PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made as of the 22nd day of
September, 2003 by and among World Heart Corporation, a corporation incorporated
under the laws of the Province of Ontario, Canada (the "Company"), and the
Investors set forth on the signature pages affixed hereto (each an "Investor"
and collectively the "Investors").
Recitals
A. The Company and the Investors are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended; and
B. The Investors wish to purchase from the Company, and the Company
wishes to sell and issue to the Investors, upon the terms and conditions stated
in this Agreement, units, at a price of US$0.62 per unit (determined based on
the Noon buying rate for Canadian dollars published by the Federal Reserve Bank
of New York on September 11, 2003 and a purchase price of Cdn$0.85 per unit) for
(i) an aggregate of 38,943,549 shares of the Company's Common Shares (the
"Common Stock"), and (ii) warrants to purchase an aggregate of 38,943,549 shares
of Common Stock in the form attached hereto as Exhibit A (the "Warrants"), each
such unit consisting of one share of Common Stock and a warrant for one share of
Common Stock; and
C. Contemporaneous with the sale of the Common Stock and Warrants, the
parties hereto will execute and deliver a Registration Rights Agreement, in the
form attached hereto as Exhibit B (the "Registration Rights Agreement"),
pursuant to which the Company will agree to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, and applicable state securities laws.
In consideration of the mutual promises made herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. In addition to those terms defined above and elsewhere in
this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly Controls, is controlled by, or is under common control
with, such Person.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in Xxx Xxxx Xxxx xxx Xxxxxx, Xxxxxxx 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, drawings, specifications, designs, business and marketing plans,
and customer and supplier lists and related information).
"Control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Dollars" or "$" means United States dollars.
"Intellectual Property" means all of the following: (i) patents,
patent applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice); (ii) trademarks, service
marks, trade dress, trade names, corporate names, logos, slogans and Internet
domain names, together with all goodwill associated with each of the foregoing;
(iii) copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).
"Material Adverse Effect" means a material adverse effect on (i) the
assets, liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole, or
(ii) the ability of the Company to perform its obligations under the Transaction
Documents.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
"Purchase Price" means Twenty-Four Million One Hundred Forty-Five
Thousand Dollars ($24,145,000).
"SEC Filings" has the meaning set forth in Section 4.6.
"Securities" means the Shares, the Warrants and the Warrant Shares.
"Shares" means the shares of Common Stock being purchased by the
Investors hereunder.
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"Subsidiary" has the meaning set forth in Section 4.1.
"Transaction Documents" means this Agreement, the Warrants and the
Registration Rights Agreement.
"TSX" means the Toronto Stock Exchange, Inc., its successors and
assigns.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
"1933 Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares and Warrants. Subject to the terms and
conditions of this Agreement, on the Closing Date, each of the Investors shall
severally, and not jointly, purchase, and the Company shall sell and issue to
the Investors, the Shares and Warrants in the respective amounts set forth
opposite the Investors' names on the signature pages attached hereto in exchange
for the Purchase Price as specified in Section 3 below.
3. Closing. Upon confirmation that the other conditions to closing
specified herein have been satisfied, the Company shall deliver to Xxxxxxxxxx
Xxxxxxx PC, in trust, a certificate or certificates, registered in such name or
names as the Investors may designate, representing the Shares and Warrants, with
instructions that such certificates are to be held for release to the Investors
only upon payment of the Purchase Price to the Company. Upon receipt by
Xxxxxxxxxx Xxxxxxx PC of the certificates, each Investor shall promptly cause a
wire transfer in same day funds to be sent to the account of the Company as
instructed in writing by the Company, in an amount representing such Investor's
pro rata portion of the Purchase Price as set forth on the signature pages to
this Agreement. On the date (the "Closing Date") the Company receives such
funds, the certificates evidencing the Shares and Warrants shall be released to
the Investors (the "Closing"). The purchase and sale of the Shares and Warrants
shall take place at the offices of Xxxxxxxxxx Xxxxxxx PC, 1330 Avenue of the
Americas, 21st Floor, New York, New York, or at such other location and on such
other date as the Company and the Investors shall mutually agree.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as set forth in the
schedules delivered herewith (collectively, the "Disclosure Schedules"):
4.1 Organization, Good Standing and Qualification. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to carry on its business as now
conducted and to own its properties. Each of the Company and its Subsidiaries is
duly qualified to do business as a foreign corporation and is in
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good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify has not and could not reasonably be expected to
have a Material Adverse Effect. The Company's subsidiaries are reflected on
Schedule 4.1 hereto (the "Subsidiaries").
4.2 Authorization. The Company has full power and authority and has
taken all requisite action on the part of the Company, its officers, directors
and shareholders necessary for (i) the authorization, execution and delivery of
the Transaction Documents, (ii) authorization of the performance of all
obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Securities. The
Transaction Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally.
4.3 Capitalization. Schedule 4.3 sets forth (a) the authorized capital
stock of the Company on the date hereof; (b) the number of shares of capital
stock issued and outstanding; (c) the number of shares of capital stock issuable
pursuant to the Company's stock plans; and (d) the number of shares of capital
stock issuable and reserved for issuance pursuant to securities (other than the
Shares and the Warrants) exercisable for, or convertible into or exchangeable
for any shares of capital stock of the Company. All of the issued and
outstanding shares of the Company's capital stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of pre-emptive rights
and were issued in full compliance with applicable law and any rights of third
parties. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid,
nonassessable and free of pre-emptive rights, were issued in full compliance
with applicable law and any rights of third parties and are owned by the
Company, beneficially and of record, subject to no lien, encumbrance or other
adverse claim. No Person is entitled to pre-emptive or similar statutory or
contractual rights with respect to any securities of the Company. Except as
described on Schedule 4.3, there are no outstanding warrants, options,
convertible securities or other rights, agreements or arrangements of any
character under which the Company or any of its Subsidiaries is or may be
obligated to issue any equity securities of any kind and except as contemplated
by this Agreement, neither the Company nor any of its Subsidiaries is currently
in negotiations for the issuance of any equity securities of any kind. Except as
described on Schedule 4.3 and except for the Registration Rights Agreement,
there are no voting agreements, buy-sell agreements, option or right of first
purchase agreements or other agreements of any kind among the Company and any of
the securityholders of the Company relating to the securities of the Company
held by them. The Company has not granted any Person the right to require the
Company to register any securities of the Company under the 1933 Act, whether on
a demand basis or in connection with the registration of securities of the
Company for its own account or for the account of any other Person.
Schedule 4.3 sets forth a true and complete table setting forth the
pro forma capitalization of the Company on a fully diluted basis giving effect
to (i) the issuance of the Shares and the Warrants, (ii) any adjustments in
other securities resulting from the issuance of the Shares or the Warrants, and
(iii) the exercise or conversion of all outstanding securities.
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Except as described on Schedule 4.3, the issuance and sale of the Securities
hereunder will not obligate the Company to issue shares of Common Stock or other
securities to any other Person (other than the Investors) and will not result in
the adjustment of the exercise, conversion, exchange or reset price of any
outstanding security.
The Company does not have outstanding shareholder purchase rights or
any similar arrangement in effect giving any Person the right to purchase any
equity interest in the Company upon the occurrence of certain events.
4.4 Valid Issuance. The Shares have been duly and validly authorized
and, when issued and paid for pursuant to this Agreement, will be validly
issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions, except for restrictions on transfer set forth in
the Transaction Documents or imposed by applicable securities laws. The Warrants
have been duly and validly authorized. Upon the due exercise of the Warrants,
the Warrant Shares will be validly issued, fully paid and non-assessable free
and clear of all encumbrances and restrictions, except for restrictions on
transfer set forth in the Transaction Documents or imposed by applicable
securities laws. The Company has reserved a sufficient number of shares of
Common Stock for issuance upon the exercise of the Warrants, free and clear of
all encumbrances and restrictions, except for restrictions on transfer set forth
in the Transaction Documents or imposed by applicable securities laws.
4.5 Consents. The execution, delivery and performance by the Company
of the Transaction Documents and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person,
governmental body, agency, or official other than (i) approvals required to be
obtained by the TSX, all of which shall be obtained and shall be in full force
and effect prior to the Closing, and (ii) filings that have been made pursuant
to applicable securities laws and post-sale filings pursuant to applicable
state, federal and provincial securities laws which the Company undertakes to
file within the applicable time periods. The Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities, (ii) the
issuance of the Warrant Shares upon due exercise of the Warrants, and (iii) the
other transactions contemplated by the Transaction Documents from the provisions
of any anti-takeover, business combination or control share law or statute
binding on the Company or to which the Company or any of its assets and
properties may be subject or any provision of the Company's Articles of
Incorporation, By-laws or any shareholder rights agreement that is or could
become applicable to the Investors as a result of the transactions contemplated
hereby, including without limitation, the issuance of the Securities and the
ownership, disposition or voting of the Securities by the Investors or the
exercise of any right granted to the Investors pursuant to this Agreement or the
other Transaction Documents.
4.6 Delivery of SEC Filings; Business. The Company has provided the
Investors with copies of the Company's most recent Annual Report on Form 20-F
for the fiscal year ended December 31, 2002 (the "20-F"), and all other reports
filed by the Company pursuant to the 1934 Act since the filing of the 20-F and
prior to the date hereof (collectively, the "SEC Filings"). The SEC Filings are
the only filings required of the Company pursuant to the 1934 Act for such
period. The Company and its Subsidiaries are engaged only in the business
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described in the SEC Filings and the SEC Filings contain a complete and accurate
description in all material respects of the business of the Company and its
Subsidiaries, taken as a whole.
4.7 Use of Proceeds. The proceeds of the sale of the Shares and the
Warrants hereunder shall be used by the Company to repay indebtedness and for
working capital and general corporate purposes.
4.8 No Material Adverse Change. Since December 31, 2002, except as
identified and described in the SEC Filings or as described on Schedule 4.8,
there has not been:
(i) any change in the consolidated assets, liabilities, financial
condition or operating results of the Company from that reflected in the
financial statements included in the 20-F, except for changes in the ordinary
course of business which have not and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;
(ii) any declaration or payment of any dividend, or any
authorization or payment of any distribution, on any of the capital stock of the
Company, or any redemption or repurchase of any securities of the Company;
(iii) any material damage, destruction or loss, whether or not
covered by insurance to any assets or properties of the Company or its
Subsidiaries;
(iv) any waiver, not in the ordinary course of business, by the
Company or any Subsidiary of a material right or of a material debt owed to it;
(v) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or a Subsidiary, except
in the ordinary course of business and which is not material to the assets,
properties, financial condition, operating results or business of the Company
and its Subsidiaries taken as a whole (as such business is presently conducted
and as it is proposed to be conducted);
(vi) any change or amendment to the Company's Articles of
Incorporation or by-laws, or material change to any material contract or
arrangement by which the Company or any Subsidiary is bound or to which any of
their respective assets or properties is subject;
(vii) any material labor difficulties or labor union organizing
activities with respect to employees of the Company or any Subsidiary;
(viii) any transaction entered into by the Company or a
Subsidiary other than in the ordinary course of business;
(ix) the loss of the services of any key employee, or material
change in the composition or duties of the senior management of the Company or
any Subsidiary;
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(x) the loss or threatened loss of any customer which has had or
could reasonably be expected to have a Material Adverse Effect; or
(xi) any other event or condition of any character that has had
or could reasonably be expected to have a Material Adverse Effect.
4.9 SEC Filings; F-3 Eligibility.
(a) At the time of filing thereof, the SEC Filings complied as to
form in all material respects with the requirements of the 1934 Act and did not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each registration statement and any amendment thereto filed
by the Company since January 1, 2001 pursuant to the 1933 Act and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading; and each prospectus filed pursuant to Rule 424(b) under
the 1933 Act, as of its issue date and as of the closing of any sale of
securities pursuant thereto did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(c) The Company is eligible to use Form F-3 to register the
Registrable Securities (as such term is defined in the Registration Rights
Agreement) for sale by the Investors as contemplated by the Registration Rights
Agreement.
4.10 No Conflict, Breach, Violation or Default. The execution,
delivery and performance of the Transaction Documents by the Company and the
issuance and sale of the Securities will not conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a default
under (i) the Company's Articles of Incorporation or the Company's Bylaws, both
as in effect on the date hereof (copies of which have been provided to the
Investors before the date hereof), or (ii)(a) any statute, rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company, any Subsidiary or any of their respective
assets or properties, or (b) any agreement or instrument to which the Company or
any Subsidiary is a party or by which the Company or a Subsidiary is bound or to
which any of their respective assets or properties is subject.
4.11 Tax Matters. The Company and each Subsidiary has timely prepared
and filed all material tax returns required to have been filed by the Company or
such Subsidiary with all appropriate governmental agencies and timely paid all
taxes shown thereon or otherwise owed by it. The charges, accruals and reserves
on the books of the Company in respect of taxes for all fiscal periods are
adequate in all material respects, and there are no material unpaid
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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
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and each of its Subsidiaries' respective businesses as currently conducted or as
currently proposed to be conducted to which the Company or any Subsidiary is a
party or by which any of their assets are bound (other than generally
commercially available, non-custom, off-the-shelf software application programs
having a retail acquisition price of less than $10,000 per license)
(collectively, "License Agreements") are valid and binding obligations of the
Company or its Subsidiaries that are parties thereto and, to the Company's
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally, and
there exists no event or condition which will result in a material violation or
breach of or constitute (with or without due notice or lapse of time or both) a
default by the Company or any of its Subsidiaries under any such License
Agreement.
(c) The Company and its Subsidiaries own or have the valid right
to use all of the Intellectual Property that is material to the conduct of the
Company's and each of its Subsidiaries' respective businesses as currently
conducted or as currently proposed to be conducted and for the ownership,
maintenance and operation of the Company's and its Subsidiaries' properties and
assets, free and clear of all liens, encumbrances, adverse claims or obligations
to license all such owned Intellectual Property and Confidential Information,
other than licenses entered into in the ordinary course of the Company's and its
Subsidiaries' businesses. The Company and its Subsidiaries have a valid and
enforceable right to use all third party Intellectual Property and Confidential
Information used or held for use in the respective businesses of the Company and
its Subsidiaries.
(d) To the Company's Knowledge, the conduct of the Company's and
its Subsidiaries' businesses as currently conducted does not infringe or
otherwise impair or conflict with (collectively, "Infringe") any Intellectual
Property rights of any third party or any confidentiality obligation owed to a
third party, and the Intellectual Property and Confidential Information of the
Company and its Subsidiaries which are material to the conduct of Company's and
each of its Subsidiaries' respective businesses as currently conducted or as
currently proposed to be conducted are not being Infringed by any third party.
There is no litigation or order pending or outstanding or, to the Company's
Knowledge, threatened or imminent, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries and the
Company's and its Subsidiaries' use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company's Knowledge, there is no
valid basis for the same.
(e) The consummation of the transactions contemplated hereby will
not result in the alteration, loss, impairment of or restriction on the
Company's or any of its Subsidiaries' ownership or right to use any of the
Intellectual Property or Confidential Information which is material to the
conduct of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted.
(f) To the Company's Knowledge, as currently used all software
owned by the Company or any of its Subsidiaries and all software licensed from
third parties by
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the Company or any of its Subsidiaries, (i) is free from any material defect,
bug, virus, or programming, design or documentation error; (ii) operates and
runs in a reasonable and efficient business manner; and (iii) conforms in all
material respects to the specifications and purposes thereof.
(g) The Company and its Subsidiaries have taken reasonable steps
to protect the Company's and its Subsidiaries' rights in their Intellectual
Property and Confidential Information. Each employee, consultant and contractor
who has had access to Confidential Information which is material to the conduct
of the Company's and each of its Subsidiaries' respective businesses as
currently conducted or as currently proposed to be conducted has either (i)
executed an agreement to maintain the confidentiality of such Confidential
Information; (ii) executed appropriate agreements that are substantially
consistent with the Company's standard forms thereof or (iii) undertaken similar
safeguards to protect and preserve the confidentiality of all Confidential
Information. Except under confidentiality obligations, to the Company's
Knowledge there has been no material disclosure of any of the Company's or its
Subsidiaries' Confidential Information to any third party.
4.16 Environmental Matters. Neither the Company nor any Subsidiary is
in violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "Environmental Laws"), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, and is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and to the Company's Knowledge there is no pending or threatened
investigation that might lead to such a claim.
4.17 Litigation. Except as described on Schedule 4.17, there are no
pending actions, suits or proceedings against or affecting the Company, its
Subsidiaries or any of its or their properties; and to the Company's Knowledge,
no such actions, suits or proceedings are threatened or contemplated.
4.18 Financial Statements. The financial statements included in each
SEC Filing present fairly, in all material respects, the consolidated financial
position of the Company as of the dates shown and its consolidated results of
operations and cash flows for the periods shown, and such financial statements
have been prepared in conformity with Canadian generally accepted accounting
principles applied on a consistent basis (except as may be disclosed therein or
in the notes thereto). Except as set forth in the financial statements of the
Company included in the SEC Filings filed prior to the date hereof or as
described on Schedule 4.18, neither the Company nor any of its Subsidiaries has
incurred any liabilities, contingent or otherwise, except those incurred in the
ordinary course of business, consistent (as to amount and nature) with past
practices since the date of such financial statements, none of which,
individually or in the aggregate, have had or could reasonably be expected to
have a Material Adverse Effect.
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4.19 Insurance Coverage. The Company and each Subsidiary maintains in
full force and effect insurance coverage that is customary for comparably
situated companies for the business being conducted and properties owned or
leased by the Company and each Subsidiary, and the Company reasonably believes
such insurance coverage to be adequate against all liabilities, claims and risks
against which it is customary for comparably situated companies to insure.
4.20 Compliance with TSX Continued Listing Requirements. Upon the
Closing, the Company will be in compliance with applicable TSX continued listing
requirements. There are no proceedings pending or, to the Company's Knowledge,
threatened against the Company relating to the continued listing of the
Company's Common Stock on the TSX and the Company has not received any notice
of, nor to the Company's Knowledge is there any basis for, the delisting of the
Common Stock from the TSX.
4.21 Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Company, other than as
described in Schedule 4.21.
4.22 No Directed Selling Efforts or General Solicitation. Neither the
Company nor any Person acting on its behalf has conducted any general
solicitation or general advertising (as those terms are used in Regulation D) in
connection with the offer or sale of any of the Securities.
4.23 No Integrated Offering. Neither the Company nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any Company security or solicited any
offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for
the transactions contemplated hereby or would require registration of the
Securities under the 1933 Act.
4.24 Private Placement. The offer and sale of the Securities to the
Investors as contemplated hereby is exempt from the registration requirements of
the 1933 Act.
4.25 Questionable Payments. Neither the Company nor any of its
Subsidiaries nor, to the Company's Knowledge, any of their respective current or
former shareholders, directors, officers, employees, agents or other Persons
acting on behalf of the Company or any Subsidiary, has on behalf of the Company
or any Subsidiary or in connection with their respective businesses: (a) used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.
-11-
4.26 Transactions with Affiliates. Except as disclosed in SEC Filings
made on or prior to the date hereof or as disclosed on Schedule 4.26, none of
the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than as holders of stock options
and/or warrants, and for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.
4.27 Internal Controls. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
4.28 Disclosures. Neither the Company nor any Person acting on its
behalf has provided the Investors or their agents or counsel with any
information that constitutes or might constitute material, non-public
information. The written materials delivered to the Investors in connection with
the transactions contemplated by the Transaction Documents do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.
5. Representations and Warranties of the Investors. Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company that:
5.1 Organization and Existence. The Investor is a validly existing
corporation, limited partnership or limited liability company and has all
requisite corporate, partnership or limited liability company power and
authority to invest in the Securities pursuant to this Agreement.
5.2 Authorization. The execution, delivery and performance by the
Investor of the Transaction Documents to which such Investor is a party have
been duly authorized and will each constitute the valid and legally binding
obligation of the Investor, enforceable against the Investor in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors' rights generally.
5.3 Purchase Entirely for Own Account. The Securities to be received
by the Investor hereunder will be acquired for the Investor's own account, not
as nominee or agent, and
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not with a view to the resale or distribution of any part thereof in violation
of the 1933 Act, and the Investor has no present intention of selling, granting
any participation in, or otherwise distributing the same in violation of the
1933 Act. The Investor is not a registered broker dealer or an entity engaged in
the business of being a broker dealer.
5.4 Investment Experience. The Investor acknowledges that it can bear
the economic risk and complete loss of its investment in the Securities and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5 Disclosure of Information. The Investor has had an opportunity to
receive all additional information related to the Company requested by it and to
ask questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the Securities. The
Investor acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by the Investor
shall modify, amend or affect the Investor's right to rely on the Company's
representations and warranties contained in this Agreement.
5.6 Restricted Securities. The Investor understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the 1933 Act only in certain limited circumstances.
5.7 Legends. It is understood that, except as provided below,
certificates evidencing such Securities may bear the following or any similar
legend:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER
HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(A) TO THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT, IF APPLICABLE (C) INSIDE THE UNITED
STATES (1) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAW OR (2) IN A TRANSACTION THAT
DOES NOT OTHERWISE REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAW, PROVIDED THE HOLDER HAS FURNISHED TO THE
COMPANY AN OPINION OF COUNSEL OF RECOGNIZED STANDING TO THAT EFFECT REASONABLY
SATISFACTORY TO THE COMPANY OR (3) PURSUANT TO A REGISTRATION STATEMENT PURSUANT
TO THE U.S. SECURITIES ACT."
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED THROUGH
THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD DELIVERY"
IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."
(b) "THE HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS,
ACKNOWLEDGES, AND AGREES THAT IT WILL NOT AND WILL NOT BE ENTITLED TO, DIRECTLY
OR INDIRECTLY, SELL OR TRANSFER THE SECURITIES INTO CANADA OR TO RESIDENTS OF
CANADA, EXPECT IN COMPLIANCE WITH APPLICABLE CANADIAN SECURITIES LAWS. NO SALE
OR TRANSFER INTO CANADA OR TO A CANADIAN RESIDENT WILL BE REGISTERED BY WORLD
HEART CORPORATION'S TRANSFER AGENT AND ANY ATTEMPT TO EFFECT SUCH A TRANSFER IS
INVALID UNLESS MADE IN COMPLIANCE WITH THE ABOVE-NOTED RESTRICTIONS. UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE JANUARY 23, 2004.
(c) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by such state
authority.
Upon the earlier of (i) registration for resale pursuant to the
Registration Rights Agreement and receipt by the Company of the Investor's
written confirmation that such Securities will not be disposed of except in
compliance with the prospectus delivery requirements of the 1933 Act or (ii)
Rule 144(k) becoming available the Company shall, upon an Investor's written
request, promptly cause certificates evidencing the Securities to be replaced
with certificates which do not the restrictive legend set forth in paragraph (a)
above, and Warrant Shares subsequently issued upon due exercise of the Warrants
shall not bear such restrictive legend provided the provisions of either clause
(i) or clause (ii) above, as applicable, are satisfied with respect to such
Warrant Shares. From and after the anniversary of four months and one day of the
Closing, the Company shall, upon an Investor's written request, promptly cause
certificates evidencing the Securities to be replaced with certificates which do
not the restrictive legend set forth in paragraph (b) above, and Warrant Shares
subsequently issued upon due exercise of the Warrants shall not bear such
restrictive legend. When the Company is required to cause unlegended
certificates to replace previously issued legended certificates, if unlegended
certificates are not delivered to an Investor within three (3) Business Days of
submission by that Investor of legended certificate(s) to the Company's transfer
agent together with a representation letter in customary form, the Company shall
be liable to the Investor for a penalty equal to 1.5% of the aggregate purchase
price of the Securities evidenced by such certificate(s) for each thirty (30)
day period (or portion thereof) beyond such three (3) Business Day that the
unlegended certificates have not been so delivered.
5.8 Accredited Investor. The Investor is an accredited investor as
defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
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5.9 Toronto Stock Exchange. The Investor has completed and duly signed
a copy of the Private Placement Questionnaire and Undertaking required by the
TSX attached hereto as Exhibit C;
5.10 No General Solicitation. The Investor did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.
5.11 Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission,
fee or other compensation pursuant to any agreement, arrangement or
understanding entered into by or on behalf of the Investors.
6. Conditions to Closing.
6.1 Conditions to the Investors' Obligations. The obligation of the
Investors to purchase the Securities at the Closing is subject to the
fulfillment to the Investors' satisfaction, on or prior to the Closing Date, of
the following conditions, any of which may be waived by the Investors agreeing
hereunder to purchase a majority of the Shares and Warrants (the "Required
Investors"):
(a) The representations and warranties made by the Company in
Section 4 hereof qualified as to materiality shall be true and correct at all
times prior to and on the Closing Date, except to the extent any such
representation or warranty expressly speaks as of an earlier date, in which case
such representation or warranty shall be true and correct as of such earlier
date, and, the representations and warranties made by the Company in Section 4
hereof not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects as of such earlier date. The Company shall have performed in all
material respects all obligations and conditions herein required to be performed
or observed by it on or prior to the Closing Date.
(b) The Company shall have obtained in a timely fashion any and
all consents, permits, approvals, registrations and waivers (including, without
limitation, any required approval of the TSX) necessary or appropriate for
consummation of the purchase and sale of the Securities and the consummation of
the other transactions contemplated hereby, all of which shall be in full force
and effect.
(c) The Company shall have executed and delivered the
Registration Rights Agreement.
(d) The Company shall have entered into one or more subscription
agreements with investors located in Canada that contain terms no more favorable
to the subscriber than the terms of this Agreement (the "Other Agreements").
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(e) The Company shall have received gross proceeds from the sale
of the Shares and Warrants as contemplated hereby and under the Other Agreements
of at least Forty Million Dollars ($40,000,000) (determined based on Noon buying
rate for Canadian dollars published by the Federal Reserve Bank of New York on
September 11, 2003).
(f) Xxxxxxx Lifesciences LLC shall have (i) converted or
exchanged all of the shares of preferred stock of the Company's subsidiary,
World Heart Inc., held by it and its Affiliates into 4,981,128 shares of Common
Stock of the Company, and (ii) executed a definitive agreement with respect to
the conversion or exchange of the shares of preferred stock of the Company held
by it or its Affiliates into 3,500,000 share of Common Stock and 7,000,000
warrants, each warrant exercisable for one share of Common Stock and otherwise
on terms and conditions no more favorable to the holder than the Warrant,
subject to approval of the Company's shareholders.
(g) The Board shall have duly adopted resolutions (i) approving a
reverse split of the Common Stock such that, after giving effect to such reverse
split and the transactions contemplated hereby and by the Other Agreements but
prior to the exercise of any Warrants or any other securities set forth in
Schedule 4.3, the number of shares of Common Stock outstanding shall not exceed
15,000,000 (the "Reverse Split"); (ii) approving an amendment to the Articles of
Incorporation of the Company to amend the conversion provisions of the Series A
participating convertible preferred shares of the Company ("Amendment") and
(iii) authorizing the Company and its officers to take all actions necessary or
appropriate to effect the Reverse Split and the Amendment (including, without
limitation, the calling of a special meeting of shareholders for the purpose of
approving the Reverse Split and the Amendment but excluding the fixing of the
record and meeting dates for the meeting or approving a management proxy
circular for use at the meeting), and such resolutions shall not have been
amended, modified or rescinded and shall remain in full force and effect.
(h) No judgment, writ, order, injunction, award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, or any order of or by any governmental authority, shall have been issued,
and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions
contemplated hereby or in the other Transaction Documents.
(i) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfilment of the
conditions specified in subsections (a), (b), (d), (e), (f), (g) and (h) of this
Section 6.1.
(j) The Company shall have delivered a Certificate, executed on
behalf of the Company by its Secretary, dated as of the Closing Date, certifying
the resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents
and the issuance of the Securities, certifying the current versions of the
Articles of Incorporation and Bylaws of the Company and certifying as to the
signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company.
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(k) The Investors shall have received opinions from White & Case
LLP and XxXxxxxx Xxxxxxxx LLP, the Company's counsel, dated as of the Closing
Date, in form and substance reasonably acceptable to the Investors and
addressing such legal matters as the Investors may reasonably request.
(l) No stop order or suspension of trading shall have been
imposed by the TSX, the SEC or any other governmental regulatory body with
respect to public trading in the Common Stock.
6.2 Conditions to Obligations of the Company. The Company's obligation
to sell and issue the Securities at the Closing is subject to the fulfillment to
the satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:
(a) The representations and warranties made by the Investors in
Section 5 hereof, other than the representations and warranties contained in
Sections 5.3, 5.4, 5.5, 5.6, 5.7, 5.8 and 5.10 (the "Investment
Representations"), shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. The
Investment Representations shall be true and correct in all respects when made,
and shall be true and correct in all respects on the Closing Date with the same
force and effect as if they had been made on and as of said date. The Investors
shall have performed in all material respects all obligations and conditions
herein required to be performed or observed by them on or prior to the Closing
Date.
(b) The Investors shall have executed and delivered the
Registration Rights Agreement.
(c) The Investors shall have delivered the Purchase Price to the
Company.
6.3 Termination of Obligations to Effect Closing; Effects.
(a) The obligations of the Company, on the one hand, and the
Investors, on the other hand, to effect the Closing shall terminate as follows:
(i) Upon the mutual written consent of the Company and the
Required Investors;
(ii) By the Company if any of the conditions set forth in
Section 6.2 shall have become incapable of fulfillment, and shall not have been
waived by the Company;
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(iii) By the Required Investors if any of the conditions set
forth in Section 6.1 shall have become incapable of fulfillment, and shall not
have been waived by the Required Investors; or
(iv) By the Required Investors if the Closing has not
occurred on or prior to September 30, 2003;
provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party's seeking to
terminate its obligation to effect the Closing.
(b) In the event of termination by the Company or the Required
Investors of their obligations to effect the Closing pursuant to this Section
6.3, written notice thereof shall forthwith be given to the other parties hereto
and the obligation of all parties to effect the Closing shall be terminated,
without further action by any party. Nothing in this Section 6.3 shall be deemed
to release any party from any liability for any breach by such party of the
terms and provisions of this Agreement or the other Transaction Documents or to
impair the right of any party to compel specific performance by any other party
of its obligations under this Agreement or the other Transaction Documents.
7. Covenants and Agreements of the Company.
7.1 Reservation of Common Stock. The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of providing for the exercise of the Warrants,
such number of shares of Common Stock as shall from time to time equal the
number of shares sufficient to permit the exercise of the Warrants issued
pursuant to this Agreement in accordance with their respective terms.
7.2 Reports. The Company will furnish to such Investors and/or their
assignees such information relating to the Company and its Subsidiaries as from
time to time may reasonably be requested by such Investors and/or their
assignees; provided, however, that the Company shall not disclose material
nonpublic information to the Investors, or to advisors to or representatives of
the Investors, unless prior to disclosure of such information the Company
identifies such information as being material nonpublic information and provides
the Investors, such advisors and representatives with the opportunity to accept
or refuse to accept such material nonpublic information for review and any
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Company with respect thereto.
7.3 No Conflicting Agreements. The Company will not take any action,
enter into any agreement or make any commitment that would conflict or interfere
in any material respect with the obligations to the Investors under the
Transaction Documents.
7.4 Insurance. The Company shall not materially reduce the insurance
coverages described in Section 4.19.
-18-
7.5 Compliance with Laws. The Company will comply in all material
respects with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities.
7.6 Listing of Underlying Shares and Related Matters. Promptly
following the date hereof, the Company shall take all necessary action to cause
the Shares and the Warrant Shares to be listed, subject to issuance, on the TSX
no later than the Closing Date. Further, if the Company applies to have its
Common Stock or other securities traded on any other principal stock exchange or
market, it shall include in such application the Shares and the Warrant Shares
and will take such other action as is necessary to cause such Common Stock to be
so listed. The Company will use commercially reasonable efforts to continue the
listing and trading of its Common Stock on the TSX and, in accordance,
therewith, will use commercially reasonable efforts to comply in all respects
with the Company's reporting, filing and other obligations under the bylaws or
rules of such market or exchange, as applicable.
7.7 Termination of Covenants. The provisions of Sections 7.2 through
7.5 shall terminate and be of no further force and effect upon the earlier of
(i) the mutual consent of the Company and the Required Investors or (ii) the
date on which the Company's obligations under the Registration Rights Agreement
to register or maintain the effectiveness of any registration covering the
Registrable Securities (as such term is defined in the Registration Rights
Agreement) shall terminate.
7.8 Reconstitution of the Board. No later than the Closing Date, the
Company shall have taken all action necessary to (i) reduce the number of
directors constituting the Board of Directors of the Company (the "Board") to no
more than five and (ii) effect the resignation or removal of all but three of
the existing directors of the Company.
7.9 Director Designees.
(a) So long as the Investors hold at least 25% of the Registrable
Securities (as such term is defined in the Registration Rights Agreement), the
Investors shall have the right to designate two persons for election to the
board of directors of the Company (the "Investor Designees"). Each of the
Investors acknowledges that so long as Special Situations Fund III, L.P. ("SSF")
and/or one of its Affiliates hold any of such securities, SSF shall have the
right to appoint the Investor Designees. The Company shall use its best efforts
to cause the Investor Designees to be elected to the Company's board of
directors. SSF and/or the Investors shall have the right to remove or replace
any Investor Designee by giving notice to such Investor Designee and the
Company. The Company shall use its best efforts to effect the removal or
replacement of any such Investor Designee. For the avoidance of doubt, Xx.
Xxxxxxx X. Xxxxxx shall not be deemed to be an Investor Designee.
(b) Subject to any limitations imposed by applicable law, the
Investor Designees shall be entitled to the same perquisites, including stock
options, reimbursement of expenses and other similar rights in connection with
such person's membership on the Board of
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Directors of the Company, as every other non-executive member of the Board of
Directors of the Company.
(c) So long as the Investors have the right to appoint Investor
Designees, in the event that the size of the Board is increased to more than
five persons, the Investors shall have the right to designate one or more
additional persons such that the Investors shall have the right to designate at
least 40% of the members of the Board.
7.10 Proxy Statement; Shareholders Meeting. (a) Promptly following the
Closing, the Company shall take all action necessary to call a meeting of its
shareholders (the "Shareholders Meeting") for the purpose of seeking approval of
the Company's shareholders for the Reverse Split and the Amendment (the
"Proposals"). In connection therewith, the Company will promptly prepare and
file proxy materials (including a proxy statement and form of proxy) for use at
the Shareholders Meeting and, after receiving and promptly responding to any
comments of any applicable securities regulator thereon, shall promptly mail
such proxy materials to the shareholders of the Company. Each Investor shall
promptly furnish in writing to the Company such information relating to such
Investor and its investment in the Company as the Company may reasonably request
for inclusion in the Proxy Statement. The Company will comply with applicable
Canadian and United States securities laws in relation to any proxy statement
(as amended or supplemented, the "Proxy Statement") and any form of proxy to be
sent to the shareholders of the Company in connection with the Shareholders
Meeting, and the Proxy Statement shall not, on the date of the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to shareholders
or at the time of the Shareholders Meeting, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein not false or misleading, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies or the Shareholders Meeting which has
become false or misleading. If the Company should discover, at any time prior to
the Closing, any event relating to the Company or any of its Subsidiaries or any
of their respective affiliates, officers or directors that is required to be set
forth in a supplement or amendment to the Proxy Statement, in addition to the
Company's obligations under applicable Canadian and United States securities
laws, the Company will promptly inform the Investors thereof.
(b) Subject to their fiduciary obligations under applicable law (as
determined in good faith by the Company's Board of Directors after consultation
with the Company's outside counsel), the Company's Board of Directors shall
recommend to the Company's shareholders (and not revoke or amend such
recommendation) that the shareholders vote in favor of the Proposals and shall
cause the Company to take all commercially reasonable action (including, without
limitation, the hiring of a proxy solicitation firm of nationally recognized
standing) to solicit the approval of the shareholders for the Proposals. Whether
or not the Company's Board of Directors determines at any time after the date
hereof that, due to its fiduciary duties, it must revoke or amend its
recommendation to the Company's shareholders, the Company is required to, and
will take, in accordance with applicable law and its Articles of Incorporation
and Bylaws, all action necessary to convene the Shareholders Meeting as promptly
as practicable to consider and vote upon the approval of the Proposals.
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(c) Subject to applicable law and the requirements of the TSX and
Nasdaq, each Investor shall vote or cause to be voted at the Special Meeting all
shares of Common Stock held by it or as to which it has the right to vote or
direct the vote in favor of the Proposals.
7.11 Reverse Split. Promptly following approval of the Proposals by
the Company's shareholders as contemplated by Section 7.10 (and in no event more
than five Business Days thereafter), the Company shall effect the Reverse Split
and the Amendment.
7.12 Nasdaq Listing. Promptly following the Closing, the Company shall
prepare and file with The Nasdaq Stock Market, Inc. ("Nasdaq") an application to
list the Common Stock on The Nasdaq SmallCap Market (the "SmallCap Market"). The
Company shall use commercially reasonable efforts to have the application
approved as promptly as practicable. The Company will thereafter use
commercially reasonable efforts to continue the listing and trading of its
Common Stock on Nasdaq and, in accordance, therewith, will use commercially
reasonable efforts to comply in all respects with the Company's reporting,
filing and other obligations under Nasdaq's bylaws or rules, as applicable. If
the Common Stock is not listed on the SmallCap Market on or before May 1, 2004
(the "Listing Deadline"), the Company will make pro rata payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to 1.5%
of the aggregate amount invested by such Investor for each 30-day period or pro
rata for any portion thereof following the Listing Deadline until the Common
Stock is so listed; provided, however, that the Listing Deadline shall be
extended, if necessary, until four weeks after such time as the Company meets
the requirements of Nasdaq Marketplace Rules 4310(c)(2)(A)(ii) and 4310(c)(4).
Such payments shall be in partial compensation to the Investors, and shall not
constitute the Investors' exclusive remedy for such events. Such payments shall
be made to each Investor in cash
8. Survival and Indemnification.
8.1 Survival. All representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to be representations,
warranties, covenants and agreements as of the date hereof and shall survive the
execution and delivery of this Agreement for a period of two (2) years from the
date of this Agreement; provided, however, that the provisions contained in
Section 7 hereof shall survive in accordance therewith.
8.2 Indemnification. The Company agrees to indemnify and hold harmless
each Investor and its Affiliates and their respective directors, officers,
employees and agents from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorney fees
and disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement hereof) (collectively, "Losses") to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or to be performed on the part of the Company
under the Transaction Documents, and will reimburse any such Person for all such
amounts as they are incurred by such Person.
8.3 Conduct of Indemnification Proceedings. Promptly after receipt by
any Person (the "Indemnified Person") of notice of any demand, claim or
circumstances which
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would or might give rise to a claim or the commencement of any action,
proceeding or investigation in respect of which indemnity may be sought pursuant
to Section 8.2, such Indemnified Person shall promptly notify the Company in
writing and the Company shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Person, and
shall assume the payment of all fees and expenses; provided, however, that the
failure of any Indemnified Person so to notify the Company shall not relieve the
Company of its obligations hereunder except to the extent that the Company is
materially prejudiced by such failure to notify. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to
the retention of such counsel; or (ii) in the reasonable judgment of counsel to
such Indemnified Person representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The Company shall not be liable for any settlement of any proceeding effected
without its written consent, which consent shall not be unreasonably withheld,
but if settled with such consent, or if there be a final judgment for the
plaintiff, the Company shall indemnify and hold harmless such Indemnified Person
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, the
Company shall not effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Person is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Person
from all liability arising out of such proceeding.
9. Miscellaneous.
9.1 Successors and Assigns. This Agreement may not be assigned by a
party hereto without the prior written consent of the Company or the Required
Investors, as applicable, provided, however, that an Investor may assign its
rights and delegate its duties hereunder in whole or in part to an Affiliate or
to a third party acquiring some or all of its Securities in a private
transaction without the prior written consent of the Company or the other
Investors, after notice duly given by such Investor to the Company and the other
Investors, provided, that no such assignment or obligation shall affect the
obligations of such Investor hereunder. The provisions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.2 Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile, which shall be deemed an original.
-22-
9.3 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery,
then such notice shall be deemed given upon such delivery, (ii) if given by
telex or telecopier, then such notice shall be deemed given upon receipt of
confirmation of complete transmittal, (iii) if given by mail, then such notice
shall be deemed given upon the earlier of (A) receipt of such notice by the
recipient or (B) three days after such notice is deposited in first class mail,
postage prepaid, and (iv) if given by an internationally recognized overnight
air courier, then such notice shall be deemed given one day after delivery to
such carrier. All notices shall be addressed to the party to be notified at the
address as follows, or at such other address as such party may designate by ten
days' advance written notice to the other party:
If to the Company:
0 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx Xxxxxx
X0X 0X0
Attention: Chief Financial Officer
Fax: (000) 000-0000
With a copy to:
XxXxxxxx Xxxxxxxx LLP
Suite 1400
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to the Investors:
to the addresses set forth on the signature pages hereto.
9.5 Expenses. The parties hereto shall pay their own costs and
expenses in connection herewith, except that the Company shall pay the
reasonable fees and expenses of counsel to the Investors, not to exceed a total
aggregate amount of $25,000 for all Investors. Such expenses shall be paid not
later than the Closing. The Company shall reimburse the Investors upon demand
for all reasonable out-of-pocket expenses incurred by the Investors, including
without limitation reimbursement of attorneys' fees and disbursements, in
connection with any amendment, modification or waiver of this Agreement or the
other Transaction Documents. In the event that legal proceedings are commenced
by any party to this Agreement
-23-
against another party to this Agreement in connection with this Agreement or the
other Transaction Documents, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys' fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.
9.6 Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Company and the Required Investors. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any Securities purchased under this Agreement at the time
outstanding, each future holder of all such securities, and the Company.
9.7 Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by the Company or the Investors
without the prior consent of the Company (in the case of a release or
announcement by the Investors) or Special Situations Fund III, L.P. ("SSF") (in
the case of a release or announcement by the Company) (which consents shall not
be unreasonably withheld), except as such release or announcement may be
required by law or the applicable rules or regulations of any securities
exchange or securities market, in which case the Company or the Investors, as
the case may be, shall allow SSF or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance.
9.8 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
9.9 Entire Agreement. This Agreement, including the Exhibits and the
Disclosure Schedules, and the other Transaction Documents constitute the entire
agreement among the parties hereof with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof and
thereof.
9.10 Further Assurances. The parties shall execute and deliver all
such further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
9.11 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably
-24-
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the Southern
District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated
hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of
the parties hereto irrevocably consents to the jurisdiction of any such court in
any such suit, action or proceeding and to the laying of venue in such court.
Each party hereto irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
[signature page follows]
-25-
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company: WORLD HEART CORPORATION
By:
-------------------------------------
Name:
Title:
-26-
The Investors: SPECIAL SITUATIONS FUND III, L.P.
By:
-------------------------------------
Name: Xxxxx Greenhouse
Title: General Partner
Aggregate Purchase Price: $4,125,000
Number of Shares: 6,653,226
Number of Warrants: 6,653,226
Address for Notice:
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
SPECIAL SITUATIONS CAYMAN FUND, L.P.
By:
-------------------------------------
Name: Xxxxx Greenhouse
Title: General Partner
Aggregate Purchase Price: $1,375,000
Number of Shares: 2,217,742
Number of Warrants: 2,217,742
Address for Notice:
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
-27-
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
SPECIAL SITUATIONS PRIVATE EQUITY FUND,
L.P.
By:
-------------------------------------
Name: Xxxxx Greenhouse
Title: General Partner
Aggregate Purchase Price: $1,500,000
Number of Shares: 2,419,355
Number of Warrants: 2,419,355
000 X. 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Telephone: 000.000.0000
Facsimile: 973.597.2400
-28-
CLARION CAPITAL CORPORATION
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $449,999.72
Number of Shares: 725,806
Number of Warrants: 725,806
Address for Notice:
The Clarion Group
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
xxx@xxxxxxxxxx.xxx
CLARION PARTNERS, L.P.
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $200,000.22
Number of Shares: 322,581
Number of Warrants: 322,581
Address for Notice:
The Clarion Group
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
xxx@xxxxxxxxxx.xxx
-29-
CLARION OFFSHORE FUND, LTD.
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $200,000.22
Number of Shares: 322,581
Number of Warrants: 322,581
Address for Notice:
The Clarion Group
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
xxx@xxxxxxxxxx.xxx
DYNAMIC EQUITY HEDGE FUND
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $49,999.90
Number of Shares: 80,645
Number of Warrants: 80,645
Address for Notice:
The Clarion Group
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
xxx@xxxxxxxxxx.xxx
-30-
THE XXXXXX X. XXXXX REVOCABLE
LIVING TRUST
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $99,999.80
Number of Shares: 161,290
Number of Warrants: 161,290
Address for Notice:
The Clarion Group
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
xxx@xxxxxxxxxx.xxx
-31-
XXXXXX PARTNERS L.P.
By:
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: General Partner
Aggregate Purchase Price: $616,000
Number of Shares: 993,548
Number of Warrants: 993,548
Address for Notice:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXX-GEPT PARTNERS L.P.
By:
-------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: General Partner
Aggregate Purchase Price: $384,000
Number of Shares: 619,355
Number of Warrants: 619,355
Address for Notice:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-32-
THE FEDERATED XXXXXXX FUND,
A PORTFOLIO OF FEDERATED EQUITY FUNDS
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $6,120,000
Number of Shares: 9,870,968
Number of Warrants: 9,870,968
Address for Notice:
State Street Bank & Trust
0 Xxxxxx XxXxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Name: Federated Xxxxxxx Fund
Fund Number: 22L9
Attention: Xxxxxx Xxxxxxx
SF CAPITAL PARTNERS LIMITED
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $3,000,000
Number of Shares: 4,838,710
Number of Warrants: 4,838,710
Address for Notice:
0000 Xxxxx Xxxx Xxxxx
Xx. Xxxxxxx, Xxxxxxxxx 00000
-33-
MEDCAP PARTNERS L.P.
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $2,000,000
Number of Shares: 3,225,806
Number of Warrants: 3,225,806
Address for Notice:
000 Xxxxx Xxxxxx, XXX 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
-34-
----------------------------------------
XxXxxx X. Xxxxxx
Aggregate Purchase Price: $4,759
Number of Shares: 7,676
Number of Warrants: 7,676
Address for Notice:
0000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
XXXXXX BROTHERS
FBO Xxxxxxxxxxx X. Xxxxxxxx
SEP XXX a/c # 000-00000-00
By:
-------------------------------------
Name:
Title:
Aggregate Purchase Price: $20,000
Number of Shares: 32,259
Number of Warrants: 32,259
Address for Notice:
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
-35-
CITY OF MILFORD PENSION & RETIREMENT
FUND
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $499,720
Number of Shares: 806,000
Number of Warrants: 806,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
NFIB EMPLOYEE PENSION TRUST
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $140,120
Number of Shares: 226,000
Number of Warrants: 226,000
-36-
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
NFIB CORPORATE ACCOUNT
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $99,820
Number of Shares: 161,000
Number of Warrants: 161,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
NFIB SERP ASSETS
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $24,800
-37-
Number of Shares: 40,000
Number of Warrants: 40,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
NORWALK EMPLOYEES' PENSION PLAN
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $274,660
Number of Shares: 443,000
Number of Warrants: 443,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-38-
PUBLIC EMPLOYEE RETIREMENT
SYSTEM OF IDAHO
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $1,799,860
Number of Shares: 2,903,000
Number of Warrants: 2,903,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
CITY OF STAMFORD FIREMEN'S PENSION FUND
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $244,900
Number of Shares: 395,000
Number of Warrants: 395,000
-39-
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
ASPHALT GREEN, INC.
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $50,220
Number of Shares: 81,000
Number of Warrants: 81,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXX FOUNDATION
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $50,220
-40-
Number of Shares: 81,000
Number of Warrants: 81,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXXXX XXXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $45,260
Number of Shares: 73,000
Number of Warrants: 73,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-41-
HBL CHARITABLE UNITRUST
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $39,680
Number of Shares: 64,000
Number of Warrants: 64,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXX XXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By: ________________________________
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $50,220
Number of Shares: 81,000
Number of Warrants: 81,000
-42-
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXX X. XXXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $34,720
Number of Shares: 56,000
Number of Warrants: 56,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
PSYCHOLOGY ASSOCIATES
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $14,880
Number of Shares: 24,000
-43-
Number of Warrants: 24,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXX XXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $24,180
Number of Shares: 39,000
Number of Warrants: 39,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-44-
XXXXXX CAPITAL, LLC
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $50,220
Number of Shares: 81,000
Number of Warrants: 81,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXX FOUNDATION
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $40,300
Number of Shares: 65,000
Number of Warrants: 65,000
-45-
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXXX X. XXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $70,060
Number of Shares: 113,000
Number of Warrants: 113,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXX TRUST CO. OF THE BAHAMAS LTD.
AS TRUSTEE U/A/D 11/30/93
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
-00-
Xxxxxxxxx Xxxxxxxx Price: $150,040
Number of Shares: 242,000
Number of Warrants: 242,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXX XXXX XXXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $89,900
Number of Shares: 145,000
Number of Warrants: 145,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-47-
THEEUWES FAMILY TRUST,
XXXXX XXXXXXXX TRUSTEE
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $40,300
Number of Shares: 65,000
Number of Warrants: 65,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXX X. & XXXXXX X. XXXXXXXX 1993 TRUST
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $40,300
Number of Shares: 65,000
Number of Warrants: 65,000
-48-
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXXX X. XXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $34,720
Number of Shares: 56,000
Number of Warrants: 56,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXX XXXXXX XXXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $79,980
-49-
Number of Shares: 129,000
Number of Warrants: 129,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
XXXX X. & XXXXXXXXX X. XXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $8,060
Number of Shares: 13,000
Number of Warrants: 13,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-50-
XXXXXX X. XXXXXXX
By: XXXXXXX CAPITAL GROUP LLC, as
Attorney-in-fact
By:
-------------------------------------
Xxxxx Xxxxxx, Managing Director
Aggregate Purchase Price: $3,100
Number of Shares: 5,000
Number of Warrants: 5,000
Address for Notice:
C/o Zesiger Capital Group LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
-51-
