Document:

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                                                                   Exhibit 10.02

                                                                  EXECUTION COPY

                               HEARTWARE LIMITED,
                                 ACN 111 970 257

                                 (as the Buyer)

                                       and

                          APPLE TREE PARTNERS I, L.P.,

                     Anthony Low-Beer, individually, and for
   Weiss Peck & Gallagher as Trustee for Anthony Low-Beer Acct. No. 77509658,

   Edward Nerssissian, M.D., individually, and J.T.W.R.O.S. with Mary Luellen,
      Mary Luellen, individually, and J.T.W.R.O.S. with Edward Nerssissian,

                                       and

                          Garrett H. and Carol Thunen,

          (as the Series B Preferred Stockholders of HeartWare, Inc.),

                                       and

                                HEARTWARE, INC.,

                                 (as Heartware)

                          SECURITIES EXCHANGE AGREEMENT

                          Dated as of December 13, 2004

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     SECURITIES EXCHANGE AGREEMENT, dated as of December 13, 2004 (this
"Agreement"), by and among HeartWare Limited, ACN 111 970 257, incorporated
under the laws of Victoria, Australia (the "Buyer"), Apple Tree Partners I, L.P.
("ATP"), and the other holders of Series B Preferred Stock of HeartWare, Inc., a
Delaware corporation ("HeartWare") listed on Schedule 1 hereto, as the holders
of all of the issued and outstanding shares of Series B Preferred Stock (each, a
"Selling Stockholder" and collectively, the "Selling Stockholders") of
HeartWare, and HeartWare.

                                   WITNESSETH:

     WHEREAS, the Selling Stockholders own in the aggregate 603,130 shares of
Series B Convertible Preferred Stock, par value $.001 per share (the "Shares"),
of HeartWare; and

     WHEREAS, ATP is the holder of certain promissory notes, as more fully set
forth on Schedule 1 hereto, issued by HeartWare, in the aggregate principal
amount of $11,659,546 (as such notes may be further amended, restated,
supplemented or otherwise modified from time to time, and any notes given in
substitution, exchange or replacement of the foregoing, the "Notes" and,
together with the Shares, the "Securities"), of which all but $1 million has
been borrowed by HeartWare to date (such remaining amount remaining available to
HeartWare under the terms of the Notes); and

     WHEREAS, the Buyer desires to purchase, and the Selling Stockholders have
agreed to sell, the Securities on the terms set forth in this Agreement; and

     WHEREAS, the Buyer has agreed to undertake an initial public offering of
its ordinary shares to raise up to AUD$30 million (the "IPO"), and a private
placement of its ordinary shares of up to AUD$5 million (the "U.S. Private
Placement"), but no more in the aggregate than the U.S. dollar equivalent of
$24,950,000 (collectively, the "Capital Raising"), and to seek admission to the
official list of Australian Stock Exchange Limited (ACN 008 624 691) and the
official quotation of all of its ordinary shares on ASX, including the Buyer
Shares (as defined below) ("Listing"); and

     WHEREAS, the exchange contemplated by this Agreement, the Capital Raising
and the Listing are interdependent parts of a single transaction by which stock
of HeartWare, cash and other property are being contributed to the Buyer in
exchange for stock of the Buyer and the Buyer Note (as defined below), the
parties intend for Section 351 of the Internal Revenue Code of 1986, as amended,
to apply to the exchange contemplated by this Agreement, the Capital Raising and
the Listing; and

     NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

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                                    ARTICLE 1

                               EXCHANGE OF SHARES

     1.1. Exchange of Shares. Upon the terms and subject to the conditions of
this Agreement, each Selling Stockholder hereby sells to the Buyer, and the
Buyer hereby purchases from (i) each Selling Stockholder, the Shares of
HeartWare set forth opposite such Selling Stockholder's name on Schedule 1,
representing in the aggregate all of the issued and outstanding shares of Series
B Preferred Stock, and (ii) ATP, 1,208,465(1) additional shares of Series B
Preferred Stock issued by HeartWare to ATP immediately prior to the Closing (as
defined in Section 1.2 below) on conversion by ATP of the Notes set forth
opposite ATP's name on Schedule 1. The purchase price (the "Purchase Price") for
all of the Securities in the aggregate is (x) Eighty-Eight Million (88,000,000)
ordinary shares of the Buyer (the "Buyer Shares"), with each Selling Stockholder
receiving the number of Buyer Shares set forth opposite such Selling
Stockholder's name on Schedule 1 and (y) a convertible promissory note in the
form annexed hereto as Exhibit A (the "Buyer Note") issued to ATP.

     1.2. Closing. Subject to the satisfaction (or waiver) of conditions set
forth in Article 5 below, the closing of the transactions contemplated by this
Agreement (the "Closing") shall occur immediately following the closing of the
offer contemplated by the Capital Raising (the "Closing Date").

     1.3. Closing Deliveries. At the Closing, the parties will make the
following deliveries:

          (a) The Buyer shall provide to each Selling Stockholder a holding
     statement in accordance with the settlement rules of the ASX Settlement and
     Transfer Corporation Pty Ltd ABN (49 008 504 532) ("ASTC Settlement Rules")
     representing the Buyer Shares registered in the name of such Selling
     Stockholder for the number of Buyer Shares set forth in the third column
     opposite such Selling Stockholder's name on Schedule 1 annexed hereto.

          (b) The Buyer shall deliver to ATP the Buyer Note.

          (c) The Selling Stockholders shall deliver to the Buyer Certificates
     for the Shares duly endorsed to the Buyer or accompanied by stock powers
     duly endorsed to the Buyer.

     The parties also agree to execute and deliver any other instruments,
documents and certificates that are required to be delivered pursuant to this
Agreement or as may be reasonably requested by any party in order to consummate
the transactions contemplated by this Agreement.

----------
(1)  Based on a January 31, 2005 closing date. If the Closing occurs after
     January 31, 2005, ATP will be entitled to more Series B shares because of
     accrued interest.

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                                    ARTICLE 2

              REPRESENTATIONS AND WARRANTIES RELATING TO HEARTWARE

     Except as set forth in the Schedule of Exceptions attached hereto as
Exhibit B (the "Schedule of Exceptions"), HeartWare hereby represents and
warrants to the Buyer as follows:

     2.1. Organization, Standing, Etc. HeartWare is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own, lease or
operate its properties and to carry on its business as it is now being
conducted.

     2.2. Governing Instruments. The copies of HeartWare's Restated Certificate
of Incorporation, as amended to date, and the Bylaws of HeartWare, and all
amendments thereto and restatements thereof as existing immediately prior to the
Closing (collectively, the "Charter Documents"), delivered to Buyer or their
counsel prior to the execution of this Agreement, are true and complete copies
of the duly adopted Charter Documents in effect as of the date of this
Agreement.

     2.3. Subsidiaries, Etc. HeartWare does not have any direct or indirect
ownership interest, controlling or otherwise, in any corporation, partnership,
joint venture, association or other business enterprise.

     2.4. Qualification. HeartWare is duly qualified, licensed or domesticated
as a foreign corporation in good standing in the State of Florida. HeartWare has
not failed to qualify or be licensed or domesticated in any jurisdiction in
which the failure to so qualify or be licensed or domesticated would have a
material adverse effect upon the business, properties, prospects or condition,
financial or otherwise, of HeartWare (a "Material Adverse Effect").

     2.5. Corporate Acts and Proceedings. This Agreement has been duly
authorized by all necessary corporate action on behalf of Heart Ware, has been
duly executed and delivered by authorized officers of HeartWare, is a valid and
binding agreement on the part of HeartWare and is enforceable against HeartWare
in accordance with its terms, except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency, moratorium, reorganization or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights generally, or (ii) laws of general application relating to the
remedy of specific performance, injunctive relief and other equitable remedies.

     2.6. Capital Stock.

          (a) Immediately prior to the Closing, the authorized capital stock of
     HeartWare consists of 6,000,000 shares of Common Stock, none of which is
     issued or outstanding, 626,700 shares of Series A-1 Preferred Stock, of
     which 626,652 shares are issued and outstanding, 436,500 shares of Series
     A-2 Preferred Stock, of which 436,443 shares are issued and outstanding,
     and 3,985,190 shares of Series B Preferred Stock, of which 603,130 shares
     are issued and outstanding. All of the outstanding shares of capital stock
     of HeartWare were duly authorized and validly issued and are fully paid and
     nonassessable.

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          (b) Except as set forth in the Schedule of Exceptions, there are no
     outstanding subscriptions, options, warrants, calls, contracts, demands,
     commitments, convertible securities or other agreements or arrangements of
     any character or nature whatever, other than this Agreement, under which
     HeartWare is obligated to issue any securities of any kind representing an
     ownership interest in HeartWare.

          (c) Except as set forth in that certain Stockholders Agreement, dated
     as of July 10, 2003, among HeartWare and the holders of Series B Preferred
     Stock, no holder of any securities of HeartWare is entitled to any
     preemptive or similar rights to purchase any securities of HeartWare from
     HeartWare. All outstanding securities of HeartWare have been issued in full
     compliance with an exemption or exemptions from the registration and
     prospectus delivery requirements of the Securities Act of 1933, as amended
     (the "Securities Act"), and from the registration and qualification
     requirements of all applicable state securities laws.

     2.7. Financial Statements and Projections.

          (a) The audited financial statements of HeartWare for the fiscal year
     ended December 31, 2003, together with the notes thereto, and the unaudited
     internal financial statements for the nine (9) months ended September 30,
     2004 (also referred to as the "Balance Sheet Date"), complete and correct
     copies of which are attached to the Schedule of Exceptions (collectively
     the "Financial Statements"), present fairly the financial position of
     HeartWare, as of such dates, and the results of operations and statement of
     cash flows for the periods covered thereby (subject, in the case of the
     interim financial statements, to year-end audit adjustments) and have been
     prepared in accordance with generally accepted accounting principles in the
     United States ("US GAAP") consistently applied throughout the relevant
     period, except as to the October 31, 2004 interim financial statements,
     which are subject to normal year-end adjustments, and the absence of
     footnotes required by US GAAP. Except as set forth in the Financial
     Statements or in the Schedule of Exceptions, HeartWare does not have any
     liabilities, contingent or otherwise, other than (i) liabilities incurred
     in the ordinary course of business subsequent to the Balance Sheet Date and
     not in excess of $70,000 alone or in the aggregate; (ii) obligations under
     real and personal property leases disclosed; and (iii) obligations under
     contracts and commitments incurred in the ordinary course of business and
     not required under US GAAP to be reflected in the Financial Statements,
     which, individually or in the aggregate, are not material to the financial
     condition or operating results of HeartWare.

          (b) Since the Balance Sheet Date, except as set forth in the Schedule
     of Exceptions, there has not been:

          (i) any adverse change in the assets, liabilities, financial condition
     or operating results of HeartWare, except changes in the ordinary course of
     business that have not resulted, in the aggregate, in a Material Adverse
     Effect;

          (ii) any damage, destruction or loss, whether covered by insurance or
     not, materially and adversely affecting the assets, properties, financial
     condition, operating

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     results, prospects or business of HeartWare as such business is presently
     conducted and as it is proposed to be conducted;

          (iii) any waiver by HeartWare of a material right or of a material
     debt owed to it;

          (iv) any satisfaction or discharge of any lien, claim or encumbrance
     or payment of any obligation by HeartWare, except in the ordinary course of
     business and that is not material to the assets, properties, financial
     condition, operating results or business of HeartWare as such business is
     presently conducted and as it is proposed to be conducted, exceeding
     $70,000;

          (v) any material change or amendment to a material contract or
     arrangement by which HeartWare or any of its assets or properties is bound
     or subject;

          (vi) any material change in any compensation arrangement or agreement
     with any employee;

          (vii) any sale, assignment or transfer of any patents, trademarks,
     copyrights, trade secrets or other intangible assets;

          (viii) any resignation or termination of employment of any key officer
     of HeartWare;

          (ix) any mortgage, pledge, transfer of a security interest in, or
     lien, created by HeartWare with respect to any of its material properties
     or assets, except liens for taxes not yet due or payable;

          (x) any loans or guarantees made by HeartWare to or for the benefit of
     its employees, officers or directors, or any members of their immediate
     families, other than travel advances and other advances made in the
     ordinary course of its business;

          (xi) any declaration, setting aside or payment of any dividend or
     other distribution in respect of any of HeartWare's capital stock, or any
     direct or indirect redemption, purchase or other acquisition of any of such
     stock by HeartWare;

          (xii) any authorization, issuance, sale or other disposition of any of
     HeartWare's capital stock;

          (xiii) any other event or condition of any nature that might
     materially and adversely affect the assets, properties, financial
     condition, operating results or business of HeartWare as such business is
     presently conducted and as it is proposed to be conducted; or

          (xiv) any agreement or commitment by HeartWare to do any of the things
     described in this subsection 2.7(b).

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     2.8. Tax Returns and Audits. HeartWare has accurately prepared and timely
filed, or has timely obtained presently effective extensions with respect to,
all United States federal, state and other tax returns required by law to be
filed, has paid or made provision for the payment of all taxes shown to be due
and all additional assessments, and adequate provisions have been made and are
reflected in the Financial Statements to the extent required by US GAAP for all
current taxes and other charges to which HeartWare is subject and which are not
currently due and payable. None of the federal income tax returns of HeartWare
has been audited by the United States Internal Revenue Service. HeartWare does
not know of any additional assessments or adjustments pending or threatened
against HeartWare or its assets for any period, nor of any basis for any such
assessment or adjustment.

     2.9. Title to Properties and Encumbrances. HeartWare has good and
marketable title to all of its properties and assets, which properties and
assets are not subject to any mortgage, pledge, lease, lien, charge, security
interest, encumbrance or restriction, except (i) liens for taxes and assessments
or governmental charges or levies not at the time due or in respect of which the
validity thereof shall currently be contested in good faith by appropriate
proceedings and in any event would not result in a Material Adverse Effect or
(ii) minor imperfections of title, if any, not material in nature or amount and
not materially (x) detracting from the value or impairing the use of the
property subject thereto or (y) impairing the operations or proposed operations
of HeartWare, including, without limitation, the ability of HeartWare to secure
financing using such properties and assets as collateral.

     2.10. Condition of Properties. The offices, equipment and other assets of
HeartWare have been kept in reasonable condition and repair in the ordinary
course of business, are reasonably fit and suitable for the purposes for which
they are being used and conform in all material respects with applicable
ordinances, regulations and laws.

     2.11. Litigation: Governmental Proceedings. Except as set forth on the
Schedule of Exceptions, there are no legal actions, suits, arbitrations or other
legal, administrative or governmental proceedings or investigations pending or,
to the knowledge of HeartWare, threatened against HeartWare, or its properties
or business or any officer or director of HeartWare, in either case that would
have a Material Adverse Effect, and neither HeartWare nor of any officer or
director of HeartWare is aware of any facts which may reasonably be expected to
result in or form the basis for any such action, suit or other proceeding. The
foregoing includes, without limitation, actions, suits, proceedings or
investigations pending or threatened (or any basis therefor known to HeartWare)
involving the prior or other employment of any of the employees of HeartWare,
their use in connection with HeartWare's business of any information or
techniques allegedly proprietary to any of their prior or other employers or
their obligations under any agreements with prior or other employers, as
applicable. HeartWare is not subject to, or in default under, the provisions of
any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality, which default would result in a Material Adverse
Effect. There is no action, suit, proceeding or investigation by HeartWare
currently pending or that HeartWare intends to initiate.

     2.12. Compliance with Applicable Laws and Other Instruments. The
properties, business and operations of HeartWare have been and are being
conducted in all material respects in accordance with all applicable laws, rules
and regulations of all governmental authorities

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having jurisdiction over HeartWare's business or properties. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the consummation of the transactions contemplated hereby by
HeartWare will, with or without the giving of notice or passage of time, result
in any breach of, or constitute a default under, or result in the imposition of
any lien or encumbrance upon any asset or property of HeartWare pursuant to, any
agreement or other instrument to which HeartWare is a party or by which it or
any of its properties, assets or rights is bound or affected, and will not
violate the Charter Documents. HeartWare is not in violation of its Charter
Documents or in violation of, or in default under, any lien, indenture,
mortgage, lease, agreement, instrument, commitment or arrangement in any
material respect. HeartWare is not subject to any restriction that would
prohibit it from entering into or performing its obligations under this
Agreement.

     2.13. Environmental and Safety Laws. HeartWare is not, in any material
respect, in violation of any applicable statute, law or regulation relating to
the environment or occupational health and safety, and no material expenditures
are or are reasonably anticipated to be required in order to comply with any
such existing statute, law or regulation. To HeartWare's knowledge, during the
period that HeartWare has owned or leased its properties and facilities, (i)
there have been no disposals, releases or threatened releases of Hazardous
Materials (as defined below) by HeartWare on, from or under such properties or
facilities, and (ii) other than normal office products and cleaning supplies, it
has not used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials. For purposes of this Agreement, the terms "disposal,"
"release" and "threatened release" shall have the definitions assigned thereto
by the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Section 960I, et. seq. as amended ("CERCLA"). For the purposes
of this Section, "Hazardous Materials" shall mean any hazardous or toxic
substance, material or waste, which is regulated under, or defined as a
"hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous
material," "toxic substance" or "hazardous chemical" under (1) CERCLA; (2) the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001, et.
seq.; (3) the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801,
et. seq.; (4) the Toxic Substance Control Act, 15 U.S.C. Section 2601, et. seq.;
(5) the Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651, et.
seq.; (6) regulations promulgated under any of the above statutes; or (7) any
applicable state or local statute, ordinance, rule or regulation that has a
scope or purpose similar to those statutes identified above.

     2.14. Patents and Other Intangible Rights. HeartWare: (i) owns or has the
exclusive and/or unrestricted right to use, free and clear of all liens, claims
and restrictions, all patents, patent applications, trademarks, trademark
applications, service marks, service mark applications, trade names, copyrights,
copyright applications, trade secrets, licenses and similar rights with respect
to the foregoing, necessary for and used in the conduct of its business as now
conducted, and as currently contemplated to be conducted, to its knowledge after
due inquiry without infringing upon or otherwise acting adversely to any right
or claimed right of any person under or with respect to any of the foregoing;
(ii) is not required to pay any taxes or maintenance fees to maintain the
validity or effectiveness of the registrations and applications referred to in
(i) above and all such registrations and applications are valid and in full
force and effect; (iii) is not contractually or otherwise obligated to make any
material payments by way of royalties, fees or otherwise to any owner of,
licensor of, or other claimant to any patent, trademark, service mark,

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trade name, copyright, trade secret or other intangible asset, with respect to
the use thereof or in connection with the conduct of its business or otherwise,
except for commercially available "off the shelf" software that HeartWare
licenses on standard terms; (iv) has not received any written notice of conflict
with the asserted rights of others with respect to such matters and has no
reason to believe that there is a basis for any such notice or a claim relating
thereto; (v) owns or has the unrestricted right to use all trade secrets,
including know-how, customer lists, inventions, designs, processes, computer
programs and technical data used by HeartWare in the development, operation and
sale of all products and services sold by it, free and clear of any rights,
liens or claims of others; and (vi) is not using any confidential information or
trade secrets of others except pursuant to a written license or other agreement.

     2.15. Outstanding Indebtedness. Except for the convertible notes issued to
ATP (which ATP will convert into shares of Series B Preferred Stock immediately
prior to the Closing hereunder), HeartWare does not have any indebtedness
incurred as the result of a direct borrowing of money, including, but not
limited to, indebtedness with respect to trade accounts, other than indebtedness
incurred in the ordinary course of business and not exceeding $70,000
individually or in the aggregate not otherwise set forth in the Financial
Statements. HeartWare is not in default in the payment of the principal of or
interest or premium on any such indebtedness, and no event has occurred or is
continuing under the provisions of any instrument, document or agreement
evidencing or relating to any such indebtedness which with the lapse of time or
the giving of notice, or both, would constitute an event of default thereunder.
HeartWare is not committed or obligated to make any loan or advance to any
person or entity.

     2.16. Contracts.

          (a) Prior to the execution of this Agreement, HeartWare has delivered
     to Buyer and/or its counsel, true and complete copies of HeartWare's
     material contracts in effect at the time of the Closing with expected
     receipts or expenditures in excess of $70,000, where a monetary threshold
     is applicable, or that are otherwise material to the business, condition
     (financial or otherwise), operations or prospects of HeartWare.

          (b) HeartWare has performed all obligations required to be performed
     by it to date and is not in default under any of the contracts, agreements,
     leases, documents, commitments or other arrangements to which it is a party
     or by which it is otherwise bound, except to the extent such failure to
     perform or default has no Material Adverse Effect. Except as disclosed
     thereon, all agreements referred to in Section 2.16(a) above are in effect
     and enforceable against HeartWare according to their respective terms
     subject to applicable bankruptcy, insolvency, moratorium, reorganization
     and other similar laws of general application relating to or affecting the
     enforcement of creditors' rights generally and laws of general application
     relating to the remedy of specific performance, injunctive relief and other
     equitable remedies, and there is not under any of such agreements any
     existing material default or event of default or event that, with notice or
     lapse of time or both, would constitute an event of default thereunder. To
     HeartWare's knowledge, after due investigation, all parties having material
     contractual arrangements with HeartWare are in substantial compliance
     therewith and none is in material default in any respect thereunder.

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     2.17. Insurance Coverage. HeartWare maintains policies of insurance from
insurers of recognized responsibility to insure HeartWare and its properties and
business against such losses and risks, and in such amounts, as in HeartWare's
business judgment, after advice from its insurance broker, are acceptable for
the nature and extent of such business and its resources. HeartWare is not in
default with respect to any material provision contained in any insurance
policy, and has not failed to give any notice or present any material existing
claims it has under any insurance policies in a timely fashion.

     2.18. Licenses. HeartWare possesses from the appropriate agency,
commission, board and government body and authority, whether state, local or
federal, all licenses, permits, authorizations, approvals, franchises and rights
that (i) are necessary for it to engage in the business currently conducted by
it, and (ii) if not possessed by HeartWare, would have a Material Adverse
Effect. All such licenses, permits, authorizations, approvals, franchises and
rights are in full force and HeartWare has not received any notice that it is in
default, or with the giving of notice or lapse of time or both, would be in
default thereunder.

     2.19. Retirement Plans. HeartWare does not have any retirement plan in
which any employee of HeartWare participates that is subject to any provisions
of the Employee Retirement Income Security Act of 1974, as amended, and of the
regulations adopted pursuant thereto ("ERISA").

     2.20. Employees. No officer of HeartWare or employee of HeartWare (whose
annual compensation is in excess of $75,000) has advised HeartWare that he or
she has any present plans to terminate his or her employment with HeartWare.
Except as set forth on the Schedule of Exceptions, all employees of HeartWare
are terminable at will. HeartWare has complied in all material respects with all
laws relating to the employment of labor, including provisions relating to
wages, hours, equal opportunity, collective bargaining and (without any
materiality qualification) payment of Social Security and other taxes and no
unfair labor practice complaint or sex or age discrimination claim has been
brought against it. HeartWare has not encountered any material labor
difficulties and has not received any information that would lead it to believe
that a material number of its employees will or may cease to be employees or
will refuse offers of employment from the Buyer, because of the consummation of
the transactions contemplated by this Agreement. HeartWare does not have any
worker's compensation liabilities. HeartWare had complied in all material
respects with all applicable United States state and federal equal employment
opportunity and other laws related to employment. HeartWare is not a party to or
bound by any currently effective employment contract, deferred compensation
agreement, bonus plan, incentive plan, profit sharing plan, retirement
agreement, restricted stock award agreement, or other employee compensation
agreement. HeartWare is not a party to any contract, agreement, plan or
arrangement covering any employee or former employee thereof, that, individually
or collectively, could give rise to the payment of any amount that would not be
deductible pursuant to Section 280G or Section 162 of the Internal Revenue Code
of 1986, as amended. All past and current employees and consultants of HeartWare
having access to the confidential and proprietary information of HeartWare have
executed a Proprietary Information and Inventions Agreement with HeartWare
containing provisions regarding non-competition, non-solicitation,
confidentiality and proprietary information.

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     2.21. Absence of Restrictive Agreements. To HeartWare's knowledge, no
employee of HeartWare is subject to any secrecy or non-competition agreement or
any agreement or restriction of any kind that would impede in any way the
ability of such employee to carry out fully all activities of such employee in
furtherance of the business of HeartWare. No former or other employer of any
employee of HeartWare has any claim of any kind whatsoever in respect of any of
the patents or other intangible rights of HeartWare described in Section 2.14 of
this Agreement.

     2.22. No Brokers or Finders. Except as set forth in the Schedule of
Exceptions, no person, firm or corporation has or will have, as a result of any
contractual undertaking by HeartWare, any right, interest or valid claim against
HeartWare for any commission, fee or other compensation as a finder or broker,
or in any similar capacity, in connection with the transactions contemplated by
this Agreement. HeartWare will indemnify and hold Buyer harmless against any and
all liability (and any asserted liability) with respect to any such commission,
fee or other compensation that may be payable or determined to be payable.

     2.23. Transactions with Affiliates. Except as set forth in the Schedule of
Exceptions, no director, officer, employee or shareholder of HeartWare, or
member of the immediate family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or any member of
the family of any such person, has a substantial interest or is an officer,
director, trustee, partner or holder or more than five percent (5%) of the
outstanding capital stock thereof, is a party to any transaction with HeartWare,
including any contract, agreement or other arrangement providing for the
employment of, furnishing of services by, rental of real or personal property
from or otherwise requiring payments to any such person or firm, other than
employment-at-will arrangements in the ordinary course of business.

     2.24. Disclosure. No representation or warranty in this Agreement, or in
any written certificate or schedule delivered in connection with this Agreement,
when taken as a whole, contains any untrue statement of a material fact or omits
to state any material fact required to be stated herein or therein or necessary
to make the statements herein or therein, not misleading.

                                    ARTICLE 3

             REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLING
                                  STOCKHOLDERS

     Each Selling Stockholder represents and warrants to, and agrees with, the
Buyer as follows:

     3.1. Organization and Qualification. Each Selling Stockholder that is an
entity is duly organized, validly existing and in good standing under the laws
of its state of organization, and has the requisite corporate or other power and
authority to execute this Agreement and to perform its obligations hereunder,
including to own, hold, sell and transfer (pursuant to this Agreement) the
Securities held by such Selling Stockholder.

                                       10

<PAGE>

     3.2. Title to Shares. Such Selling Stockholder is the lawful(2) owner of,
and except with respect to that certain Subscription for Shares Voting
Agreement, dated July 10, 2003, between HeartWare and such holder of Series B
Preferred Stock, other than ATP (each, a "Voting Agreement"), has the
unrestricted power to vote and sell the Securities held by such Stockholder and
has good and clear title to the Securities, free and clear of any mortgage,
pledge, security interest, conditional sale or other title retention agreement,
encumbrance, lien, claim, right, covenant, restriction, warrant, option or
charge of any kind (collectively, "Liens"), but subject to any restrictions
imposed by (i) the Voting Agreement, (ii) that certain Stockholders Agreement,
dated July 10, 2003, entered into by ATP and to which the other holders of
Series B Preferred Stock may be deemed parties (the "Stockholders Agreement"),
and (iii) United States federal and securities laws.

     3.3. Authority. Such Selling Stockholder has full legal right, power and
authority to enter into and perform this Agreement and to sell and deliver the
Securities held by such Selling Stockholder in the manner provided herein and
for each Selling Stockholder that is a corporation such performance has been
duly an d validly authorized by the respective boards of directors of the
Selling Stockholder and no other corporate action on its part is necessary. Such
Selling Stockholder has duly and validly executed this Agreement and has duly
and validly executed and delivered all other agreements contemplated hereby, and
each of this Agreement and such other agreements constitutes a valid, binding
and enforceable obligation of such Selling Stockholder in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws from time to time in effect affecting
creditors' rights generally and by legal and equitable limitations on the
availability of specific remedies.

     3.4. Non-Contravention. The execution, delivery and performance of this
Agreement and the other agreements contemplated hereby by the Selling
Stockholder, and the consummation of the transactions contemplated hereby or
thereby, will not require, on the part of the Selling Stockholder, any consent,
approval, authorization or other order of, or any filing with, any court,
administrative agency or commission or other governmental authority or
instrumentality, whether domestic or foreign (each a "Governmental Entity"), or
under any contract, agreement or commitment to which the Selling Stockholder is
a party or by which the Selling Stockholder is or the Securities are bound, and
will not contravene the charter documents of the Selling Stockholder (if
applicable) or any United States federal, state or local court or administrative
order or process, statute, law, ordinance, rule or regulation, or any contract,
agreement or commitment to which the Selling Stockholder is a party, other than
certain restrictions on transfer contained in the Voting Agreement and/or the
Stockholders Agreement, each of which are waived in respect of the transactions
contemplated hereby and by the Capital Raising and the Listing.

     3.5. Investment. (a) Such Selling Stockholder has been advised that the
Buyer Shares being acquired by such Selling Stockholder will be subject to a
two-year escrow lock-up or restriction arrangement under the official listing
rules and requirements of ASX, as waived or modified from time to time ("ASX
Listing Rules"). Such Selling Stockholder is acquiring such shares for the
Selling Stockholder's own account for investment and not with a view to, or for

----------
(2)  The stockholders may not be the beneficial owners of the securities-they
     may be partnerships or trusts.

                                       11

<PAGE>

sale in connection with, any distribution thereof, nor with any present
intention of distributing or selling the same; and, except as contemplated by
this Agreement and the exhibits hereto, such Selling Stockholder has no present
or contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof.

          (b) Such Selling Stockholder has carefully reviewed the
representations concerning the Buyer contained in this Agreement and has made
detailed inquiry concerning the Buyer; the Current Directors have made available
to the Selling Stockholders any and all written information that a Selling
Stockholder has requested and have answered to each Selling Stockholder's
satisfaction all inquiries made by such Selling Stockholder; and each Selling
Stockholder has sufficient knowledge and experience in finance and business so
as to be capable of evaluating the risks and merits of such Selling
Stockholder's investment in the Buyer and such Selling Stockholder is able
financially to bear the risks thereof.

                                    ARTICLE 4

                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

    The Buyer represents and warrants to the Selling Stockholders as follows:

     4.1. Organization and Qualification. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Victoria, Australia, has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its businesses as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification necessary, except where a
failure to so qualify would have a material adverse effect on the business,
condition (financial or otherwise), results of operations, assets or prospects
of the Buyer.

     4.2. Capital Stock. Immediately prior to the date of this Agreement, Two
Thousand (2,000) ordinary shares of the Buyer had been issued. All of the
ordinary shares of Buyer were validly issued and are fully paid and
nonassessable. There are no outstanding subscriptions, options, calls,
contracts, demands, commitments, convertible securities or other agreements or
arrangements of any character or nature whatever, other than this Agreement,
under which Buyer is obligated to issue any securities of any kind representing
an ownership interest in Buyer.

     4.3. Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement, the Buyer Note and all other agreements and
instruments contemplated hereby by the Buyer, and the issuance of the Buyer
Shares, have been duly authorized by all necessary action of the Board of
Directors of the Buyer and shall be duly authorized by all necessary action of
the shareholders of the Buyer prior to the Closing. Certified copies of the
resolutions adopted by the Board of Directors of the Buyer approving this
Agreement, all other agreements contemplated hereby and the issuance of the
Buyer Shares and the Buyer Note have been or will be provided to the Selling
Stockholders. The Buyer has duly and validly executed and delivered this
Agreement, the Buyer Note and each other agreement and instrument contemplated
hereby to be executed by it, and each of this Agreement, the Buyer Note and each

                                       12

<PAGE>

other agreement and instrument constitutes a valid, binding and enforceable
obligation of the Buyer in accordance with its terms.

     4.4. Non-Contravention. Assuming the accuracy of the representations and
warranties of the Selling Stockholders contained in this Agreement and the other
agreements contemplated hereby, neither the execution, delivery or performance
of this Agreement, the Buyer Note and all other agreements and instruments
contemplated hereby by the Buyer, nor the consummation of the transactions
described herein, does or will, after the giving of notice, or the lapse of
time, or otherwise, contravene the Charter Documents of the Buyer or any United
States or Australian federal, state or local court or administrative order or
process, statute, law, ordinance, rule or regulation, or any contract, agreement
or commitment to which the Buyer is a party, or under which the Buyer is
obligated, or by which the Buyer or any of the rights, properties or assets of
the Buyer are subject or bound, other than any of the foregoing that would not
have, individually or in the aggregate, a material adverse effect on the
business, condition (financial or otherwise), results of operations, assets or
prospects of the Buyer.

     4.5. Validity of the Buyer Shares. The Buyer Shares to be issued pursuant
to this Agreement will be, when issued, validly issued, fully paid and
nonassessable.

     4.6. Consents and Approvals of Governmental Authorities. Assuming the
accuracy of the representations and warranties of the Selling Stockholders
contained in the Agreement and the other agreements contemplated hereby, no
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Entity is required to be made or obtained by the Buyer in
connection with the execution, delivery and performance of this Agreement or the
Notes or the consummation of the transactions contemplated hereby and thereby.

     4.7. Brokers and Finders. Except for its agreements with Inteq Limited and
Emerging Growth Capital Pty Limited, the Buyer has not retained any broker,
finder, or investment banker in connection with this Agreement or any of the
transactions contemplated by this Agreement, nor does or will the Buyer owe any
fee or other amount to any broker, finder, or investment banker in connection
with this Agreement or the transactions contemplated by this Agreement.

                                    ARTICLE 5

                              CONDITIONS TO CLOSING

     5.1. Conditions Precedent to the Buyer's Obligations. The Buyer's
obligations to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction or waiver of each of the following conditions
precedent on or prior to the Closing Date:

          (a) Representations and Warranties: Performance. Except for
     modifications to the representations and warranties contained in an updated
     Schedule of Exceptions (which modifications shall not have a Material
     Adverse Effect, individually or in the aggregate), the representations and
     warranties of HeartWare and the Selling Stockholders contained herein shall
     be true and accurate in all material respects as of the Closing Date and
     HeartWare and each Selling Stockholder shall have performed and complied,
     in all

                                       13

<PAGE>

     material respects, with all agreements, obligations and conditions required
     by this Agreement to be performed or complied with by it on or prior to the
     Closing Date. ATP shall have delivered to the Buyer a certificate, dated
     the Closing Date, to the foregoing effect as to itself only, and not to any
     of the other Selling Stockholders.

          (b) Consents. All filings with and consents from (i) all US and
     Australian Federal, state and local governmental agencies and (ii) all
     parties (other than HeartWare and the Selling Stockholders) to the
     contracts and commitments required to consummate the transactions
     contemplated hereby shall have been made or obtained.

          (c) Legal Proceedings. No suit, action, claim, proceeding or
     investigation shall have been instituted or threatened by or before any US
     or foreign (including Australian) court or any US or foreign (including
     Australian) federal, state, county or local government or any other
     governmental, regulatory or administrative agency or authority seeking to
     restrain, prohibit or invalidate the sale of any of the Shares to the Buyer
     hereunder or the consummation of the transactions contemplated hereby or to
     seek damages in connection with such transactions or which might affect the
     right of the Buyer to own any Shares.

          (d) Delivery of Legal Opinion. HeartWare shall have delivered a legal
     opinion from Richards Layton & Finger LLP, its special Delaware counsel,
     dated as of the Closing Date, in the form of Exhibit C.

     5.2. Conditions to Obligations of the Selling Stockholders. The obligations
of the Selling Stockholders to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver of each of the
following conditions on or prior to the Closing Date:

          (a) Representations and Warranties; Performance. The representations
     and warranties of the Buyer contained herein shall be true and accurate, in
     all material respects, as of the Closing Date, and the Buyer shall have
     performed and complied, in all materials respects, with all agreements,
     obligations and conditions required by this Agreement to be performed or
     complied with by it on or prior to the Closing Date. The Buyer shall have
     delivered to the Selling Stockholders a certificate, dated the Closing
     Date, to the foregoing effect.

          (b) Consents. All filings with and consents from (i) all U.S. and
     foreign (including, without limitation, Australian) Federal, state, local
     and other governmental agencies and (ii) all parties (other than the
     Selling Stockholders) to the contracts and commitments required to
     consummate the transactions contemplated hereby shall have been made or
     obtained.

          (c) Delivery of Buyer Shares and Buyer Note. The Buyer shall have
     provided to each Selling Stockholder a holding statement in accordance with
     the ASTC Settlement Rules representing the Buyer Shares being issued to
     such Selling Stockholder, and the Buyer shall have delivered to ATP the
     duly executed Buyer Note.

                                       14
<PAGE>

          (d) Legal Proceedings. No suit, action, claim, proceeding or
     investigation shall have been instituted or threatened by or before any US
     or foreign (including Australian) court or any or US or foreign (including
     Australian) federal, state, county or local government or any other
     governmental, regulatory or administrative agency or authority seeking to
     restrain, prohibit or invalidate the sale of any of the Buyer Shares to the
     Selling Stockholders hereunder or the consummation of the transactions
     contemplated hereby or to seek damages in connection with such transactions
     or which might affect the right of the Selling Stockholders to own any
     Buyer Shares.

     5.3. Conditions to Obligations of the Buyer and the Selling Stockholders.
The obligations of the Buyer and the Selling Stockholders to consummate the
transactions contemplated by this Agreement shall be subject to the satisfaction
or waiver of each of the following conditions on or prior to the Closing Date:

          (a) IPO. The Buyer shall have received firm commitments in the Capital
     Raising of not less than (i)AUD$30,000,000, with the ability to accept up
     to AUD$5,000,000 oversubscriptions to a maximum of AUD$35,000,000, in the
     IPO, and (ii) AUD$5,000,000 in the U.S. Private Placement, but in the
     aggregate no more than the U.S. dollar equivalent of $24,950,000, or such
     other minimum capital raising amount as may be agreed to by the Selling
     Stockholders holding a majority of the Shares; and

          (b) Listing. The Buyer shall have been informed by ASX that approval
     is pending for the Buyer's admission to the official list of ASX and the
     official quotation on ASX of all of the Buyer Shares and all of the
     ordinary shares of the Buyer being issued in the Capital Raising, subject
     solely to the consummation of the transactions contemplated by this
     Agreement.

          (c) FIRB approval. The Treasurer of the Commonwealth of Australia (i)
     shall have issued a notice pursuant to the Australian Foreign Acquisitions
     and Takeovers Act 1975 (Cth) stating that the Commonwealth Government does
     not object to the transactions contemplated by this Agreement and the
     Capital Raising and the Listing or (ii) shall have become or been precluded
     from making an order in respect of the completion of the transactions
     contemplated by this Agreement and the Capital Raising and the Listing,
     including by reason of a change in the law so that such approval is no
     longer required.

     5.4. Failure to Meet Conditions. In the event that the conditions set forth
in this Article 5 are not met on or prior to January 31, 2005, as it may be
extended by the parties hereto, this Agreement shall terminate and be null and
void and of no further force or effect.

                                   ARTICLE 6

                              ADDITIONAL COVENANTS

     In addition to the foregoing, the Buyer and the Selling Stockholders each
agree to take the following actions, as applicable, after the execution of this
Agreement.

                                       15

<PAGE>

     6.1. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby, including investment
banking, legal and accounting expenses, will be paid by the party incurring such
expense. Notwithstanding the foregoing, the Buyer shall pay the reasonable legal
fees and expenses of Finn, Dixon & Herling LLP, counsel to ATP.

     6.2. Listing. The Buyer must use its best endeavours to procure that
official quotation is granted for its ordinary shares on ASX as soon as
practicable after the Closing.

     6.3. ASX Restrictions. The Selling Stockholders agree to be bound by
whatever restrictions are imposed on the Shares by ASX under the ASX Listing
Rules and to promptly execute and deliver to the Buyer all restriction
agreements that ASX may require be executed in that regard. Notwithstanding the
foregoing, Buyer agrees to cooperate fully with the Selling Stockholders and to
take all reasonable steps to shorten the two-year period of the escrow that ASX
typically requires of stockholders of the type of the Selling Stockholders.

     6.4. Election of Selling Stockholders. The holders of a majority in
interest of the Selling Stockholders shall execute and deliver to HeartWare and
all holders of its Preferred Stock, in timely fashion, an election pursuant to
Section A(3)(a)(iv) of HeartWare's current Restated Certificate of Incorporation
that the transactions contemplated by this Agreement shall not be deemed to be a
Liquidation Event (as defined therein).

     6.5. Additional Agreements. In case at any time after the Closing any
further action is reasonably necessary or desirable to carry out the purposes of
this Agreement, the parties will take all such necessary action.

                                    ARTICLE 7

                                  MISCELLANEOUS

     7.1. Entire Agreement. This Agreement, including the exhibits, schedules
and other agreements delivered pursuant to this Agreement contain all of the
terms and conditions agreed upon by the parties relating to the subject matter
of this Agreement and supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, whether oral or
written, respecting that subject matter.

     7.2. Governing Law. This Agreement will be governed by the internal laws of
the State of Delaware, without regard to principles of conflicts of law.

     7.3. Notices. All notices, requests, demands or other communications which
are required or may be given pursuant to the terms of this Agreement will be in
writing and will be deemed to have been duly given: (i) on the date of delivery
if personally delivered by hand, (ii) upon the tenth day after such notice is
deposited in the mail, if mailed by registered mail, postage prepaid, return
receipt requested, (iii) upon the date scheduled for delivery after such notice
is sent by a internationally recognized overnight express courier or (iv) by fax
upon written confirmation (including the automatic confirmation that is received
from the recipient's fax machine) of receipt by the recipient of such notice:

                                       16

<PAGE>

     If to the Buyer: HeartWare Limited
                      Level 1, 1 Bligh Street,
                      Sydney, NSW 2000,
                      Australia
                      Attention: Stuart McConchie, CEO
                      Telephone No.: (+61 2) 9231 3322
                      Fax No.: (+61 2) 9229 2727

     If to the Selling Stockholders: at the addresses shown in Schedule 1.

     Such addresses may be changed, from time to time, by means of a notice
given in the manner provided in this Section 7.3.

     7.4. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it will be modified rather than voided, if
possible, in order to achieve the intent of the parties to this Agreement to the
extent possible. In any event, all other provisions of this Agreement will be
deemed valid and enforceable to the full extent.

     7.5. Survival of Representations and Warranties. All representations and
warranties contained in this Agreement, including the exhibits and schedules
delivered pursuant to this Agreement, will survive the Closing for a period of
one (1) year, but any claims for breach thereof may only be made within any
applicable time limits specified herein.

     7.6. Assignment. No party to this Agreement may assign, by operation of law
or otherwise, all or any portion of its rights, obligations, or liabilities
under this Agreement without the prior written consent of the parties, which
consent may be withheld in the absolute discretion of the party asked to grant
such consent.

     7.7. Counterparts. This Agreement may be executed in two or more partially
or fully executed counterparts each of which will be deemed an original and will
bind the signatory, but all of which together will constitute but one and the
same instrument. The execution and delivery of a Signature Page to Securities
Exchange Agreement in the form annexed to this Agreement, including a fax copy
of the actual signature, by any party hereto who will have been furnished the
final form of this Agreement will constitute the execution and delivery of this
Agreement by such party.

     7.8. Amendment: Waiver. This Agreement may not be amended, and no provision
hereof can be waived, except by an instrument in writing executed by the Buyer,
HeartWare, and the Selling Stockholders holding a majority of the Shares or, in
the case of a waiver, by the party(ies) waiving compliance (provided that the
Selling Stockholders holding a majority of the Shares shall be able to waive any
provision hereof for all of the Selling Stockholders).

     7.9. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference will be to a Section, Exhibit or
Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes," and "including" when used therein will be deemed in each case to be
followed by the words "without limitation." The table of contents, index to
defined terms, and headings contained in this Agreement are for reference
purposes only and will not affect in any way the meaning or interpretation of
this Agreement.

                                       17

<PAGE>

     7.10. Transfer, Sales, Documentary, Stamp and Other Similar Taxes. Any and
all transfer, sales, documentary, stamp and other similar Taxes imposed in
connection with the transactions contemplated by this Agreement will be paid by
the Selling Stockholders with respect to which such Tax relates.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       18

<PAGE>

                                                               Signature Page to
                                                   Securities Exchange Agreement

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.

                                        HEARTWARE LIMITED (ACN 111 970 257)

                                        By: /s/ Robert Bain Thomas
                                            ------------------------------------
                                        Name: Robert Bain Thomas
                                        Title: Chairman

                                        HEARTWARE, INC.

                                        By: /s/ Seth L. Harrison
                                            ------------------------------------
                                        Name: Seth L. Harrison, M.D.
                                        Title: President

                                        APPLE TREE PARTNERS I, L.P.

                                        By: Apple Tree Ventures I, LLC, its
                                            General Partner

                                        By: /s/ Seth L. Harrison
                                            ------------------------------------
                                        Name: Seth L. Harrison, M.D.
                                        Title: Managing Member

                                        /s/ Anthony Low-Beer
                                        ----------------------------------------
                                        Anthony Low-Beer, individually, and for
                                        Weiss Peck & Gallagher as Trustee for
                                        Anthony Low-Beer
                                        Acct. No. 77509658

                                        /s/ Edward Nerssissian  /S/ Mary Luellen
                                        ----------------------------------------
                                        Edward Nerssissian, M.D., individually,
                                        and J.T.W.R.O.S. with Mary Luellen

                                        /s/ Mary Luellen  /S/ Edward Nerssissian
                                        ----------------------------------------
                                        Mary Luellen, individually, and
                                        J.T.W.R.O.S. with EdwardNerssissian

<PAGE>

                                                               Signature Page to
                                                   Securities Exchange Agreement

                                        /s/ Garrett E. Thunen
                                        ----------------------------------------
                                        Garrett E. Thunen

                                        /s/ Carol Thunen
                                        ----------------------------------------
                                        Carol Thunen

<PAGE>

                                   SCHEDULE 1
                SELLING STOCKHOLDERS, SECURITIES AND BUYER SHARES

<TABLE>
<CAPTION>
                                               PRINCIPAL AMOUNT OF NOTES
NAME AND ADDRESS OF SELLING                     HELD/SHARES INTO WHICH      BUYER SHARES
        STOCKHOLDERS           SHARES OWNED           CONVERTIBLE             DELIVERED
----------------------------   ------------    -------------------------   ------------
<S>                            <C>             <C>                         <C>
Apple Tree Partners I, L.P.       582,610        $11,659,546/1,208,465      87,003,221
The Chrysler Building
405 Lexington Avenue
54th Floor
New York, NY 10174

Anthony Low-Beer                    6,520                  0                   316,715
Brimberg & Co.
45 Rockefeller Plaza
Suite 2570
New York, NY 10111
Attn: Wade Black/Heather
Seal

Weiss Peck & Gallagher as           6,000                  0                   291,456
Trustee for Anthony Low-Beer
Acct. No. 77509658
Brimberg & Co.
45 Rockefeller Plaza
Suite 2570
New York, NY 10111
Attn: Wade Black/Heather
Seal

Edward Nerssissian, M.D.            2,000                  0                    97,152
72 East 91st Street
New York, NY 10128

Edward Nerssissian, M.D.            1,000                  0                    48,576
J.T.W.R.O.S. with Mary
Luellen
72 East 91st Street
New York, NY 10128

Edward Nerssissian, M.D.,           1,000                  0                    48,576
PSP Act. 87541074
72 East 91st Street
New York, NY 10128

Garrett H. and Carol Thunen         4,000                  0                   194,304
30 Brookside Avenue
Berkeley CA 94705-2719
                                  -------                                   ----------
   TOTAL:                         603,130        $11,659,546/1,208,465      88,000,000
                                  =======                                   ==========
</TABLE>

<PAGE>

                                                                    EXHIBIT A TO
                                                   SECURITIES EXCHANGE AGREEMENT

                                HEARTWARE LIMITED
                                 ACN 111 970 257
                                    (COMPANY)

                             CONVERTIBLE NOTE TERMS

1    FACE VALUE

     This Convertible Note has a face value of $1,420,000 (PRINCIPAL).

2    DATE OF ISSUE

     This Convertible Note is issued on January [___], 2005 to Apple Tree
     Partners I, L.P. (HOLDER).

3    INTEREST

     Interest accrues daily at 2.00% per annum and capitalises monthly in
     arrears.

4    REPAYMENT

     (a)  The Company promises to pay to the order of the Holder the Principal
          with interest on it. The Principal and interest on this Convertible
          Note is repayable by the Company to the Holder on the second
          anniversary of the date of issue of this Convertible Note (DUE DATE).

     (b)  The Company may repay all, or any portion of not less than $100,000,
          of this Convertible Note at any time prior to the Due Date on 30 days
          written notice to the Holder.

     (c)  All payments by the Company under this Convertible Note will be made
          without deduction of any kind, including by reason of set-off,
          counterclaim or otherwise.

     (d)  All payments by the Company under this Convertible Note will be
          applied first to interest and then to Principal.

5    CONVERSION

     (a)  Subject to clause 5(c), the Holder may, in its sole discretion,
          convert all or any portion of the Principal and interest on this
          Convertible Note into ordinary shares of the Company (SHARES) at a
          conversion price of $1.00 per Share by giving 14 days written notice
          to the Company in the form attached (NOTICE). For example, if the
          amount outstanding on this Convertible Note at the time of conversion
          is

                                     page 2

<PAGE>

          $120,000 (being principal of $100,000 and interest of $20,000), the
          Convertible Note will convert into 120,000 Shares.

     (b)  The Shares issued on conversion of this Convertible Note will rank
          equally with all existing Shares then on issue.

     (c)  The Company will not issue fractional shares upon conversion of this
          Convertible Note and, for any fraction of a Share called for upon
          conversion, the Company will pay a cash amount equal to such fraction
          to the Holder.

     (d)  On receipt by the Company of a Notice and on expiry of the notice
          period in the Notice, the Company must issue to the Holder the number
          of Shares in respect of which the conversion is exercised unless the
          issue would give rise to a contravention of the Corporations Act 2001
          (Cth) or the Official Listing Rules of the Australian Stock Exchange
          (ASX), as modified or varied from time to time.

6    ADJUSTMENTS FOR REORGANISATIONS OF CAPITAL

     If there is:

     (a)  a reconstruction or reorganisation (including consolidation,
          sub-division, reduction or return of capital) of the Shares, the
          conversion price of this Convertible Note will be adjusted so as to
          ensure that no benefit is conferred on, and no burden is assumed by,
          the Holder; and

     (b)  a bonus issue of Shares, the conversion price will be adjusted so that
          this Convertible Note will confer on the holder the right to receive,
          on conversion, the additional number of Shares which the holder would
          have received if conversion had occurred before the date for
          calculating entitlements to the bonus issue.

7    TRANSFERABILITY

     (a)  This Convertible Note is freely transferable by the Holder.

     (b)  The Company must not assign or deal with any of its rights or
          obligations under this Convertible Note without the prior written
          consent of the Holder (which consent must not be unreasonably
          withheld).

8    SECURITY

     This Convertible Note is unsecured.

9    QUOTATION OF CONVERTIBLE NOTE AND SHARES

     This Convertible Note will not be quoted on the Official List of the ASX.
     Within one business day of the exercise of the conversion rights under
     clause 5, the Company will apply for the Shares to be admitted for
     quotation on the Official List of the ASX.

                                     page 3

<PAGE>

10   SHAREHOLDER APPROVAL

     If, for any reason, an issue of Shares to the Holder under this Convertible
     Note would result in the need for the Company to obtain the approval of the
     Shareholders, the Company must convene the necessary meeting at its own
     cost as soon as reasonably practicable.

11   REGISTER

     The Company will maintain a register of Convertible Note holders and will
     record changes in the register notified to the Company in a form prescribed
     by the Company for that purpose.

12   EXTENSION PERIOD

     (a)  If this Convertible Note is not repaid by the Company or converted by
          the Holder on or before the Due Date, the Holder may give written
          notice to the Company demanding repayment of the Principal and
          interest in full within 30 days of the date of receipt of the notice
          by the Company. If the Company does not have at least 12 months of
          Working Capital on Hand at the date of receipt of the notice, then the
          Company's obligation to repay the Principal and interest outstanding
          on this Convertible Note will be delayed until 12 months Working
          Capital on Hand is available (EXTENSION PERIOD).

     (b)  During the Extension Period, the Holder may convert this Convertible
          Note into Shares under clause 5.

     (c)  In this clause 12, "WORKING CAPITAL ON HAND" means cash reserves
          sufficient in the good faith opinion of the board of the Company to
          meet the Company's operational needs on an consolidated basis for 12
          months following the date of such determination, based on the then
          current budget previously approved by the board of the Company.

13   DEFAULT; ACCELERATION

     (a)  It will be an event of default under this Convertible Note if:

          (i)  the Company fails to make any payment of any Principal or
               interest within five business days of the due date for payment
               under this Convertible Note;

          (ii) any court of competent jurisdiction enters any judgment against
               the Company in an amount in excess of $250,000 which is not
               vacated, discharged or stayed pending appeal within 30 days from
               the entry of such judgment (but only for so long as it is
               stayed);

          (iii) a default in any agreement to which the Company is a party with
               a third party or parties results in a right by such third party
               or parties, whether or

                                     page 4

<PAGE>

               not exercised, to accelerate the maturity of any indebtedness or
               any payment, or any payment default by the Company (other than
               normal account payable management in the ordinary course of
               business), in either case in excess of $250,000, individually or
               in the aggregate; or

          (iv) an Insolvency Event occurs in relation to the Company.

     (b)  If any event of default occurs, the Holder may make all unpaid
          Principal and interest owing by the Company to the Holder under this
          Convertible Note immediately due and payable.

     (c)  In this clause 13, "INSOLVENCY EVENT" means:

          (i)  an order is made or an application is made to a court for an
               order that the Company be wound up; or

          (ii) an application is made to a court for an order appointing a
               liquidator or provisional liquidator or a liquidator or
               provisional liquidator is appointed in respect of the Company; or

          (iii) the Company enters into, or resolves to enter into, a scheme of
               arrangement, deed of company arrangement or composition with, or
               assignment for the benefit of, all or any classes of its
               creditors, or it proposes a re-organisation, moratorium or other
               administration involving any of them; or

          (iv) the Company resolves to wind itself up, or otherwise dissolve
               itself, or gives notice of intention to do so, except to
               reconstruct or amalgamate while solvent, or is otherwise wound up
               or dissolved; or

          (v)  the Company is or states that it is unable to pay its debts when
               they fall due; or

          (vi) the Company takes any step to obtain protection or is granted
               protection from its creditors, under any applicable legislation
               or an administrator is appointed to a party; or

          (vii) anything analogous or having a substantially similar direct
               effect to any of the events specified in (i)-(vi) above happens
               under the law of any applicable jurisdiction.

14   EXPENSES; TAXES

     The Company will pay or reimburse the Holder on demand, for any and all
     costs and expenses, including, but not limited to, the reasonable fees and
     disbursements of legal counsel and other experts employed by the Holder, in
     connection with the enforcement of this Convertible Note.

                                     page 5

<PAGE>

15   GOVERNING LAW

     (a)  This document is governed by and is to be construed in accordance with
          the laws applicable in New South Wales, Australia.

     (b)  Each party irrevocably and unconditionally submits to the
          non-exclusive jurisdiction of the courts of that place and any courts
          which have jurisdiction to hear appeals from any of those courts and
          waives any right to object to any proceedings being brought in those
          courts.

16   GENERAL

     (viii)(a) (Waiver):

          (ix) (i) A single or partial exercise or waiver by a party of a right
               relating to this document does not prevent any other exercise of
               that right or the exercise of any other right.

          (x)  (ii) A party is not liable for any loss, cost or expense of any
               other party caused or contributed to by the waiver, exercise,
               attempted exercise, failure to exercise or delay in the exercise
               of a right.

          (xi) (iii) A right relating to this document may only be waived in
               writing signed by the party or parties waiving the right.

     (b)  (SEVERABILITY): If a provision of this document is illegal or
          unenforceable in any relevant jurisdiction, it may be severed for the
          purposes of that jurisdiction without affecting the enforceability of
          the other provisions of this document.

     (viii)(c) (MORATORIUM): Any statute, proclamation, order or regulation
          establishing ( a moratorium or limiting, postponing or otherwise
          prejudicially affecting any of the rights, powers or remedies
          conferred on any of the parties does not, to the extent lawful, apply
          to any of the provisions of this document.

     (viii)(d) (ENTIRE UNDERSTANDING): This document contains the entire
          understanding between the parties as to the subject matter of this
          document. All previous negotiations, understandings, representations,
          warranties, memoranda or commitments concerning the subject matter of
          this document are merged in and superseded by this document and are of
          no effect. No party is liable to any other party in respect of those
          matters.

17   CONSTRUCTION

     Unless expressed to the contrary, in this document:

          (a)  words in the singular include the plural and vice versa;

                                     page 6

<PAGE>

          (b)  if a word or phrase is defined its other grammatical forms have
               corresponding meanings;

          (c)  "includes" means includes without limitation;

          (d)  a reference to:

          (i)  a person includes a partnership, joint venture, unincorporated
               association, corporation and a government or statutory body or
               authority;

          (ii) a person includes the person's legal personal representatives,
               successors, assigns and persons substituted by novation;

          (iii) any legislation includes subordinate legislation under it and
               includes that legislation and subordinate legislation as modified
               or replaced;

          (iv) a right includes a benefit, remedy, discretion or power;

          (v)  "$" or "dollars" is a reference to Australian currency;

          (vi) this or any other document includes the document as novated,
               varied or replaced and despite any change in the identity of the
               parties;

          (vii) writing includes any mode of representing or reproducing words
               in tangible and permanently visible form, and includes fax
               transmissions;

          (viii) this document includes all schedules and annexures to it; and

          (ix) a clause, schedule or annexure is a reference to a clause,
               schedule or annexure, as the case may be, of this document;

          (e) if the date on or by which any act must be done under this
document is not a business day, the act must be done on or by the next business
day; and

          (f) where time is to be calculated by reference to a day or event,
that day or the day of that event is excluded.

                                     page 7

<PAGE>

EXECUTED as a deed poll:

EXECUTED BY                           )
HEARTWARE LIMITED                     )

-------------------------------------   ----------------------------------------
Company Secretary/Director              Director

-------------------------------------   ----------------------------------------
Name of Company Secretary/ Director     Name of Director (print)
(print)

<PAGE>

                          FORM OF NOTICE OF CONVERSION

[Date]

The Company Secretary
HeartWare Limited
C/- Level 1, 1 Bligh Street
SYDNEY NSW 2000

Dear Sir/Madam

Apple Tree Partners I, L.P. (HOLDER) gives 14 days notice of the conversion of
[#insert amount converted#]] into ordinary shares in HeartWare Limited (COMPANY)
at $1.00 per share, pursuant to the Convertible Note issued by the Company to
the Holder on [date].

APPLE TREE PARTNERS I, L.P.

By: Apple Tree Ventures I, LLC, its
    General Partner

By:
    ---------------------------------
Name: Seth L. Harrison, M.D.
Title: Managing Member

<PAGE>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

SECTION 2.6(B)

     -    Three Warrants, dated October 3, 2003, issued by HeartWare to Robert
          Fine, exercisable for an aggregate of 3% of HeartWare's outstanding
          stock on the date of exercise. It is currently contemplated that Mr.
          Fine will receive replacement options for ordinary shares of the
          Buyer.

     -    The Company reserves the right to issue one or more options for up to
          US$100,000 of ordinary shares of the Buyer to a consultant of
          HeartWare, which option would be exercisable for a period of seven
          years at a price per share of AUS$0.50.

SECTION 2.7(A)(I)

     The Company has the following additional liabilities, in addition to those
     set forth in the Financial Statements:

     -    Agreement, dated February 16, 2004, between the Company and Inteq
          Limited

     -    Consulting Agreement, dated September 23, 2003, between the Company
          and Jane Reedy

     -    Employment Agreement, dated November 12, 2004, between the Company and
          Stuart McConchie

     -    Employment Agreement, dated November 21, 2004, between the Company and
          Jeffrey A. LaRose

SECTION 2.7(B)

     -    Section 2.7(b)(v) -- Those certain convertible notes issued by
          HeartWare to ATP, have been consolidated, as of November 19, 2004,
          into two convertible notes, with amended terms, as follows: The
          maturity date of the convertible notes has been extended until January
          31, 2005 and the notes are convertible either into (i) shares of
          HeartWare's Series B Convertible Preferred Stock, at the price per
          share indicated in the notes, and/or (ii) shares of HeartWare's next
          series of Preferred Stock issued in an equity financing, at the price
          per share of that series of Preferred Stock sold in the offering.

     -    Section 2.7(b)(vi) -- HeartWare has entered into employment agreements
          with two employees:

          -    Jeffrey LaRose, CTO, dated November 23, 2004

          -    Stuart McConchie, CEO, dated November 12, 2004

<PAGE>

     -    Section 2.7(b)(xii) -- HeartWare has amended and restated the
          convertible notes that it has issued to ATP, which notes are
          convertible on the terms described above in the disclosure relating to
          Section 2.7(b)(v). In connection with the amendment and restatement of
          those notes, HeartWare filed an amendment to its certificate of
          incorporation to increase the number of authorized shares of Series B
          Convertible Preferred Stock and Common Stock.

SECTION 2.9

     -    In connection with the various loans made by ATP to HeartWare to date,
          ATP has received a security interest in all the assets of HeartWare,
          including all of its intellectual property.

SECTION 2.15

     -    In connection with the various loans made by ATP to HeartWare to date,
          ATP has received a security interest in all the assets of HeartWare,
          including all of its intellectual property.

SECTION 2.20

     -    Certain past employees of HeartWare or its predecessor in interest,
          Kriton Medical, Inc., have not executed Proprietary Information
          Agreements. However, HeartWare does not believe that the failure of
          any of these individuals to have executed and delivered such Agreement
          would have a Material Adverse Effect on HeartWare, or ownership of its
          intellectual property.

     -    There is currently in effect a Retention and Equity Rights Plan, dated
          February 27, 2004. HeartWare intends to terminate this Plan effective
          on the Closing Date.

SECTION 2.23

     -    Employment Agreement, dated November 12, 2004, between HeartWare and
          Stuart McConchie.

     -    Convertible notes issued by HeartWare to ATP on November 19, 2004.

                                        2

<PAGE>

                                    EXHIBIT C
                FORM OF OPINION OF RICHARDS, LAYTON & FINGER LLP

                 [LETTERHEAD OF RICHARDS, LAYTON & FINGER, P.A.]

                                January ___, 2005

Board of Directors of
HeartWare, Inc.
3351 Executive Way
Miramar, FL 33025-3935

and Board of Directors of
HeartWare Limited
Level 1, 1 Bligh Street
Sydney, NSW 2000
Australia

          Re: HeartWare, Inc. - Proposed Restructuring

Ladies and Gentlemen:

          We have acted as special Delaware counsel to HeartWare, Inc., a
Delaware corporation (the "Company"), and HeartWare Limited, a public company
incorporated under the laws of Victoria, Australia (the "Parent") in connection
with the proposed restructuring of the Company, pursuant to the Securities
Exchange Agreement, dated as of December 10, 2004 (the Exchange Agreement"),
among the Parent, the Company and certain of the holders of Series B Convertible
Participating Preferred Stock, par value $.001 per share (the "Series B
Preferred Stock"), which would involve, inter alia, the exchange of at least
96.6% of the issued and outstanding shares of the Company's Series B Preferred
Stock, for ordinary shares of the Parent (the "Proposed Restructuring"). In this
connection, you have requested our opinions as to certain matters under the
General Corporation Law of the State of Delaware (the "General Corporation Law")
and under the laws of the State of Delaware as they relate to the enforceability
of the Exchange Agreement. This opinion is being delivered to each of you
pursuant to Section 5.1(d) of the Exchange Agreement. Terms capitalized but not
otherwise defined herein shall have the meanings ascribed to them in the
Certificate of Incorporation (as defined below).

          For the purpose of rendering our opinions as expressed herein, we have
been

<PAGE>

furnished and have reviewed copies of the following documents:

          (i) the Amended and Restated Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of Delaware (the
"Secretary of State") on June 30, 2003 and the Certificate of Amendment of
Certificate of Incorporation of the Company as filed with the Secretary of State
on July 11, 2003 (collectively, the "Certificate of Incorporation");

          (ii) the Bylaws of the Company, dated April 9, 2003 (the "Bylaws");

          (iii) the Exchange Agreement; and

          (iv) the written notice of the holders of a Majority Interest in
Series B Preferred Stock that such holders have voted, as a separate class,
against treating the Proposed Restructuring as a Deemed Liquidation Event
pursuant to Article 4A(3)(a)(iv) of the Certificate of Incorporation and waiving
any notice requirements of the Company for the benefit of such holders in
connection with the Proposed Restructuring pursuant to Article 4A(8)(b) of the
Certificate of Incorporation which notice was delivered to the Company and the
other holders of Preferred Stock at least ten (10) days prior to the closing of
the Proposed Restructuring.

          With respect to the foregoing documents, we have assumed: (a) the
genuineness of all signatures, and the incumbency, authority, legal right and
power and legal capacity under all applicable laws and regulations, of each of
the officers and other persons and entities signing or whose signatures appear
upon each of said documents as or on behalf of the parties thereto; (b) the
authenticity of all documents submitted to us as originals; (c) the conformity
to authentic originals of all documents submitted to us as certified, conformed,
photostatic, electronic or other copies; and (d) that the foregoing documents,
in the forms submitted to us for our review, have not been and will not be
altered or amended in any respect material to our opinions as expressed herein.
For the purpose of rendering our opinions as expressed herein, we have not
reviewed any document other than the documents set forth above, and we assume
there exists no provision of any such other document that bears upon or is
inconsistent with our opinions as expressed herein. We have conducted no
independent factual investigation of our own, but rather have relied solely upon
the foregoing documents, the statements and information set forth therein, and
the additional matters recited or assumed herein, all of which we assume to be
true, complete and accurate in all material respects.

          In addition to the foregoing, for the purpose of rendering our
opinions as expressed herein, we have, with your consent, assumed:

          (i) that the Certificate of Incorporation and Bylaws constitutes the
certificate of incorporation and bylaws of the Company, respectively, as
presently in effect;

          (ii) that each of the parties to the Exchange Agreement (other than
the Company and natural persons) has been duly created, organized or formed, as
the case may be, and is validly existing in good standing under the laws of the
jurisdiction governing its creation, organization or formation, as the case may
be;

                                        2

<PAGE>

          (iii) that each of the parties to the Exchange Agreement has the
requisite capacity, power, authority and legal right, as the case may be, to
execute and deliver, and to perform such person's obligations under, the
Agreement;

          (iv) that the Exchange Agreement has been duly authorized, executed
and delivered by each of the parties thereto;

          (v) that the Exchange Agreement constitutes a legal, valid and binding
obligation of each of the parties thereto (other than the Company), enforceable
against each such party (other than the Company) in accordance with its terms;

          (vi) that the due authorization, execution and delivery of the
Exchange Agreement by each of the parties thereto did not, and the consummation
of the transactions contemplated thereby will not, violate or conflict with any
provision of any judgment, order, writ, injunction or decree of any court or
governmental authority, or violate or result in a breach of or constitute a
default or require any consent (other than such consents as have been duly
obtained) under, any provision of any other agreement, contract, instrument or
obligation to which any such party is a party or by which any such party or any
of such party's properties is bound;

          (vii) that the Exchange Agreement has not been terminated in
accordance with the terms thereof;

          (viii) that the restrictions on "business combinations" (as defined in
Section 203(c)(3) of the General Corporation Law of the State of Delaware) set
forth in Section 203 of the General Corporation Law are not applicable to the
Company, the Buyer (as defined in the Agreement), the Selling Stockholders (as
defined in the Agreement), the Exchange Agreement or the transactions
contemplated thereby pursuant to Section 203(b)(4) thereof; and

          (ix) that (x) the application of Delaware law to the Exchange
Agreement would not be contrary to a fundamental policy of a jurisdiction (other
than the State of Delaware) which (a) would be the jurisdiction of applicable
law in the absence of an effective choice of law, and (b) has a materially
greater interest than Delaware in the determination of any particular issue
relating to the Agreement, and (y) the transactions described in, and relating
to, the Exchange Agreement have a substantial and reasonable relationship with
Delaware and there is a reasonable basis for the choice of Delaware law to
govern the Agreement.

                                   BACKGROUND

          The Company currently has the following authorized classes of capital
stock: (1) 6,000,000 shares of Common Stock, and (2) 2,000,000 shares of
preferred stock, par value $.001 per share (the "Preferred Stock"), of which
626,700 shares are designated Series A-1 Non-Voting Preferred Stock (the "Series
A-1 Preferred Stock"), 436,500 shares are designated Series A-2 Non-Voting
Preferred Stock (the "Series A-2 Preferred Stock"), and 603,105 shares are
designated Series B Preferred Stock. Collectively, the Series A-1 Preferred
Stock and the Series A-2 Preferred Stock are referred to herein as the "Series A
Preferred Stock." The Company also has 333,650 shares of authorized blank check
Preferred Stock.

                                        3

<PAGE>

          With respect to voting power, the holders of Series B Preferred Stock
generally are entitled to the number of votes equal to the number of shares of
Common Stock into which their shares of Series B Preferred Stock are then
convertible. The Series B Preferred Stock votes together with the Common Stock,
as a single class, with respect to all matters presented to the stockholders of
the Company for adoption other than specified actions and transactions for which
the Series B Preferred Stock votes as a separate class. One of the specified
transactions on which the Series B Preferred Stock votes as a separate class is
any transaction or series of related transactions pursuant to or as a result of
which a single person (or group of affiliated persons) acquires or holds capital
stock of the Company representing a majority of the Company's outstanding voting
power -- a Change in Control Transaction. A Change in Control Transaction will
constitute a Deemed Liquidation Event under Article 4A(3)(a)(iv) of the
Certificate of Incorporation unless the holders of a Majority Interest in Series
B Preferred Stock, voting separately as a class, vote against treating such
transaction or series of transactions as a Deemed Liquidation Event. The Series
A Preferred Stock has no voting rights under the Certificate of Incorporation.
The holders of Common Stock vote together with the holders of Series B Preferred
Stock as a single class on all matters on which stockholders are generally
entitled to vote except that the holders of Common Stock are not entitled to
vote on any amendment to the Certificate of Incorporation that relates solely to
the terms of one or more outstanding series of Preferred Stock if the holders of
such affected series are entitled, either separately or together with the
holders of one or more of such series, to vote thereon.

          The Company is currently seeking funding of up to US$24,950,000 to
finance the development of a medical device for the treatment of congestive
heart failure. It is contemplated that the funding will be obtained through an
initial public offering of ordinary shares in the Parent (the "IPO") and a U.S
private placement of ordinary shares under Regulation D promulgated under the
Securities Act of 1933, as amended. The IPO requires that the Company
restructure the ownership of its capital stock into the Parent, so that an
Australian entity can be the IPO vehicle. Pursuant to the terms of the Proposed
Restructuring, holders of at least 96.6% of the Series B Preferred Stock will
exchange their shares in the Company for ordinary shares in the Parent [with an
aggregate value of US$32.5 million], subject to adjustment based on the value of
the Parent. As a result of the foregoing, the Parent will acquire at least 96.6%
of the issued and outstanding shares of Series B Preferred Stock and thereby
acquire control of a majority in voting power of the outstanding capital stock
of the Company -- a Change in Control Transaction. Following the Proposed
Restructuring, the holders of Series A Preferred Stock will continue to hold
shares of Series A Preferred Stock. The Proposed Restructuring does not
contemplate any amendments to the Certificate of Incorporation; therefore, the
powers, preferences and special rights of the Series A Preferred Stock, the
Series B Preferred Stock and the Common Stock will be unaffected by the Proposed
Restructuring. In this connection, you have requested our opinions regarding
whether: (1) the Proposed Restructuring will violate the Certificate of
Incorporation or the General Corporation Law; (2) the Proposed Restructuring
will result in a Deemed Liquidation Event under Article 4A(3)(a)(iv) of the
Certificate of Incorporation or result in the liquidation or dissolution of the
Company under the General Corporation Law; (3) the holders of Series A Preferred
Stock are entitled under the Certificate of Incorporation or the General
Corporation Law to a separate series vote on the Proposed Restructuring; and (4)
the Exchange Agreement constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.

                                        4

<PAGE>

                                   CONCLUSION

          Based upon and subject to the foregoing and based upon our review of
such matters of law as we have deemed necessary and appropriate in order to
render our opinions as expressed herein, and subject to the assumptions,
limitations, exceptions and qualifications set forth herein, it is our opinion
that:

          The Proposed Restructuring will not violate the Certificate of
Incorporation or the General Corporation Law.

          The Proposed Restructuring will not result in a Deemed Liquidation
Event under Article 4A(3)(a)(iv) of the Certificate of Incorporation or result
in the liquidation or dissolution of the Company under the General Corporation
Law.

          Holders of Series A Preferred Stock are not entitled under the
Certificate of Incorporation or the General Corporation Law to a separate series
vote on the Proposed Restructuring.

          The Exchange Agreement constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.

          The foregoing opinions are subject to the following limitations,
assumptions, exceptions and qualifications:

          We are admitted to practice law in the State of Delaware and do not
hold ourselves out as being experts on the law of any other jurisdiction. The
foregoing opinions are limited to the laws of the State of Delaware, and we have
not considered and express no opinion on the effect of the laws of any other
state or jurisdiction, including state or federal laws relating to securities or
other federal laws, or the rules and regulations of stock exchanges or of any
other regulatory body. In addition, we have not considered and express no
opinion as to the applicability of or any compliance with the Delaware
Securities Act, 6 Del. C. section 7301 et seq., or any rules or regulations
promulgated thereunder.

          Our opinion as expressed in paragraph 4 above is subject to (i)
applicable bankruptcy, insolvency, fraudulent transfer and conveyance,
moratorium, reorganization, receivership and similar laws relating to or
affecting the enforcement of the rights and remedies of creditors generally,
(ii) principles of equity, including principles of commercial reasonableness,
good faith and fair dealing and the applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding in equity or at
law), and (iii) the discretion of the court before which any proceeding in
respect of the Exchange Agreement or the transactions contemplated thereby may
be brought.

          With respect to our opinion as set forth in paragraph 4 above, we
express no opinion with respect to the legality, validity, binding effect or
enforceability of Section 7.8 of the Exchange Agreement (to the extent it
purports, or would operate, to render ineffective any waiver, amendment or
modification not in writing) and with respect to the second clause of the first
sentence of Section 7.4 of the Exchange Agreement (to the extent it purports to
modify a provision of the Exchange Agreement which has been found to be
unenforceable).

                                        5

<PAGE>

          Our opinion as set forth in paragraph 4 above does not encompass any
agreement or document referred to or incorporated by reference into the
Agreement.

          The foregoing opinions are rendered solely for the benefit of
HeartWare, Inc. and HeartWare Limited in connection with the matters addressed
herein and, without our prior written consent, may not be furnished or quoted
to, or be relied upon by, any other person or entity other than the Company and
may not be relied upon by you or by any other person or entity for any other
purpose.

                                       Very truly yours,

                                       -----------------------------------------

CSB/LRS/th

                                        6<PAGE>

                                                                  Exhibit 10.03

                              KRITON MEDICAL, INC.
                            MIRAMAR PARK OF COMMERCE
                                 BUSINESS LEASE

THIS LEASE, entered as of the 1st day of March, 2001, between Sunbeam
Properties, Inc., hereinafter called the Lessor, party of the first part, and
Kriton Medical, Inc., a Delaware Corporation, hereinafter called the Lessee or
tenant, party of the second part:

WITNESSETH, That the said Lessor does this day lease unto Lessee, and Lessee
does hereby hire and take as tenant 3351 Executive Way, Miramar, Broward County,
Florida 33025 (the "Premises"), which consists of approximately 14,922 square
feet as shown on Exhibit "A" attached and which is a portion of a two-building
complex (the "Building" as identified on Exhibit "A"). The Premises shall be
used and occupied by the Lessee as a medical laboratory and research and
development and manufacturing facility with offices ancillary thereto and for no
other purposes or uses whatsoever without the express written consent of Lessor,
said consent not to be unreasonably withheld or delayed, for the term beginning
March 1, 2001 and ending April 30, 2004, at and for the agreed rental payable as
follows:

     $0.00 for the period from March 1, 2001 thru July 14, 2001;
     $7,150.12 per month plus State Sales Tax from July 15, 2001 thru July 31,
     2001;
     $14,300.25 per month plus State Sales Tax from August 1, 2001 thru April
     30, 2002;
     $14,721.65 per month plus State Sales Tax from May 1, 2002 thru April 30,
     2003;
     $15,169.70 per month plus State Sales Tax from May 1, 2003 thru April 30,
     2004.

Such payments are in addition to all other payments to be made under this Lease
by Lessee, including but not limited to Lessee's obligation to pay increases in
Expenses above the Base Year Expenses as described in Paragraphs 25 thru 28.

Lessee hereby deposits $36,179.63 with Lessor for the following:

<TABLE>
<S>                      <C>
July 15-31, 2001 Rent:   $ 7,150.12
Sales Tax:               $   429.01
Security Deposit         $28,600.50
                         ----------
Total:                   $36,179.63
</TABLE>

$14,300.25 of the security deposit may be refunded to Lessee in accordance with
Paragraph 45. The balance of the security deposit shall be refunded to Lessee at
the expiration of this Lease provided this Lease is in good standing at that
time.

In the event the term of this Lease begins or ends on other than the first or
last day of a month, rent for such month(s) shall be prorated on a per diem
basis. In the event that any monthly rental payment due hereunder is not
received by Lessor after the tenth (10th) day of any month, said payment shall
bear a late charge of three percent (3%) of the monthly payment which shall be
then due and payable.

<PAGE>

All payments are to be made to the Lessor on the first day of each and every
month in advance without demand at the office of Sunbeam Properties, Inc., 1401
79th St. Causeway in the City of Miami, Florida 33141 or at such other place and
to such other person, as the Lessor may from the time to time designate in
writing.

The following express stipulations and conditions are made a part of this Lease
and are hereby assented to by the Lessee:

     FIRST: (a) The Lessee shall not assign this Lease, nor sub-let the
Premises, or any part thereof nor use the same, or any part thereof, nor permit
the same, or any part thereof, to be used for any other purpose than as above
stipulated, nor make any alterations therein, and all additions thereto, without
the written consent of the Lessor, said consent not to be unreasonably withheld
or delayed, and all additions, fixtures, or improvements which may be made by
Lessee, except moveable office furniture, shall become the property of the
Lessor and remain upon the Premises as a part thereof, and be surrendered with
the Premises at the termination of this Lease.

          (b) Notwithstanding anything to the contrary contained hereinabove,
Lessee shall have the right, without the necessity of obtaining the consent of
Lessor, to install appliances, trade fixtures, shelving and partitions in the
Premises and to paint, decorate and refurbish the interior of the Premises and
make immaterial, interior, non-structural alterations thereto so long as Lessee
complies with all applicable laws relating to such alterations and the value of
such work is less than $10,000.00.

          (c) Lessor's consent shall not be required for an assignment of this
Lease to a wholly-owned subsidiary of Lessee or to successors of Lessee
resulting from a merger or consolidation of Lessee's assets or to any
corporation or other business entity which controls, is controlled by, or is
under common control with Lessee. For the purpose hereof, "control" shall be
deemed to mean ownership of more than fifty (50%) percent of all of the voting
stock of such corporation or more than fifty (50%) of all the legal and
equitable interests in any other business entity, and in either case, the
ability to control the actions and policies of such corporation or other
business entity. Notwithstanding, Lessee shall remain liable for all of its
obligations under this Lease irrespective of any assignment, unless specifically
released in writing by Lessor pursuant to this Paragraph.

          (d) Notwithstanding anything to the contrary contained hereinabove,
Lessee shall make no alterations or modifications to the Premises prior to
providing Lessor with written confirmation that it has waived the cancellation
right described in Paragraph 12(e).

     SECOND: All personal property pieced or moved in the Premises above
described shall be at the risk of the Lessee or owner thereof, and Lessor shall
not be liable for any damage to said personal property, or to the Lessee arising
from any act of negligence of any co-tenant or occupants of the Building or of
any other third party.

<PAGE>

     THIRD: (a) Subject to Subparagraph 3(b) below, Lessee shall promptly
execute and comply with all statutes, ordinances, rules, orders, regulations and
requirements of the Federal, State and City Government and of any and all their
Departments and Bureaus applicable to said Premises, for the correction,
prevention, and abatement of nuisances or other grievances, in, upon, or
connected with said Premises during said term.

          (b) Lessor shall make any necessary repairs or alterations to the
Premises and Building required by statutes, ordinances, rules, orders,
regulations and/or the requirements of the Federal, State and City Government
and of any and all their Departments and Bureaus which are not required due to
Lessee's specific use of the Premises.

     FOURTH: (a) In the event the Premises shall be destroyed or so damaged or
injured by fire or other casualty during the life of this Lease, whereby the
same shall be rendered untenantable, then the Lessor shall have the right to
render said Premises tenantable by repairs within 180 days therefrom. If said
Premises are not rendered tenantable within said time, it shall be optional with
Lessee to cancel this Lease, and in the event of such cancellation the rent
shall be paid only to the date of such fire or casualty. The cancellation herein
mentioned shall be evidenced in writing. During any period of time that the
Premises are untenantable as a result of a casualty, the Rent and all other
charges due under this Lease shall abate.

          (b) Notwithstanding the foregoing, following a casualty which either
damages sixty (60%) percent or more of the Premises or causes access to the
Premises to be denied (whether or not the Premises are damaged or destroyed),
Lessor shall cause an independent architect selected by Lessor to determine
within sixty (60) days after such fire or other casualty whether or not it will
be possible to restore the portion of the Premises so affected within 180 days
following such fire or other casualty and if such architect determines that it
will not be possible to so restore the damage; or if, after commencing the
repair and restoration of the Premises following a fire or other casualty, such
repair or restoration shall not be substantially completed within 180 days,
then, in either of the foregoing events, Lessee may, within ten (10) days (time
being of the essence) after Lessee's receipt of such independent architect's
determination or the expiration of such 180 day period, respectively, terminate
this lease by providing thirty (30) days written notice to Lessor, and upon the
expiration of such thirty (30) day period this lease shall terminate, unless
such repair or restoration shall be substantially completed within such thirty
(30) day period. In the event of such termination, Rent shall be paid only to
the date of such fire or casualty. In addition, during any period of time that
the Premises are untenentable as a result of a casualty, the Rent and all other
charges due under this Lease shall abate.

     FIFTH: The prompt payment of the rent for said Premises upon the dates
named, and the faithful observance of the rules and regulations printed upon
this Lease, and which are hereby made a part of this covenant, are the
conditions upon which this Lease is made and accepted and any failure on the
part of the Lessee to comply with the terms of said Lease, or any of said rules,
shall, subject to the cure provisions of Paragraph 38 and at the option of the
Lessor, be deemed a default of this Lease.

<PAGE>

     SIXTH: Subject to the cure provisions of Paragraph 38, if the Lessee shall
be in default under this Lease or shall abandon said Premises before the end of
the term of this Lease, or shall suffer the rent to be in arrears, the Lessor
may, at his option, forthwith cancel this Lease or he may enter said Premises as
the agent of the Lessee, by force or otherwise (all in accordance with local
law), and relet the Premises with or without any furniture that may be therein,
as the agent of the Lessee, at such price and upon such terms and for such
duration of time as the Lessor may determine, and receive the rent therefor,
applying the same to the payment of the rent due by these presents, and if the
full rental herein provided shall not be realized by Lessor over and above the
expenses to Lessor in such re-letting, the said Lessee shall pay any deficiency,
and if more than the full rental is realized Lessor will pay over to said Lessee
the excess of demand.

     SEVENTH: Lessor and Lessee both agree that whenever a dispute shall arise
between the parties under this Lease, the losing party shall pay all reasonable,
documented attorney's fees and all reasonable, documented costs involved in the
dispute.

     EIGHTH: It shall be considered a default of this Lease in the event a lien
is placed against the Building or Premises as the result of work performed by
Lessee or Lessee's contractors, subcontractors or agents and such lien is not
released or bonded by Lessee within sixty (60) days of Lessee receiving notice
of such lien.

     NINTH: The said Lessee hereby pledges and grants to the Lessor a security
interest in all the furniture and fixtures of said Lessee, which shall or may be
brought or put on said Premises as security for the payment of the rent herein
reserved, and the Lessee agrees that the said lien may be enforced by distress
foreclosure or otherwise at the election of the said Lessor, and does hereby
agree to pay Lessor's reasonable attorney's fees together with all costs and
charges therefore incurred or paid by Lessor. Lessor hereby agrees to
subordinate its lien rights to the lien rights of any mortgagees or equipment
lessors of Lessee. Notwithstanding the foregoing, it is expressly agreed and
understood that the furniture and fixtures subject to the pledge and assignment
in this paragraph shall include all typewriters, copiers, desks, chairs, lamps,
file cabinets (but not the contents therein) and other similar business
equipment and items but shall expressly exclude any of the Lessee's products,
processes, laboratory equipment or machines, any intellectual or similar
intangible property right or interest, or any trade secret or confidential
information, and under no circumstances whatsoever, shall anything in this Lease
or otherwise: (i) constitute any grant, option, license, pledge or assignment to
Lessor or to any third party in any patent, trade secret, intellectual property,
or other right (including, without limitation, any product, process or machine
incorporating any intellectual property or other intangible property right) held
by Lessee; (ii) create any economic claim (except for any agreed upon fees and
expenses) by Lessor or any third party on any of Lessee's capital or product
sales; or (iii) create any commitment on the part of the Lessee to enter into
any other agreement with Lessor or any third party.

     TENTH: (INTENTIONALLY DELETED)

     ELEVENTH: The Lessor, or any of its agents, shall have the right to enter
said Premises during all reasonable hours upon reasonable advance written notice
(except in the case of emergencies where written notice maybe impractical) and
so as not to unreasonably disrupt the operation of Lessee's business, to examine
the same to make such repairs, additions or

<PAGE>

alterations as may be deemed necessary for the safety, comfort, or preservation
thereof, or of said Building, or to exhibit said Premises to companies other
than competitors of Lessee. The right of entry shall likewise exist for the
purpose of removing placards, signs, fixtures, alterations, or additions, which
do not conform to this Lease, or to the rules and regulations of the Building.

     TWELFTH: (a) Subject to Paragraphs 12(c) and 23(e) below, Lessee hereby
accepts the Premises in the condition they are on the date of this Lease and
agrees to maintain said Premises in the same condition, order and repair as they
are on such date, excepting only reasonable wear and tear arising from the use
thereof under this Lease, alterations which have been made in accordance with
the terms of this Lease and damage by casualty, and to make good to said Lessor
immediately upon demand (subject to the waiver of subrogation in Paragraph 39),
any damage to water apparatus, or electric lights, or any fixtures, appliances
or appurtenances of said Premises, or of the Building, caused by any act or
neglect of Lessee, or of any person or persons in the employ or under the
control of the Lessee.

          (b) Lessor has attached a copy of the current Certificate of Occupancy
for the Premises as Exhibit "C". Lessor represents that to the best of its
knowledge, the Premises are in compliance with all applicable codes and
regulations and is free of all hazardous materials on the date of this Lease.
Lessor shall remove, at its sole cost and expense, any hazardous materials which
are required to be removed by code or regulation and which are present in the
Premises on the date of this Lease. In addition, if it is determined that on the
date of this Lease or at anytime thereafter the Premises is not in compliance
with any applicable code and such non-compliance is not the result of Lessee's
specific use of or alterations to the Premises, Lessor shall promptly effect any
repairs that are necessary to bring the Premises into compliance.

          (c) Notwithstanding anything to the contrary contained hereinabove,
Lessor shall make all necessary repairs to the systems serving the Premises,
including but not limited to the electrical, plumbing and air conditioning, so
as to put such systems in good working service prior to the commencement of the
term of this Lease.

          (d) Lessor represents that the air conditioning system serving the
Premises is separate and independent of any other air conditioning systems in
the Binding. In addition, the Premises is separately metered for electricity.

          (e) Within fifteen (15) days after the date that Lessee receives a
fully executed counterpart of this Lease (such 15-day period being hereinafter
referred to as the "Inspection Period"), Lessee shall have the right to inspect
the Premises, using a qualified contractor or other professional, to determine
the compliance of the Premises, and its fixtures, systems, improvements and
components, with all applicable codes, laws and ordinances. If such personnel
determine that a noncompliance or noncompliances with such codes, laws or
ordinances exists (collectively, "Noncompliance(s)"), then Lessee will notify
Lessor in writing, not later than the last day of the Inspection Period,
specifying the Noncompliance(s) that exist with respect to the Premises. If
Lessee fails to notify Lessor, then it will be presumed that Lessee's inspector
has discovered no visible Noncompliance(s) and Lessee shall have no rights to
cancel this Lease pursuant to this subparagraph. However, if Lessee does not
notify Lessor of Noncompliance(s), Lessor will notify Lessee in writing within
five (5) business days after receipt of Lessee's notice whether it elects to
cure the Noncompliance(s). If Lessor elects to cure the

<PAGE>

Noncompliance(s), Lessor will do so diligently and Lessee shall have no right to
cancel this Lease pursuant to this subparagraph. If Lessor elects not to cure
the Noncompliances, Lessee may cancel this Lease by providing written
cancellation notice to Lessor within three (3) business days of receipt of
Lessor' s notice not to cure. In the event of such termination, the $36,179.63
deposited by the Lessee with Lessor per page one of this Lease shall promptly be
returned to Lessee and all rights, obligations and liabilities of the parties
under this Lease will cease. In the event Lessor does not receive cancellation
notice from Lessee within the (3) business day timeframe described above, Lessee
will be deemed to have waived the cancellation rights described in this
subparagraph. Notwithstanding anything to the contrary contained in this Lease,
Lessee shall make no alterations or modifications to the Premises unless it has
waived its cancellation rights described hereinabove.

     THIRTEENTH: (a) It is expressly agreed and understood by and between the
parties to this Lease, that the Lessor shall not be liable for any damage or
injury by water, which may be sustained by the said tenant or other person or
for any other damage or injury resulting from the carelessness, negligence, or
improper conduct on the part of any other tenant or agents, or employees, or by
reason of the breakage, leakage, or obstruction of the water, sewer or soil
pipes, or other leakage in or about the said Building.

          (b) Except for Lessor's negligence or intentional acts and except as
may be specifically provided elsewhere in this Lease, Lessor shall not be liable
for any damage or injury to any person or property whether it be to the person
or property of the Lessee, its employees, agents, invitees, licensees or guests
by reason of Lessee's occupancy of the Premises or because of fire, flood,
windstorm, water, acts of God or third parties or for any other reason beyond
the control of Lessor. Lessee agrees to indemnify and save harmless Lessor from
and against any and all loss, damage, claim, demand, liability or expense,
including reasonable attorney's fees at trial and upon appeal, by reason of
damage to person or property which may arise or be claimed to have arisen as a
result of Lessee's occupancy or use of the Premises, Building and/or property of
which the Premises is a part by Lessee, its employees, agents, invitees,
licensees or guests, or in connection therewith, or in any way arising on
account of any injury or damage caused to any person or property on or in the
Premises.

     FOURTEENTH: If the Lessee shall become insolvent or if bankruptcy
proceedings shall be begun by or against the Lessee, before the end of said term
(and said proceedings are not dismissed within ninety (90) days of commencing),
the Lessor is hereby irrevocably authorized at its option, to forthwith cancel
this Lease, as for a default. Lessor may elect to accept rent from such
receiver, trustee, or other judicial officer during the term of their occupancy
in their fiduciary capacity without effecting Lessor's rights as contained in
this Lease, but no receiver, trustee or other judicial officer shall ever have
any right, title or interest in or to the above described Premises by virtue of
this Lease.

     FIFTEENTH: (INTENTIONALLY DELETED)

     SIXTEENTH: This Lease shall bind the Lessee and its assigns or successors,
and the heirs, assigns, administrators, legal representatives, executors or
successors as the case may be, of the Lessee.

<PAGE>

     SEVENTEENTH: (Intentionally deleted)

     EIGHTEENTH: It is understood and agreed between the parties hereto that
written notice mailed or delivered certified, return receipt requested to the
Premises leased hereunder shall constitute sufficient notice to the Lessee and
written notice mailed or delivered in the office of the Lessor shall constitute
sufficient notice to the Lessor, to comply with the terms of this Lease. Prior
to Lessee taking occupancy of the Premises all notices to Lessee shall be sent
by the means described above to: David R. Brittan, Trenam Kemker, 101 E. Kennedy
Blvd., Ste. 2700, Tampa, FL 33602 (813) 223-7444, fax (813) 229-6553. In
addition, copies of any default notices shall be sent by the means described
above simultaneously to Lessee and to said recipient.

     NINETEENTH: The rights of the Lessor and Lessee under the foregoing shall
be cumulative, and failure on the part of the Lessor or Lessee to exercise
promptly any rights given hereunder shall not operate to forfeit any of the said
rights.

     TWENTIETH: It is further understood and agreed between the parties hereto
that any charges against the Lessee by the Lessor for services or for work done
on the Premises by order of the Lessee or otherwise accruing under this Lease
shall be considered as rent due and shall be included in any lien for rent due
and unpaid.

     TWENTY-FIRST: Signage. (a) It is hereby understood and agreed that any
signs or advertising to be used, including awnings, in connection with the
Premises leased hereunder shall be first submitted to the Lessor for approval
before installation of same, said approval not to be unreasonably withheld,
conditioned or delayed.

          (b) Lessee may install an eighteen inch (18") high by four-foot (4')
wide sign on the glass panel over its front door. Said sign shall be white vinyl
and surface-applied and shall be subject to Lessor's reasonable approval. The
defined copy area is attached as Exhibit "D-1".

          (c) Lessee shall also be given the opportunity to have shared signage
on a monument sign to be installed by Lessor in front of the Building. Lessee's
portion of the sign shall be installed by Lessor. The copy and graphics shall be
in Lessees corporate colors. A conceptual example of such signage is attached as
Exhibit "D-2". Lessee shall reimburse Lessor $250.00 for such signage.

     TWENTY-SECOND: All personal property placed or moved in the Premises and
tenant improvements to the Premises shall be at the risk of Lessee or the owner
thereof, and Lessor shall not be liable to Lessee for damages to same unless
caused by or due to the negligence or intentional acts of Lessor, Lessor's
agents or employees. Lessee agrees to obtain liability insurance containing a
single limit of not less then $500,000.00 for both property (including but not
limited to fire hazard) and bodily Injury, at its own cost Lessee consents to
provide Lessor with a Certificate of Insurance, as above described, naming
Lessor as additional insured and favoring the Lessor with a thirty (30) day
notice of cancellation.

<PAGE>

     TWENTY-THIRD: (a) In addition to Lessor's maintenance responsibilities
described in Paragraph 25, Lessor shall maintain the Building's structure and
foundation and the electrical and plumbing systems located outside of the walls
of the Premises, except to the extent they may be modified by Lessee, at its
sole cost and expense.

          (b) Subject to Lessor's repair obligations described in Paragraph
12(c) and 25, Lessee is responsible for the maintenance and repair of the
Premises, including but not limited to plate glass windows, all doors, all
interior plumbing, the electrical system and any items which the Lessee installs
or has others install. If Lessee or any agent employed by Lessee damages the
roof, the repair of said roof will be Lessee's sole responsibility. Lessee
shall, at its own cost and expense, enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor reasonably approved
by Lessor, for servicing all heating and air conditioning systems and equipment
within the Premises. Such contract must become effective within thirty (30) days
of the date Lessee takes possession of the Premises. Lessee may elect to provide
heating and air conditioning service and maintenance as aforesaid using its own
employees or agents; provided, however that such personnel are reasonably
qualified to perform such work and have been approved in advance by Lessor, such
approval not to be unreasonably withheld.

          (c) Subject to Lessee complying with its air conditioning maintenance
and service obligations described in Paragraph 23(b), Lessor agrees to pay for
all major repairs and replacements in excess of $1,000.00 to the air
conditioning system as Lessor deems reasonably necessary. Lessee agrees to
notify Lessor prior to service being performed if any repair or replacement is
estimated to cost in excess of $500.00. Lessor shall in such case have the
opportunity to obtain another estimate to determine if the service can be
performed less expensively and/or contract to perform the work itself.
Notwithstanding anything to the contrary contained hereinabove, Lessor's
obligation to pay for air conditioning maintenance shall only apply to the air
conditioning equipment in place at the Premises on the date of this Lease and
shall not cover air conditioning equipment installed by Lessee, work required as
the result of Lessee's alterations to the Premises, or misuse of the air
conditioning equipment

     TWENTY-FOURTH: Lessee and Lessor each represents and warrants to the other
that it has not dealt with any broker other than CB Richard Ellis, Inc. with
regard to leasing, acquisition or other such matters related to the Premises.
All compensation and fees due to said broker with respect to this Lease shall be
paid by Lessor. Lessor and Lessee agree to indemnify and hold each other
harmless from any and all liability for the payment of any other such
commissions, fees and other sums.

     TWENTY-FIFTH: Lessor agrees to provide water and sewer service to the
Building and Premises, maintain the roof, landscaping, irrigation system, the
exterior of the Building, the adjacent lake bank, lighting, loading areas,
parking areas, sidewalks and driveways, and to keep the common areas reasonably
clean of debris and to provide proper illumination, supervision and security of
such areas as necessary. Lessor shall charge a management fee of five- percent
(5%) for providing the aforesdescribed services.

<PAGE>

     TWENTY-SIXTH: Lessor shall pay all taxes, assessments and levies charged or
assessed by any governmental authority, (hereinafter collectively referred to as
Taxes) upon its property in the Building and Lessee's Premises and land,
Buildings or Premises in or upon which the Lessee's Premises are located, and
shall cause all-risk casualty insurance to be maintained thereon in amounts not
to exceed the full replacement cost of the improvements constituting the
Building from time to time. In addition, Lessor shall maintain public liability
insurance (containing a single limit of not less than $500,000.00 for both
property and bodily injury) and rental insurance in respect of the land and the
Building.

     TWENTY-SEVENTH: Lessee recognizes that the Premises are subject to that
certain Declaration of Protective Covenants and Restrictions for Miramar Park of
Commerce. Under the Declaration, Sunbeam Properties, Inc. currently enforces the
Declaration and operates and maintains the Common Area referred to therein.
Lessor agrees to pay any and all maintenance or other assessments imposed by
Sunbeam Properties, Inc. (or its successor) on the Lessor as owner of the
Building as provided in the Declaration.

     TWENTY-EIGHTH: (a) "Lessee's Proportionate Share" shall be the fraction or
ratio of the floor area of the Lessee's Premises divided by the total floor area
of the Building (14,922 square feet /78,974 square feet square feet = 18.89%).
Lessor warrants and represents that, to Lessor's best knowledge, the current
gross square footage of the tenantable portions of the Building is 78,974 square
feet and the current gross square footage of the Premises is 14,922 square feet
Measurements are taken from the outside of exterior walls and the centerline of
common walls between lessees. If Lessee delivers reasonable proof to Lessor that
the gross square footage of either the Building or the Premises differs from the
foregoing figures (based on the aforedescribed method of measurement), then
Lessor will promptly recalculate and adjust Lessee's Proportionate Share to
reflect the change in such figures. Such adjustment shall be retroactive.

          (b) The expenses paid by Lessor and the management fee described in
Paragraphs 25, 28 and 27 (the "Expenses") for calendar year 2000 totaled
$239,066.00 ($3.03 per square foot of Building) and are hereby established to be
the "Base Year Expenses". Lessee's Proportionate Share of the Base Year Expenses
is included in the Rents scheduled in the Witnesseth Paragraph on Page 1 on the
Renewal Option (Paragraph 36) of this Lease. On an annual basis, Lessor shall
notify Lessee in writing what the increase (or decrease) is between the Expenses
paid by Lessor pursuant to Paragraphs 25, 26 and 27 and the Base Year Expenses.
Within ten (10) days of such notice, Lessee shall pay to Lessor (or receive a
reimbursement from Lessor for) Lessee's Proportionate Share of such increase (or
decrease) plus State Sales Tax. Such payment is in addition to all other sums to
be paid by Lessee Including but not limited to Rent Lessee's share of a partial
calendar year at the beginning or at the end of the term of this Lease shall be
prorated on a per diem basis.

          (c) Notwithstanding anything to the contrary contained hereinabove,
Lessee shall have no obligation to pay Lessee's Proportionate Share of the
increase in the Expenses over the Base Year Expenses as described herein for the
period from March 1, 2001 thru July 15, 2001.

<PAGE>

          (d) Notwithstanding anything to the contrary contained hereinabove,
the portion of the Expenses described in Paragraphs 25 and 27 shall not
unreasonably exceed what is typical for similar quality buildings located in
first class business parks in Southwest Broward County. In the event the real
estate taxes or insurance expenses described in Paragraph 26 unreasonably exceed
what is typical for similar quality buildings located in first class business
parks in Southwest Broward County, Sunbeam will appeal the real estate tax bill
and/or reprice the insurance policies as appropriate.

          (e) Lessee shall have the right to review and/or audit the expense
items being proportionately charged to Lessee. For the purposes of such review,
Lessor shall provide all applicable back-up materials and copies of paid bills.
If any such audit reveals an overpayment of expenses for the period covered by
such annual statement, then, at Lessee's sole option, the amount of such
overpayment, plus interest at the prime rate then in effect from the date of
payment, shall be credited against the next installment(s) of base rent and all
other sums due under this Lease due from Lessee, or refunded to Lessee within
thirty (30) days of receipt of written demand by Lessee. If Lessor is found to
have been in error by a factor which would be in excess of five percent (5%) of
the actual Expenses, taxes or insurance, then Lessor shall pay for the cost of
such audit. At the end of the term, any amounts overpaid shall be refunded to
Lessee. If such audit reveals an underpayment of expenses for the period
covered, then Lessee :hall pay the same plus interest at the prime rate then in
effect from the date the original amount was due with its next monthly base rent
payment, or if the term has expired, then within thirty (30) days after receipt
of the audit results.

          (f) Notwithstanding anything to the contrary contained hereinabove,
capital expenditures of any kind shall not be included in the Expenses described
hereinabove, unless such expenditures are made to decrease the cost of operating
or maintaining the Building and such expenditures are capitalized over the
longest period allowed under GAAP (Generally Accepted Accounting Principles).

     TWENTY-NINTH: (a) If the whole or any substantial part of the Premises
should be taken for any public or quasi-public use under governmental law,
ordinance or regulation or by right of eminent domain, and the taking would
prevent or materially interfere with the use of the Premises for the purpose of
which they are then being used, this Lease shall terminate, at Lessee's option,
and the rent shall be abated during the unexpired portion of this Lease,
effective when the physical taking shall occur.

          (b) If part of the Premises shall be taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain, or by private purchase of right-of-way in lieu thereof,
and this Lease is not terminated as provided in the Subparagraph above, this
Lease shall not terminate but the rent payable hereunder during the unexpired
pardon of this Lease shall be reduced to such extent as may be fair and
reasonable under all of the circumstances and Lessor shall undertake to restore
the Premises to a condition suitable for the Lessee's use, as near to the
condition thereof immediately prior to such taking as is a reasonably feasible
under all the circumstances.

<PAGE>

          (c) In the event of any such taking or private purchase of
right-of-way in lieu thereof, Lessor and Lessee shall each be entitled to
receive and retain such separate awards and/or portion of lump sum awards as may
be allocated to their respective interest in any condemnation proceedings;
provided that Lessee shall not be entitled to receive any award for Lessee's
loss of its Leasehold interest, the right to such award being hereby assigned by
Lessee to Lessor.

     THIRTIETH: Should Lessee hold over and remain in possession of the Premises
at the expiration of any term hereby created, Lessee shall, by virtue of this
paragraph, become a Lessee by the month at one and one-half times (150%) the
Rent per month of the last monthly installment of Rent above provided to be
paid, which said monthly tenancy shall be subject to all the conditions and
covenants of this Lease as though the same had been a monthly tenancy instead of
a tenancy as provided herein, and Lessee shall give to Lessor at least thirty
(30) days' written notice of any intention to remove from the Premises, and
shall be entitled to thirty (30) days' notice from Lessor in the event Lessor
desires possession of the Premises; provided, however, that said Lessee by the
month shall not be entitled to thirty (30) days' notice. In the event the said
Rent is not paid in advance without demand, the usual thirty (30) days' written
notice being hereby expressly waived.

     THIRTY-FIRST: (Intentionally Deleted)

     THIRTY-SECOND: Lessee shall be entitled to the use of sixty (60) parking
spaces on an unassigned, non-reserved basis including striping a portion of the
rear truck yard. In its normal course of business, Lessee will not cause more
than said number of parking spaces to be occupied at any one time by its
employees or invitees.

     THIRTY-THIRD: Lessee, its successors and assigns shall comply with the
Hazardous Materials Standard for the Miramar Park of Commerce attached hereto as
Exhibit "B".

     THIRTY-FOURTH: Radon is a naturally occurring radioactive gas that, when it
has accumulated in a building in sufficient quantities, may present health risks
to persons who are exposed to it over time. Levels of radon that exceed federal
and state guidelines have been found in buildings in Florida. Additional
information may be obtained from your county public health unit. Lessor
represents that to the best of its knowledge there is no radon in the Building
and/or Premises.

     THIRTY-FIFTH: In any case, where either party hereto is required to do any
act, except the payment of rent or other money, the term for the performance
thereof shall be extended by a period equal to any delay caused by or resulting
from acts of God, the elements, weather, war, civil commotion, fire or other
casualty, strikes, lockouts, labor disturbances, inability to procure labor or
materials, failure of power, government regulations or other causes beyond such
party's reasonable control, whether such time be designated by a fixed date, a
fixed time or a "reasonable time".

     THIRTY-SIXTH: Renewal Option. Provided that there are no material defaults
under this Lease which have not been cured within the applicable grace, notice
or due period at the time that the option herein set forth is exercised by
Lessee, this Lease may be renewed or

<PAGE>

extended for one (1) additional term of three (3) years by Lessee giving written
notice to Lessor of its interest to renew not less than six (6) months prior to
the expiration of the then current term. All conditions and covenants of the
Lease shall continue in full force and effect during such additional term except
that:

     (a) the monthly rent described in the Witnesseth Paragraph an page 1 of
this Lease shall be as follows:

     $15,614.49 per month plus State Sales Tax from May 1, 2004 thru April 30,
     2005;
     $16,082.92 per month plus State Sales Tax front May 1, 2005 thru April 30,
     2006;
     $16,565.41 per month plus State Sales Tax from May 1, 2006 thru April 30;
     2007.

     (b) provided there are no material defaults under this Lease which have not
been cured within the applicable grace, notice or cure period and all payments
due hereunder have been made to Lessor by Lessee, Lessee may cancel this Lease
at any time after the expiration of the sixth (6th) month of the renewal term.
Such cancellation is subject to Lessee providing Lessor with six (6) months
prior written notice (sent certified mall, return receipt requested) together
with payment of a $45,000.00 cancellation fee. Such payment must be included
with Lessee's cancellation notice to Lessor in order for such notice to be
effective. Rent and Lessee's Proportionate Share of Expenses shall be payable
thru the effective date of the cancellation.

     THIRTY-SEVENTH: Expansion Option. The premises located at 3361 Commerce
Parkway (the "Expansion Space") is adjacent to the south end of the Premises and
consists of +/-4,046 square feet The current tenant's lease for the Expansion
Space expires on June 30, 2004 and said tenant has no renewal option. Lessor
hereby agrees that it will not renew the current tenant's lease for the
Expansion Space or sign a new lease with another tenant prior to January 1,
2004. Upon Lessee's written request to Lessor, Lessor will enter into good faith
negotiations with Lessee to agree on a Lease Modification Agreement to expand
the Premises to include the Expansion Space. Such Lease Modification Agreement
shall include the following terms and conditions:

          (a)  The term of this Lease will be extended so as to expire no
               earlier than May 31, 2007.

          (b)  Lessee's Cancellation Option as described in Paragraph 36(b)
               above shall be null and void; and

          (c)  Lessee's Renewal Option as described In Paragraph 36 above shall
               be null and void.

Lessor's obligations to enter into negotiations with Lessee with regards to the
Expansion Space shall be subject to their being no defaults under this Lease by
Lessee and Lessee being in sound financial condition. Notwithstanding anything
to the contrary contained herein, in the event Lessee and Lessor do not mutually
execute a Lease Modification Agreement to extend the Lease for the Premises as
described above and to expand the Premises to include the Expansion Space by
December 31, 2003, Lessor shall be allowed to renew the current tenant's lease
for the Expansion Space and/or sign a lease with another tenant for the
Expansion Space.

<PAGE>

     THIRTY-EIGHTH: Right to Cure. Notwithstanding anything to the contrary
contained in this Lease, Lessee shall, prior to Lessee being in default or any
interest or late charge being imposed, or Lessor having any rights or remedies,
be entitled to receive (i) fifteen (15) day advance written notice in the case
of any non-payment of money (including rent) by Lessee (except that if Lessee
shall receive more than two (2) notices of late payment of monthly rent in any
calendar year, it forfeits its rights to any additional notice and grace for
late payment of monthly rent for the remainder of said calendar year) and (ii)
thirty (30) day advance written notice in the case of non-performance of any
term other than the payment of money; provided, however, in the event such
non-performance cannot reasonably be cured by Lessee within thirty (30) days
after written notice from Lessor, Lessee shall have an additional period of time
as is reasonable under the circumstances for Lessee to cure said non-compliance
with the terms of this Lease provided Lessee shall at all times diligently
pursue said cure.

     THIRTY-NINTH: Waiver of Subrogation. Lessor and Lessee hereby release the
other for and from all liability for loss or damage to the Premises, Lessee's
property and to any and all property of any kind owned by or in the custody,
care, or control of either Lessor or Lessee caused by any of the perils or risks
which can be insured by Lessor or Lessee under an all-risk insurance policy and
endorsements, notwithstanding the fact that such loss or damage is caused or
contributed to by any act or omission of Lessor, Lessee, their agents, servants,
employees, or visitors, and whether or not such property of Lessor and Lessee
shell be actually insured, provided that either party shell continue to be
liable for any loss occasioned by Lessor' s or Lessee's failure to obtain
insurance.

     FORTIETH: Non-Disturbance: Lessor agrees that Lessee, upon paying all Rent
and all other charges herein provided for and observing and keeping the
covenants, agreements, terms and conditions of the Lease and the rules and
regulations of the Lessor affecting the premises on its part to be performed,
shall lawfully and quietly hold, occupy and enjoy the premises during the term
of this Lease, subject to these terms, without hindrance or molestation by
Lessor or any party claiming by, under or through Lessor. Lessor represents that
there is no mortgagee of the Premises as of the execution date of the Lease.

     FORTY-FIRST: Confidentiality. Lessor expressly acknowledges that as a
material inducement to Lessee to enter into negotiations with respect to this
Lease and to enter into the same, it has executed a Confidentiality Agreement
with Lessee dated as of February 23, 2001 (Exhibit "E") pursuant to which Lessor
acknowledges, among other things, the highly sensitive and confidential nature
of Lessee's business and the information made available to Lessor in connection
with this Lease. Lessor agrees that the terms and conditions of such
Confidentiality Agreement are incorporated herein as if fully set forth herein
and are a material term of this Lease

     FORTY-SECOND: Quiet Enjoyment. Lessor agrees that Lessee, upon paying all
Rent and all other charges herein provided for and observing and keeping the
covenants, agreements, terms and conditions of the Lease, shall lawfully and
quietly hold, occupy and enjoy the Premises during the term of this Lease,
twenty-four (24) hours per day, seven (7) days per week and fifty-two (52) weeks
per year subject to these terms, without hindrance or molestation by Lessor or
any party claiming by, under or through Lessor. Lessor represents that there is
no mortgagee of the Premises as of the execution date of the Lease. As a
condition precedent to

<PAGE>

Lessee's obligations under the Lease, any future mortgagee shall execute a
non-disturbance agreement reasonably acceptable to Lessee, said acceptance not
to be unreasonably withheld or delayed.

     FORTY-THIRD: (intentionally deleted)

     FORTY-FOURTH: Condition at end of Lease Term. Upon the expiration or
termination of this Lease, Lessee shall have the right, at Lessee's sole option,
to remove or abandon at the Premises any fixtures, equipment or personal
property installed by Lessee, and shall deliver the Premises and all keys
thereto to Lessor in broom-clean condition and in accordance with Paragraph
12(a). Lessee shall repair any damage to the Premises caused by the removals
described above and shall properly terminate or "cap-off" all associated
mechanical, electrical, plumbing or other connections.

     FORTY-FIFTH: Security Deposit. Subject to Lessor's reasonable, written
approval, Lessee plans to air condition the portions of the Premises which are
not air conditioned as of the date of this Lease and make other improvements to
the premises ("Lessee's Improvements"). Provided there are no material defaults
under this Lease which have not been cured within the applicable grace, notice
or cure period and all payments due hereunder have been made to Lessor by
Lessee, Lessor agrees to refund $14,300.25 of the security deposit to Lessee
within ten (10) days after satisfaction of all of the following:

               (1)  Lessee's completion of and full payment for Lessee's
                    Improvements in substantial compliance with the mutually
                    agreed plans and specifications;

               (2)  Lessor's receipt of final releases-of-lien from all of
                    Lessee's contractor's and subcontractors;

               (3)  Lessor's receipt of an affidavit of payment from Lessee's
                    general contracts;

               (4)  Issuance of a certificate of completion and/or final
                    inspection sign-offs from the City of Miramar.

               (5)  Lessor's receipt of a copy of one-year warranties for all
                    components of Lessee's Improvements from Lessee's general
                    contractor and all associated subcontractors plus a 5-year
                    manufacturer's warranty on any air conditioning compressors
                    installed as part of Lessee's Improvements.

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