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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
TO
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period
ended June 30,1999 Commission File Number 0-20991
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CAMBRIDGE HEART, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3679946
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 OAK PARK DRIVE
BEDFORD, MASSACHUSETTS 01730
(Address of principal executive offices) (Zip Code)
781-271-1200
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Number of shares outstanding of each of the issuer's classes of common stock
as of August 16, 1998:
Class Number of Shares Outstanding
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Common Stock, par value $.001 per share 11,865,988
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CAMBRIDGE HEART, INC.
PART II - OTHER INFORMATION
Item 6 is amended in its entirety as set forth below.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
a. The exhibits listed in the Exhibit Index filed as part of this report
are filed as part of or are included in this report.
b. On June 16, 1999, the Company filed a current report on Form 8K dated
June 9, 1999 reporting under Item 5 the issuance of a press release
announcing the private placement of equity capital.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
CAMBRIDGE HEART, INC.
Date: August 18, 1999 By: /s/ Robert B. Palardy
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Robert B. Palardy
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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10.1* Cooperative Marketing Agreement between Registrant and
Guidant Corporation dated May 7, 1999
10.2* Cooperative Marketing Agreement between Registrant and
Medtronic, Inc dated May 20, 1999
10.3 Purchase Agreement among the Registant, The Tail Wind
Fund Ltd., Special Situations Private Equity Fund, L.P.,
Special Situations Fund III, L.P. and Geoffrey H.
Galley dated June 8, 1999
10.4 Registration Rights Agreement among the Registrant, The
Tail Wind Fund Ltd., Special Situations Private Equity
Fund, L.P., Special Situations Fund III, L.P. and
Geoffrey H. Galley dated June 8, 1999
10.5 Warrant to purchase common stock of the Registrant in
favor of Geoffrey H. Galley
10.6 Warrant to purchase common stock of the Registrant in
favor of Special Situations Fund III, L.P.
10.7 Warrant to purchase common stock of the Registrant in
favor of Special Situations Private Equity Fund, L.P.
10.8 Warrant to purchase common stock of the Registrant in
favor of The Tail Wind Fund Ltd.
11* Statement re Computation of Net Loss per Share
27* Financial Data Schedule
____________________
* Previously Filed
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Exhibit 10.3
PURCHASE AGREEMENT
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THIS PURCHASE AGREEMENT ("Agreement") is made as of the 8th day of June, 1999
by and among Cambridge Heart, Inc., a Delaware corporation (the "Company"), and
the Investors set forth on the signature page affixed hereto (each an "Investor"
and collectively the "Investors").
RECITALS
A. The Company and the Investors are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933,
as amended;
B. The Investors wish to purchase, and the Company wishes to sell and issue
to the Investors, upon the terms and conditions stated in this Agreement, such
number of shares of the common stock of the Company, $0.001 par value per share
(the "Common Stock") and that number of warrants to purchase Common Stock in the
form attached hereto as EXHIBIT A (the "Warrants"), as are set forth on the
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signature page attached hereto and executed by each such Investor; and
C. Contemporaneous with the execution and delivery of this Agreement, the
parties hereto are executing and delivering a Registration Rights Agreement, in
the form attached hereto as EXHIBIT B (the "Registration Rights Agreement"),
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pursuant to which the Company has agreed 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
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this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:
1.1 "Affiliate" means, with respect to any Person, any other Person which
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directly or indirectly controls, is controlled by, or is under common control
with, such Person.
1.2 "Agreements" means this Agreement, the Registration Rights
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Agreement, and the Warrants.
1.3 "Closing" means the consummation of the transactions contemplated
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by this Agreement, and "Closing Date" means the date of such Closing.
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1.4 "Control" means the possession , direct or indirect, of the power to
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direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract or otherwise.
1.5 "Material Adverse Effect" means a material adverse effect on the (i)
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condition (financial or otherwise), business, assets, or results of operations
of the Company and its subsidiaries, taken as a whole; (ii) ability of the
Company to perform any of its material obligations under the terms of this
Agreement; or (iii) rights and remedies of the Investor under the terms of this
Agreement.
1.6 "Person" means an individual, corporation, partnership, trust,
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business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
1.7 "SEC Filings" has the meaning set forth in Section 4.6.
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1.8 "Securities" means the Shares, the Warrants and the Warrant Shares
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(defined below).
1.9 "Shares" means the shares of Common Stock being purchased by the
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Investors hereunder.
1.10 "Warrant Shares" means the shares of Common Stock issuable upon
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exercise of or otherwise pursuant to the Warrants.
1.11 "1933 Act" means the Securities Act of 1933, as amended, and the
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rules and regulations promulgated thereunder.
1.12 "1934 Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations promulgated thereunder.
2. Purchase and Sale of the Shares and Warrants. Subject to the terms and
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conditions of this Agreement, each of the Investors hereby severally, and not
jointly, agrees to purchase and the Company hereby agrees to sell and issue to
the Investor, the number of Shares and Warrants to purchase the number of shares
of Common Stock set forth on such Investor's signature page attached hereto.
The number of Shares to be purchased by each Investor shall be determined by
dividing such Investor's aggregate purchase price (as such aggregate purchase
price is set forth on such Investor's signature page attached hereto), by an
amount equal to the per share purchase price (also as set forth on the signature
page attached hereto) (the "Purchase Price"). The number of shares of Common
Stock purchasable by each Investor pursuant to the Warrants shall be equal to
10% of the number of Shares purchased by such Investor.
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3. Closing. On the date of this Agreement, the Purchase Price shall be
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determined. The Company shall promptly deliver to Investors' counsel, in trust,
a certificate or certificates, registered in such name or names as the Investors
may designate, representing all of the Shares and all of the 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 counsel
to the Investors 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 amounts representing such Investor's
aggregate Purchase Price. On the date the Company receives such funds, the
certificates evidencing the Shares and the Warrants shall be released to the
Investors (and such date shall be deemed the "Closing Date").
4. Representations and Warranties of the Company. The Company hereby
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represents and warrants to the Investors that:
4.1 Organization, Good Standing and Qualification. The Company is a
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corporation duly incorporated, validly existing and in good standing under the
laws of its organization and has all requisite power and authority to carry on
its business and own its properties as now conducted and owned. The Company is
duly qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or licensing necessary
unless the failure to so qualify or be licensed would not have a Material
Adverse Effect.
4.2 Authorization. The Company has full power and authority and has
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taken all requisite action on the part of the Company, its officers, directors
and stockholders necessary for (i) the authorization, execution and delivery of
the Agreements, (ii) 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 Agreements 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. Set forth on Schedule 4.3 hereto is (a) the
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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. 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
preemptive rights. Except as set forth on Schedule 4.3, no Person is entitled to
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preemptive or similar statutory or contractual rights with respect to any
securities of the Company. Except as set forth on Schedule 4.3, there are no
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outstanding warrants, options, convertible securities or other rights,
agreements or arrangements of any character under which the Company is or may be
obligated to issue any equity securities of any kind, or to transfer any equity
securities of any kind, and except as contemplated by this Agreement, the
Company does
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not have any present plan or intention to issue any equity securities of any
kind, or to transfer any equity securities of any kind owned by it. Except as
set forth on Schedule 4.3, the Company does not know of any voting agreements,
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buy-sell agreements, option or right of first purchase agreements or other
agreements of any kind among any of the securityholders of the Company relating
to the securities held by them. Except as set forth on Schedule 4.3, the Company
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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.
4.4 Valid Issuance. The Company has reserved a sufficient number of
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shares of Common Stock for issuance pursuant to this Agreement and upon exercise
of the Warrants. The Company will take such steps as may be necessary to reserve
sufficient shares for issuance pursuant to Section 7 below when such issuance is
determinable. The Shares and Warrants are duly authorized, and such Securities,
along with the Warrant Shares when issued in accordance herewith and with the
terms of the Warrants, will be duly authorized, validly issued, fully paid, non-
assessable and free and clear of all encumbrances and restrictions, except for
restrictions on transfer imposed by applicable securities laws.
4.5 Consents. The execution, delivery and performance by the Company of
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the Agreements 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 filings that have been made pursuant to
applicable state securities laws and post-sale filings pursuant to applicable
state and federal securities laws and the requirements of the Nasdaq Stock
Market, which the Company undertakes to file within the applicable time periods.
4.6 Delivery of SEC Filings; Business. The Company has provided the
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Investors with copies of the Company's most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 1998, and all other reports filed by the
Company pursuant to the 1934 Act since the filing of the Annual Report on Form
10-K (collectively, the "SEC Filings"). The Company is engaged only in the
business described in the SEC Filings and the SEC Filings contain a complete and
accurate description of the business of the Company.
4.7 Use of Proceeds. The proceeds of the sale of the Securities hereunder
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shall be used by the Company for working capital and general corporate purposes.
4.8 No Material Adverse Change. Since the filing of the Company's most
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recent Annual Report on Form 10-K or as otherwise identified and described in
subsequent reports filed by the Company pursuant to the 1934 Act, 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 Company's most recent Quarterly Report on
Form 10-Q, except changes in the ordinary course of business which have not had,
in the aggregate, a Material Adverse Effect;
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(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 any of its
subsidiaries;
(iv) any waiver by the Company of a valuable 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, 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 taken as a whole (as
such business is presently conducted and as it is proposed to be conducted);
(vi) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;
(vii) any labor difficulties or labor union organizing activities with
respect to employees of the Company;
(viii) any transaction entered into by the Company other than in the
ordinary course of business; or
(ix) any other event or condition of any character that might have
a Material Adverse Effect.
4.9 SEC Filings; Material Contracts.
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(a) As of its filing date, each report filed by the Company with
the SEC pursuant to the 1934 Act, 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 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 to make the statements 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 necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
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(c) Except as set forth on Schedule 4.3 hereto, there are no
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agreements or instruments currently in force and effect that constitute a
warrant, option, convertible security or other right, agreement or arrangement
of any character under which the Company is or may be obligated to issue any
material amounts of any equity security of any kind, or to transfer any material
amounts of any equity security of any kind.
4.10 Form S-3 Eligibility. The Company is currently eligible to
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register the resale of its Common Stock on a registration statement on Form S-3
under the 1933 Act.
4.11 No Conflict, Breach, Violation or Default. The execution, delivery
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and performance of the Agreements 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
Certificate of Incorporation ("Articles") or Bylaws, each as in effect on the
date hereof, or (ii) except where it would not have a Material Adverse Effect,
(a) any statute, rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company or any of
its properties, or (b) any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the properties of the
Company are subject.
4.12 Tax Matters. The Company has correctly and timely prepared and filed
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or timely obtained extensions for, all tax returns required to have been filed
by it with all appropriate governmental agencies and timely paid all taxes 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 assessments of the Company nor, to the knowledge of the
Company, any basis for the assessment of any additional taxes, penalties or
interest for any fiscal period or audits by any federal, state or local taxing
authority except such as which are not material. All material taxes and other
assessments and levies that the Company 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. There are no tax liens or claims pending or
threatened against the Company or any of its assets or property. There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other corporation or entity.
4.13 Title to Properties. Except as disclosed in the SEC Filings, the
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Company 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 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.
4.14 Certificates, Authorities and Permits. The Company possesses
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adequate certificates, authorizations or permits issued by appropriate
governmental agencies or bodies
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necessary to conduct its business as presently operated and has not received any
written notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to the
Company, would individually or in the aggregate have a Material Adverse Effect.
4.15 No Labor Disputes. No labor dispute with the employees of the
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Company or any subsidiary exists or, to the knowledge of the Company, is
imminent.
4.16 Intellectual Property. The Company owns or possesses adequate
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trademarks and trade names and have all other rights to inventions, know-how,
patents, copyrights, trademarks, trade names, confidential information and other
intellectual property (collectively, "Intellectual Property Rights"), free and
clear of all liens, security interests, charges, encumbrances, equities and
other adverse claims, necessary to conduct the business now operated by it, or
presently employed by it, and presently contemplated to be operated by it, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any Intellectual Property Rights. Schedule 4.16 sets
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forth a list by serial number and title of the patents and/or patent
applications owned or possessed by the Company. No proprietary technology of
any Person was used in the design or development by the Company of (or otherwise
with respect to) any of the Intellectual Property Rights, which technology was
not properly acquired by the Company from such Person.
4.17 Environmental Matters. The Company is not in violation of any
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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"), does not own or operate any real property
contaminated with any substance that is subject to any Environmental Laws, is
not liable for any off-site disposal or contamination pursuant to any
Environmental Laws, and is not subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation that might lead to such a claim.
4.18 Litigation. Except as disclosed in the SEC Filings, there are no
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pending actions, suits or proceedings against or affecting the Company, or any
of its properties that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the context
of the sale of the Securities; and to the Company's knowledge, no such actions,
suits or proceedings are threatened or contemplated.
4.19 Financial Statements. The financial statements included in each SEC
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Filing present fairly and accurately the consolidated financial position of the
Company as of the dates shown and its results of operations and cash flows for
the periods shown, and such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a consistent
basis. Except as set forth on Schedule 4.19 or in the financial statements of
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the Company included in the SEC Filings filed prior to the date hereof, the
Company has no liabilities, contingent or otherwise, except those which
individually or in the aggregate are not material to the financial condition or
operating results of the Company.
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4.20 Insurance Coverage. The Company and maintains in full force and
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effect insurance coverage that is customary for comparably situated companies
for the business being conducted, and properties owned or leased, by the
Company, 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.
4.21 Compliance with Nasdaq Continued Listing Requirements. The Company
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is in compliance with all applicable Nasdaq 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 Nasdaq National Market and the Company has not received any notice
of, nor to the knowledge of the Company is there any basis for, the delisting of
the Common Stock from the Nasdaq National Market.
4.22 Acknowledgement of Dilution. The number of shares of Common Stock
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issuable pursuant to this Agreement may increase significantly. The Company's
executive officers and directors have studied and fully understand the nature of
the transactions being contemplated hereunder and recognize that they have a
potential dilutive effect.
4.23 Brokers and Finders. The Investors shall have no liability or
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responsibility for the payment of any commission or finder's fee to any third
party in connection with or resulting from this agreement or the transactions
contemplated by this Agreement by virtue of any agreement made by the Company to
a third party. A cash fee equal to 4% of the gross proceeds received by the
Company hereunder to be paid by the Company to Astor Capital is the only
broker's or finder's fee payable by the Company in connection with the
transactions contemplated by the Agreements.
4.24 No Directed Selling Efforts or General Solicitation. Neither the
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Company nor, to its knowledge, 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.
4.25 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 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.
4.26 Disclosures. No representation or warranty made under any Section
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hereof and no information furnished by the Company pursuant hereto, or in any
other document, certificate or statement furnished by the Company to the
Investor or any authorized representative
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of the Investor, pursuant to the Agreements or in connection therewith, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the respective statements contained herein or therein, in
light of the circumstances under which the statements were made, not misleading.
5. Representations and Warranties of the Investor. Each of the Investors
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hereby severally, and not jointly, represents and warrants to the Company that:
5.1 Organization and Existence. The Investor is a validly existing
--------------------------
corporation or limited liability company and has all requisite corporate 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
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Investor of the Agreements have been duly authorized and the Agreements will
each constitute the valid and legally binding obligation of the Investor,
enforceable against the Investor in accordance with their terms.
5.3 Purchase Entirely for Own Account. The Securities to be received by
---------------------------------
the Investor hereunder will be acquired for investment for the Investor's own
account, not as nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Investor has no present intention of
selling, granting any participation in, or otherwise distributing the same. 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
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economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial and 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
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receive documents related to the Company 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. 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 or made pursuant to this Agreement.
5.6 Restricted Securities. The Investor understands that the Securities
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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, until registration for resale
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pursuant to the Registration Rights Agreement, certificates evidencing the
Securities will bear one or all of the following legends or legends
substantially similar thereto:
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(a) "These securities have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may not be offered, sold,
pledged, hypothecated, assigned or transferred except (i) pursuant to a
registration statement under the Act which has become effective and is current
with respect to these securities, or (ii) pursuant to a specific exemption from
registration under the Act but only upon a holder hereof first having obtained
the written opinion of counsel to the Corporation, or other counsel reasonably
acceptable to the Corporation, that the proposed disposition is consistent with
all applicable provisions of the Act as well as any applicable "blue sky" or
similar securities laws."
(b) 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 registration for resale pursuant to the Registration Rights Agreement,
the Company shall promptly cause certificates evidencing the Shares previously
issued hereunder to be replaced with certificates which do not bear such
restrictive legends.
5.8 Accredited Investor. The Investor is an accredited investor as
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defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
5.9 No General Solicitation. The Investor did not learn of the
-----------------------
investment in the Securities as a result of any public advertising or general
solicitation.
5.10 Brokers and Finders. The Investors shall have no liability or
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responsibility for the payment of any commission or finder's fee to any third
party in connection with or resulting from this argument or the transactions
contemplated by the Agreement.
6. Registration Rights Agreement. The parties acknowledge and agree that
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part of the inducement for the Investor to enter into this Agreement is the
Company's execution and delivery of the Registration Rights Agreement. The
parties acknowledge and agree that simultaneously with the execution hereof, the
Registration Rights Agreement is being duly executed and delivered by the
parties thereto.
7. Covenants and Agreements of the Company.
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7.1 Subsequent Sale at Lower Price.
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(a) Required Adjustments. Subject to the exclusions contained in
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Section 7.1(e) below, if during the period ending on the later of (i) twenty-
four (24) months following the Closing Date or (ii) twenty-one (21) months
following the date the registration statement contemplated by the Registration
Rights Agreement for the Registrable Securities (as defined in the Registration
Rights Agreement) is first declared effective (the "MFN Period"), the Company
sells any shares of its Common Stock in a capital raising transaction at a per
share selling price ("Per Share Selling Price") lower than the Purchase Price
per share set forth in Section 2 hereof, the Purchase Price per share of the
Shares
10
<PAGE>
originally sold to the Investors hereunder shall be adjusted downward to equal
such lower Per Share Selling Price and Investors shall be entitled to receive
the additional shares as provided by Section 7.1(b); provided, however, that in
the event an Investor then owns less than 60% of the Shares originally acquired
by it hereunder, such Investor shall be entitled to additional shares only with
respect to the number of Shares originally acquired and then owned by such
Investor as provided in Section 7.1(b). The Company shall give to the Investors
written notice of any such sale within 24 hours of the closing of any such sale.
For so long as an Investor owns 60% or more of the Shares originally acquired by
such Investor hereunder, such Investor shall be entitled to the full benefit of
the Purchase Price adjustment required by this Section 7.1. The parties agree
that for purposes of this Section 7 (including determination of the number of
originally acquired shares held by an Investor) shares of Common Stock sold or
otherwise disposed of by an Investor shall be deemed to be those originally
acquired hereunder until that number is reduced to zero.
(b) Definitions.
-----------
(i) For the purposes of this Section 7.1, the term "Per Share
Selling Price" as used in this Section 7.1 shall include the amount actually
paid by third parties for each share of Common Stock plus, in the event a fee in
excess of 7% is paid by the Company in connection with the transaction, any such
excess amount shall be deducted from the selling price pro rata to all shares
sold in the transaction to arrive at the Per Share Selling Price. A sale in a
capital raising transaction of shares of Common Stock shall include the sale or
issuance of rights, options, warrants or convertible securities under which the
Company is or may become obligated to issue shares of Common Stock, and in such
circumstances the Per Share Selling Price of the Common Stock covered thereby
shall also include the exercise or conversion price thereof (in addition to the
consideration received by the Company upon such sale or issuance less the excess
fee amount as provided above). In case of any such security issued within the
MFN Period in a "Variable Rate Transaction" or an "MFN Transaction" (each as
defined below), the Per Share Selling Price shall be deemed to be the lowest
conversion or exercise price at which such securities are converted or exercised
or might have been converted or exercised in the case of a Variable Rate
Transaction, or the lowest adjustment price in the case of an MFN Transaction.
If shares are issued for a consideration other than cash, the per share selling
price shall be the fair value of such consideration as determined in good faith
by the Board of Directors of the Company.
(ii) The term "Variable Rate Transaction" shall mean a
transaction in which the company issues or sells (a) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (x) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the Common Stock at any time
after the initial issuance of such debt or equity securities, or (y) with a
fixed conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock (but
excluding standard stock split anti-dilution provisions), or (b) any securities
of the Company pursuant to an "equity line" structure which provides for the
sale, from time to time, of securities of the Company which are registered for
resale pursuant to the 1933 Act.
11
<PAGE>
(iii) The term "MFN Transaction" shall mean a transaction in
which the Company issues or sells any equity securities in a capital raising
transaction or series of related transactions involving more than $500,000 in
the aggregate (the "New Offering") which grants to an investor (the "New
Investor") the right to receive additional shares based upon future equity
raising transactions of the Company on terms more favorable than those granted
to the New Investor in the New Offering.
(iv) The term "MFN Period" shall have the meaning set forth
in Section 7.1(a), above.
(c) Adjustment Mechanism. If an adjustment of the Purchase Price
--------------------
is required pursuant to Section 7.1(a), the Company shall deliver to the
Investors within eight calendar days of the closing of the transaction giving
rise to the adjustment or by such other date as may be required by Section
7.1(d) ("Delivery Date") each Investor's pro-rata share of such number of
additional shares of Common Stock equal to (i) the aggregate Purchase Price paid
by such Investor divided by the adjusted Per Share Purchase Price as required
under Section 7.1(a), minus (ii) the total number of shares of Common Stock
previously delivered to that Investor hereunder; provided however, that the
----------------
Company shall delay effecting such adjustment, in whole or in part, to the
extent required by Section 7.1(d). In the event the Company fails to deliver the
additional shares by the applicable Delivery Date, the Company shall be liable
to the Investors for a penalty equal to 2% of the aggregate Purchase Price
adjustment per month (in each instance to such Investor pro rata in accordance
with its participation in this offering), payable in Common Stock or cash, at
each Investor's election.
(d) Limitation on Number of Shares.
------------------------------
(i) If by way of any adjustment required by this Section 7.1,
an Investor would receive a number of shares of Common Stock such that the total
number of such shares held by the Investor as of the date of such adjustment
would be greater than 9.90% but less than 13.0% of the total outstanding Common
Stock of the Company, then the Company shall not effect the adjustment required
by this Section to the extent necessary to avoid causing the aforesaid
limitation to be exceeded until 120 days following the date such adjustment
would have otherwise been made.
(ii) If by way of any adjustment required by this Section 7.1,
an Investor would receive a number of shares of Common Stock such that the total
number of such shares held by the Investor as of the date of such adjustment
would equal or exceed 13.0% of the total outstanding Common Stock of the
Company, then the Company shall not effect the adjustment required by this
Section to the extent necessary to avoid causing the aforesaid limitation to be
exceeded until 180 days following the date such adjustment would have otherwise
been made.
12
<PAGE>
(iii) In no event shall the Company issue to the Investors
additional shares pursuant to an adjustment required by this Section 7.1 such
that the total number of shares issued to the Investors (when added to the
Warrant Shares) would exceed 19.9% of the Company's issued and outstanding
shares of Common Stock on the date hereof. Instead, the Company shall redeem
such excess shares at 110% of the Per Share Purchase Price, as adjusted. Only
shares acquired pursuant to this Agreement will be included in determining
whether the limitations would be exceeded for purposes of this
Section 7.1(d)(iii).
(e) Capital Adjustments. In case of any stock split or reverse
-------------------
stock split, stock dividend, reclassification of the common stock,
recapitalization, merger or consolidation, or like capital adjustment affecting
the Common Stock of the Company, the provisions of Section 7.1 shall be applied
in a fair, equitable and reasonable manner so as to give effect, as nearly as
may be, to the purposes hereof.
(f) Exclusions. Section 7.1(a) shall not apply to (i) sales of
----------
shares of Common Stock by the Company upon conversion or exercise of any
convertible securities, options or warrants outstanding prior to the date
hereof; or (ii) sales of shares of Common Stock by the Company pursuant to the
provisions of any shareholder-approved option or similar plan heretofore or
hereafter adopted by the Company.
(g) Extension of MFN Period. If, prior to the date of effectiveness
-----------------------
of the registration statement contemplated by the Registration Rights Agreement,
the Company issues or sells for cash in a non-public offering any equity
securities in a capital raising transaction not prohibited by Section 7.2 below,
the MFN Period shall be extended by two months for each $1,000,000 of gross
proceeds received by the Company in such a transaction or series of such
transactions.
(h) Extension of MFN Period. If, prior to the date of effectiveness
-----------------------
of the registration statement contemplated by the Registration Rights Agreement,
the Company issues securities in a MFN Transaction permitted under
Section 7.2(a) below to a corporate partner (for gross proceeds of up to
$4 million), the MFN Period shall be extended by two months for each $800,000 of
gross proceeds received by the Company in such a transaction or series of
transactions.
7.2 Limitation on Transactions.
--------------------------
(a) Until the date of effectiveness of the registration statement
contemplated by the Registration Rights Agreement, without the prior written
consent of the Investors (which consent may be withheld in the Investors'
discretion), the Company shall not (i) issue or sell or agree to issue or sell
any securities for cash in a non-public MFN Transaction provided, however, that
the Company may issue such securities to a corporate partner of the Company for
gross proceeds of up to $4 million; or (ii) issue or sell, or agree to issue or
sell, any securities for cash in a non-public Variable Rate Transaction.
13
<PAGE>
(b) During the period after effectiveness of the registration
statement contemplated by the Registration Rights Agreement and until the
expiration of the MFN Period, without the prior written consent of the Investors
(which consent may be withheld in the Investors' discretion), the Company shall
not (i) issue or sell or agree to issue or sell any securities for cash in a
non-public MFN Transaction; provided, however, that the Company may issue such
securities in a single transaction to a corporate partner of the Company for
gross proceeds of up to $4 million and, in the same transaction, to another
(non-corporate partner) third party for gross proceeds of up to $1 million,
(ii) issue or sell, or agree to issue or sell, any securities for cash in a non-
public Variable Rate Transactions, provided, however, that the foregoing
limitation on Variable Rate Transactions shall not apply to any such securities
with an aggregate face value outstanding at any time equal to or less than eight
percent (8%) of the Company's outstanding shares of Common Stock.
7.3 Right of Investors to Participate in Future Transactions. The Company
--------------------------------------------------------
agrees that during the MFN Period the Investors will have a right to participate
in future non-public capital raising transactions as set forth in this
Section 7.3. The Company shall give advance written notice to the Investors
prior to any offer or sale of any of its equity securities or any securities
convertible into or exchangeable or exercisable for such securities in a non-
public capital raising transaction. Such notice shall be given upon the
Company's receipt of a written commitment from a third party to engage in such a
transaction with the Company and when the Company reasonably believes that such
transaction will be consummated and publicly announced within two weeks. Prior
to the closing of any such transaction, each Investor shall have the right to
participate in up to 15% of such new offering (or in the case of a Variable Rate
Transaction, up to 50% of such new offering) and purchase such equity securities
for the same consideration and on the same terms and conditions as contemplated
for such third-party sale. An Investor's right to participate in the new
offering shall initially be limited to pro rata participation in accordance with
such Investor's participation in this offering. If an Investor chooses not to
participate in the new offering to some extent or at all, the other Investors
shall have the right, on a pro rata basis to such participation in the new
offering. In order to exercise this right, an Investor must give written notice
to the Company of the Investor's election to participate and such notice must be
given within one week following receipt of the notice from the Company. In the
event the Company gives notice to the Investors of an expected transaction
pursuant to this Section 7.3 but cannot consummate such transaction, the Company
will give the Investors prompt written notice of the cancellation of such
transaction. After written notice of a possible transaction has been given by
the Company pursuant to this Section 7.3, the Investors shall refrain from
trading in the Company's securities until such transaction has been publicly
announced or cancelled. If, subsequent to the Company giving notice to the
Investors hereunder, the terms and conditions of the proposed third-party sale
are changed in any way, the Company shall be required to provide a new notice to
the Investors hereunder and the Investors shall have the right to participate in
the offering on such changed terms and conditions as provided hereunder.
14
<PAGE>
7.4 Opinion of Counsel. On or prior to the Closing Date, the Company
------------------
will deliver to the Investors the opinion of legal counsel to the Company, in
form and substance reasonably acceptable to the Investors, addressing those
legal matters set forth in Schedule 7.4 hereto.
7.5 Reservation of Common Stock Pursuant to Section 7.1 and Exercise of
-------------------------------------------------------------------
Warrants. The Company hereby agrees, at all times with respect to shares
- --------
issuable upon exercise of the Warrants, and at all appropriate times with
respect to shares issuable pursuant to Section 7.1, to reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the additional issuance(s) of Common Stock pursuant
to Section 7.1 and 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 issuance, if any, required pursuant to Section 7.1 plus the number of shares
of Common Stock as shall be necessary to permit the exercise of the Warrants in
accordance with the terms of the Warrants.
7.6 Reports. Within one week of filing the following reports with the
-------
SEC, or in the absence of such filing within the time periods specified below,
the Company shall send a copy of the following reports to each Investor by
regular mail:
(a) Quarterly Reports. As soon as available and in any event within
-----------------
52 days after the end of each fiscal quarter of the Company, the Company's
quarterly report on Form 10-Q or, in the absence of such report, consolidated
balance sheets of the Company and its subsidiaries as at the end of such period
and the related consolidated statements of operations, stockholders' equity and
cash flows for such period and for the portion of the Company's fiscal year
ended on the last day of such quarter, all in reasonable detail and certified by
a principal financial officer of the Company to have been prepared in accordance
with generally accepted accounting principles, subject to year-end and audit
adjustments.
(b) Annual Reports. As soon as available and in any event within 97
--------------
days after the end of each fiscal year of the Company, the Company's Form 10-K
or, in the absence of a Form 10-K, consolidated balance sheets of the Company
and its subsidiaries as at the end of such year and the related consolidated
statements of earnings, stockholders' equity and cash flows for such year, all
in reasonable detail and accompanied by the report on such consolidated
financial statements of an independent certified public accountant selected by
the Company and reasonably satisfactory to the Investor.
(c) Securities Filings. As promptly as practicable and in any event
------------------
within one week after the same are issued or filed, copies of (i) all notices,
proxy statements, financial statements, reports and documents as the Company or
any subsidiary shall send or make available generally to its stockholders or to
financial analysts, and (ii) all periodic and special reports, documents and
registration statements (other than on Form S-8) which the Company or any
subsidiary furnishes or files, or any officer or director of the Company or any
of its subsidiaries (in such person's capacity as such) furnishes or files with
the SEC.
(d) Other Information. Such other information relating to the
-----------------
Company or its subsidiaries as from time to time may reasonably be requested by
the Investors provided the Company produces such information in its ordinary
course of business, and further provided that the Company, solely in its own
discretion, determines that such information is not confidential in nature and
disclosure to the Investor would not be harmful to the Company.
15
<PAGE>
7.7 Press Releases. Any press release or other publicity concerning this
--------------
Agreement or the transactions contemplated by this Agreement shall be submitted
to the Investors for comment at least two (2) business days prior to issuance,
unless the release is required to be issued within a shorter period of time by
law or pursuant to the rules of a national securities exchange. The Company
shall issue a press release concerning the fact and material terms of this
Agreement within one business day of the Closing.
7.8 No Conflicting Agreements. The Company will not, and will not permit
-------------------------
its subsidiaries to, 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 Agreements.
7.9 Insurance. For so long as any Investor beneficially owns any of the
---------
Securities, the Company shall, and shall cause each subsidiary to, have in full
force and effect (a) insurance reasonably believed to be adequate on all assets
and activities of a type customarily insured, covering property damage and loss
of income by fire or other casualty, and (b) insurance reasonably believed to be
adequate protection against all liabilities, claims and risks against which it
is customary for companies similarly situated as the Company and the
subsidiaries to insure.
7.10 Compliance with Laws. For so long as any Investor beneficially owns
--------------------
any of the Securities, the Company will use reasonable efforts, and will cause
each of its subsidiaries to use reasonable efforts, to comply with all
applicable laws, rules, regulations, orders and decrees of all governmental
authorities, except to the extent non-compliance (in one instance or in the
aggregate) would not have a Material Adverse Effect.
7.11 Listing of Underlying Shares and Related Matters. The Company hereby
------------------------------------------------
agrees, promptly following the Closing of the transactions contemplated by this
Agreement, to take such action to cause the Shares and the Warrant Shares to be
listed on the Nasdaq National Market as promptly as possible but no later than
the effective date of the registration contemplated by the Registration Rights
Agreement. The Company further agrees that if the Company applies to have its
Common Stock or other securities traded on any other principal stock exchange or
market, it will include in such application the Common Stock underlying the
Warrants, and will take such other action as is necessary to cause such Common
Stock to be so listed. The Company will take all action necessary to continue
the listing and trading of its Common Stock on the Nasdaq National Market and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of such exchange, as applicable, to ensure
the continued eligibility for trading of the Shares and the Warrant Shares
thereon.
7.12 Corporate Existence. So long as the Investors beneficially own any
-------------------
of the Shares or Warrants, the Company shall maintain its corporate existence,
except in the event of a merger, consolidation or sale of all or substantially
all of the Company's assets, as long as the
16
<PAGE>
surviving or successor entity in such transaction (a) assumes the Company's
obligations hereunder and under the agreements and instruments entered into in
connection herewith, regardless of whether or not the Company would have had a
sufficient number of shares of Common Stock authorized and available for
issuance in order to fulfill its obligations hereunder and effect the exercise
in full of all Warrants outstanding as of the date of such transaction; (b) has
no legal, contractual or other restrictions on its ability to perform the
obligations of the Company hereunder and under the agreements and instruments
entered into in connection herewith; and (c) (i) is a publicly traded
corporation whose common stock and the shares of capital stock issuable upon
exercise of the Warrants are (or would be upon issuance thereof) listed for
trading on the Nasdaq National Market, New York Stock Exchange or American Stock
Exchange, or (ii) if not such a publicly traded corporation, then the buyer
agrees that it will, at the election of an Investor, purchase such Investor's
Shares (and Warrant Shares) at a price equal to 120% of the Per Share Purchase
Price of such Shares unless the Common Stock of the Company, for ten consecutive
trading days after public announcement of the transaction closes at or above
such price in which case the Investor will have no such election right. The
rights of Investors provided in clause (c)(ii) shall expire thirty (30) months
after the date hereof.
8. 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 twenty-four (24) months from the
date of this Agreement; provided, however, that the provisions contained in
Section 7 hereof shall survive in accordance therewith.
9. Arbitration.
-----------
9.1 Scope. Resolution of any and all disputes arising from or in
-----
connection with the Agreements, whether based on contract, tort, common law,
equity, statute, regulation, order or otherwise ("Disputes"), shall be
exclusively governed by and settled in accordance with the provisions of this
Section 9; provided, that the foregoing shall not preclude equitable or other
judicial relief to enforce the provisions hereof or to preserve the status quo
pending resolution of Disputes hereunder.
9.2. Binding Arbitration. The parties hereby agree to submit all Disputes
-------------------
to arbitration for final and binding resolution. Either party may initiate such
arbitration by delivery of a demand therefor (the "Arbitration Demand") to the
other party. The arbitration shall be conducted in New York, New York by a sole
arbitrator selected by agreement of the parties not later than 10 days after
delivery of the Arbitration Demand, or, failing such agreement, appointed
pursuant to the Commercial Arbitration Rules of the America Arbitration
Association, as amended from time to time (the "AAA Rules"). If the arbitrator
becomes unable to serve, his successor(s) shall be similarly selected or
appointed.
9.3. Procedure. The arbitration shall be conducted pursuant to the
---------
Federal Arbitration Act and such procedures as the parties may agree or, in the
absence of or failing such agreement, pursuant to the AAA Rules. Notwithstanding
the foregoing, (a) each party shall have the right to conduct limited discovery
of information relevant to the Dispute; (b) each party shall
17
<PAGE>
provide to the other, reasonably in advance of any hearing, copies of all
documents that a party intends to present in such hearing; (c) all hearings
shall be conducted on an expedited schedule; and (d) all proceedings shall be
confidential, except that either party may at its expense make a stenographic
record thereof.
9.4. Timing. The arbitrator shall use best efforts to complete all
------
hearings not later than 90 days after his or her selection or appointment, and
shall use best efforts to make a final award not later than 30 days thereafter.
The arbitrator shall apportion all costs and expenses of the arbitration,
including the arbitrator's fees and expenses, and fees and expenses of experts
("Arbitration Costs") between the prevailing and non-prevailing party as the
arbitrator shall deem fair and reasonable. In circumstances where a Dispute has
been asserted or defended against on grounds that the arbitrator deems
manifestly unreasonable, the arbitrator may assess all Arbitration Costs against
the non-prevailing party and may include in the award the prevailing party's
attorney's fees and expenses in connection with any and all proceedings under
this Section 9. Notwithstanding the foregoing, in no event may the arbitrator
award multiple or punitive damages.
10. Miscellaneous.
-------------
10.1 Successors and Assigns. This Agreement may not be assigned by a
----------------------
party hereto without the prior written consent of the other party hereto, except
that without the prior written consent of the Company, but after notice duly
given, an Investor may assign its rights and delegate its duties hereunder to an
Affiliate, and without the prior written consent of the Investors, but after
notice duly given and in compliance with this Agreement, the Company may assign
its rights and delegate its duties hereunder to any successor-in-interest
corporation in the event of a merger or consolidation of the Company with or
into another corporation, or any merger or consolidation of another corporation
with or into the Company that results directly or indirectly in an aggregate
change in the ownership or control of more than 50% of the voting rights of the
equity securities of the Company, or the sale of all or substantially all of the
Company's assets. The terms and conditions 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.
10.2 Counterparts. 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.
10.3 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.
18
<PAGE>
10.4 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given only upon delivery to each party to be notified by
(i) personal delivery, (ii) telex or telecopier, upon receipt of the correct
answer back, or (iii) an internationally recognized overnight air courier,
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:
Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730
Attn: Jeffrey M. Arnold
with a copy to:
Hale and Dorr, LLP
60 State Street
Boston, MA 02109
Attn: Steven D. Singer
If to the Investors, to the addresses set forth on the
signature pages hereto.
10.5 Fees and Expenses. The parties hereto shall pay their own costs and
-----------------
expenses in connection herewith, except that the Company shall pay to Tail Wind,
Inc. the sum of 0.5% of the gross proceeds of this offering by the Company as
and for legal and due diligence expenses in connection herewith and such amount
shall be paid at Closing from gross proceeds of the offering.
10.6 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 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.
10.7 Severability. If one or more provisions of this Agreement are held
------------
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
10.8 Entire Agreement. This Agreement, including the Exhibits and
----------------
Schedules hereto, and the Registration Rights Agreement 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.
19
<PAGE>
10.9 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.
10.10 Applicable Law. This Agreement shall be governed by, and construed
--------------
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
The Company:
CAMBRIDGE HEART, INC.
By: /s/ Jeffrey Arnold
-----------------------------
Name: Jeffrey Arnold
Title: Chief Executive Officer
20
<PAGE>
The Investor: The Tail Wind Fund Ltd.
---------------------------------
By: /s/ Jason McCarroll
-----------------------------
Brighton Holdings Limited
as Sole Director
By:
-----------------------------
Name:
Title:
Aggregate Purchase Price: $2,500,000
-----------
Number of Shares of Common Stock: 476,190
-------------
Number of Warrants: 47,619
---------------
Effective per share Purchase Price of Shares: $5.25
-----------
Exercise price of Warrants: $7.22 (10% premium to Market Price, but no
-----------
lower than closing bid price on date immediately prior to Closing Date)
Address for Notice: The Tail Wind Fund Ltd.
-----------------------------------
MeesPierson (Bahamas) Ltd.
-----------------------------------
Attn: Jason McCarroll
-----------------------------------
Windermere House, 404 East Bay St.
-----------------------------------
P.O. Box SS 5539, Nassau, Bahamas
-----------------------------------
Tel: 242-393-8777 Fax: 242-393-9021
-----------------------------------
with a copy to:
David Crook, Esq.
The Tail Wind Fund Ltd.
c/o EASI
4th Floor, No. 1 Regent Street
London, SW1Y 4NS UK
Telephone: 144-171-468-7660
Facsimile: 7657
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005
Attn: LaDawn Naegle
Telephone: 202/508-6046
Facsimile: 202/508-6200
21
<PAGE>
The Investor: Special Situations Private Equity Fund, L.P.
--------------------------------------------
By: /s/ David M. Greenhouse
----------------------------------------
Name: David M. Greenhouse
Title:
By:
----------------------------------------
Name:
Title:
Aggregate Purchase Price: $1,197,000
-----------
Number of Shares of Common Stock: 228,000
-------------
Number of Warrants: 22,800
---------------
Effective per share Purchase Price of Shares: $5.25
-----------
Exercise price of Warrants: $7.22 (10% premium to Market Price, but no
-----------
lower than closing bid price on date immediately prior to Closing Date)
Address for Notice: Special Situations Private Equity Fund, L.P.
--------------------------------------------
153 East 53rd
--------------------------------------------
New York, NY 10022
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
with a copy to:
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005
Attn: LaDawn Naegle
Telephone: 202/508-6046
Facsimile: 202/508-6200
22
<PAGE>
The Investor: Special Situations Fund III, L.P.
---------------------------------
By: /s/ David M. Greenhouse
-----------------------------
Name: David M. Greenhouse
Title:
By:
-----------------------------
Name:
Title:
Aggregate Purchase Price: $303,000
-----------
Number of Shares of Common Stock: 57,714
-------------
Number of Warrants: 5,771
---------------
Effective per share Purchase Price of Shares: $5.25
-----------
Exercise price of Warrants: $7.22 (10% premium to Market Price, but no
-----------
lower than closing bid price on date immediately prior to Closing Date)
Address for Notice: Special Situations Fund III, L.P.
---------------------------------
153 East 53rd
---------------------------------
New York, NY 10022
---------------------------------
---------------------------------
---------------------------------
---------------------------------
with a copy to:
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005
Attn: LaDawn Naegle
Telephone: 202/508-6046
Facsimile: 202/508-6200
23
<PAGE>
The Investor: Geoffrey H. Galley
---------------------------------
By: /s/ Geoffrey H. Galley
-----------------------------
Name: Geoffrey H. Galley
Title:
By:
-----------------------------
Name:
Title:
Aggregate Purchase Price: $1,000,000
-----------
Number of Shares of Common Stock: 190,416
-------------
Number of Warrants: 19,048
---------------
Effective per share Purchase Price of Shares: $5.25
-----------
Exercise price of Warrants: $7.22 (10% premium to Market Price, but no
-----------
lower than closing bid price on date immediately prior to Closing Date)
Address for Notice: Geoffrey H. Galley
---------------------------
Red Lodge
---------------------------
The Close
---------------------------
Totteridge
---------------------------
London
---------------------------
N20 8PJ UK
---------------------------
with a copy to:
Bryan Cave LLP
700 Thirteenth Street, N.W.
Washington, D.C. 20005
Attn: LaDawn Naegle
Telephone: 202/508-6046
Facsimile: 202/508-6200
24
<PAGE>
Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (the "Agreement") is made and entered
into as of this 8th day of June, 1999 by and among Cambridge Heart, Inc., a
Delaware corporation (the "Company"), and the "Investors" named in that Purchase
Agreement of even date herewith by and among the Company and the Investors (the
"Purchase Agreement").
The parties hereby agree as follows:
1. Certain Definitions
-------------------
As used in this Agreement, the following terms shall have the following
meanings:
"Additional Registrable Securities" shall mean the shares of Common
---------------------------------
Stock, if any, issued to the Investors pursuant to Section 7.1 of the Purchase
Agreement.
"Common Stock" shall mean the Company's Common Stock, par value $0.001
------------
per share.
"Investors" shall mean the purchasers identified in the Purchase
---------
Agreement and any affiliate of any Investor who is a subsequent holder of any
Warrants, Registrable Securities or Additional Registrable Securities.
"Prospectus" shall mean the prospectus included in any Registration
----------
Statement, as amended or supplemented by any amendment or prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities or Additional Registrable Securities covered by such Registration
Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference
in such prospectus.
"Register," "registered" and "registration" refer to a registration made
-------- ---------- ------------
by preparing and filing a registration statement or similar document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such registration statement or document.
"Registrable Securities" shall mean the shares of Common Stock issued
----------------------
and issuable to the Investors pursuant to the Purchase Agreement (other than
additional shares of Common Stock issuable pursuant to Section 7.1 of the
Purchase Agreement) and issuable upon the exercise of the Warrants.
"Registration Statement" shall mean any registration statement filed by
----------------------
the Company under the 1933 Act of the Company that covers the resale of any of
the Registrable
<PAGE>
Securities or Additional Registrable Securities pursuant to the provisions of
this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission.
---
"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.
"Warrants" mean the warrants to purchase shares of Common Stock issued
--------
to the Investors pursuant to the Purchase Agreement, the form of which is
attached to the Purchase Agreement as Exhibit A.
2. Registration.
------------
(a) Registration Statements.
-----------------------
(i) Registrable Securities. Promptly following the closing of the
----------------------
purchase and sale of Common Stock and Warrants contemplated by the Purchase
Agreement (the "Closing Date") (but no later than thirty (30) days after the
Closing Date), the Company shall prepare and file with the SEC one Registration
Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on
such form of registration statement as is then available to effect a
registration for resale of the Registrable Securities, subject to the Investors'
consent) covering the resale of the Registrable Securities in an amount equal to
the number of shares of Common Stock issued to the Investors on the Closing Date
plus the number of shares of Common Stock necessary to permit the exercise in
full of the Warrants. Such Registration Statement also shall cover, to the
extent allowable under the 1933 Act and the Rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities. No securities shall be included in the
Registration Statement without the consent of each Investor other than the
Registrable Securities. The Registration Statement (and each amendment or
supplement thereto, and each request for acceleration of effectiveness thereof)
shall be provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission.
(ii) Additional Registrable Securities. Upon the written demand of any
---------------------------------
Investor and following the issuance of any additional shares of Common Stock to
such Investor pursuant to Section 7.1 of the Purchase Agreement, the Company
shall prepare and file with the SEC one Registration Statement on Form S-3 (or,
if Form S-3 is not then available to the Company, on such form of registration
statement as is then available to effect a registration for resale of the
Additional Registrable Securities, subject to the Investor's consent) covering
the
2
<PAGE>
resale of the Additional Registrable Securities in an amount equal to the
number of shares of Common Stock issued to and designated in the demand by such
Investor. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the Rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Additional Registrable Securities. No securities shall be included in the
Registration Statement without the consent of the Investor other than the
Registrable Securities and the Additional Registrable Securities. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) to the Investor and its counsel prior to its filing
or other submission.
(b) Expenses. The Company will pay all expenses associated with each
--------
registration, including the Investors' reasonable expenses in connection with
the registration (including the reasonable expenses of one counsel designated by
the Investors) but excluding discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals.
(c) Effectiveness.
-------------
(i) The Company shall use its best efforts to have each Registration
Statement declared effective as soon as practicable. If (A) the Registration
Statement covering Registrable Securities is not declared effective by the SEC
within three (3) months following the Closing Date, or the Registration
Statement covering Additional Registrable Securities is not declared effective
by the SEC within three (3) months following the demand of an Investor relating
to the Additional Registrable Securities covered thereby, (each, a "Registration
Date"), (B) after a Registration Statement has been declared effective by the
SEC, sales cannot be made pursuant to such Registration Statement (by reason of
a stop order, or the Company's failure to update the Registration Statement) but
except as excused pursuant to subparagraph (ii) below, or (C) the Common Stock
generally or the Registrable Securities specifically is not listed or included
for quotation on the Nasdaq National Market System, the Nasdaq Small Cap Market,
the New York Stock Exchange or the American Stock Exchange, then the Company
will make pro-rata payments to each Investor, as liquidated damages and not as a
penalty, in an amount equal to 2% of the aggregate amount paid by such Investor
on the Closing Date to the Company for any month or pro rata for any portion
thereof following the Registration Date during which any of the events described
in (A) or (B) or (C) above occurs and is continuing (the "Blackout Period").
The Blackout Period shall terminate upon (x) the effectiveness of the applicable
Registration Statement in the case of (A) and (B) above; (y) listing or
inclusion of the Common Stock on the Nasdaq National Market System, the Nasdaq
Small Cap Market, the New York Stock Exchange or the American Stock Exchange in
the case of (C) above; and (z) in the case of the events described in (A) or (B)
above, the earlier termination of the Registration Period (as defined in Section
3(a) below). The amounts payable as liquidated damages pursuant to this
paragraph shall be payable, at the option of the Company, in lawful money of the
United States or in shares of Common Stock at the Market Price (as that term is
defined in the Purchase Agreement), and amounts payable as liquidated damages
shall be paid monthly on the last day of each month following the commencement
of the Blackout Period until the termination of the Blackout Period.
3
<PAGE>
Amounts payable as liquidated damages hereunder shall cease when an Investor no
longer holds Warrants or Registrable Securities, or Additional Registrable
Securities, as applicable.
(ii) For not more than ten (10) consecutive trading days or for a
total of not more than twenty (20) trading days in any twelve (12) month period,
the Company may delay the disclosure of material non-public information
concerning the Company, by terminating or suspending effectiveness of any
registration contemplated by this Section containing such information, the
disclosure of which at the time is not, in the good faith opinion of the
Company, in the best interests of the Company (an "Allowed Delay"); provided,
that the Company shall promptly (a) notify the Investors in writing of the
existence of (but in no event, without the prior written consent of an Investor,
shall the Company disclose to such Investor any of the facts or circumstances
regarding) material non-public information giving rise to an Allowed Delay, and
(b) advise the Investors in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay. The duration of the MFN Period
provided for in the Purchase Agreement will be extended by the number of days of
any and all Allowed Delays.
(d) Underwritten Offering. If any offering pursuant to a Registration
---------------------
Statement pursuant to Section 2(a) hereof involves an underwritten offering, the
Company shall have the right to select an investment banker and manager to
administer the offering, which investment banker or manager shall be reasonably
satisfactory to the Investors.
3. Company Obligations. The Company will use its best efforts to effect
-------------------
the registration of the Registrable Securities and Additional Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company
will, as expeditiously as possible:
(a) use its best efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earlier of the date on which all Registrable Securities or Additional
Registrable Securities, as the case may be, covered by such Registration
Statement, as amended from time to time, have been sold (the "Registration
Period");
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and the Prospectus as may be necessary
to keep the Registration Statement effective for the period specified in Section
3(a) and to comply with the provisions of the 1933 Act and the 1934 Act with
respect to the distribution of all Registrable Securities and Additional
Registrable Securities; provided that, at least three (3) days prior to the
filing of a Registration Statement or Prospectus, or any amendments or
supplements thereto, the Company will furnish to the Investors copies of all
documents proposed to be filed, which documents will be subject to the comments
of the Investors;
(c) permit one counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
seven (7) days prior to their filing with the SEC and not file any document to
which such counsel reasonably objects;
4
<PAGE>
(d) furnish to the Investors and their legal counsel (i) promptly after
the same is prepared and publicly distributed, filed with the SEC, or received
by the Company, one copy of any Registration Statement and any amendment
thereto, each preliminary prospectus and Prospectus and each amendment or
supplement thereto, and each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion of any thereof which contains information for which the
Company has sought confidential treatment), and (ii) such number of copies of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities and
Additional Registrable Securities owned by such Investor;
(e) in the event the Company selects an underwriter for the offering,
the Company shall enter into and perform its reasonable obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriter of such offering;
(f) if required by the underwriter, at the request of the Investors, the
Company shall furnish, on the date that Registrable Securities or Additional
Registrable Securities, as applicable, are delivered to an underwriter, if any,
for sale in connection with the Registration Statement (i) an opinion, dated as
of such date, from counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the underwriter and the Investors
and (ii) a letter, dated such date, from the Company's independent certified
public accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriter and the Investors;
(g) make effort to prevent the issuance of any stop order or other
suspension of effectiveness and, if such order is issued, obtain the withdrawal
of any such order at the earliest possible moment;
(h) furnish to each Investor at least five copies of the Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules by courier pursuant to the notice requirements of
Section 10.4 of the Purchase Agreement;
(i) prior to any public offering of Registrable Securities or Additional
Registrable Securities, use its reasonable best efforts to register or qualify
or cooperate with the Investors and their counsel in connection with the
registration or qualification of such Registrable Securities or Additional
Registrable Securities, as applicable, for offer and sale under the securities
or blue sky laws of such jurisdictions as the Investors reasonably request in
writing and do any and all other reasonable acts or things necessary or
advisable to enable the distribution in such jurisdictions of the Registrable
Securities or Additional Registrable Securities covered by the Registration
Statement;
5
<PAGE>
(j) cause all Registrable Securities or Additional Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar
securities issued by the Company are then listed;
(k) immediately notify the Investors, at any time when a Prospectus
relating to the Registrable Securities or Additional Registrable Securities is
required to be delivered under the Securities Act, upon discovery that, or upon
the happening of any event as a result of which, the Prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of the
circumstances then existing, and at the request of any such holder, promptly
prepare and furnish to such holder a reasonable number of copies of a supplement
to or an amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities or Additional
Registrable Securities, as applicable, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; and
(l) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC under the 1933 Act and the 1934 Act, take such other
actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities and Additional Registrable Securities, if applicable,
hereunder; and make available to its security holders, as soon as reasonably
practicable, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least twelve months, beginning after
the effective date of each Registration Statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the 1933 Act (for the purpose
of this subsection 3(m), "Availability Date" means the 45th day following the
end of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company's fiscal year, "Availability Date" means the 90th day
after the end of such fourth fiscal quarter).
4. Obligations of the Investors.
----------------------------
(a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities or Additional Registrable Securities, as applicable, that
each Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities or Additional Registrable Securities, as
applicable, held by it and the intended method of disposition of the Registrable
Securities or Additional Registrable Securities, as applicable, held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities or Additional Registrable Securities, as applicable, and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least fifteen (15) business days prior to the first
anticipated filing date of any Registration Statement, the Company shall notify
each Investor of the information the Company requires from such Investor if such
Investor elects to have any of the Registrable Securities or Additional
Registrable Securities included in the Registration
6
<PAGE>
Statement. An Investor shall provide such information to the Company at least
five (5) business days prior to the first anticipated filing date of such
Registration Statement if such Investor elects to have any of the Registrable
Securities or Additional Registrable Securities included in the Registration
Statement.
(b) Each Investor, by its acceptance of the Registrable Securities and
Additional Registrable Securities, if any, agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of a Registration Statement hereunder, unless such Investor has notified
the Company in writing of its election to exclude all of its Registrable
Securities or Additional Registrable Securities, as applicable, from the
Registration Statement, in which case the Investor shall be deemed to have
waived its rights to have Registrable Securities or Additional Registrable
Securities, as the case may be, registered under this Agreement, unless the
Investor has good cause for such an election.
(c) In the event the Company determines to engage the services of an
underwriter, each Investor agrees to enter into and perform its obligations
under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the dispositions of the
Registrable Securities or Additional Registrable Securities, as applicable.
(d) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event rendering a Registration Statement no
longer effective, such Investor will immediately discontinue disposition of
Registrable Securities or Additional Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities or Additional
Registrable Securities, until the Investor's receipt of the copies of the
supplemented or amended prospectus filed with the SEC and declared effective
and, if so directed by the Company, the Investor shall deliver to the Company
(at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor's possession of the
prospectus covering the Registrable Securities or Additional Registrable
Securities, as applicable, current at the time of receipt of such notice.
(e) No Investor may participate in any underwritten registration
hereunder unless it (i) agrees to sell the Registrable Securities or Additional
Registrable Securities, as applicable, on the basis provided in any underwriting
arrangements in usual and customary form entered into by the Company, (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements, and (iii) agrees to pay its pro rata share of
all underwriting discounts and commissions and any expenses in excess of those
payable by the Company pursuant to the terms of this Agreement.
7
<PAGE>
5. Indemnification.
---------------
(a) Indemnification by Company. The Company agrees to indemnify and hold
--------------------------
harmless, to the fullest extent permitted by law the Investors, each of their
officers, directors, partners and employees and each person who controls the
Investors (within the meaning of the 1933 Act) and each underwriter of
Registrable Securities and Additional Registrable Securities against all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
attorney's fees) and expenses imposed on such person caused by (i) any untrue or
alleged untrue statement of a material fact contained in any Registration
Statement, Prospectus or any preliminary prospectus or any amendment or
supplement thereto or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same are based upon any
information furnished in writing to the Company by such Investors, expressly for
use therein, or (ii) any violation by the Company of any federal, state or
common law, rule or regulation applicable to the Company in connection with any
Registration Statement, Prospectus or any preliminary prospectus, or any
amendment or supplement thereto, and shall reimburse in accordance with
subparagraph (c) below, each of the foregoing persons for any legal and any
other expenses reasonably incurred in connection with investigating or defending
any such claims. The foregoing is subject to the condition that, insofar as the
foregoing indemnities relate to any untrue statement, alleged untrue statement,
omission or alleged omission made in any preliminary prospectus or Prospectus
that is eliminated or remedied in any Prospectus or amendment or supplement
thereto, the above indemnity obligations of the Company shall not inure to the
benefit of any indemnified party if a copy of such corrected Prospectus or
amendment or supplement thereto had been made available to such indemnified
party and was not sent or given by such indemnified party at or prior to the
time such action was required of such indemnified party by the 1933 Act and if
delivery of such Prospectus or amendment or supplement thereto would have
eliminated (or been a sufficient defense to) any liability of such indemnified
party with respect to such statement or omission. Indemnity under this Section
5(a) shall remain in full force and effect regardless of any investigation made
by or on behalf of any indemnified party and shall survive the permitted
transfer of the Registrable Securities and Additional Registrable Securities.
(b) Indemnification by Investor. In connection with any registration
---------------------------
pursuant to the terms of this Agreement, each Investor will furnish to the
Company in writing such information as the Company reasonably requests
concerning the holders of Registrable Securities and Additional Registrable
Securities or the proposed manner of distribution for use in connection with any
Registration Statement or Prospectus and agrees, severally but not jointly, to
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees, stockholders and each person who
controls the Company (within the meaning of the 1933 Act) and each underwriter
of Registrable Securities and Additional Registrable Securities against any
losses, claims, damages, liabilities and expense (including reasonable
attorney's fees) resulting from any untrue statement of a material fact or any
omission of a material fact required to be stated in the Registration Statement
or Prospectus or preliminary prospectus or amendment or supplement thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent that such untrue statement or omission is contained in any
information furnished in writing by such Investor to the Company specifically
for
8
<PAGE>
inclusion in such Registration Statement or Prospectus or amendment or
supplement thereto and that such information was substantially relied upon by
the Company in preparation of the Registration Statement or Prospectus or any
amendment or supplement thereto. In no event shall the liability of an Investor
be greater in amount than the dollar amount of the proceeds (net of all expense
paid by such Investor and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue statement or omission) received by
such Investor upon the sale of the Registrable Securities or Additional
Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person entitled to
--------------------------------------
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for in
------------
the preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
or Additional Registrable Securities be greater in amount than the dollar amount
of the proceeds (net of all expenses paid by such holder and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged
9
<PAGE>
omission) received by it upon the sale of the Registrable Securities or
Additional Registrable Securities giving rise to such contribution obligation.
6. Miscellaneous.
-------------
(a) Amendments and Waivers. This Agreement may be amended only by a
----------------------
writing signed by the parties hereto. The Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of each Investor.
(b) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made as set forth in Section 10.4 of the Purchase
Agreement.
(c) Assignments and Transfers by Investors. This Agreement and all the
--------------------------------------
rights and obligations of the Investors hereunder may not be assigned or
transferred to any transferee or assignee except to an affiliate of an Investor
who is a subsequent holder of any Warrants, Registrable Securities or Additional
Registrable Securities.
(d) Assignments and Transfers by the Company. This Agreement may not be
----------------------------------------
assigned by the Company without the prior written consent of each Investor,
except that without the prior written consent of the Investors, but after notice
duly given, the Company shall assign its rights and delegate its duties
hereunder to any successor-in-interest corporation, and such successor-in-
interest shall assume such rights and duties, in the event of a merger or
consolidation of the Company with or into another corporation or the sale of all
or substantially all of the Company's assets.
(e) Benefits of the Agreement. The terms and conditions 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.
(f) Counterparts. 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.
(g) 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.
(h) Severability. If one or more provisions of this Agreement are held
------------
to be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its terms
to the fullest extent permitted by law.
10
<PAGE>
(i) 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.
(j) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
(k) Applicable Law. This Agreement shall be governed by, and construed
--------------
in accordance with, the laws of the State of New York without regard to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
The Company:
By: /s/Jeffrey Arnold
-----------------
Name: Jeffrey Arnold
Title: Chief Executive Officer
The Investors:
By: /s/ Jason McCarroll
-------------------
Brighton Holdings Limited
as Sole Director
By: /s/ Geoffrey Galley
-------------------
Name: Geoffrey Galley
Title:
By: /s/ David M. Greenhouse
-----------------------
Name: David M. Greenhouse
Title:
By: /s/ David M. Greenhouse
-----------------------
Name: David M. Greenhouse
Title:
11
<PAGE>
EXHIBIT 10.5
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT COVERING THIS WARRANT UNDER SAID ACT OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE 9, 2003 ("EXPIRATION DATE").
CAMBRIDGE HEART, INC.
WARRANT TO PURCHASE 19,048 SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE ("Common Stock")
For VALUE RECEIVED, Geoffrey H. Galley ("Warrantholder"), is entitled to
purchase, subject to the provisions of this Warrant, from Cambridge Heart, Inc.,
a Delaware corporation ("Company"), at any time not later than 5:00 P.M.,
Eastern time, on the Expiration Date, at an exercise price per share equal to
$7.22 (the exercise price in effect being herein called the "Warrant Price"),
19,048 shares ("Warrant Shares") of Common Stock. The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to adjustment from time to time as described herein.
Section 1. Registration. The Company shall maintain books for the
------------
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, the Warrant may be transferred
---------
only pursuant to a registration statement filed under the Securities Act of
1933, as amended ("Securities Act") or an exemption from registration
thereunder. Subject to such restrictions, the Company shall transfer the Warrant
from time to time upon the books to be maintained by the Company for that
purpose, upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer upon any such transfer, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
-------------------
Warrantholder may exercise the Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof). The Warrantholder will not be required to make any
cash payment upon exercise hereunder, but shall only be entitled to effect a
cashless exercise of this Warrant for that number of Warrant Shares indicated in
the Exercise Agreement.
<PAGE>
The Warrant Shares so purchased shall be deemed to be issued to the holder
hereof or such holder's designee, as the record owner of such shares, as of the
close of business on the date on which this Warrant shall have been surrendered
(or evidence of loss, theft or destruction thereof and security or indemnity
satisfactory to the Company) and the completed Exercise Agreement shall have
been delivered. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
To effect the cashless exercise, the Warrantholder shall include in the
Exercise Agreement a calculation of the number of shares of Common Stock to be
issued determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the Market Price per share of the Common Stock on the date of
exercise and the Warrant Price, and the denominator of which shall be such
Market Price per share of the Common Stock. For this purpose, the "Market Price"
of the Common Stock shall be the closing price of the Common Stock as reported
by the Nasdaq National Market on the trading day first preceding the date in
question.
Each exercise hereof shall constitute the representation and warranty of
the Warrantholder to the Company that the representations and warranties
contained in Article 5 of the Purchase Agreement (as defined below) are true and
correct in all material respects as of the time of such exercise.
Section 4. Compliance with the Securities Act of 1933. Neither this
------------------------------------------
Warrant nor the Common Stock issued upon exercise hereof nor any other security
issued or issuable upon exercise of this Warrant may be offered or sold except
as provided in this agreement and in conformity with the Securities Act, and
then only against receipt of an agreement of such person to whom such offer of
sale is made to comply with the provisions of this Section 4 with respect to any
resale or other disposition of such security. The Company may cause the legend
set forth on the first page of this Warrant to be set forth on each Warrant or
similar legend on any security issued or issuable upon exercise of this Warrant,
unless counsel for the Company is of the opinion as to any such security that
such legend is unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
----------------
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any
2
<PAGE>
certificates for Warrant Shares in a name other than that of the registered
holder of the Warrant in respect of which such shares are issued, and in such
case, the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to
the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is due.
Section 6. Mutilated or Missing Warrants. In case the Warrant shall be
-----------------------------
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond, if requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents and
---------------------------
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section
7, out of the authorized and unissued Common Stock, sufficient shares to provide
for the exercise of the rights of purchase represented by the Warrant. The
Company further represents and warrants that the transfer agent for the Common
Stock ("Transfer Agent"), and every subsequent transfer agent for the Common
Stock or other shares of the Company's capital stock issuable upon the exercise
of any of the right of purchase or conversion aforesaid, shall be irrevocably
authorized and directed at all times to issue such number of authorized and
unissued shares of Common Stock as shall be issuable upon the proper exercise
hereof. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company. The Company will keep a conformed copy of this
Warrant on file with the Transfer Agent and with every subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant. The
Company will supply from time to time the Transfer Agent with duly executed
stock certificates required to honor the outstanding Warrant.
Section 8. Adjustments. Subject and pursuant to the provisions of this
-----------
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while the
Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares
into a smaller number of shares or issue by reclassification of its
outstanding shares of Common Stock any shares of its capital stock
(including any such reclassification in connection with a consolidation or
merger in which the
3
<PAGE>
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become
effective, shall be adjusted by the Company so that the Warrantholder
thereafter exercising the Warrant shall be entitled to receive the number
of shares of Common Stock or other capital stock which the Warrantholder
would have received if the Warrant had been exercised immediately prior to
such event. Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) If any capital reorganization, reclassification of the capital
stock of the Company, consolidation or merger of the Company with another
corporation in which the Company is not the survivor, or sale, transfer or
other disposition of all or substantially all of the Company's properties
to another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon
the basis and upon the terms and conditions herein specified and in lieu of
the Warrant Shares immediately theretofore issuable upon exercise of the
Warrant, such shares of stock, securities or properties as would have been
issuable or payable with respect to or in exchange for a number of Warrant
Shares equal to the number of Warrant Shares immediately theretofore
issuable upon exercise of the Warrant, had such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of each
Warrantholder to the end that the provisions hereof (including, without
limitations, provision for adjustment of the Warrant Price) shall
thereafter be applicable, as nearly equivalent as may be practicable in
relation to any shares of stock, securities or properties thereafter
deliverable upon the exercise thereof. The Company shall not effect any
such consolidation, merger, sale, transfer or other disposition unless
prior to or simultaneously with the consummation thereof the successor
corporation (if other than the Company) resulting from such consolidation
or merger, or the corporation purchasing or otherwise acquiring such assets
or other appropriate corporation or entity shall assume the obligation to
deliver to the holder of the Warrant such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may be
entitled to purchase and the other obligations under this Warrant. The
provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales,
transfers or other dispositions.
(c) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or
assets (other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends or distributions
referred to in Section 8(a)), or subscription rights or warrants, the
Warrant Price to be in effect after such payment date shall be determined
by multiplying the Warrant Price in effect immediately prior to such
payment date by a fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding multiplied by the Market Price
4
<PAGE>
per share of Common Stock (as determined pursuant to Section 3), less the
fair market value (as determined by the Company's Board of Directors in
good faith) of said assets or evidences of indebtedness so distributed, or
of such subscription rights or warrants, and the denominator of which shall
be the total number of shares of Common Stock outstanding multiplied by
such Market Price per share of Common Stock. Such adjustment shall be made
successively whenever such a payment date is fixed.
(d) If pursuant to the Purchase Agreement by and between the Company
and the Investor named therein dated June 8, 1999 (the "Purchase
Agreement") there is an adjustment to the Purchase Price under Section
7.1(a), then the Warrant Price shall be reduced to a price equal to 110% of
such per share adjusted Purchase Price. Such adjustments shall be made
successively whenever required.
(e) An adjustment shall become effective immediately after the
payment date in the case of each dividend or distribution and immediately
after the effective date of each other event which requires an adjustment.
(f) In the event that, as a result of an adjustment made pursuant to
Section 8(a), the holder of the Warrant shall become entitled to receive
any shares of capital stock of the Company other than shares of Common
Stock, the number of such other shares so receivable upon exercise of the
Warrant shall be subject thereafter to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Warrant Shares contained in this Warrant.
Section 9. Fractional Interest. The Company shall not be required to
-------------------
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon the exercise of the Warrant (or specified portions thereof), the
fractional share shall be disregarded and the number of shares to be issued upon
exercise shall be the number of whole shares only.
Section 10. Benefits. Nothing in this Warrant shall be construed to give
--------
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 11. Notices to Warrantholder. Upon the happening of any event
------------------------
requiring an adjustment of the Warrant Price, the Company shall forthwith give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The certificate of the Company's independent certified
public accountants shall be conclusive evidence of the correctness of any
computation made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment.
5
<PAGE>
Section 12. Identity of Transfer Agent. The Transfer Agent for the Common
--------------------------
Stock is American Stock Transfer & Trust Company, 40 Wall Street, New York,
New York 10005. Forthwith upon the appointment of any subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant, the
Company will mail to the Warrantholder a statement setting forth the name and
address of such transfer agent.
Section 13. Notices. Any notice pursuant hereto to be given or made by
-------
the Warrantholder to or on the Company shall be sufficiently given or made if
sent by certified mail, return receipt requested, postage prepaid, addressed as
follows:
Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730
Attention: Jeffrey M. Arnold
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 13.
Any notice pursuant hereto to be given or made by the Company to or on the
Warrantholder shall be sufficiently given or made if personally delivered or if
sent by an internationally recognized courier services by overnight or two-day
service, to the address set forth on the books of the Company or, as to each of
the Company and the Warrantholder, at such other address as shall be designated
by such party by written notice to the other party complying as to delivery with
the terms of this Section 13. All such notices, requests, demands, directions
and other communications shall, when sent by courier be effective three (3) days
after delivery to such courier as provided and addressed as aforesaid.
Section 14. Registration Rights. The initial holder of this Warrant is
-------------------
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement dated as of as of
June 8, 1999.
Section 15. Successors. All the covenants and provisions hereof by or
----------
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 16. Governing Law. This Warrant shall be deemed to be a contract
-------------
made under the laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be duly
executed, as of the day and year first above written.
6
<PAGE>
CAMBRIDGE HEART, INC.
By: /s/ Jeffrey Arnold
------------------------------
Name: Jeffrey Arnold
Title: Chief Executive Officer
7
<PAGE>
CAMBRIDGE HEART, INC.
WARRANT EXERCISE FORM
CAMBRIDGE HEART, INC.
- ---------------------
- ---------------------
This undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by [_] cash; or [_] cashless exercise of the within Warrant by
surrender of the Warrant, shares of Common Stock ("Warrant
---------------
Shares") provided for therein, and requests that certificates for the Warrant
Shares be issued as follows:
--------------------------------
Name
--------------------------------
Address
--------------------------------
--------------------------------
--------------------------------
Federal Tax Identification No.
or Social Security No.
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of the Warrant be registered in the
name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
Dated: ,
------------------ ----
Note: The signature must correspond with
Signature:
the name of the registered holder as written -----------------------
on the first page of the Warrant in every
particular, without alteration or enlargement -------------------------------
or any change whatever, unless the Warrant Name (please print)
has been assigned. -------------------------------
-------------------------------
-------------------------------
Address
______________________________
Federal Identification or
Social Security No.
Assignee:
-------------------------------
-------------------------------
-------------------------------
-------------------------------
8
<PAGE>
Exhibit 10.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT COVERING THIS WARRANT UNDER SAID ACT OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE 9, 2003 ("EXPIRATION DATE").
CAMBRIDGE HEART, INC.
WARRANT TO PURCHASE 5,771 SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE ("COMMON STOCK")
For VALUE RECEIVED, Special Situations Fund III, L.P. ("Warrantholder"),
is entitled to purchase, subject to the provisions of this Warrant, from
Cambridge Heart, Inc., a Delaware corporation ("Company"), at any time not later
than 5:00 P.M., Eastern time, on the Expiration Date, at an exercise price per
share equal to $7.22 (the exercise price in effect being herein called the
"Warrant Price"), 5,771 shares ("Warrant Shares") of Common Stock. The number of
Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time as described herein.
Section 1. Registration. The Company shall maintain books for the
------------
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, the Warrant may be transferred
---------
only pursuant to a registration statement filed under the Securities
Act of 1933, as amended ("Securities Act") or an exemption from registration
thereunder. Subject to such restrictions, the Company shall transfer the Warrant
from time to time upon the books to be maintained by the Company for that
purpose, upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer upon any such transfer, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
-------------------
Warrantholder may exercise the Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof). The Warrantholder will not be required to make
any cash payment upon exercise hereunder, but shall only be entitled to effect a
cashless exercise of this Warrant for that number of Warrant Shares indicated in
the Exercise
<PAGE>
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such holder's designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered (or evidence of loss, theft or destruction thereof and security or
indemnity satisfactory to the Company) and the completed Exercise Agreement
shall have been delivered. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within a reasonable time, not exceeding
ten (10) business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such certificates, deliver to
the holder a new Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.
To effect the cashless exercise, the Warrantholder shall include in the
Exercise Agreement a calculation of the number of shares of Common Stock to be
issued determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the Market Price per share of the Common Stock on the date of
exercise and the Warrant Price, and the denominator of which shall be such
Market Price per share of the Common Stock. For this purpose, the "Market
Price" of the Common Stock shall be the closing price of the Common Stock as
reported by the Nasdaq National Market on the trading day first preceding the
date in question.
Each exercise hereof shall constitute the representation and warranty of
the Warrantholder to the Company that the representations and warranties
contained in Article 5 of the Purchase Agreement (as defined below) are true and
correct in all material respects as of the time of such exercise.
Section 4. Compliance with the Securities Act of 1933. Neither this
------------------------------------------
Warrant nor the Common Stock issued upon exercise hereof nor any other security
issued or issuable upon exercise of this Warrant may be offered or sold except
as provided in this agreement and in conformity with the Securities Act, and
then only against receipt of an agreement of such person to whom such offer of
sale is made to comply with the provisions of this Section 4 with respect to any
resale or other disposition of such security. The Company may cause the legend
set forth on the first page of this Warrant to be set forth on each Warrant or
similar legend on any security issued or issuable upon exercise of this Warrant,
unless counsel for the Company is of the opinion as to any such security that
such legend is unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
----------------
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any
2
<PAGE>
certificates for Warrant Shares in a name other than that of the registered
holder of the Warrant in respect of which such shares are issued, and in such
case, the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to
the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is due.
Section 6. Mutilated or Missing Warrants. In case the Warrant shall be
-----------------------------
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond, if requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents and
---------------------------
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section
7, out of the authorized and unissued Common Stock, sufficient shares to provide
for the exercise of the rights of purchase represented by the Warrant. The
Company further represents and warrants that the transfer agent for the Common
Stock ("Transfer Agent"), and every subsequent transfer agent for the Common
Stock or other shares of the Company's capital stock issuable upon the exercise
of any of the right of purchase or conversion aforesaid, shall be irrevocably
authorized and directed at all times to issue such number of authorized and
unissued shares of Common Stock as shall be issuable upon the proper exercise
hereof. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company. The Company will keep a conformed copy of this
Warrant on file with the Transfer Agent and with every subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant. The
Company will supply from time to time the Transfer Agent with duly executed
stock certificates required to honor the outstanding Warrant.
Section 8. Adjustments. Subject and pursuant to the provisions of this
-----------
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while the
Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
3
<PAGE>
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) If any capital reorganization, reclassification of the capital stock
of the Company, consolidation or merger of the Company with another corporation
in which the Company is not the survivor, or sale, transfer or other disposition
of all or substantially all of the Company's properties to another corporation
shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each Warrantholder shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions herein specified and in lieu of the Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, such shares of
stock, securities or properties as would have been issuable or payable with
respect to or in exchange for a number of Warrant Shares equal to the number of
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
had such reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of each Warrantholder to
the end that the provisions hereof (including, without limitations, provision
for adjustment of the Warrant Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or properties thereafter deliverable upon the exercise thereof. The Company
shall not effect any such consolidation, merger, sale, transfer or other
disposition unless prior to or simultaneously with the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing or otherwise acquiring
such assets or other appropriate corporation or entity shall assume the
obligation to deliver to the holder of the Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase and the other obligations under this Warrant.
The provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or
other dispositions.
(c) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8(a)), or
subscription rights or warrants, the Warrant Price to be in effect after such
payment date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price
4
<PAGE>
per share of Common Stock (as determined pursuant to Section 3), less the fair
market value (as determined by the Company's Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock. Such adjustment shall be made successively whenever such
a payment date is fixed.
(d) If pursuant to the Purchase Agreement by and between the Company and
the Investor named therein dated June 8, 1999 (the "Purchase Agreement") there
is an adjustment to the Purchase Price under Section 7.1(a), then the Warrant
Price shall be reduced to a price equal to 110% of such per share adjusted
Purchase Price. Such adjustments shall be made successively whenever required.
(e) An adjustment shall become effective immediately after the payment
date in the case of each dividend or distribution and immediately after the
effective date of each other event which requires an adjustment.
(f) In the event that, as a result of an adjustment made pursuant to
Section 8(a), the holder of the Warrant shall become entitled to receive any
shares of capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of the Warrant shall be
subject thereafter to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in this Warrant.
Section 9. Fractional Interest. The Company shall not be required to
-------------------
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon the exercise of the Warrant (or specified portions thereof), the
fractional share shall be disregarded and the number of shares to be issued upon
exercise shall be the number of whole shares only.
Section 10. Benefits. Nothing in this Warrant shall be construed to give
--------
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 11. Notices to Warrantholder. Upon the happening of any event
------------------------
requiring an adjustment of the Warrant Price, the Company shall forthwith give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The certificate of the Company's independent certified
public accountants shall be conclusive evidence of the correctness of any
computation made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment.
5
<PAGE>
Section 12. Identity of Transfer Agent. The Transfer Agent for the Common
--------------------------
Stock is American Stock Transfer & Trust Company, 40 Wall Street, NewYork, New
YOrk 10005. Forthwith upon the appointment of any subsequent transfer agent for
the Common Stock or other shares of the Company's capital stock issuable upon
the exercise of the rights of purchase represented by the Warrant, the Company
will mail to the Warrantholder a statement setting forth the name and address of
such transfer agent.
Section 13. Notices. Any notice pursuant hereto to be given or made by
-------
the Warrantholder to or on the Company shall be sufficiently given or made if
sent by certified mail, return receipt requested, postage prepaid, addressed as
follows:
Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730
Attention: Jeffrey M. Arnold
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 13.
Any notice pursuant hereto to be given or made by the Company to or on
the Warrantholder shall be sufficiently given or made if personally delivered or
if sent by an internationally recognized courier services by overnight or two-
day service, to the address set forth on the books of the Company or, as to each
of the Company and the Warrantholder, at such other address as shall be
designated by such party by written notice to the other party complying as to
delivery with the terms of this Section 13. All such notices, requests, demands,
directions and other communications shall, when sent by courier be effective
three (3) days after delivery to such courier as provided and addressed as
aforesaid.
Section 14. Registration Rights. The initial holder of this Warrant is
-------------------
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement dated as of as of June
8, 1999.
Section 15. Successors. All the covenants and provisions hereof by or for
----------
the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 16. Governing Law. This Warrant shall be deemed to be a contract
-------------
made under the laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
duly executed, as of the day and year first above written.
6
<PAGE>
CAMBRIDGE HEART, INC.
By: /s/ Jeffrey Arnold
---------------------
Name: Jeffrey Arnold
Title: Chief Executive Officer
7
<PAGE>
CAMBRIDGE HEART, INC.
WARRANT EXERCISE FORM
CAMBRIDGE HEART, INC.
- --------------------
- --------------------
This undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by cash; or cashless exercise of the within Warrant by surrender of
the Warrant, _______________ shares of Common Stock ("Warrant Shares") provided
for therein, and requests that certificates for the Warrant Shares be issued as
follows:
_______________________________
Name
_______________________________
Address
_______________________________
_______________________________
_______________________________
Federal Tax Identification No.
or Social Security No.
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of the Warrant be registered in the
name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
Dated:___________________, ____
Note: The signature must correspond Signature:
with the name of the registered holder ------------------------
as written on the first page of the ------------------------------
Warrant in every particular, without Name (please print)
alteration or enlargement or any change
whatever, unless the Warrant has been ------------------------------
assigned. ------------------------------
Address
------------------------------
Federal Identification or
Social Security No.
Assignee:
______________________________
______________________________
______________________________
______________________________
8
<PAGE>
Exhibit 10.7
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT COVERING THIS WARRANT UNDER SAID ACT OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE 9, 2003 ("EXPIRATION DATE").
CAMBRIDGE HEART, INC.
WARRANT TO PURCHASE 22,800 SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE ("COMMON STOCK")
For VALUE RECEIVED, Special Situations Private Equity Fund, L.P.
("Warrantholder"), is entitled to purchase, subject to the provisions of this
Warrant, from Cambridge Heart, Inc., a Delaware corporation ("Company"), at any
time not later than 5:00 P.M., Eastern time, on the Expiration Date, at an
exercise price per share equal to $7.22 (the exercise price in effect being
herein called the "Warrant Price"), 22,800 shares ("Warrant Shares") of Common
Stock. The number of Warrant Shares purchasable upon exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time as
described herein.
Section 1. Registration. The Company shall maintain books for the
------------
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, the Warrant may be transferred
---------
only pursuant to a registration statement filed under the Securities Act of
1933, as amended ("Securities Act") or an exemption from registration
thereunder. Subject to such restrictions, the Company shall transfer the Warrant
from time to time upon the books to be maintained by the Company for that
purpose, upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer upon any such transfer, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
-------------------
Warrantholder may exercise the Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof). The Warrantholder will not be required to make any
cash payment upon exercise hereunder, but shall only be entitled to effect a
cashless exercise of this Warrant for that number of Warrant Shares indicated in
the Exercise Agreement.
<PAGE>
The Warrant Shares so purchased shall be deemed to be issued to the holder
hereof or such holder's designee, as the record owner of such shares, as of the
close of business on the date on which this Warrant shall have been surrendered
(or evidence of loss, theft or destruction thereof and security or indemnity
satisfactory to the Company) and the completed Exercise Agreement shall have
been delivered. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised.
To effect the cashless exercise, the Warrantholder shall include in the
Exercise Agreement a calculation of the number of shares of Common Stock to be
issued determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the Market Price per share of the Common Stock on the date of
exercise and the Warrant Price, and the denominator of which shall be such
Market Price per share of the Common Stock. For this purpose, the "Market Price"
of the Common Stock shall be the closing price of the Common Stock as reported
by the Nasdaq National Market on the trading day first preceding the date in
question.
Each exercise hereof shall constitute the representation and warranty of
the Warrantholder to the Company that the representations and warranties
contained in Article 5 of the Purchase Agreement (as defined below) are true and
correct in all material respects as of the time of such exercise.
Section 4. Compliance with the Securities Act of 1933. Neither this
------------------------------------------
Warrant nor the Common Stock issued upon exercise hereof nor any other security
issued or issuable upon exercise of this Warrant may be offered or sold except
as provided in this agreement and in conformity with the Securities Act, and
then only against receipt of an agreement of such person to whom such offer of
sale is made to comply with the provisions of this Section 4 with respect to any
resale or other disposition of such security. The Company may cause the legend
set forth on the first page of this Warrant to be set forth on each Warrant or
similar legend on any security issued or issuable upon exercise of this Warrant,
unless counsel for the Company is of the opinion as to any such security that
such legend is unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
----------------
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any
<PAGE>
certificates for Warrant Shares in a name other than that of the registered
holder of the Warrant in respect of which such shares are issued, and in such
case, the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to
the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is due.
Section 6. Mutilated or Missing Warrants. In case the Warrant shall be
-----------------------------
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond, if requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents and
---------------------------
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section
7, out of the authorized and unissued Common Stock, sufficient shares to provide
for the exercise of the rights of purchase represented by the Warrant. The
Company further represents and warrants that the transfer agent for the Common
Stock ("Transfer Agent"), and every subsequent transfer agent for the Common
Stock or other shares of the Company's capital stock issuable upon the exercise
of any of the right of purchase or conversion aforesaid, shall be irrevocably
authorized and directed at all times to issue such number of authorized and
unissued shares of Common Stock as shall be issuable upon the proper exercise
hereof. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company. The Company will keep a conformed copy of this
Warrant on file with the Transfer Agent and with every subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant. The
Company will supply from time to time the Transfer Agent with duly executed
stock certificates required to honor the outstanding Warrant.
Section 8. Adjustments. Subject and pursuant to the provisions of this
-----------
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while
the Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
<PAGE>
Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) If any capital reorganization, reclassification of the
capital stock of the Company, consolidation or merger of the Company with
another corporation in which the Company is not the survivor, or sale, transfer
or other disposition of all or substantially all of the Company's properties to
another corporation shall be effected, then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition, lawful and adequate provision shall be made whereby each
Warrantholder shall thereafter have the right to purchase and receive upon the
basis and upon the terms and conditions herein specified and in lieu of the
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
such shares of stock, securities or properties as would have been issuable or
payable with respect to or in exchange for a number of Warrant Shares equal to
the number of Warrant Shares immediately theretofore issuable upon exercise of
the Warrant, had such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition not taken place, and in any such case
appropriate provision shall be made with respect to the rights and interests of
each Warrantholder to the end that the provisions hereof (including, without
limitations, provision for adjustment of the Warrant Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or properties thereafter deliverable upon the exercise
thereof. The Company shall not effect any such consolidation, merger, sale,
transfer or other disposition unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger, or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity shall
assume the obligation to deliver to the holder of the Warrant such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase and the other obligations under this
Warrant. The provisions of this paragraph (b) shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales,
transfers or other dispositions.
(c) In case the Company shall fix a payment date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or assets
(other than cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends or distributions referred to in Section
8(a)), or subscription rights or warrants, the Warrant Price to be in effect
after such payment date shall be determined by multiplying the Warrant Price in
effect immediately prior to such payment date by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding multiplied
by the Market Price
<PAGE>
per share of Common Stock (as determined pursuant to Section 3), less the fair
market value (as determined by the Company's Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock. Such adjustment shall be made successively whenever such
a payment date is fixed.
(d) If pursuant to the Purchase Agreement by and between the
Company and the Investor named therein dated June 8, 1999 (the "Purchase
Agreement") there is an adjustment to the Purchase Price under Section 7.1(a),
then the Warrant Price shall be reduced to a price equal to 110% of such per
share adjusted Purchase Price. Such adjustments shall be made successively
whenever required.
(e) An adjustment shall become effective immediately after the
payment date in the case of each dividend or distribution and immediately after
the effective date of each other event which requires an adjustment.
(f) In the event that, as a result of an adjustment made
pursuant to Section 8(a), the holder of the Warrant shall become entitled to
receive any shares of capital stock of the Company other than shares of Common
Stock, the number of such other shares so receivable upon exercise of the
Warrant shall be subject thereafter to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect
to the Warrant Shares contained in this Warrant.
Section 9. Fractional Interest. The Company shall not be required to
-------------------
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon the exercise of the Warrant (or specified portions thereof), the
fractional share shall be disregarded and the number of shares to be issued upon
exercise shall be the number of whole shares only.
Section 10. Benefits. Nothing in this Warrant shall be construed to give
--------
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 11. Notices to Warrantholder. Upon the happening of any event
------------------------
requiring an adjustment of the Warrant Price, the Company shall forthwith give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The certificate of the Company's independent certified
public accountants shall be conclusive evidence of the correctness of any
computation made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment.
<PAGE>
Section 12. Identity of Transfer Agent. The Transfer Agent for the Common
--------------------------
Stock is American Stock Transfer & Trust Company, 40 Wall Street, New York,
New York 10005. Forthwith upon the appointment of any subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant, the
Company will mail to the Warrantholder a statement setting forth the name and
address of such transfer agent.
Section 13. Notices. Any notice pursuant hereto to be given or made by
-------
the Warrantholder to or on the Company shall be sufficiently given or made if
sent by certified mail, return receipt requested, postage prepaid, addressed as
follows:
Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730
Attention: Jeffrey M. Arnold
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 13.
Any notice pursuant hereto to be given or made by the Company to or on the
Warrantholder shall be sufficiently given or made if personally delivered or if
sent by an internationally recognized courier services by overnight or two-day
service, to the address set forth on the books of the Company or, as to each of
the Company and the Warrantholder, at such other address as shall be designated
by such party by written notice to the other party complying as to delivery with
the terms of this Section 13. All such notices, requests, demands, directions
and other communications shall, when sent by courier be effective three (3) days
after delivery to such courier as provided and addressed as aforesaid.
Section 14. Registration Rights. The initial holder of this Warrant is
-------------------
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement dated as of as of
June 8, 1999.
Section 15. Successors. All the covenants and provisions hereof by or
----------
for the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 16. Governing Law. This Warrant shall be deemed to be a contract
--------------
made under the laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be duly
executed, as of the day and year first above written.
<PAGE>
CAMBRIDGE HEART, INC.
By: /s/ Jeffrey Arnold
------------------------------
Name: Jeffrey Arnold
Title: Chief Executive Officer
<PAGE>
CAMBRIDGE HEART, INC.
WARRANT EXERCISE FORM
CAMBRIDGE HEART, INC.
- ---------------------
- ---------------------
This undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by [_] cash; or [_] cashless exercise of the within Warrant by
surrender of the Warrant, shares of Common Stock ("Warrant
---------------
Shares") provided for therein, and requests that certificates for the Warrant
Shares be issued as follows:
--------------------------------
Name
--------------------------------
Address
--------------------------------
--------------------------------
--------------------------------
Federal Tax Identification No.
or Social Security No.
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of the Warrant be registered in the
name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
Dated: ,
------------------ ----
Note: The signature must correspond with
the name of the registered holder as written Signature:
on the first page of the Warrant in every -----------------------
particular, without alteration or enlargement
or any change whatever, unless the Warrant -------------------------------
has been assigned. Name (please print)
-------------------------------
-------------------------------
-------------------------------
Address
______________________________
Federal Identification or
Social Security No.
Assignee:
-------------------------------
-------------------------------
-------------------------------
-------------------------------
<PAGE>
Exhibit 10.8
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT COVERING THIS WARRANT UNDER SAID ACT OR AN
EXEMPTION FROM REGISTRATION UNDER SAID ACT.
VOID AFTER 5:00 P.M. EASTERN TIME ON JUNE 9, 2003 ("EXPIRATION DATE").
CAMBRIDGE HEART, INC.
WARRANT TO PURCHASE 47,619 SHARES OF
COMMON STOCK, PAR VALUE $0.001 PER SHARE ("Common Stock")
For VALUE RECEIVED, The Tail Wind Fund Ltd. ("Warrantholder"), is
entitled to purchase, subject to the provisions of this Warrant, from Cambridge
Heart, Inc., a Delaware corporation ("Company"), at any time not later than 5:00
P.M., Eastern time, on the Expiration Date, at an exercise price per share equal
to $7.22 (the exercise price in effect being herein called the "Warrant Price"),
47,619 shares ("Warrant Shares") of Common Stock. The number of Warrant Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to adjustment from time to time as described herein.
Section 1. Registration. The Company shall maintain books for the
------------
transfer and registration of the Warrant. Upon the initial issuance of the
Warrant, the Company shall issue and register the Warrant in the name of the
Warrantholder.
Section 2. Transfers. As provided herein, the Warrant may be transferred
---------
only pursuant to a registration statement filed under the Securities Act of
1933, as amended ("Securities Act") or an exemption from registration
thereunder. Subject to such restrictions, the Company shall transfer the Warrant
from time to time upon the books to be maintained by the Company for that
purpose, upon surrender thereof for transfer properly endorsed or accompanied by
appropriate instructions for transfer upon any such transfer, and a new Warrant
shall be issued to the transferee and the surrendered Warrant shall be canceled
by the Company.
Section 3. Exercise of Warrant. Subject to the provisions hereof, the
-------------------
Warrantholder may exercise the Warrant in whole or in part at any time upon
surrender of the Warrant, together with delivery of the duly executed Warrant
exercise form attached hereto (the "Exercise Agreement"), to the Company during
normal business hours on any business day at the Company's principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof). The Warrantholder will not be required to make
any cash payment upon exercise hereunder, but shall only be entitled to effect a
cashless exercise of this Warrant for that number of Warrant Shares indicated in
the Exercise
<PAGE>
Agreement. The Warrant Shares so purchased shall be deemed to be issued to the
holder hereof or such a designee, as the record owner of such shares, as
of the close of business on the date on which this Warrant shall have been
surrendered (or evidence of loss, theft or destruction thereof and security or
indemnity satisfactory to the Company) and the completed Exercise Agreement
shall have been delivered. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within a reasonable time, not exceeding
ten (10) business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such certificates, deliver to
the holder a new Warrant representing the number of shares with respect to which
this Warrant shall not then have been exercised.
To effect the cashless exercise, the Warrantholder shall include in the
Exercise Agreement a calculation of the number of shares of Common Stock to be
issued determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the Market Price per share of the Common Stock on the date of
exercise and the Warrant Price, and the denominator of which shall be such
Market Price per share of the Common Stock. For this purpose, the "Market
Price" of the Common Stock shall be the closing price of the Common Stock as
reported by the Nasdaq National Market on the trading day first preceding the
date in question.
Each exercise hereof shall constitute the representation and warranty of
the Warrantholder to the Company that the representations and warranties
contained in Article 5 of the Purchase Agreement (as defined below) are true and
correct in all material respects as of the time of such exercise.
Section 4. Compliance with the Securities Act of 1933. Neither this
------------------------------------------
Warrant nor the Common Stock issued upon exercise hereof nor any other security
issued or issuable upon exercise of this Warrant may be offered or sold except
as provided in this agreement and in conformity with the Securities Act, and
then only against receipt of an agreement of such person to whom such offer of
sale is made to comply with the provisions of this Section 4 with respect to any
resale or other disposition of such security. The Company may cause the legend
set forth on the first page of this Warrant to be set forth on each Warrant or
similar legend on any security issued or issuable upon exercise of this Warrant,
unless counsel for the Company is of the opinion as to any such security that
such legend is unnecessary.
Section 5. Payment of Taxes. The Company will pay any documentary stamp
----------------
taxes attributable to the initial issuance of Warrant Shares issuable upon the
exercise of the Warrant; provided, however, that the Company shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any
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certificates for Warrant Shares in a name other than that of the registered
holder of the Warrant in respect of which such shares are issued, and in such
case, the Company shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same has paid to
the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid. The holder shall be responsible for
income taxes due under federal or state law, if any such tax is due.
Section 6. Mutilated or Missing Warrants. In case the Warrant shall be
-----------------------------
mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and
substitution of and upon cancellation of the mutilated Warrant, or in lieu of
and substitution for the Warrant lost, stolen or destroyed, a new Warrant of
like tenor and for the purchase of a like number of Warrant Shares, but only
upon receipt of evidence reasonably satisfactory to the Company of such loss,
theft or destruction of the Warrant, and with respect to a lost, stolen or
destroyed Warrant, reasonable indemnity or bond, if requested by the Company.
Section 7. Reservation of Common Stock. The Company hereby represents and
---------------------------
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary) as contemplated by this Section
7, out of the authorized and unissued Common Stock, sufficient shares to provide
for the exercise of the rights of purchase represented by the Warrant. The
Company further represents and warrants that the transfer agent for the Common
Stock ("Transfer Agent"), and every subsequent transfer agent for the Common
Stock or other shares of the Company's capital stock issuable upon the exercise
of any of the right of purchase or conversion aforesaid, shall be irrevocably
authorized and directed at all times to issue such number of authorized and
unissued shares of Common Stock as shall be issuable upon the proper exercise
hereof. The Company agrees that all Warrant Shares issued upon exercise of the
Warrant shall be, at the time of delivery of the certificates for such Warrant
Shares, duly authorized, validly issued, fully paid and non-assessable shares of
Common Stock of the Company. The Company will keep a conformed copy of this
Warrant on file with the Transfer Agent and with every subsequent transfer agent
for the Common Stock or other shares of the Company's capital stock issuable
upon the exercise of the rights of purchase represented by the Warrant. The
Company will supply from time to time the Transfer Agent with duly executed
stock certificates required to honor the outstanding Warrant.
Section 8. Adjustments. Subject and pursuant to the provisions of this
-----------
Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth
hereinafter.
(a) If the Company shall at any time or from time to time while the
Warrant is outstanding, pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, subdivide its outstanding shares of Common
Stock into a greater number of shares or combine its outstanding shares into a
smaller number of shares or issue by reclassification of its outstanding shares
of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the
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Company is the continuing corporation), then the number of Warrant Shares
purchasable upon exercise of the Warrant and the Warrant Price in effect
immediately prior to the date upon which such change shall become effective,
shall be adjusted by the Company so that the Warrantholder thereafter exercising
the Warrant shall be entitled to receive the number of shares of Common Stock or
other capital stock which the Warrantholder would have received if the Warrant
had been exercised immediately prior to such event. Such adjustment shall be
made successively whenever any event listed above shall occur.
(b) If any capital reorganization, reclassification of the capital stock
of the Company, consolidation or merger of the Company with another corporation
in which the Company is not the survivor, or sale, transfer or other disposition
of all or substantially all of the Company's properties to another corporation
shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each Warrantholder shall
thereafter have the right to purchase and receive upon the basis and upon the
terms and conditions herein specified and in lieu of the Warrant Shares
immediately theretofore issuable upon exercise of the Warrant, such shares of
stock, securities or properties as would have been issuable or payable with
respect to or in exchange for a number of Warrant Shares equal to the number of
Warrant Shares immediately theretofore issuable upon exercise of the Warrant,
had such reorganization, reclassification, consolidation, merger, sale, transfer
or other disposition not taken place, and in any such case appropriate provision
shall be made with respect to the rights and interests of each Warrantholder to
the end that the provisions hereof (including, without limitations, provision
for adjustment of the Warrant Price) shall thereafter be applicable, as nearly
equivalent as may be practicable in relation to any shares of stock, securities
or properties thereafter deliverable upon the exercise thereof. The Company
shall not effect any such consolidation, merger, sale, transfer or other
disposition unless prior to or simultaneously with the consummation thereof the
successor corporation (if other than the Company) resulting from such
consolidation or merger, or the corporation purchasing or otherwise acquiring
such assets or other appropriate corporation or entity shall assume the
obligation to deliver to the holder of the Warrant such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase and the other obligations under this Warrant.
The provisions of this paragraph (b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or
other dispositions.
(c) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions payable out of consolidated earnings or earned
surplus or dividends or distributions referred to in Section 8(a)), or
subscription rights or warrants, the Warrant Price to be in effect after such
payment date shall be determined by multiplying the Warrant Price in effect
immediately prior to such payment date by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding multiplied by
the Market Price
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per share of Common Stock (as determined pursuant to Section 3), less the fair
market value (as determined by the Company's Board of Directors in good faith)
of said assets or evidences of indebtedness so distributed, or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common Stock outstanding multiplied by such Market Price per
share of Common Stock. Such adjustment shall be made successively whenever such
a payment date is fixed.
(d) If pursuant to the Purchase Agreement by and between the Company and
the Investor named therein dated June 8, 1999 (the "Purchase Agreement") there
is an adjustment to the Purchase Price under Section 7.1(a), then the Warrant
Price shall be reduced to a price equal to 110% of such per share adjusted
Purchase Price. Such adjustments shall be made successively whenever required.
(e) An adjustment shall become effective immediately after the payment
date in the case of each dividend or distribution and immediately after the
effective date of each other event which requires an adjustment.
(f) In the event that, as a result of an adjustment made pursuant to
Section 8(a), the holder of the Warrant shall become entitled to receive any
shares of capital stock of the Company other than shares of Common Stock, the
number of such other shares so receivable upon exercise of the Warrant shall be
subject thereafter to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in this Warrant.
Section 9. Fractional Interest. The Company shall not be required to
-------------------
issue fractions of Warrant Shares upon the exercise of the Warrant. If any
fraction of a Warrant Share would, except for the provisions of this Section, be
issuable upon the exercise of the Warrant (or specified portions thereof), the
fractional share shall be disregarded and the number of shares to be issued upon
exercise shall be the number of whole shares only.
Section 10. Benefits. Nothing in this Warrant shall be construed to give
--------
any person, firm or corporation (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall be for the sole and exclusive benefit of the Company and the
Warrantholder.
Section 11. Notices to Warrantholder. Upon the happening of any event
------------------------
requiring an adjustment of the Warrant Price, the Company shall forthwith give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted Warrant Price and the adjusted
number of Warrant Shares resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The certificate of the Company's independent certified
public accountants shall be conclusive evidence of the correctness of any
computation made, absent manifest error. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment.
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Section 12. Identity of Transfer Agent. The Transfer Agent for the Common
--------------------------
Stock is American Stock Transfer & Trust Company, 40 Wall Street, New York, New
York 10005. Forthwith upon the appointment of any subsequent transfer agent for
the Common Stock or other shares of the Company's capital stock issuable upon
the exercise of the rights of purchase represented by the Warrant, the Company
will mail to the Warrantholder a statement setting forth the name and address of
such transfer agent.
Section 13. Notices. Any notice pursuant hereto to be given or made by
-------
the Warrantholder to or on the Company shall be sufficiently given or made if
sent by certified mail, return receipt requested, postage prepaid, addressed as
follows :
Cambridge Heart, Inc.
One Oak Park Drive
Bedford, MA 01730
Attention: Jeffrey M. Arnold
or such other address as the Company may specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 13.
Any notice pursuant hereto to be given or made by the Company to or on
the Warrantholder shall be sufficiently given or made if personally delivered or
if sent by an internationally recognized courier services by overnight or two-
day service, to the address set forth on the books of the Company or, as to each
of the Company and the Warrantholder, at such other address as shall be
designated by such party by written notice to the other party complying as to
delivery with the terms of this Section 13. All such notices, requests, demands,
directions and other communications shall, when sent by courier be effective
three (3) days after delivery to such courier as provided and addressed as
aforesaid.
Section 14. Registration Rights. The initial holder of this Warrant is
-------------------
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Registration Rights Agreement dated as of as of
June 8, 1999.
Section 15. Successors. All the covenants and provisions hereof by or for
----------
the benefit of the Warrantholder shall bind and inure to the benefit of its
respective successors and assigns hereunder.
Section 16. Governing Law. This Warrant shall be deemed to be a contract
-------------
made under the laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State.
IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be
duly executed, as of the day and year first above written.
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CAMBRIDGE HEART, INC.
By: /s/ Jeffrey Arnold
___________________________
Name: Jeffrey Arnold
Title: Chief Executive Officer
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CAMBRIDGE HEART, INC.
WARRANT EXERCISE FORM
CAMBRIDGE HEART, INC.
- ---------------
- ---------------
This undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant ("Warrant") for, and to purchase
thereunder by [ ] cash; or [ ]cashless exercise of the within Warrant by
surrender of the Warrant, _______________ shares of Common Stock ("Warrant
Shares") provided for therein, and requests that certificates for the Warrant
Shares be issued as follows:
_______________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
Federal Tax Identification No.
or Social Security No.
and, if the number of Warrant Shares shall not be all the Warrant Shares
purchasable upon exercise of the Warrant, that a new Warrant for the balance of
the Warrant Shares purchasable upon exercise of the Warrant be registered in the
name of the undersigned Warrantholder or the undersigned's Assignee as below
indicated and delivered to the address stated below.
Dated:___________________, ____
Note: The signature must correspond Signature:
the name of the registered holder as ------------------------
written on the first page of the --------------------------------
Warrant in every particular, without Name (please print)
alteration or enlargement or any
change whatever, unless the Warrant --------------------------------
has been assigned. --------------------------------
Address
--------------------------------
Federal Identification or
Social Security No.
Assignee:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
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