GUARANTEE
(WORLD HEART INC.)
TO: Argosy Bridge Fund L.P.I. and Sherfam Inc. (together, the "Lenders")
WHEREAS the Lenders and World Heart Corporation (the "Debtor") and World
Heart Inc. (the "Guarantor") have entered into a loan agreement dated as of
January 28, 2003 (including as same may be amended, supplemented, revised,
restated or replaced from time to time, the "Loan Agreement").
IN CONSIDERATION of the Lenders extending loans to the Debtor and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the Guarantor hereby unconditionally guarantees
payment to the Lenders of all obligations, indebtedness and liabilities of any
kind, present and future, direct or indirect, absolute or contingent, matured or
not, joint or several, of the Debtor to the Lender under the Loan Agreement and
the Security ("Guaranteed Obligations") whether as principal or surety, together
with all reasonable costs and expenses (including reasonable legal fees)
incurred by the Lenders, any receiver, receiver manager, representatives or
agent in the enforcing or endeavouring to collect any of such indebtedness,
obligations or liabilities, and interest thereon or enforcing any of its rights
hereunder; (all of which present and future indebtedness, obligations,
liabilities, costs, expenses and interest arising under the Loan Agreement and
Security are herein collectively referred to as the "Indebtedness" by the
Debtor).
AND IT IS AGREED THAT:
1. The Guarantor hereby affirms that the Guarantor is a primary obligor and
that this Guarantee is not merely a guaranty of collection, is continuing
in nature and applies to all Guaranteed Obligations, whether existing now
or in the future, including Guaranteed Obligations arising or accruing
before or after bankruptcy of Debtor. The Guarantor agrees to make all
payments under this Guarantee upon demand by the Lenders. Each and every
default in payment of the Indebtedness by the Debtor shall give rise to a
separate cause of action hereunder and separate suits may be brought
hereunder as each cause of action arises. In the event of such a default,
the Lenders shall have the right to proceed first and directly against the
Guarantor under this Guarantee without proceeding against any other person
or entity or exhausting any other remedies which it may have, and without
resorting to any security of the Debtor held by it. Furthermore, the
Guaranteed Obligations are independent of the obligations and duties of the
Debtor under the Loan Agreement and a separate action or actions may be
brought and prosecuted against the Guarantor hereunder, whether or not an
action is brought against the Debtor under the Loan Agreement or any other
person, whether or not the Debtor or the Guarantor or any other person or
entity may be joined in any such action or actions, and whether or not an
action or actions may be brought against the Guarantor or any other person
or entity.
2. No change in the name, objects, capital stock or constitution of the Debtor
or the Guarantor shall in any way release, discharge, limit, lessen or
otherwise affect the liability of the Guarantor, either with respect to
transactions occurring before or after any such change, and the Lenders
shall not be concerned to see or inquire into the powers of
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the Debtor, the Guarantor, or any of their directors or other agents acting
on behalf of the Debtor or the Guarantor, or any of their directors or
other agents acting or purporting to act on their behalf, and moneys,
advances, renewals or credits in fact borrowed or obtained from the Lenders
in professed exercise of such powers shall be deemed to form part of the
Indebtedness notwithstanding that such borrowing or obtaining of moneys,
advances, renewals or credits shall be in excess of the powers of the
Debtor, the Guarantor or their directors or other agents aforesaid, the
Debtor shall not be a legal or suable entity or there shall exist any
irregularity, defect or informality in the borrowing or obtaining of such
moneys, advances, renewals or credits, the whole whether known to the
Lenders or not.
3. The Guarantor hereby waives protest, promptness, diligence, notice of
acceptance, demand for payment and notice of default or non payment in
respect of the Loan Agreement and the Guarantor waives all other notices of
every kind and description with respect to any indebtedness now or
hereafter provided by any statute or rule of law. The Guarantor hereby
waives any requirement that the Lenders protect, secure, perfect or insure
any security interest or lien or any property subject thereto or exhaust
any right or take any action against the Debtor, or against any other
guarantor or any other person, entity or any collateral. The Guarantor
hereby waives, to the fullest extent permitted by applicable law, the
benefit of any statute of limitations which may affect its liability
hereunder or the enforcement hereof. Any payment by the Debtor or other
circumstance that operates to toll any statute of limitations as to the
Debtor shall not operate to toll the statute of limitations as to the
Guarantor.
4. The Lenders shall not be bound to seek or exhaust their recourse against
the Debtor or any other persons or to realize on any securities it may hold
in respect of the Indebtedness before being entitled to payment from the
Guarantor under this Guarantee.
5. All monies received by a Lender in respect of the Indebtedness may be
applied on such part or parts of the Indebtedness as the Lender may see fit
and the Lender shall at all times and from time to time, in any
circumstance where the Lender would otherwise be required to return to the
Guarantor any monies paid to the Lender by the Guarantor, have the right to
change any appropriation of any moneys received by it and to reapply the
same on any other part or parts of the Indebtedness as the Lender may see
fit, notwithstanding any previous application by whomsoever made.
6. All dividends, compositions and moneys received by a Lender from the Debtor
or the Guarantor or from any other person or estate capable of being
applied by the Lender in reduction of the Indebtedness shall be regarded
for all purposes as payments in gross, and, subject to the aforesaid, each
Lender shall be entitled to prove against the estate of the Debtor or the
Guarantor upon any insolvency or winding-up in respect of the whole of the
Indebtedness, and the Guarantor shall not have any right to be subrogated
to the Lenders in respect of any such proof until the Lenders shall have
received from such estate payment in full of their claim with interest.
7. This Guarantee will not be diminished or affected on account of any act or
failure to act on the part of the Lenders which would prevent subrogation
from operating in favour of the Guarantor. The Guarantor agrees that it
shall not have and hereby waives any rights
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of subrogation under the Guarantee until such time as all Indebtedness is
paid in full to the Lenders. All monies received by the Guarantor as a
result of any such subrogation shall be received in trust for the Lenders
until payment and satisfaction of the Indebtedness in full.
8. The Lenders, without exonerating in whole or in part the Guarantor, may
grant time, renewals, extensions, indulgences, releases and discharges to,
may take security from and give the same and any or all existing security
up to, may abstain from taking security from or from perfecting,
registering, renewing or realizing upon security of and may otherwise deal
with the Debtor or the Guarantor and all other persons (including the
Guarantor and any other guarantor) and security as the Lenders may see fit.
9. Without in any manner limiting the generality of the foregoing, the
Guarantor agrees that the Lenders may, from time to time, consent to any
action or non-action of the Debtor or the Guarantor which, in the absence
of such consent, violates or may violate any agreement or agreements
between the Debtor or the Guarantor and the Lenders relating to any of the
Indebtedness, with or without consideration on such terms and conditions as
may be acceptable to the Lenders, without in any manner affecting,
releasing or impairing the liability or obligations of the Guarantor
hereunder.
10. This shall be a continuing, absolute and unconditional Guarantee and shall
cover all the Indebtedness, shall not be subject to any set-off,
counterclaim, reduction or diminution of an obligation, or any defence of
any kind or nature (other than the payment of the Indebtedness) which the
Guarantor may have or assert against the Lenders and shall apply to and
secure any ultimate balance owing to the Lenders, notwithstanding that any
other security for the repayment of the Indebtedness or for the obligations
of the Guarantor to the Lenders may no longer be enforceable, but the
Lenders shall not be obliged to exhaust its recourse against the Debtor or
other persons or the securities they may hold before being entitled to
payment from the Guarantor of all of the Indebtedness. The Guarantor's
liability hereunder shall in no way be limited or impaired by any or all of
the following: (i) the failure of the Lenders to exercise or to exhaust any
right or remedy or take any action against the Debtor; (ii) any change in
the time, manner or place of payment or performance, of all or any of the
obligations of the Debtor under the Loan Agreement or any extensions of
time for payment or performance, whether in whole or in part, of the terms
of the Loan Agreement on the part of the Lenders to be paid, performed or
observed, as applicable; (iii) any failure or delay of the to exercise, or
any lack of diligence in exercising, any right or remedy with respect to
the Loan Agreement or this Guarantee; (iv) any dealings or transactions
between the Lenders and the Debtor, whether or not the Guarantor shall be a
party to or cognizant of the same, other than the payment of the Guaranteed
Obligations; (v) any financial decline, bankruptcy, insolvency, assignment
for the benefit of creditors, receivership, trusteeship or dissolution of
or affecting the Debtor; (vi) any other guaranty now or hereafter executed
by the Guarantor or any other guarantor or the release of any other
guarantor from or failure of any other Person to assume liability for the
payment, performance or observance of the Guaranteed Obligations or any of
the terms of the Loan Agreement, or any other agreement on the part of the
Lenders to be paid, performed or observed whether by operation of law or
otherwise; (vii) any rights, powers or privileges the Lenders may now or
hereafter have against any Person or collateral in respect of the
Guaranteed Obligations;(viii) the failure
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to give the Guarantor any notices whatsoever (the Guarantor expressly
agreeing that upon the Debtor's failure to perform the Guaranteed
Obligations, the Guarantor shall perform such Guaranteed Obligations
immediately upon request from the Lenders); (ix) any other circumstance
which might in any manner or to any extent constitute a defense available
to the Guarantor, or vary the risk of the Guarantor, or might otherwise
constitute a legal or equitable discharge or defense available to a surety
or guarantor, whether similar or dissimilar to the foregoing; (x) any and
all notice of the creation, renewal or extension of the Guaranteed
Obligations; (xi) any change, restructuring or termination of the structure
or existence of the Debtor; and (xii) the invalidity, irregularity or
unenforceability, in whole or in part, of this Guarantee or the Loan
Agreement, and, in any such case, whether with or without notice to the
Guarantor and with or without consideration.
11. Notwithstanding the provisions of any statute relating to interest payable
by debtors, this Guarantee shall remain in full force and effect whatever
the rate of interest received or demanded by the Lenders. No invalidity,
irregularity or unenforceability (by reason of any bankruptcy or similar
law, any law or order of any government or agency thereof purporting to
reduce, amend or otherwise affect the Indebtedness or any liability or
obligation of the Guarantor to the Lenders) of the Indebtedness or of any
liabilities or obligations of the Guarantor to the Lenders or of any
security therefor shall affect, impair or be a defence to this Guarantee.
If one or more of the provisions contained herein shall be invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be
affected or impaired thereby.
12. The Guarantor shall at all times and from time to time do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all and singular every such further act, deed, transfer,
assignment, assurance, document and instrument as the Lenders may
reasonably require for the better accomplishing and effectuating of this
Guarantee and the provisions contained herein, and every officer of the
Lenders and each of them are irrevocably appointed attorney or attorneys of
the Guarantor from and after any demand for payment having been made by the
Lenders upon the Guarantor hereunder which has not been remedied or waived,
to execute in the name and on behalf of the Guarantor any document or
instrument for the said purpose.
13. This Guarantee shall continue to be effective or be reinstated (as the case
may be) if at any time payment by the Debtor or the Guarantor of all or any
part of the Indebtedness or the obligations of the Guarantor to the Lenders
is rescinded or must otherwise be returned by the Lenders upon the
insolvency, bankruptcy or reorganization of the Debtor or the Guarantor or
otherwise, all as though such payment to the Lenders had not been made.
14. The Lenders may assign, transfer and deliver to any transferee of the
Indebtedness or any part thereof the liability and obligations of the
Guarantor under this Guarantee and any security documents or instruments
held by the Lenders in respect of the Guarantee, provided that no such
assignment, transfer or delivery shall release the Guarantor from said
liability. Such transferee shall be vested with all powers and rights of
the Lenders hereunder and under such security documents or instruments, but
the Lenders shall retain all rights and powers with respect to any such
security documents or instruments not so assigned, transferred or
delivered.
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15. This Guarantee shall be binding upon the Guarantor and its successors and
permitted assigns provided that the Guarantor may not assign any of its
rights or obligations hereunder without the prior written consent of the
Lenders and shall enure to the benefit of the Lenders and its successors
and assigns.
16. The Guarantor acknowledges that this Guarantee has been delivered free of
any conditions and that no representations have been made to the Guarantor
affecting the liability of the Guarantor under this Guarantee save as may
be specifically embodied herein and agrees that this Guarantee is in
addition to and not in substitution for any other guarantee held or which
may hereafter be held by the Lenders. The rights, remedies and benefits
herein are cumulative and not in substitution for or exclusive of any
rights, remedies or benefits which the Lenders may otherwise have.
17. Any account settled or stated between the Debtor and the Lenders shall be
accepted by the Guarantor as conclusive evidence, absent manifest error,
that the amount thereby appearing due by the Debtor to the Lenders is so
due and if no such account has been so settled immediately before demand
for payment under this Guarantee, any account stated by the Lenders shall
be accepted by the Guarantor as conclusive evidence of the amount which at
the date of the account so settled or stated is due by the Debtor to the
Lenders.
18. If demand for, or acceleration of the time for, payment by the Debtor of
any Indebtedness is stayed upon the insolvency, bankruptcy or
reorganization of the Debtor, the Indebtedness otherwise subject to demand
for payment or acceleration shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Lenders.
19. This Guarantee shall be construed in accordance with and be governed by the
laws of the State of New York applicable therein and for the purpose of
legal proceedings, this Guarantee shall be deemed to have been made in the
State of New York and to be performed there, and the state or federal
Courts located in the State of New York shall have jurisdiction over all
disputes which may arise under this Guarantee and the Guarantor hereby
irrevocably and unconditionally submits to the non-exclusive jurisdiction
of such Courts. The Guarantor and Lenders hereby irrevocably waive, to the
fullest extent possible, the defence of an inconvenient forum and
irrevocably agrees to be bound by any final judgement of any court of the
State of New York. The Guarantor and the Lenders agree that a judgement or
order of any such court may be enforced in other jurisdictions in any
manner provided by law.
20. All payments made by the Guarantor to the Lenders pursuant to this
Guarantee shall be made free and clear of and without deduction for or
withholding of any and all present and future taxes, levies, imposts,
deductions, stamp taxes, charges and withholdings with respect thereto. If
any such amount is deducted or withheld from any payment to the Lenders,
then the Guarantor shall promptly remit to the Lenders, in the currency in
which such payment is to be made, the equivalent of the amount so deducted
or withheld together with relevant receipts addressed to the Lenders.
21. With respect to any portion of the Indebtedness which is payable in a
currency other than Canadian currency (the "Foreign Currency Obligation or
Foreign Currency"), the following provisions shall apply:
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(a) Payment hereunder with respect to the Foreign Currency Obligation
shall be made in immediately available funds in lawful money of the
jurisdiction in the currency of which the Foreign Currency obligation
is payable (the "Foreign Currency") in such form as shall be customary
at the time of payment for settlement of international payments in
Ottawa, Ontario without set-off or counterclaim and free and clear of
and without deduction for any and all present and future taxes,
levies, imposts, stamp taxes, reductions, charges and withholdings
with respect thereto.
(b) The Guarantor shall hold the Lenders harmless from any loss incurred
by the Lenders arising from any change in the value of Canadian
currency in relation to the Foreign Currency between the date the
Foreign Currency Obligation becomes due and the date of Payment
thereof.
(c) If for the purpose of obtaining judgment in any court it is necessary
to convert a sum due hereunder in the Foreign Currency into Canadian
funds ("Canadian dollars"), the rate of exchange used shall be that at
which in accordance with normal banking procedures the Lenders could
purchase the Foreign Currency with Canadian dollars on the business
day preceding that on which final judgment is given.
(d) The obligation of the Guarantor in respect of any Foreign Currency
Obligation due by it to the Lenders hereunder shall, notwithstanding
any judgment in Canadian dollars, be discharged only to the extent
that on the business day following receipt by the Lenders of any sum
adjudged to be so due in Canadian dollars, the Lenders may in
accordance with normal banking procedures purchase the Foreign
Currency with the Canadian dollars; if the amount of the Foreign
Currency so purchased is less than the sum originally due to the
Lenders in the Foreign Currency, the Guarantor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Lenders against such loss and if the Foreign Currency purchased
exceeds the sum originally due to the Lenders in the Foreign Currency,
the Lenders agrees to remit such excess to the Guarantor as the
Guarantor may be entitled thereto.
22. All notices, requests and demands hereunder shall be in writing and (a)
made to the Lenders at its address set forth below and to the Guarantor at
its office set forth below, or to such other address as either party may
designate by written notice to the other in accordance with this provision,
and (b) deemed to have been given or made: if delivered in person,
immediately upon delivery; if by facsimile transmission, immediately upon
sending and upon confirmation of receipts; and if by nationally recognized
overnight courier service with instructions to deliver within the next two
(2) business days, on two (2) business days after sending:
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For the Guarantor:
World Heart Inc.
c/o 0 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Attention: Vice President
Telefax: (000) 000-0000
For the Lenders:
Argosy Bridge Fund L.P.I.
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Mr. Xxxxxxx Xxxx
Fax No: (000) 000-0000
For the Sherfam:
Sherfam Inc.
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Attention: Xx. Xxxxx X. Xxxxxxxx
Fax No: (000) 000-0000
23. Time shall be of the essence of all provisions of this Guarantee.
AS WITNESS the hand and seal of the Guarantor at Ottawa, as of the 28th day
of January, 2003.
WORLD HEART INC.
Per: /s/Xxx Xxxxxx
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Name Xxx X. Xxxxxx
Title Vice President
