EXCHANGE AGREEMENT
EXCHANGE AGREEMENT, dated as of May 24, 2000 (the "Agreement"), by and
between Xxxxxxx Lifesciences LLC, a Delaware limited liability company
("Xxxxxxx"), and World Heart Corporation, an Ontario corporation ("World
Heart").
WHEREAS, Xxxxxxx, Xxxxxxx Novacor LLC, a Delaware limited liability
company and wholly owned subsidiary of Xxxxxxx ("Novacor LLC"), World Heart, and
Valentine Acquisition Corp., a Delaware corporation ("Newco"), have entered into
a contribution agreement, dated May 24, 2000 (the "Contribution Agreement");
WHEREAS, Xxxxxxx and World Heart have entered into, and as a condition
to closing of the Transactions (as defined in the Contribution Agreement) shall
have consummated the transactions contemplated by, the Series A convertible
preferred shares purchase agreement dated as of May 24, 2000 (the "World Heart
Preferred Agreement");
WHEREAS, Xxxxxxx owns 4,981,128 shares of Series A cumulative
participating preferred stock of Newco (the "Put Shares");
NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" shall have the meaning specified in the Securities Act
(Ontario) as in effect on the date of this Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in New York, New York or Toronto, Ontario are required
by law to close or are customarily closed.
"Canadian Securities Administrators" means the Canadian securities
regulators in each of the Provinces of Canada.
"Initial Issue Date" shall have such meaning as ascribed to the term
under the certificate of designation of the Series A cumulative participating
preferred stock of Newco, Inc. (the "Certificate of Designation").
"Person" shall mean any natural person, corporation, general
partnership, limited partnership, limited liability company, limited liability
partnership, proprietorship, trust, union, association, court, tribunal, agency,
government, department, commission, self-regulatory organization, arbitrator,
board, bureau, instrumentality or other entity, enterprise, authority or
business organization.
"World Heart Common Shares" shall mean common shares of World Heart.
SECTION 2. Xxxxxxx'x Put Right.
(a) For a period of one (1) year, commencing on the second anniversary
of the Initial Issue Date (the "Put Notice Period"), Xxxxxxx shall have the
right (the "Put Right") to require World Heart to acquire all, but not less than
all, of the Put Shares in exchange for 4,981,128 shares of World Heart Common
Shares (or such number as may be determined pursuant to the adjustments provided
in Section 3 hereof) (the "World Heart Shares"). The Put Right shall be
exercisable by delivery during the put notice period of a written notice (the
"Put Notice") to World Heart (i) requesting World Heart to acquire the Put
Shares pursuant to the Put Right, (ii) stating the date and time, which shall be
at least ten but not more than 30 Business Days after the date of the Put
Notice, at which the closing (the "Put Closing") of the purchase of the Put
Shares and the issuance of the World Heart Shares is to occur, and (iii)
specifying the names and denominations in which the certificates representing
the World Heart Shares to be delivered at the Put Closing are to be issued. Such
Put Notice shall be irrevocable. World Heart shall purchase the Put Shares,
subject to the terms hereof on the date of the Put Closing.
(b) The Put Right may be exercised only once (unless the Put Closing
in respect of such exercise fails to occur as a result of World Heart's failure
to issue all of the World Heart Shares on the date of the Put Closing).
(c) The Put Closing shall take place at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000, or such other location as the parties hereto shall mutually
agree, at 10:00 a.m. (local time). At the Put Closing, (i) World Heart shall
deliver to Xxxxxxx a certificate or certificates representing the World Heart
Shares, in such denominations and registered in such names as Xxxxxxx shall have
requested in its
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Put Notice to World Heart, and (ii) Xxxxxxx shall deliver or cause to be
delivered a certificate or certificates representing the Put Shares, accompanied
by duly executed blank stock powers or endorsed in blank for transfer, as World
Heart may request at least three (3) Business Days prior to the Put Closing.
SECTION 3. Adjustment of World Heart Shares.
(a) In the event World Heart shall at any time after the Initial Issue
Date:
(i) declare any dividend, or make any distribution on World Heart
Common Shares, in World Heart Common Shares;
(ii) subdivide or reclassify the outstanding World Heart Common
Shares;
(iii) combine or reclassify the outstanding World Heart Common
Shares into a smaller number of shares;
(iv) make a distribution on World Heart Common Shares in shares
of its capital stock or securities convertible, exchangeable or exercisable into
its capital stock other than, in each case, World Heart Common Shares; or
(v) issue by reclassification of the World Heart Common Shares
any shares of its capital stock;
then the aggregate number of World Heart Shares immediately prior to such action
shall be proportionately adjusted to reflect the aggregate number and kind of
shares of capital stock of World Heart which Xxxxxxx would have owned
immediately following such action if the Put Right had been exercised
immediately prior to such action.
The adjustment shall become effectively immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed above shall
occur; provided that, if the occurrence of any event listed above results in an
adjustment under subsection 3(b) or (c) below, no adjustment shall be made under
this subsection (a).
World Heart shall not issue World Heart Common Shares as a dividend or
distribution on any class of capital stock other than World Heart Common Shares
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unless the appropriate adjustment to the World Heart Shares is made under this
subsection 3(a).
(b) Adjustment for Rights Issue. If World Heart distributes (and
receives no consideration therefor) any rights, options or warrants (whether or
not immediately exercisable) to all holders of any class of its capital stock
entitling them to purchase World Heart Common Shares at a price per share less
than the Specified Value (as defined in Section 3(g) hereof) per share on the
record date relating to such distribution, the World Heart Shares shall be
adjusted in accordance with the formula:
V' = V x O + N
-------------
O + N x E
-----
M
where:
V' = the adjusted World Heart Shares.
V = the World Heart Shares immediately prior to
the record date for any such distribution.
O = the number of World Heart Common Shares
outstanding on the record date for any such
distribution.
N = the number of additional World Heart Common
Shares issuable upon exercise of such rights,
options or warrants.
E = the exercise price per share of such rights,
options or warrants.
M = the Specified Value per World Heart Common
Share on the record date for any such
distribution.
The adjustment shall be made whenever any such rights, options or
warrants are issued and shall become effective immediately after the record date
for the determination of stockholders entitled to receive the rights, options or
warrants. If at the end of the period during which such rights, options or
warrants are exercisable, not all rights, options or warrants shall have been
exercised, the adjusted World Heart Shares shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued. The adjustment in the number of World Heart Shares
provided for in this Section 3(b) shall not apply upon the issuance of World
Heart Common Shares, rights, options, warrants or convertible or exchangeable
securities in an arm's-length transaction to stockholders of any unaffiliated
third party, who are neither existing stockholders nor Affiliates of World Heart
at the time, which unaffiliated third party substantially and concurrently
merges
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with or into World Heart or any subsidiary thereof, in proportion to their stock
holdings of such unaffiliated third party immediately prior to such merger.
(c) Adjustment for Other Distributions. If World Heart distributes to
all holders of any class of its capital stock (other than scheduled dividends
payable on preferred stock or payments made to redeem preferred stock in
accordance with its terms) (i) any evidences of indebtedness of World Heart or
any of its subsidiaries, (ii) any assets of World Heart or any of its
subsidiaries, or (iii) any rights, options or warrants to acquire any of the
foregoing or to acquire any other securities of World Heart, the World Heart
Shares shall be adjusted in accordance with the formula:
V' = V x M
------
M - F
where:
V' = the adjusted World Heart Shares.
V = the World Heart Shares immediately prior to
the record date mentioned below.
M = the Specified Value per World Heart Common
Share on the record date mentioned below.
F = the fair market value on the record date
mentioned below of the shares, the
indebtedness, assets, rights, options or
warrants distributable to the holder of one
World Heart Common Share.
The adjustment shall be made whenever any such distribution is made
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. If an
adjustment is made pursuant to this subsection (c) as a result of the issuance
of rights, options or warrants and at the end of the period during which any
such rights, options or warrants are exercisable, not all such rights, options
or warrants shall have been exercised, the adjusted World Heart Shares shall be
immediately readjusted as if "F" in the above formula was the fair market value
on the record date of the indebtedness or assets actually distributed upon
exercise of such rights, options or warrants divided by the number of World
Heart Common Shares outstanding on the record date.
This subsection does not apply to rights, options or warrants referred
to in subsection (b) or for any World Heart Common Share referred to in
subsection (d) of this Section 3. The adjustment in the number of World Heart
Shares provided
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for in the preceding paragraph shall not apply upon the issuance of World Heart
Common Shares, rights, options, warrants or convertible or exchangeable
securities in an arm's-length transaction to stockholders of any unaffiliated
third party, who are neither existing stockholders nor Affiliates of World Heart
at the time, which unaffiliated third party substantially and concurrently
merges with or into World Heart or any subsidiary thereof, in proportion to
their stock holdings of such unaffiliated third party immediately prior to such
merger.
(d) Adjustment for Common Stock Issue. If World Heart issues World
Heart Common Shares for a consideration per share less than the Specified Value
per share on the date World Heart fixes the offering price of such additional
shares, the World Heart Shares shall be adjusted in accordance with the formula:
V' = V x A
----------
O + C
----
M
where:
V' = the adjusted World Heart Shares.
V = the World Heart Shares immediately prior to
any such issuance.
O = the number of World Heart Common Shares
outstanding immediately prior to the issuance
of such additional World Heart Common Shares.
C = the aggregate consideration received for the
issuance of such additional World Heart
Common Shares.
M = the Specified Value per World Heart Common
Share on the date the offering price of such
additional shares is fixed.
A = the number of World Heart Common Shares
outstanding immediately after the issuance of
such additional World Heart Common Shares.
The adjustment shall be made whenever any such issuance is made, and
shall become effective immediately after such issuance. The adjustment in the
number of World Heart Shares provided for in the preceding paragraph shall not
apply upon (i) the issuance of World Heart Common Shares, rights, options,
warrants or convertible or exchangeable securities in an arm's-length
transaction to stockholders of any unaffiliated third party, who are neither
existing stockholders nor Affiliates of World Heart at the time, which
unaffiliated third party substantially and
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concurrently merges with or into World Heart or any subsidiary thereof, in
proportion to their stock holdings of such unaffiliated third party immediately
prior to such merger; (ii) the issuance of options or restricted stock at an
exercise price below the Specified Value pursuant to any now or hereafter
existing stock option or incentive plan of World Heart which in the aggregate do
not exceed 20% of the World Heart Common Shares on a fully diluted basis as of
the date hereof; or (iii) the issuance of securities in connection with a bona
fide financing or refinancing by World Heart with a Person that is not an
Affiliate.
This subsection (d) does not apply to any World Heart Common Shares
with respect to which adjustments have been made pursuant to subsections (b),
(c) or (e).
(e) Adjustment for Convertible Securities Issue. If World Heart issues
any options, warrants or other securities convertible into or exchangeable or
exercisable for World Heart Common Shares (other than securities issued in
transactions described in subsection (b) or (c) of this Section 3) for a
consideration per share of World Heart Common Shares initially deliverable upon
conversion, exchange or exercise of such securities less than the Specified
Value per share on the date of issuance of such securities, the World Heart
Shares shall be adjusted in accordance with this formula:
V' = V x O + D
-----
O + C
-
M
where:
V' = the adjusted World Heart Shares.
V = the World Heart Shares immediately prior to
any such issuance.
O = the number of World Heart Common Shares
outstanding immediately prior to the issuance
of such securities.
C = the sum of the aggregate consideration
received for the issuance of such securities
and the aggregate minimum consideration
receivable by World Heart for issuance of
World Heart Common Shares upon conversion or
in exchange for, or upon exercise of, such
securities.
M = the Specified Value per World Heart Common
Share on the date of issuance of such
securities.
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D = the maximum number of World Heart Common
Shares deliverable upon conversion or in
exchange for or upon exercise of such
securities at the initial conversion,
exchange or exercise rate.
The adjustment shall be made whenever any such issuance is made, and
shall become effective immediately after such issuance.
If all of the World Heart Common Shares deliverable upon conversion,
exchange or exercise of such securities has not been issued when the conversion,
exchange or exercise rights of such securities have expired or been terminated,
then the adjusted World Heart Shares shall promptly be readjusted to the
adjusted World Heart Shares which would then be in effect had the adjustment
upon the issuance of such securities been made on the basis of the actual number
of World Heart Common Shares issued upon conversion, exchange or exercise of
such securities. If the aggregate minimum consideration receivable by World
Heart for issuance of World Heart Common Shares upon conversion or in exchange
for, or upon exercise of, such securities shall be increased by virtue of
provisions therein contained or upon the arrival of a specified date or the
happening of a specified event, then the World Heart Shares shall promptly be
readjusted to the World Heart Shares which would then be in effect had the
adjustment upon the issuance of such securities been made on the basis of such
increased minimum consideration.
This subsection (e) does not apply to the issuance of the Put Shares
or any of the transactions described in subsections (b), (c) or (d) of this
Section 3. The adjustment in the number of World Heart Shares provided for in
the preceding formula shall not apply upon (i) the issuance of options or
restricted stock at an exercise price below the Specified Value pursuant to any
now or hereafter existing stock option or incentive plan of World Heart which in
the aggregate do not exceed 20% of the World Heart Common Shares on a fully
diluted basis or (ii) the issuance of securities in connection with a bona fide
financing or refinancing by World Heart with a Person that is not an Affiliate.
(f) Adjustment for Tender Offer. If World Heart consummates a tender
offer for any World Heart Common Shares and purchases shares pursuant to such
tender offer for an aggregate consideration having a fair market value (as
determined reasonably and in good faith by the Board of Directors of World Heart
and described in a board resolution) as of the last time (the "Expiration Time")
that tenders may be made pursuant to such tender offer (as it may have been
amended) that, together with (i) the aggregate of the cash plus the fair market
value (as determined reasonably and in good faith by the Board of Directors of
World Heart
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and described in a board resolution) of the consideration paid in respect of any
other tender offer by World Heart for any World Heart Common Shares consummated
within the 12 months preceding the Expiration Time and in respect of which no
adjustment pursuant to this subsection (f) has been made previously and (ii) the
aggregate amount of any distributions to all holders of World Heart Common
Shares within the 12 months preceding the Expiration Time exceeds 20% of the
product of the Specified Value per share immediately prior to the Expiration
Time times the number of World Heart Common Shares outstanding (including any
tendered shares) at the Expiration Time, the World Heart Shares shall be
adjusted in accordance with the formula:
V' = V x M x (O - N)
-------------
(M x O) - F
where:
V' = the adjusted World Heart Shares.
V = the World Heart Shares immediately prior to
the Expiration Time.
M = the Specified Value per World Heart Common
Share immediately prior to the Expiration
Time.
O = the number of World Heart Common Shares
outstanding (including any tendered shares)
at the Expiration Time.
F = the fair market value of the aggregate
consideration paid for all World Heart Common
Shares purchased pursuant to the tender
offer.
N = the number of World Heart Common Shares
accepted for payment in such tender offer.
If the number of shares accepted for payment in such tender offer or
the aggregate consideration payable therefor have not been finally determined by
the opening of business on the day following the Expiration Time, the adjustment
required by this subsection (f) shall, pending such final determination, be made
based upon the preliminary announced results of such tender offer, and, after
such final determination shall have been made, the adjustment required by this
subsection (f) shall be based upon the number of shares accepted for payment in
such tender offer and the aggregate consideration payable therefor as so finally
determined.
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(g) Certain Definitions. For the purposes of this Section 3, unless
the context requires otherwise, the following terms shall
have the meanings herein specified in this subsection 3(g).
The "Specified Value" per World Heart Common Share or of any other
security (herein collectively referred to as a "Security") at any date shall be:
(i) if the Security is not registered under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the value of the Security
determined in good faith by the Board of Directors of World Heart and certified
in a board resolution, which valuation shall be based on the most recently
completed arm's length transaction between World Heart and a person other than
an Affiliate of World Heart in which such determination is necessary and the
closing of which occurs on such date or shall have occurred within the six
months preceding such date, if such transaction has occurred; provided, however,
that if Xxxxxxx objects to such valuation within 60 days of the determination
thereof by the Board of Directors of World Heart, the value shall be determined
by an Independent Financial Expert selected by World Heart and reasonably
acceptable to Xxxxxxx, or
(ii) if the Security or the World Heart Common Shares into which the
Security is convertible is registered under the Exchange Act, the weighted
average of the daily market prices for each business day during the period
commencing 20 trading days before such date and ending on the date one day prior
to such date or, if the Security has been registered under the Exchange Act for
less than 20 consecutive trading days before such date, then the average of the
daily market prices (as hereinafter defined) for all of the business days before
such date for which daily market prices are available. If the market price is
not determinable for at least 15 trading days in such period, the Specified
Value of the Security shall be determined as if the Security were not registered
under the Exchange Act.
The "market price" for any Security shall mean (A) the weighted
average of closing prices for sales of such Security on The Toronto Stock
Exchange and the Nasdaq National Market (with prices on The Toronto Stock
Exchange converted into United States dollars at the noon buying rate certified
by the New York Federal Reserve Bank for customs purposes on such date) for the
five consecutive trading days preceding the date of determination or (B) if such
Security is not then listed and posted for trading on The Toronto Stock Exchange
or the Nasdaq National Market, the weighted average of the closing price on such
stock exchange on which such Security is listed and posted for trading and on
which such Security is most actively traded for the five consecutive trading
days preceding the date of
10
determination, or (C) if such Security is not then listed or admitted to trading
on any securities exchange, the last reported sale price on such day, or if
there is no such last reported sale price on such day, the average of the
closing bid and the asked prices on such day, as reported by a reputable
quotation source designated by World Heart. If there are no such prices on a
Business Day, then the market price shall not be determinable for such Business
Day.
In the case of World Heart Common Shares, if more than one class of
World Heart Common Shares is outstanding, the "Specified Value" shall be the
highest of the Specified Values per share of all such classes of World Heart
Common Shares.
"Independent Financial Expert" shall mean a nationally recognized
investment banking or appraisal firm selected by World Heart (i) that does not
(and whose directors, officers, employees and Affiliates do not) have a direct
or indirect financial interest in World Heart, (ii) that has not been, and, at
the time it is called upon to serve as an Independent Financial Expert under
this Agreement is not (and none of whose directors, officers, employees or
Affiliates is) a promoter, director or officer of World Heart, (iii) that has
not been retained by World Heart for any purpose, other than to perform an
equity valuation, within the preceding twelve months, and (iv) that, in the
reasonable judgment of the Board of Directors of World Heart, is otherwise
qualified to serve as an independent financial advisor. Any such person may
receive customary compensation and indemnification by World Heart for opinions
or services it provides as an Independent Financial Expert.
(h) Consideration Received. For purposes of any computation respecting
consideration received pursuant to subsections (d) and
(e) of this Section 3, the following shall apply:
(i) in the case of the issuance of World Heart Common Shares for
cash, the consideration shall be the amount of such cash (without any deduction
being made for any commissions, discounts or other expenses incurred by World
Heart for any underwriting of the issue or otherwise in connection therewith);
(ii) in the case of the issuance of World Heart Common Shares for
a consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof (irrespective of
the accounting treatment thereof) as determined in good faith by the Board of
Directors of World Heart; and
11
(iii) in the case of the issuance of options, warrants or other
securities convertible into or exchangeable or exercisable for World Heart
Common Shares, the aggregate consideration received therefor shall be deemed to
be the consideration received by World Heart for the issuance of such securities
plus the additional minimum consideration, if any, to be received by World Heart
upon the conversion, exchange or exercise thereof (the consideration in each
case to be determined in the same manner as provided in clauses (i) and (ii) of
this subsection (h)).
(i) When De Minimis Adjustment May Be Deferred. No adjustment to the
World Heart Shares needs be made unless the adjustment would require an increase
or decrease of at least 1% in the World Heart Shares. Any adjustment that is not
made shall be carried forward and taken into account in any subsequent
adjustment, provided that no such adjustment shall be deferred beyond the date
on which the Put Right is exercised.
All calculations under this Section 3 shall be made to the nearest
1/100th of a share.
(j) When No Adjustment Required. If an adjustment is made upon the
establishment of a record date for a distribution subject to subsection (a), (b)
or (c) hereof and such distribution is subsequently cancelled, the World Heart
Shares then in effect shall be readjusted, effective as of the date when the
Board of Directors of World Heart determines to cancel such distribution, to
that which would have been in effect prior to the fixing of such record date.
(k) Notice of Adjustment. Whenever the number of World Heart Common
Shares to be received as World Heart Shares is adjusted, World Heart shall
provide the notices required by Section 9 hereof.
(l) Reorganizations. In case of any capital reorganization, other than
in the cases referred to in subsections 3(a), (b), (c), (d), (e) or (f) hereof,
or the consolidation or merger of World Heart with or into another corporation
(other than a merger or consolidation in which World Heart is the continuing
corporation and which does not result in any reclassification of the outstanding
World Heart Common Shares into shares of other stock or other securities or
property), or the sale of the property of World Heart as an entirety or
substantially as an entirety (collectively, such actions being hereinafter
referred to as "Reorganizations"), there shall thereafter be deliverable upon
exercise of any Put Right (in lieu of the number of World Heart Common Shares
theretofore deliverable) the number of shares of stock or other
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securities or property to which a holder of the number of World Heart Common
Shares that would otherwise have been deliverable upon the exercise of such Put
Right would have been entitled upon such Reorganization if such Put Right had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of World Heart, whose determination shall be described in a duly
adopted resolution certified by the secretary or assistant secretary of World
Heart, shall be made in the application of the provisions herein set forth with
respect to the rights and interests of Xxxxxxx so that the provisions set forth
herein shall thereafter be applicable, as nearly as possible, in relation to any
shares or other property thereafter deliverable upon exercise of the Put Right.
World Heart shall not effect any such Reorganization unless prior to
or simultaneously with the consummation thereof the successor corporation
resulting from such Reorganization or the corporation purchasing or leasing such
assets or other appropriate corporation or entity shall expressly assume, by a
supplemental Exchange Agreement or other acknowledgment executed and delivered
to Xxxxxxx, the obligation to deliver to Xxxxxxx such shares of stock,
securities or assets as, in accordance with the foregoing provisions, Xxxxxxx
may be entitled to receive, and all other obligations and liabilities under this
Agreement.
(m) No Impairment. World Heart will not, through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be performed hereunder by World
Heart, but will at all times in good faith assist in the carrying out of all the
provisions of this Exchange Agreement and in the taking of all such actions as
may be necessary or appropriate in order to protect the exercisability of this
Exchange Agreement and the rights of Xxxxxxx against impairment.
(n) Miscellaneous. For purpose of this Section 3, the term "World
Heart Common Shares" shall mean (i) the World Heart Common Shares as of the date
of this Agreement, and (ii) shares of any other class of stock resulting from
successive changes or reclassification of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value. In the event that at any time, as a result of an adjustment made
pursuant to this Section 3, Xxxxxxx shall become entitled to receive any
securities other than, or in addition to, World Heart Common Shares, thereafter
the number or amount of such other securities to be received upon exercise of
the Put Right shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the
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provisions with respect to the World Heart Shares contained in subsections (a)
through (n) of this Section 3, inclusive, and the provisions of Sections 2, 4
and 5 with respect to the World Heart Shares or the World Heart Common Shares
shall apply on like terms to any such other securities.
SECTION 4. Fractional Interests. World Heart shall not issue
fractional shares of World Heart Common Shares on the exercise of the Put Right.
If any fraction of a share of World Heart Common Shares would, except for the
provisions of this Section 4, be issuable on the exercise of the Put Right,
World Heart shall pay an amount in cash equal to the fair market value of the
share of World Heart Common Shares so issuable, multiplied by such fraction.
SECTION 5. Other Adjustments. If World Heart shall take any action
affecting the World Heart Common Shares, other than action described in Sections
3 and 4, that in the good faith determination of the Board of Directors of World
Heart materially adversely affects the value of the World Heart Shares, the
aggregate amount of the World Heart Shares shall be adjusted, to the extent
permitted by law, in such manner, if any, and at such time, as the Board of
Directors of World Heart may determine to be equitable in the circumstances;
provided that the provisions of this Section 5 shall not affect any rights
Xxxxxxx may have at law or in equity.
SECTION 6. No Further Rights. From and after the date of exercise of
the Put Right pursuant to Sections 2, 3, 4 and 5, the holder of any of the Put
Shares subject to such Put Right shall cease to have any rights as a stockholder
in respect thereof, other than the right to receive the purchase price payable
therefor upon the terms and subject to the conditions set forth herein.
SECTION 7. Governing Law. This agreement shall be governed by,
interpreted under, and construed in accordance with the internal laws of the
State of New York, including, without limitation, Sections 5-1401, 5-1402 of the
New York General Obligations Law and New York Civil Practice Laws and Rules
327(b).
SECTION 8. Jurisdiction and Consent to Service. In accordance with the
laws of the State of New York, and without limiting the jurisdiction or venue of
any other court, the parties (a) agree that any suit, action or proceeding
arising out of or relating to this Agreement may be brought in the state or
federal courts of New York; (b) consent to the non-exclusive jurisdiction of
each such court in any suit, action or proceeding relating to or arising out of
the Transaction Agreements; (c) waive any objection which any of them may have
to the laying of venue in any such suit, action or proceeding in any such court
and waive any defense of forum non conveniens; and
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(d) agree that service of any court paper in any such suit, action or proceeding
may be made in the same manner in which notices may be given pursuant to Section
9 of this Agreement:
SECTION 9. Notices. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder or
which are given with respect to this Agreement shall be in writing and shall be
delivered (charges prepaid, receipt confirmed or return receipt requested (if
available)) by hand, by nationally recognized air courier service, by certified
mail or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Notice shall be
deemed given and effective (i) if delivered by hand or by nationally recognized
courier service, when delivered at the address specified in this Section (or in
accordance with the latest unrevoked written direction from such party), (ii) if
by certified mail, upon mailing or (iii) if given by facsimile when such
facsimile is transmitted to the fax number specified in this Section (or in
accordance with the latest unrevoked written direction from such party),
provided the appropriate confirmation is received.
(a) if to World Heart, to:
World Heart Corporation
0 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attn: Chief Financial Officer
Fax: (000) 000-0000
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with a copy (which shall not constitute notice) to:
XxXxxxxx Xxxxxxxx
The Xxxxxxxx
0000-00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Attn: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
(b) if to Xxxxxxx, to
Xxxxxxx Lifesciences LLC
Xxx Xxxxxxx Xxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Associate General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
SECTION 10. Interpretation. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When the words "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." All accounting terms not defined in this Agreement shall have the
meanings determined by generally accepted accounting principles as of the date
hereof. All capitalized terms defined herein are equally applicable to both the
singular and plural forms of such terms.
SECTION 11. Severability. If any provision of this Agreement or the
application of any such provision shall be held invalid, illegal or
unenforceable in any respect for any reason, the parties shall negotiate in good
faith with a view to the substitution therefor of a suitable and equitable
solution in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid provision;
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provided, however, that the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
SECTION 12. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall, taken together, be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
SECTION 13. Entire Agreement; No Third Party Beneficiaries. This
Agreement and the other Transaction Agreements, including all exhibits hereto
and thereto, by and between Xxxxxxx and World Heart,
(a) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous agreements,
representations, understandings, negotiations and discussions between the
parties, whether oral or written, with respect to the subject matter hereof; and
(b) this Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and permitted assigns and is not intended to confer any rights,
remedies or benefits on any Persons other than as expressly set forth in this
Section 13.
SECTION 14. Further Assurances. Each party hereto shall do all such
further acts and execute, acknowledge, deliver and file all such further
instruments and documents as may be necessary or desirable to give effect to and
carry out the transactions contemplated by this Agreement.
SECTION 15. Amendments and Modifications; Waivers and Extensions.
(a) No amendment, modification or termination of this Agreement shall
be binding upon any other party unless executed in writing by the parties hereto
intending to be bound thereby.
(b) Any party to this Agreement may waive any right, breach or default
which such party has the right to waive; provided that such waiver will not be
effective against the waiving party unless it is in writing, is signed by such
party, and specifically refers to this Agreement. Waivers may be made in advance
or after the
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right waived has arisen or the breach or default waived has occurred. Any waiver
may be conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No failure or delay in
exercising any right, power or privilege hereunder shall be deemed a waiver or
extension of the time for performance of any other obligations or acts nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
SECTION 16. Assignment. Neither this Agreement nor any of the rights
or obligations hereunder shall be assigned by either of the parties hereto
without the prior written consent of the other party, except that Xxxxxxx may
assign all its rights and obligations to any transferee of the Put Shares. Any
such assignment shall not affect the requirement of Section 2(a) that the Put
Right be exercised for all, but not less than all, of the Put Shares. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. Any attempted assignment in contravention hereof shall be null and
void.
SECTION 17. Equitable Remedies. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to equitable relief, including in the form of injunctions, in order to
enforce specifically the provisions of this Agreement, in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 18. Expenses. Except as otherwise provided in this Agreement,
each party to this Agreement shall bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated hereby, including all fees and expenses of
agents, representations, counsel and accountants.
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IN WITNESS WHEREOF, this Agreement has been signed by or on behalf of
the Xxxxxxx and World Heart, as of the date first written above.
XXXXXXX LIFESCIENCES LLC
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
WORLD HEART CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
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