  proceeding,  any
Indemnified Person shall have the right to retain its own counsel,  but the fees
and expenses of such counsel shall be at the expense of such Indemnified  Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel;  or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate  due to actual or potential  differing  interests between them.
The Company shall not be liable for any  settlement of any  proceeding  effected
without its written consent,  which consent shall not be unreasonably  withheld,
but if  settled  with  such  consent,  or if there be a final  judgment  for the
plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
from and against any loss or liability (to the extent stated above) by reason of
such  settlement  or  judgment.   Without  the  prior  written  consent  of  the
Indemnified  Person,  which  consent  shall not be  unreasonably  withheld,  the
Company shall not effect any settlement of any pending or threatened  proceeding
in  respect  of which any  Indemnified  Person is or could have been a party and
indemnity could have been sought  hereunder by such  Indemnified  Party,  unless
such settlement  includes an unconditional  release of such  Indemnified  Person
from all liability arising out of such proceeding.

     9.   Miscellaneous.

          9.1  Successors  and Assigns.  This Agreement may not be assigned by a
party hereto  without the prior  written  consent of the Company or the Required
Investors,  as applicable,  provided,  however,  that an Investor may assign its
rights and delegate its duties  hereunder in whole or in part to an Affiliate or
to a  third  party  acquiring  some  or  all  of  its  Securities  in a  private
transaction  without  the prior  written  consent  of the  Company  or the other
Investors, after notice duly given by such Investor to the Company and the other
Investors,  provided,  that no such  assignment or  obligation  shall affect the
obligations of such Investor  hereunder.  The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective  permitted successors
and assigns of the parties.  Nothing in this Agreement,  express or implied,  is
intended  to  confer  upon any  party  other  than the  parties  hereto or their
respective  successors  and  assigns  any  rights,  remedies,   obligations,  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement.

          9.2 Counterparts; Faxes. This Agreement may be executed in two or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same  instrument.  This Agreement may also
be executed via facsimile, which shall be deemed an original.

                                      -22-
<PAGE>

          9.3  Titles and  Subtitles.  The  titles  and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

          9.4  Notices.  Unless  otherwise  provided,  any  notice  required  or
permitted  under this  Agreement  shall be given in writing  and shall be deemed
effectively  given as hereinafter  described (i) if given by personal  delivery,
then such  notice  shall be deemed  given upon such  delivery,  (ii) if given by
telex or  telecopier,  then such notice  shall be deemed  given upon  receipt of
confirmation of complete  transmittal,  (iii) if given by mail, then such notice
shall be deemed  given  upon the  earlier of (A)  receipt of such  notice by the
recipient  or (B) three days after such notice is deposited in first class mail,
postage prepaid,  and (iv) if given by an internationally  recognized  overnight
air courier,  then such notice  shall be deemed given one day after  delivery to
such carrier.  All notices shall be addressed to the party to be notified at the
address as follows,  or at such other address as such party may designate by ten
days' advance written notice to the other party:

          If to the Company:

          1 Laser Street
          Ottawa, Ontario Canada
          K2E 7V1
          Attention:  Chief Financial Officer
          Fax:  (613) 226-4744

          With a copy to:

          McCarthy Tetrault LLP
          Suite 1400
          40 Elgin Street
          Ottawa, Ontario
          K1P 5K6
          Attention:  Virginia K. Schweitzer, Esq.
          Fax:  (613) 563-9386

          If to the Investors:

to the addresses set forth on the signature pages hereto.

          9.5  Expenses.  The  parties  hereto  shall  pay  their  own costs and
expenses  in  connection  herewith,  except  that  the  Company  shall  pay  the
reasonable fees and expenses of counsel to the Investors,  not to exceed a total
aggregate  amount of $25,000 for all Investors.  Such expenses shall be paid not
later than the Closing.  The Company shall  reimburse the Investors  upon demand
for all reasonable  out-of-pocket expenses incurred by the Investors,  including
without  limitation  reimbursement  of  attorneys'  fees and  disbursements,  in
connection  with any amendment,  modification or waiver of this Agreement or the
other Transaction  Documents.  In the event that legal proceedings are commenced
by any  party to this  Agreement

                                      -23-
<PAGE>

against another party to this Agreement in connection with this Agreement or the
other Transaction  Documents,  the party or parties which do not prevail in such
proceedings  shall severally,  but not jointly,  pay their pro rata share of the
reasonable attorneys' fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.

          9.6 Amendments and Waivers.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular  instance and either  retroactively or  prospectively),  only
with  the  written  consent  of the  Company  and the  Required  Investors.  Any
amendment or waiver  effected in accordance with this paragraph shall be binding
upon each holder of any  Securities  purchased  under this Agreement at the time
outstanding, each future holder of all such securities, and the Company.

          9.7  Publicity.  No public  release  or  announcement  concerning  the
transactions contemplated hereby shall be issued by the Company or the Investors
without  the  prior  consent  of the  Company  (in  the  case  of a  release  or
announcement by the Investors) or Special  Situations Fund III, L.P. ("SSF") (in
the case of a release or  announcement by the Company) (which consents shall not
be  unreasonably  withheld),  except  as such  release  or  announcement  may be
required  by  law or the  applicable  rules  or  regulations  of any  securities
exchange or securities  market,  in which case the Company or the Investors,  as
the case may be, shall allow SSF or the Company,  as  applicable,  to the extent
reasonably practicable in the circumstances,  reasonable time to comment on such
release or announcement in advance of such issuance.

          9.8  Severability.  Any provision of this Agreement that is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating the remaining  provisions  hereof but shall be interpreted as if it
were  written  so as to be  enforceable  to  the  maximum  extent  permitted  by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall  not  invalidate  or  render  unenforceable  such  provision  in any other
jurisdiction.  To the extent  permitted by  applicable  law, the parties  hereby
waive any  provision of law which  renders any  provision  hereof  prohibited or
unenforceable in any respect.

          9.9 Entire Agreement.  This Agreement,  including the Exhibits and the
Disclosure Schedules,  and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior  agreements  and  understandings,  both oral and
written,  between the parties  with  respect to the  subject  matter  hereof and
thereof.

          9.10 Further  Assurances.  The parties  shall  execute and deliver all
such further  instruments  and  documents and take all such other actions as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

          9.11 Governing Law; Consent to  Jurisdiction.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without  regard to the choice of law  principles  thereof.  Each of the
parties hereto irrevocably

                                      -24-
<PAGE>

submits  to the  exclusive  jurisdiction  of the courts of the State of New York
located in New York County and the United States District Court for the Southern
District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the  transactions  contemplated
hereby.  Service  of  process  in  connection  with any  such  suit,  action  or
proceeding may be served on each party hereto  anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any such court in
any such suit,  action or  proceeding  and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit,  action or proceeding  brought in such courts and irrevocably  waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.

                            [signature page follows]

                                      -25-

<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly  authorized  officers to execute this  Agreement as of the date first
above written.

The Company:                            WORLD HEART CORPORATION

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

                                      -26-
<PAGE>

The Investors:                          SPECIAL SITUATIONS FUND III, L.P.

                                        By:
                                           -------------------------------------
                                        Name: David Greenhouse
                                        Title: General Partner

Aggregate Purchase Price:  $4,125,000
Number of Shares:  6,653,226
Number of Warrants:  6,653,226

Address for Notice:
                                             153 E. 53rd Street
                                             55th Floor
                                             New York, NY  10022

                                             with a copy to:

                                             Lowenstein Sandler PC
                                             65 Livingston Avenue
                                             Roseland, NJ  07068
                                             Attn: John D. Hogoboom, Esq.
                                             Telephone:   973.597.2500
                                             Facsimile:   973.597.2400

                                        SPECIAL SITUATIONS CAYMAN FUND, L.P.

                                        By:
                                           -------------------------------------
                                            Name: David Greenhouse
                                            Title: General Partner

Aggregate Purchase Price:  $1,375,000
Number of Shares:  2,217,742
Number of Warrants:  2,217,742

Address for Notice:
                                             153 E. 53rd Street
                                             55th Floor
                                             New York, NY  10022

                                      -27-

<PAGE>

                                             with a copy to:

                                             Lowenstein Sandler PC
                                             65 Livingston Avenue
                                             Roseland, NJ  07068
                                             Attn:  John D. Hogoboom, Esq.
                                             Telephone:   973.597.2500
                                             Facsimile:   973.597.2400

                                        SPECIAL SITUATIONS PRIVATE EQUITY FUND,
                                        L.P.

                                        By:
                                           -------------------------------------
                                           Name: David Greenhouse
                                           Title: General Partner

Aggregate Purchase Price:  $1,500,000
Number of Shares:  2,419,355
Number of Warrants:  2,419,355

                                             153 E. 53rd Street
                                             55th Floor
                                             New York, NY  10022
                                             with a copy to:

                                             Lowenstein Sandler PC
                                             65 Livingston Avenue
                                             Roseland, NJ  07068
                                             Attn:  John D. Hogoboom, Esq.
                                             Telephone:   973.597.2500
                                             Facsimile:   973.597.2400

                                      -28-
<PAGE>

                                        CLARION CAPITAL CORPORATION

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

Aggregate Purchase Price:  $449,999.72
Number of Shares:  725,806
Number of Warrants:  725,806

Address for Notice:
                                             The Clarion Group
                                             1801 East Ninth Street, Suite 1120
                                             Cleveland, Ohio 44114
                                             Attention:  Thomas E. Niehaus,
                                             Chief Financial Officer
                                             Tel: (216) 687-8948
                                             Fax: (216) 694-3545
                                             tom@clariongrp.com

                                        CLARION PARTNERS, L.P.

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

Aggregate Purchase Price:  $200,000.22
Number of Shares:  322,581
Number of Warrants:  322,581

Address for Notice:
                                             The Clarion Group
                                             1801 East Ninth Street, Suite 1120
                                             Cleveland, Ohio 44114
                                             Attention:  Thomas E. Niehaus,
                                             Chief Financial Officer
                                             Tel: (216) 687-8948
                                             Fax: (216) 694-3545
                                             tom@clariongrp.com

                                      -29-
<PAGE>

                                        CLARION OFFSHORE FUND, LTD.

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

Aggregate Purchase Price:  $200,000.22
Number of Shares:  322,581
Number of Warrants:  322,581

Address for Notice:
                                             The Clarion Group
                                             1801 East Ninth Street, Suite 1120
                                             Cleveland, Ohio 44114
                                             Attention:  Thomas E. Niehaus,
                                             Chief Financial Officer
                                             Tel: (216) 687-8948
                                             Fax: (216) 694-3545
                                             tom@clariongrp.com

                                        DYNAMIC EQUITY HEDGE FUND

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

Aggregate Purchase Price:  $49,999.90
Number of Shares:  80,645
Number of Warrants:  80,645

Address for Notice:
                                             The Clarion Group
                                             1801 East Ninth Street, Suite 1120
                                             Cleveland, Ohio 44114
                                             Attention:  Thomas E. Niehaus,
                                             Chief Financial Officer
                                             Tel: (216) 687-8948
                                             Fax: (216) 694-3545
                                             tom@clariongrp.com

                                      -30-
<PAGE>

                                        THE MORTON A. COHEN REVOCABLE
                                        LIVING TRUST

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

Aggregate Purchase Price:  $99,999.80
Number of Shares:  161,290
Number of Warrants:  161,290

Address for Notice:
                                             The Clarion Group
                                             1801 East Ninth Street, Suite 1120
                                             Cleveland, Ohio 44114
                                             Attention:  Thomas E. Niehaus,
                                             Chief Financial Officer
                                             Tel: (216) 687-8948
                                             Fax: (216) 694-3545
                                             tom@clariongrp.com

                                      -31-
<PAGE>

                                        STRAUS PARTNERS L.P.

                                        By:
                                           -------------------------------------
                                           Name: Melville Straus
                                           Title: General Partner

Aggregate Purchase Price:  $616,000
Number of Shares:  993,548
Number of Warrants:  993,548

Address for Notice:
                                             605 Third Avenue
                                             New York, New York 10158

                                        STRAUS-GEPT PARTNERS L.P.

                                        By:
                                           -------------------------------------
                                           Name: Melville Straus
                                           Title: General Partner

Aggregate Purchase Price:  $384,000
Number of Shares:  619,355
Number of Warrants:  619,355

Address for Notice:
                                             605 Third Avenue
                                             New York, New York 10158

                                      -32-
<PAGE>

                                        THE FEDERATED KAUFMAN FUND,
                                        A PORTFOLIO OF FEDERATED EQUITY FUNDS

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

Aggregate Purchase Price:  $6,120,000
Number of Shares:  9,870,968
Number of Warrants:  9,870,968

Address for Notice:
                                             State Street Bank & Trust
                                             2 Avenue DeLafayette
                                             Boston, Massachusetts 02111
                                             Name:  Federated Kaufman Fund
                                             Fund Number: 22L9
                                             Attention:  Andrea Griffin

                                        SF CAPITAL PARTNERS LIMITED

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

Aggregate Purchase Price:  $3,000,000
Number of Shares:  4,838,710
Number of Warrants:  4,838,710

Address for Notice:
                                             3600 South Lake Drive
                                             St. Francis, Wisconsin 53235

                                      -33-
<PAGE>

                                        MEDCAP PARTNERS L.P.

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

Aggregate Purchase Price:  $2,000,000
Number of Shares:  3,225,806
Number of Warrants:  3,225,806

Address for Notice:
                                             500 Third Avenue, STE 535
                                             San Francisco, California 94107

                                      -34-
<PAGE>

                                        ----------------------------------------
                                        JoAnna L. Abrams

Aggregate Purchase Price:  $4,759
Number of Shares:  7,676
Number of Warrants:  7,676

Address for Notice:
                                             2922 Montana Avenue
                                             Newport Beach, California 92657

                                        LEHMAN BROTHERS
                                        FBO Christopher D. Jennings
                                        SEP IRA a/c # 837-77720-10

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

Aggregate Purchase Price:  $20,000
Number of Shares:  32,259
Number of Warrants:  32,259

Address for Notice:
                                             70 Hudson Street
                                             Jersey City, New Jersey 07302

                                      -35-
<PAGE>

                                        CITY OF MILFORD PENSION & RETIREMENT
                                        FUND

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $499,720
Number of Shares:  806,000
Number of Warrants:  806,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        NFIB EMPLOYEE PENSION TRUST

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                          James Cleary, Managing Director

Aggregate Purchase Price:  $140,120
Number of Shares:  226,000
Number of Warrants:  226,000

                                      -36-
<PAGE>

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        NFIB CORPORATE ACCOUNT

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $99,820
Number of Shares:  161,000
Number of Warrants:  161,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        NFIB SERP ASSETS

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $24,800

                                      -37-
<PAGE>

Number of Shares:  40,000
Number of Warrants:  40,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        NORWALK EMPLOYEES' PENSION PLAN

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                          James Cleary, Managing Director

Aggregate Purchase Price:  $274,660
Number of Shares:  443,000
Number of Warrants:  443,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -38-
<PAGE>

                                        PUBLIC EMPLOYEE RETIREMENT
                                        SYSTEM OF IDAHO

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $1,799,860
Number of Shares:  2,903,000
Number of Warrants:  2,903,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        CITY OF STAMFORD FIREMEN'S PENSION FUND

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $244,900
Number of Shares:  395,000
Number of Warrants:  395,000

                                      -39-
<PAGE>

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        ASPHALT GREEN, INC.

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $50,220
Number of Shares:  81,000
Number of Warrants:  81,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        LAZAR FOUNDATION

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $50,220

                                      -40-
<PAGE>

Number of Shares:  81,000
Number of Warrants:  81,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        FRANCOIS DEMENIL

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $45,260
Number of Shares:  73,000
Number of Warrants:  73,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -41-
<PAGE>

                                        HBL CHARITABLE UNITRUST

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $39,680
Number of Shares:  64,000
Number of Warrants:  64,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        HELEN HUNT

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:  ________________________________
                                             James Cleary, Managing Director

Aggregate Purchase Price:  $50,220
Number of Shares:  81,000
Number of Warrants:  81,000

                                      -42-
<PAGE>

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        JEANNE L. MORENCY

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $34,720
Number of Shares:  56,000
Number of Warrants:  56,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        PSYCHOLOGY ASSOCIATES

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $14,880
Number of Shares:  24,000
                                      -43-
<PAGE>

Number of Warrants:  24,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        PETER LOORAM

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $24,180
Number of Shares:  39,000
Number of Warrants:  39,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -44-

<PAGE>

                                        MURRAY CAPITAL, LLC

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $50,220
Number of Shares:  81,000
Number of Warrants:  81,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        MEEHAN FOUNDATION

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $40,300
Number of Shares:  65,000
Number of Warrants:  65,000

                                      -45-
<PAGE>

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        DOMENIC J. MIZIO

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $70,060
Number of Shares:  113,000
Number of Warrants:  113,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        MORGAN TRUST CO. OF THE BAHAMAS LTD.
                                        AS TRUSTEE U/A/D 11/30/93

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

                                      -46-
<PAGE>

Aggregate Purchase Price:  $150,040
Number of Shares:  242,000
Number of Warrants:  242,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        SUSAN URIS HALPERN

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $89,900
Number of Shares:  145,000
Number of Warrants:  145,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -47-
<PAGE>

                                        THEEUWES FAMILY TRUST,
                                        FELIX THEEUWES TRUSTEE

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $40,300
Number of Shares:  65,000
Number of Warrants:  65,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        ALAN B. & JOANNE K. VIDINSKY 1993 TRUST

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $40,300
Number of Shares:  65,000
Number of Warrants:  65,000

                                      -48-
<PAGE>

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        WILLIAM B. LAZAR

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $34,720
Number of Shares:  56,000
Number of Warrants:  56,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        BARRIE RAMSAY ZESIGER

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $79,980

                                      -49-
<PAGE>

Number of Shares:  129,000
Number of Warrants:  129,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                        JOHN J. & CATHERINE H. KAYOLA

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $8,060
Number of Shares:  13,000
Number of Warrants:  13,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -50-
<PAGE>

                                        ROBERT K. WINTERS

                                        By:  ZESIGER CAPITAL GROUP LLC, as
                                             Attorney-in-fact

                                        By:
                                           -------------------------------------
                                           James Cleary, Managing Director

Aggregate Purchase Price:  $3,100
Number of Shares:  5,000
Number of Warrants:  5,000

Address for Notice:
                                             C/o Zesiger Capital Group LLC
                                             320 Park Avenue
                                             New York, New York 10022
                                             Attention:  Mary Estabil
                                             Tel:  212-508-6332
                                             Fax:  212-508-6329

                                      -51-

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