Document:

Exhibit 4.2

FORM OF PURCHASE
AGREEMENT

THIS PURCHASE AGREEMENT (“Agreement”) is made as of
the 13th day of November, 2006 by and among World Heart Corporation, a
corporation continued under the laws of 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.

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,
up to 58,000,000 of the Company’s Common Shares (the “Common Stock”) at a price
of $0.25 per share.

C.            Subject
to the terms and conditions set forth herein, 11,000,000 shares of Common Stock
(the “Initial Shares”) will be issued and sold to the initial Investors listed
on the signature pages hereto as Initial Investors (the “Initial Investors”)
on the First Closing Date (as defined below) for an aggregate purchase price of
$2,750,000 (the “Initial Purchase Price”).

D.            Subject
to the terms and conditions set forth herein, up to 47,000,000 shares of Common
Stock (the “Remaining Shares”) will be issued and sold to the Remaining
Investors listed on the signature pages hereto as Remaining Investors (the
“Remaining Investors”) on the Second Closing Date (as defined below) for an
aggregate purchase price of up to $11,750,000 (the “Remaining Purchase Price”).

E.             Contemporaneous
with the sale of the Initial Shares, 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 Oakland, California are open for the general transaction of business.

“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,

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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.

“Effective Date”
means the date on which the initial Registration Statement is declared
effective by the SEC.

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

“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).

“Investors”
means the Initial Investors and the Remaining Investors.

“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.

“Nasdaq” means
the Nasdaq Global Market or the Nasdaq Capital Market, as applicable, or their
successors and assigns on which the Common Stock is quoted.

“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.

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

“SEC Filings”
has the meaning set forth in Section 4.06.

“Shares” means
the Initial Shares and the Remaining Shares.

“Subsidiary” has
the meaning set forth in Section 4.01.

“Transaction Documents”
means this Agreement and the Registration Rights Agreement.

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

“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.

(a)           Subject
to the terms and conditions of this Agreement, on the First Closing Date, each
of the Initial Investors shall severally, and not jointly, purchase, and the
Company shall sell and issue to the Initial Investors, the Initial Shares in
the respective amounts set forth opposite the Initial Investors’ names on the

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signature pages attached
hereto in exchange for the Initial Purchase Price as specified in Section 3(a) below.

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

3.             Closing.

(a)           Upon
confirmation that the other conditions to the First Closing specified herein
have been satisfied or duly waived by the Initial Investors, the Company shall
deliver to Lowenstein Sandler PC, in trust, a certificate or certificates,
registered in such name or names as the Initial Investors may designate,
representing the Initial Shares, with instructions that such certificates are
to be held for release to the Initial Investors only upon payment in full of
the Initial Purchase Price to the Company by all the Initial Investors. Upon
such receipt by Lowenstein Sandler PC of the certificates, each Initial
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 Initial Investor’s pro rata portion of the Initial
Purchase Price as set forth on the signature pages to this Agreement. On
the date (the “First Closing Date”) the Company receives the Initial Purchase
Price, the certificates evidencing the Initial Shares shall be released to the
Initial Investors (the “First Closing”). The First Closing 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 Initial Investors shall mutually agree.

(b)           Upon
confirmation that the other conditions to the Second Closing specified herein
have been satisfied or duly waived by the Remaining Investors, the Company
shall deliver to Lowenstein Sandler PC, in trust, a certificate or
certificates, registered in such name or names as the Remaining Investors may
designate, representing the Remaining Shares with instructions that such
certificates are to be held for release to the Remaining Investors only upon
payment in full of the Remaining Purchase Price to the Company by all the
Remaining Investors. Upon such receipt by Lowenstein Sandler PC of the
certificates, each Remaining Investor shall promptly, but no more than one
Business Day thereafter, 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 Remaining Investor’s pro rata portion of the Remaining
Purchase Price as set forth on the signature pages to this Agreement. On
the date (the “Second Closing Date”) the Company receives the Second Purchase
Price, the certificates evidencing the Remaining Shares shall be released to
the Remaining Investors (the “Second Closing”). The Second Closing shall take
place at the offices of Lowenstein Sandler PC, 1251 Avenue of the Americas,
18th Floor, New York, New York 10020, or at such other location and on such
other date as the Company and the Remaining 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”):

4.01         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 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 4.01 hereto (the “Subsidiaries”).

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4.02         Authorization.   The Company has full power and except
for (a) approval of the Proposal by the shareholders as contemplated in Section 7.07,
and (b) filing of such securities filings relating to the offer, sale and
issuance of the Shares with the relevant authorities, has 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
Shares. 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.

4.03         Capitalization.   Schedule 4.03 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) 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 4.03, 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 4.03 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. Except as described in the SEC Filings and except as provided in
the Registration Rights Agreement, no Person has 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 4.03 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, (ii) any
adjustments in other securities resulting from the issuance of the Shares, and (iii) the
exercise or conversion of all outstanding securities. Except as described on
Schedule 4.03, the issuance and sale of the Shares 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.

4.04         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 non-assessable, 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.

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4.05         Consents.   Except for approval of the Proposal by the
shareholders as contemplated in Section 7.07, the execution, delivery and
performance by the Company of the Transaction Documents and the offer, issuance
and sale of the Shares 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 from Nasdaq and 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 Shares, 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 Shares and the ownership, disposition or voting of the Shares by
the Investors or the exercise of any right granted to the Investors pursuant to
this Agreement or the other Transaction Documents.

4.06         Delivery of SEC Filings; Business.   The Company has
provided the Investors through the EDGAR system, true and complete copies of
the Company’s most recent Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2005 (the “10KSB”), and all other reports
filed by the Company pursuant to the 1934 Act since the filing of the 10 KSB
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
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.

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

4.08         No Material Adverse Change.   Since December 31,
2005, except as identified and described in the SEC Filings or as described on
Schedule 4.08, there has not been:

(a)           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 10KSB, 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;

(b)           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;

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

(d)           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;

(e)           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);

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(f)            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;

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

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

(i)            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;

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

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

4.09         SEC Filings; S-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, 2003 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 S-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.   Subject to the approval of the Proposal
by its shareholders as contemplated in Section 7.07, the execution,
delivery and performance of the Transaction Documents by the Company and the
issuance and sale of the Shares 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 made available to the Investors
through the EDGAR system), 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.   Except as described in SEC Filings, 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

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are adequate in all
material respects, and there are no material unpaid 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 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.

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(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 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, 

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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 United States
generally accepted accounting principles applied on a consistent basis (except
as may be disclosed therein or in the notes thereto, and, in the case of
quarterly financial statements as permitted by Form 10-QSB under the
1934 Act). 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.

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 Nasdaq Continued Listing Requirements.   The
Company is in compliance with applicable Nasdaq continued listing requirements,
except as set out in Schedule 4.20. Except as set out in Schedule 4.20, 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 Nasdaq 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
Nasdaq.

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 Shares.

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
Shares under the 1933 Act.

4.24         Private Placement.   The offer and sale of the Shares 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

 9
 

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.

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 is in material
compliance with the provisions of the Sarbanes-Oxley Act of 2002 currently
applicable to the Company. 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 GAAP 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. The Company has established disclosure controls and procedures (as
defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for
the Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including the Subsidiaries, is
made known to the certifying officers by others within those entities,
particularly during the period in which the Company’s most recently filed
periodic report under the 1934 Act, as the case may be, is being prepared. The
Company’s certifying officers have evaluated the effectiveness of the Company’s
controls and procedures as of the end of the period covered by the most
recently filed periodic report under the 1934 Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under
the 1934 Act the conclusions of the certifying officers about the effectiveness
of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no significant
changes in the Company’s internal controls (as such term is defined in Item 308
of Regulation S-B) or, to the Company’s Knowledge, in other factors that could
significantly affect the Company’s internal controls. The Company maintains and
will continue to maintain a standard system of accounting established and
administered in accordance with GAAP and the applicable requirements of the
1934 Act.

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

5.01         Organization and Existence.   Such 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 Shares pursuant to this Agreement.

5.02         Authorization.   The execution, delivery and performance
by such 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 such Investor in
accordance with their

 10
 

respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability, relating to or affecting creditors’ rights generally.

5.03         Purchase Entirely for Own Account.   The Shares to be
received by such Investor hereunder will be acquired for such Investor’s own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the 1933 Act, and such
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.

5.04         Investment Experience.   The Investor acknowledges that
it can bear the economic risk and complete loss of its investment in the Shares
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.

5.05         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 Shares. 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.

5.06         Restricted Shares.   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 cannot be resold unless they are
registered pursuant to the 1933 Act or unless an exemption from registration is
available.

5.07         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.”

“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

 11
 

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 [FOUR MONTHS PLUS ONE DAY
FOLLOWING CLOSING].”

(c)           If
required by the authorities of any state in connection with the issuance of
sale of the Shares, 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 Shares 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 Shares to be replaced with certificates which do
not include the restrictive legend set forth in paragraph (a) above. 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 Shares to be replaced with certificates which do not include the
restrictive legend set forth in paragraph (b) above. When the Company is
required to cause unlegended certificates (removing all legends) to replace
previously issued legended certificates, if unlegended certificates (removing
all legends) 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 1.0%
of the aggregate purchase price of the Shares evidenced by such certificate(s) for
each thirty (30) day period (or portion thereof) beyond such three (3) Business
Day that the unlegended certificates (removing all legends) have not been so
delivered.

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

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

5.10         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.

 12

5.11         Prohibited Transactions.   Since the earlier of (a) such
time when such Investor was first contacted by the Company or any other Person
regarding the transactions contemplated hereby or (b) thirty (30) days
prior to the date hereof, neither such Investor nor any Affiliate of such
Investor nor any Person acting on behalf of or pursuant to any understanding
with such Investor (collectively, “Trading Affiliates”) has, directly or
indirectly, effected or agreed to effect any short sale, whether or not against
the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under
the 1934 Act) with respect to the Common Stock, granted any other right
(including, without limitation, any put or call option) with respect to the
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its position in the Shares (each, a “Prohibited Transaction”). Prior
to the earliest to occur of (i) the termination of this Agreement, (ii) the
Effective Date or (iii) the Effectiveness Deadline, such Investor shall
not, and shall cause its Trading Affiliates not to, engage, directly or
indirectly, in a Prohibited Transaction. Such Investor acknowledges that the
representations, warranties and covenants contained in this Section 5.11
are being made for the benefit of the Investors as well as the Company and that
each of the other Investors shall have an independent right to assert any
claims against such Investor arising out of any breach or violation of the
provisions of this Section 5.11.

6.             Conditions to Closing.

6.01         Conditions to the Initial Investors’ Obligations—First Closing.   The
obligation of each Initial Investor to purchase the Initial Shares at the First
Closing is subject to the fulfillment to such Initial Investor’s satisfaction,
on or prior to the First Closing Date, of the following conditions, any of
which may be waived by such Initial Investor (as to itself only):

(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 First 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 First 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 First 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 Nasdaq and TSX) necessary or appropriate for consummation
of the purchase and sale of the Initial Shares and the consummation of the
other transactions contemplated hereby on or prior to the First Closing Date,
all of which shall be in full force and effect.

(c)           The
Company shall have received confirmation from Nasdaq to the effect that (i) the
issuance and sale of the Initial Shares as contemplated hereby will not require
shareholder approval pursuant to the requirements of Nasdaq Marketplace Rule 4350(i),
and (ii) that the Initial Shares have been approved for inclusion on
Nasdaq upon official notice of issuance.

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

(e)           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

 13
 

governmental authority, enjoining or preventing the
consummation of the transactions contemplated hereby or in the other
Transaction Documents.

(f)            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
First Closing Date, certifying to the fulfilment of the conditions specified in
subsections (a), (b), (d) and (e) of this Section 6.01.

(g)           The
Company shall have delivered a Certificate, executed on behalf of the Company
by its Secretary, dated as of the First 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 Initial Shares, 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.

(h)           The
Investors shall have received opinions from the Company’s counsel dated as of
the First Closing Date, in form and substance reasonably acceptable to the
Initial Investors and addressing such legal matters as the Initial Investors
may reasonably request.

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

6.02         Conditions to Obligations of the Company—First Closing.   The
Company’s obligation to sell and issue the Initial Shares at the First Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to
the First Closing Date of the following conditions, any of which may be waived
by the Company:

(a)           The
representations and warranties made by the Initial Investors in Section 5
hereof, other than the representations and warranties contained in Sections
5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.10 and 5.11 (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 First
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 First
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 First Closing Date.

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

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

6.03         Conditions to the Remaining Investors’ Obligations—Second Closing.   The
obligation of the Remaining Investors to purchase the Remaining Shares at the
Second Closing is subject to the fulfillment to each Remaining Investor’s
satisfaction, on or prior to the Second Closing Date, of the following
conditions, any of which may be waived by such Remaining Investor (as to itself
only):

(a)           The
representations and warranties made by the Company in Section 4 hereof
qualified as to materiality shall be true and correct on the date hereof and at
all times prior to and on the Second 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 on the
date hereof and 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 on the date
hereof and at all times prior to and on the Second 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 on the date hereof and as of such earlier 

 14
 

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 Second Closing Date.

(b)           The
Company shall have obtained any and all consents, permits, approvals,
registrations and waivers (including, without limitation, approval of the
Proposal by its shareholders in accordance with applicable law and applicable
Nasdaq requirements) necessary or appropriate for consummation of the purchase
and sale of the Remaining Shares and the consummation of the other transactions
contemplated by the Transaction Documents to be consummated on or prior to the
Second Closing Date, all of which shall be in full force and effect.

(c)           The
First Closing shall have been consummated in accordance with the terms of this
Agreement.

(d)           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.

(e)           The
Remaining Shares shall have been approved for inclusion on Nasdaq upon official
notice of issuance.

(f)            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
Second Closing Date, certifying to the fulfillment of the conditions specified
in subsections (a), (b), (d), (e) and (i) of this Section 6.03.

(g)           The
Company shall have delivered a Certificate, executed on behalf of the Company
by its Secretary, dated as of the Second 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, the calling of the Special Meeting (as defined below), and the
issuance of the Shares, 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.

(h)           The
Remaining Investors shall have received opinions from the Company’s counsel,
dated as of the Second Closing Date, in form and substance substantially
similar to the opinion delivered in the First Closing, or otherwise reasonably
acceptable to the Remaining Investors and addressing such legal matters as the
Remaining Investors may reasonably request.

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

6.04         Conditions to Obligations of the Company—Second Closing.   The
Company’s obligation to sell and issue the Remaining Shares at the Second
Closing is subject to the fulfillment to the satisfaction of the Company on or
prior to the Second Closing Date of the following conditions, any of which may
be waived by the Company:

(a)           The
representations and warranties made by the Remaining Investors in Section 5
hereof, other than the Investment Representatives, shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects on the Second 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 Second Closing Date with the same force and effect as if
they had been made on 

 15
 

and as of said date. The Remaining 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 Second Closing
Date.

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

(c)           The
Company shall have obtained the approval of the Proposal by its shareholders in
accordance with applicable law and applicable Nasdaq requirements.

6.05         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 any Closing shall terminate as follows:

(i)            Upon
the mutual written consent of the Company and the Initial Investors or
Remaining Investors, as applicable;

(ii)           By
the Company if any of the conditions set forth in Section 6.02 or 6.04
shall have become incapable of fulfillment, and shall not have been waived by
the Company;

(iii)          By
an Initial Investor (with respect to itself only) if any of the conditions set
forth in Section 6.01 shall have become incapable of fulfillment, and
shall not have been waived by the Initial Investors;

(iv)          By
a Remaining Investor (with respect to itself only) if any of the conditions set
forth in Section 6.03 shall have become incapable of fulfillment, and
shall not have been waived by the Remaining Investors; or

(v)           By
either the Company or any Remaining Investor (with respect to itself only) if
the Second Closing has not occurred on or prior to December 31, 2006;

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 any Investor of its obligations to
effect a Closing pursuant to this Section 6.03, written notice thereof
shall forthwith be given to the other Investors and, if such notice is of
termination by any Investor, any other Investor (with respect to itself only)
will have the right to terminate its obligation to effect such Closing upon
written notice to the Company and the other Investors. Nothing in this Section 6.03
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.

(c)           A
termination of the obligation to effect the Second Closing pursuant to the
terms of this Section 6.03 shall not affect this Agreement or the other
Transaction Documents which shall otherwise continue in full force and effect.

 16

7.             Covenants and Agreements of the Company.

7.01         Reports.   The Company will furnish to such Investors
and/or their assignees such information relating to the Company and its
Subsidiar ies 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.

7.02         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.

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

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

7.05         Listing of Underlying Shares and Related Matters.   Promptly
following the date hereof, the Company shall take all necessary action to cause
(i) the Initial Shares to be listed on Nasdaq and TSX no later than the
First Closing Date; and (ii) the Remaining Shares to be listed on Nasdaq
and TSX no later than the Second 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
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 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 the bylaws or rules of
such market or exchange, as applicable.

7.06         Termination of Covenants.   The provisions of Sections
7.02 through 7.05 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.

7.07         Proxy Statement; Shareholders Meeting.

(a)           Promptly
following the execution and delivery of this Agreement the Company shall take
all action necessary to call a meeting of its shareholders (the “Shareholders
Meeting”), which shall be completed not later than December 31, 2006, for
the purpose of seeking approval of the Company’s shareholders for (i) the
issuance and sale to the Investors of the Remaining Shares (the “Proposal”). In
connection therewith, the Company will promptly prepare and file with the SEC
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 the SEC 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 Section 14(a) of the 1934 Act
and the rules promulgated thereunder 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 that the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
shareholders or at the time 

 17
 

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; provided however, that the
Company may rely on all information furnished by an Investor to the Company as
true and correct. If the Company should discover at any time prior to the
Shareholders Meeting, 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 the 1934 Act, 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, subject to their fiduciary obligations, not revoke
or amend such recommendation) that the shareholders vote in favor of the
Proposal 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 Proposal. 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 shall be
required to, and will take, in accordance with applicable law and its
Certificate of Incorporation and Bylaws, all action necessary to convene the
Shareholders Meeting as promptly as practicable, but no later than the
Shareholders Meeting Deadline, to consider and vote upon the approval of the
Proposal.

8.             Survival and Indemnification.

8.01         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.

8.02         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 thereof) (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. Notwithstanding
the foregoing, the Company will not indemnify the Investors in the event that
the Company is (i) delisted from Nasdaq or the TSX (unless such delisting
constitutes a breach of any representation, warranty, covenant or agreement of
the Company set forth herein), or (ii) the Company is unable to obtain
shareholder approval of the Proposal as contemplated in Section 7.07
(unless such failure constitutes a breach of any representation, warranty,
covenant or agreement of the Company set forth herein).

8.03         Conduct of Indemnification Proceedings.   Promptly after
receipt by any Person (the “Indemnified Person”) of notice of any demand, claim
or circumstances which 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 8.02, 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, 

 18
 

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.

9.01         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 Shares 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.

9.02         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.

9.03         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.

 19
 

9.04         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:

  
	
   

  	
   

  	
  7799 Pardee Lane

  
	
   

  	
   

  	
  Oakland California 94621

  
	
   

  	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
   

  	
  Fax: (510) 563-4800

  
	
   

  	
  With a copy to:

  
	
   

  	
   

  	
  McCarthy Tétrault 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.

9.05         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 $20,000 for all Investors. Such expenses shall be paid not later
than the Second 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 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.

9.06         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 Shares purchased under this Agreement
at the time outstanding, each future holder of all such securities, and the
Company.

9.07         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”)
and Greenway Capital Inc. (“Greenway”) (in the case of a release or
announcement by the Company), (which 

 20
 

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 and Greenway 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.

9.08         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.

9.09         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; Waiver of Jury Trial.   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 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. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY
IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL
HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 21

9.12         Independent Nature of Investors’ Obligations and Rights.   The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Securities pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in
any Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the Investors
are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Investor
acknowledges that no other Investor has acted as agent for such Investor in
connection with making its investment hereunder and that no Investor will be
acting as agent of such Investor in connection with monitoring its investment
in the Securities or enforcing its rights under the Transaction Documents. Each
Investor shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of the other Transaction Documents, and it shall not be necessary for any other
Investor to be joined as an additional party in any proceeding for such purpose.
The Company acknowledges that each of the Investors has been provided with the
same Transaction Documents for the purpose of closing a transaction with
multiple Investors and not because it was required or requested to do so by any
Investor.

[signature page follows]

 22
 

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:

  

 

 23
 

 

	
  The Initial Investors:

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for Notice:

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for Notice:

  	
   

  

 

 24
 

 

	
   

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate
  Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for
  Notice:

  	
   

  

 

 25
 

 

	
  The Remaining Investors:

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate
  Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for
  Notice:

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate
  Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for
  Notice:

  	
   

  

 

 26
 

 

	
   

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate
  Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for
  Notice:

  	
   

  
	
   

  	
  [Name]

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
  Aggregate
  Purchase Price: $

  	
   

  
	
  Number of
  Shares:

  	
   

  
	
  Address for
  Notice:

  	
   

  
				

 

 27Prepared and Filed by St Ives Financial

Exhibit 10.1

UNSECURED PROMISSORY NOTE

 

	

$3,000,000
 	

November 16, 2006
 

FOR VALUE RECEIVED AND INTENDING TO BE LEGALLY BOUND HEREBY, ENVIRONMENTAL TECTONICS CORPORATION, a Pennsylvania corporation (hereinafter referred to and obligated as “Borrower”), absolutely and unconditionally promises to pay to the order of H. F. Lenfest, together with his successors and assigns, (“Lender”), at such address as Lender shall designate to Borrower, the principal sum of the lesser of (i) the principal sum of $3,000,000 and (ii) the outstanding balance hereunder, in lawful money of the United States of America with interest on the unpaid principal balance from time to time outstanding, in accordance with
the terms of this Unsecured Promissory Note (this “Note”). All outstanding principal and any accrued and unpaid interest thereon shall be due and payable on the earlier of October 6, 2007 or such date as Borrower draws down sufficient funds to satisfy all amounts due under this Note pursuant to the Preferred Stock Purchase Agreement, dated as of April 6, 2006 between Borrower and Lender (the “Maturity Date”), unless sooner accelerated in accordance with this Note.

The amount of all advances made to Borrower and all payments of principal and interest in respect of such advances, together with all other fees, charges, payments and other obligations of Borrower under this Note, shall be evidenced by Lender’s records, which shall be presumptive evidence as to the amount of unpaid obligations owed by Borrower; provided, however, that Lender’s failure to make any such notation shall not affect the obligation of Borrower to repay all outstanding obligations to Lender when otherwise due. 

1. Interest.

(a) During the period beginning on the date hereof and ending on the Maturity Date, in the absence of an Event of Default, Borrower shall pay interest on the outstanding principal balance under this Note at the annual rate of six (6%) percent, payable in arrears on the Maturity Date. Interest shall accrue on each loan evidenced by this Note as of the date of the funding of such loan and, to the extent not paid, shall compound on the first day of each month. 

(b) After the occurrence and during the continuance of an Event of Default, interest shall accrue and be payable, on demand, at the per annum rate (the “Default Rate”) of ten (10%) percent.

(c) Interest shall continue to accrue on the principal balance hereof at the rate of interest specified in this Note, notwithstanding any demand for payment, acceleration and/or the entry of any judgment against Borrower, until all principal owing hereunder is paid in full.

(d) If, at any time, any of the rates hereunder shall be finally determined by any court of competent jurisdiction, governmental agency or tribunal to exceed the maximum rate of interest permitted by any applicable laws, then, for such time as such rate(s) would be deemed excessive, application thereof shall be suspended and there shall be charged in lieu thereof the maximum rate of interest permissible under such laws.

2. Procedures; Minimum Borrowing. Borrower shall provide Lender with three days’ written notice of its intent to borrow funds under this Note. Minimum borrowing, under this Note shall be in increments of $1,000,000. 

3. Payment. Borrower shall make payment in full of the principal indebtedness on the Maturity Date.

4. Prepayments. This Note may be prepaid in whole or in part at any time and from time to time without penalty. 

5. Late Payments. If any payment of principal and/or interest is not received on or before the date ten (10) days following the due date thereof, there shall be immediately added to the obligations a late charge equal to five (5%) percent of the amount past due. All late charges are immediately due and payable without notice or demand.

6. Events of Default. The term “Event of Default” hereunder shall mean the occurrence of one or more of the following:

(a) the nonpayment, when due, of any amount payable under this Note; 

(b) Borrower becoming insolvent, making an assignment for the benefit of creditors or filing or having filed against it any petition, actions, or case or proceeding, voluntarily or involuntarily under any law or statute regarding bankruptcy, insolvency, reorganization, receivership or dissolution;

(c) the entry of any final non-appealable judgment against Borrower which may, in the reasonable judgment of Lender, have a material adverse effect on the Borrower or the issuing of any attachment, levy or garnishment against any property of Borrower or the occurrence of any substantial change in the financial condition of Borrower, which in the reasonable judgment of Lender, is materially adverse; or

(d) if any information or signature heretofore or hereafter furnished to Lender from Borrower in connection with any of the Obligations (as hereinafter defined) is materially false or incorrect.

7. Lender’s Rights Upon Default. Upon the occurrence of any Event of Default and without the necessity of giving any prior written notice to Borrower, and in addition to any other rights or remedies available to it at law or in equity, Lender may do any one or all of the following: (i) accelerate the Maturity Date of this Note and all amounts payable hereunder and demand immediate payment thereof, including unpaid interest and Default Rate interest or (ii) pursuant to the Warrant of Attorney contained herein, confess judgment against the Borrower. 

8. Application of Funds. All sums realized by Lender on account of this Note, from whatever source received, shall be applied first to any fees, costs and expenses (including attorneys’ fees) incurred by Lender, second to unpaid late charges, third to accrued and unpaid interest and fourth to the repayment of outstanding principal. 

9. Attorneys’ Fees and Costs. In the event that Lender engages an attorney to represent it in connection with (a) any default by Borrower under this Note; (b) the enforcement of any of Lender’s rights and remedies under this Note, or the negotiation and preparation of any amendment to this Note; (c) any potential and/or actual bankruptcy or other insolvency proceedings commenced by or against Borrower and/or (d) any potential and/or actual litigation arising out of or related to any of the foregoing, this Note or any of the obligations evidenced thereby (the “Obligations”), then Borrower shall be liable to and shall reimburse Lender on demand for all reasonable attorneys’ fees, costs
and expenses incurred by the Lender in connection with any of the foregoing. 

10.
  Disclosure for Confession of Judgment.
  The following sets forth a warrant of authority for any attorney to, after
  the occurrence and during the continuance of an Event of Default, confess judgment
  against Borrower. In granting this Warrant of Attorney to Confess Judgment against
  Borrower, Borrower, following consultation with (or decision not to consult
  with) separate counsel for Borrower, and with knowledge of the legal effect
  hereof, hereby waives any and all rights Borrower has, or may have, to prior
  notice and an opportunity for hearing before entry of judgment, or execution
  upon any real or personal property of Borrower under the constitutions and laws
  of the United States and the Commonwealth of Pennsylvania. Borrower specifically
  acknowledges that Lender has relied on this Warrant of Attorney in granting
  the financial accommodations described herein.

11. Warrant of Attorney. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS ANY ATTORNEY OR ANY CLERK OF ANY COURT OF RECORD UPON OR AFTER THE OCCURRENCE OF ANY EVENT OF DEFAULT TO APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWER, FOR SUCH SUMS AS ARE DUE AND/OR MAY BECOME DUE ON THE BORROWER’S OBLIGATIONS, WITH OR WITHOUT DECLARATION, WITH COSTS OF SUIT, WITHOUT STAY OF EXECUTION AND WITH ATTORNEYS’ FEES EQUAL TO FIVE (5%) PERCENT OF THE PRINCIPAL AMOUNT THEREOF, BUT NOT LESS THAN TEN THOUSAND ($10,000.00) DOLLARS ADDED FOR LIEN PRIORITY PURPOSES, WITH ACTUAL ATTORNEY’S FEES GOVERNED BY THE PROVISIONS OF THIS NOTE. BORROWER UNCONDITIONALLY AND IRREVOCABLY:  (A) WAIVES THE RIGHT OF INQUISITION ON ANY REAL ESTATE LEVIED ON, VOLUNTARILY CONDEMNS THE SAME, AUTHORIZES THE
PROTHONOTARY OR CLERK TO ENTER UPON THE WRIT OF EXECUTION SAID VOLUNTARY CONDEMNATION AND AGREES THAT SAID REAL ESTATE MAY BE SOLD ON A WRIT OF EXECUTION; (B) WAIVES AND RELEASES ALL RELIEF FROM ALL REDEMPTION, APPRAISEMENT, STAY, EXEMPTION OR APPEAL LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED; AND (C) RELEASES ALL ERRORS IN SUCH PROCEEDINGS. IF A COPY OF THIS NOTE, VERIFIED BY AFFIDAVIT BY OR ON BEHALF OF LENDER SHALL HAVE BEEN FILED IN SUCH ACTION, IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS NOTE AS A WARRANT OF ATTORNEY. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST BORROWER SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF, AND THE SAME MAY BE EXERCISED, FROM TIME TO TIME, AS OFTEN AS LENDER SHALL DEEM NECESSARY AND DESIRABLE, AND THIS NOTE SHALL BE A SUFFICIENT WARRANT THEREFORE. LENDER MAY ENTER ONE OR MORE JUDGMENTS IN THE SAME OR DIFFERENT COUNTIES FOR ALL OR PART OF THE BORROWER’S OBLIGATIONS, WITHOUT REGARD TO WHETHER JUDGMENT
HAS BEEN ENTERED ON MORE THAN ONE OCCASION FOR THE SAME BORROWER’S OBLIGATIONS. IN THE EVENT ANY JUDGMENT ENTERED AGAINST BORROWER HEREUNDER IS STRICKEN OR OPENED UPON APPLICATION BY OR ON BORROWER’S BEHALF FOR ANY REASON WHATSOEVER, LENDER IS HEREBY AUTHORIZED AND EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT AGAINST BORROWER; SUBJECT, HOWEVER, TO THE LIMITATION THAT SUCH SUBSEQUENT ENTRY OR ENTRIES OF JUDGMENT BY LENDER MAY ONLY BE DONE TO CURE ANY ERRORS IN PRIOR PROCEEDINGS, ONLY AND TO THE EXTENT THAT SUCH ERRORS ARE SUBJECT TO CURE IN THE LATER PROCEEDINGS.

12.
  Waiver of Jury Trial.
  IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS NOTE OR ANY OF THE OTHER
  OBLIGATIONS IN WHICH BORROWER AND LENDER ARE ADVERSE PARTIES, BORROWER AND LENDER
  HEREBY WAIVE TRIAL BY JURY.

13. Jurisdiction. In any litigation arising out of or relating to this Note or any of the other Obligations, Borrower hereby consents to the personal jurisdiction of the State and/or Federal courts of the Commonwealth of Pennsylvania.

14. Applicable Law. The substantive Laws of the Commonwealth of Pennsylvania shall govern the construction of this Note and the rights and remedies of the parties hereto.

15. Miscellaneous.

(a) Borrower hereby waives protest, notice of protest, presentment, dishonor, notice of dishonor and demand. Borrower hereby waives and releases all errors, defects and imperfections in any proceedings instituted by Lender under the terms of this Note.

(b) The rights and privileges of Lender under this Note shall inure to the benefit of its successors and assigns. All representations, warranties and agreements of Borrower made in connection with this Note shall bind Borrower’s successors and assigns.

(c) If any provision of this Note shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision hereof, but this Note shall be construed as if such invalid or unenforceable provision had never been contained herein.

(d) The waiver of any Event of Default or the failure of Lender to exercise any right or remedy to which it may be entitled shall not be deemed to be a waiver of any subsequent Event of Default or of Lender’s right to exercise that or any other right or remedy to which Lender is entitled.

(e) The rights and remedies of Lender under this Note shall be in addition to any other rights and remedies available to Lender at law or in equity, all of which may be exercised singly or concurrently.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Borrower has duly executed this Unsecured Promissory Note as of the day and year first above written and has hereunto set hand and seal.

 

	

 
 	

 
 	

 
 	

ENVIRONMENTAL TECTONICS CORPORATION
 
	

  
 	

 
 	

By: 
 	

  
 	

  
 
	

 
 	

 
 	

 
 	

 	

 
	

 
 	

 
 	

 
 	

Name: 
 	

 
 
	

 
 	

 
 	

 
 	

Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]