Document:

EX-10.2

Exhibit 10.2

      

$28,000,000

LOAN AGREEMENT

dated as of February 12, 2009

among

HEARTWARE INTERNATIONAL, INC.

as Borrower

and

ALL OF THE SUBSIDIARIES OF

HEARTWARE INTERNATIONAL, INC.

as Guarantors

and

THORATEC CORPORATION

as Lender

      

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I. Definitions
	 	 	4	 
	SECTION 1.01. Defined Terms
	 	 	4	 
	SECTION 1.02. Terms Generally
	 	 	12	 
	ARTICLE II. The Credits
	 	 	13	 
	SECTION 2.01. Commitments
	 	 	13	 
	SECTION 2.02. Borrowing Request; Loans
	 	 	13	 
	SECTION 2.03. Repayment of Loans; Evidence of Debt
	 	 	13	 
	SECTION 2.04. Interest on Loans
	 	 	14	 
	SECTION 2.05. Default Interest
	 	 	14	 
	SECTION 2.06. Repayment of Loans
	 	 	14	 
	SECTION 2.07. Voluntary Prepayments
	 	 	14	 
	SECTION 2.08. Mandatory Prepayments
	 	 	15	 
	SECTION 2.09. Payments
	 	 	15	 
	SECTION 2.10. Conversion of Loans
	 	 	15	 
	SECTION 2.11. Conversion of Escrow Funds
	 	 	16	 
	SECTION 2.12. Maximum Amount of Converted Common Stock
	 	 	17	 
	SECTION 2.13. Adjustment of Conversion Rate
	 	 	17	 
	ARTICLE III. Representations and Warranties of the Loan Parties
	 	 	18	 
	SECTION 3.01. Organization; Powers
	 	 	18	 
	SECTION 3.02. Authorization; No Conflicts
	 	 	18	 
	SECTION 3.03. Enforceability
	 	 	18	 
	SECTION 3.04. Governmental Approvals
	 	 	18	 
	SECTION 3.05. Senior Ranking
	 	 	19	 
	SECTION 3.06. Federal Reserve Regulations
	 	 	19	 
	SECTION 3.07. Investment Company Act
	 	 	19	 
	SECTION 3.08. Solvency
	 	 	19	 
	ARTICLE IV. Representations and Warranties of the Lender
	 	 	19	 
	SECTION 4.01. Organization; Powers
	 	 	19	 
	SECTION 4.02. Authorization; No Conflicts
	 	 	20	 
	SECTION 4.03. Enforceability
	 	 	20	 
	SECTION 4.04. Governmental Approvals
	 	 	20	 
	SECTION 4.05. Capital Resources
	 	 	20	 
	ARTICLE V. Conditions of Lending
	 	 	20	 
	SECTION 5.01. All Credit Events
	 	 	20	 
	SECTION 5.02. Delayed Draw Loans
	 	 	21	 
	ARTICLE VI. Covenants
	 	 	22	 
	SECTION 6.01. Notices
	 	 	22	 
	SECTION 6.02. Use of Proceeds
	 	 	22	 
	SECTION 6.03. Further Assurances
	 	 	22	 
	SECTION 6.04. Taxes
	 	 	23	 
	SECTION 6.05. Compliance with Laws
	 	 	23	 
	SECTION 6.06. Common Stock
	 	 	23	 
	ARTICLE VII. Guaranty
	 	 	24	 
	SECTION 7.01. Guaranty of the Obligations
	 	 	24	 

2

 

	 	 	 	 	 
	 	 	Page
	SECTION 7.02. Payment by Guarantors
	 	 	24	 
	SECTION 7.03. Liability of Guarantors Absolute
	 	 	24	 
	SECTION 7.04. Waivers by Guarantors
	 	 	26	 
	SECTION 7.05. Guarantors’ Rights of Subrogation, Contribution, Etc.
	 	 	26	 
	SECTION 7.06. Subordination of Other Obligations
	 	 	27	 
	SECTION 7.07. Continuing Guaranty
	 	 	27	 
	SECTION 7.08. Authority of Guarantors or Borrower
	 	 	27	 
	SECTION 7.09. Financial Condition of Borrower
	 	 	27	 
	SECTION 7.10. Bankruptcy, Etc.
	 	 	28	 
	ARTICLE VIII. Events of Default
	 	 	28	 
	ARTICLE IX. Miscellaneous
	 	 	30	 
	SECTION 9.01. Notices
	 	 	30	 
	SECTION 9.02. Survival of Agreement
	 	 	32	 
	SECTION 9.03. Binding Effect
	 	 	32	 
	SECTION 9.04. Successors and Assigns
	 	 	32	 
	SECTION 9.05. Right of Setoff
	 	 	33	 
	SECTION 9.06. Applicable Law
	 	 	33	 
	SECTION 9.07. Waivers; Amendment
	 	 	33	 
	SECTION 9.08. Interest Rate Limitation
	 	 	33	 
	SECTION 9.09. Entire Agreement
	 	 	34	 
	SECTION 9.10. WAIVER OF JURY TRIAL
	 	 	34	 
	SECTION 9.11. Severability
	 	 	34	 
	SECTION 9.12. Counterparts
	 	 	34	 
	SECTION 9.13. Headings
	 	 	35	 
	SECTION 9.14. Jurisdiction; Consent to Service of Process
	 	 	35	 
	SECTION 9.15. No Fiduciary Duty
	 	 	35	 
	SECTION 9.16. Payments Set Aside
	 	 	36	 

EXHIBITS

	 	 	 	 	 
	Exhibit A

	 	—
	 	Form of Borrowing Request
	Exhibit B

	 	—
	 	Form of Conversion Notice

3

 

     This LOAN AGREEMENT is dated as of February 12, 2009 (this “Agreement”), among
HEARTWARE INTERNATIONAL, INC., a Delaware corporation (the “Borrower”), the GUARANTORS (as
defined herein) from time to time party hereto and THORATEC CORPORATION, a California corporation
(the “Lender”).

     The parties hereto agree as follows:

ARTICLE I.

Definitions

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall
have the meanings specified below:

     “Acquisition” shall mean, collectively, (i) the merger of Thomas Merger Sub I, Inc.
with and into the Borrower, whereupon the separate existence of Thomas Merger Sub I, Inc. shall
cease, and the Borrower shall continue as the surviving corporation and (ii) immediately following
the consummation of the merger in clause (i) of this definition, the merger of Borrower with and
into Thomas Merger Sub II, Inc., whereupon the corporate existence of Borrower shall cease and
Thomas Merger Sub II, Inc. shall continue as the surviving corporation, in each case, pursuant to
the terms of the Definitive Agreement.

     “Affiliate” means, when used with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is controlled by, or is under
common control with such Person.

     “Agreement” shall have the meaning assigned to such term in the preamble.

     “Applicable Law” means, with respect to any Person, any federal (including United
States or Australian), state, local or foreign law (statutory, common or otherwise), constitution,
treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling
or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority
that is binding upon or applicable to such Person.

     “Applicable Rate” shall mean, for any day with respect to any Loan, a rate equal to
10% per annum.

     “ASTC” means ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532.

     “ASX” means ASX Limited ACN 008 624 691 or the Australian Securities Exchange.

     “AU$” shall mean lawful money of Australia.

     “Bankruptcy Code” means Title 11 of the United States Code (11 U.S.C. §§ 101 et seq.),
as amended from time to time, and any successor statute.

     “Board” shall mean the Board of Governors of the Federal Reserve System of the United
States of America.

4

 

     “Borrower” shall have the meaning assigned to such term in the preamble.

     “Borrowing” shall mean Loans made pursuant to Section 2.01.

     “Borrowing Request” means a notice substantially in the form set forth as Exhibit
A hereto.

     “Business Day” means a day, other than Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by Applicable Law to close.

     “Capital Lease Obligations” of any Person shall mean the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations at any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.

     “CDIs” means CHESS Depositary Interests representing shares of Common Stock (in the
ratio of one (1) share of Common Stock to thirty five (35) CDIs).

     “Change of Control” shall mean, other than the transactions contemplated by the
Definitive Agreement, (A) any acquisition or purchase, direct or indirect, of fifty percent (50%)
or more of the assets (based on fair market value) of the Borrower and its Subsidiaries, taken as a
whole, or over fifty percent (50%) of any class of equity or voting securities of the Borrower or
of any of its Subsidiaries, (B) the consummation of any tender offer (including a self-tender
offer) or exchange offer that results in a Third Party beneficially owning fifty percent (50%) or
more of any class of equity or voting securities of the Borrower or of any of its Subsidiaries or
(C) a merger, consolidation, share exchange, business combination, sale of substantially all the
assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction
involving the Borrower or any of its Subsidiaries whose assets, individually or in the aggregate,
constitute more than fifty percent (50%) of the assets (based on fair market value) of the Borrower
and its Subsidiaries, taken as a whole.

     “Charges” shall have the meaning assigned to such term in Section 9.08.

     “CHESS” means the clearing house electronic sub-register system of share transfers
operated by ASTC.

     “Closing Date” shall mean February 12, 2009.

     “Commitment” shall mean, with respect to the Lender, the commitment of the Lender to
make Loans hereunder. The amount of the Lender’s Commitment is set forth on Appendix A, subject to
any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of
the Commitments on the Closing Date is $20,000,000, subject to the terms and conditions set forth
herein.

5

 

     “Common Stock” shall mean the common stock, par value $0.001 per share, of the
Borrower.

     “Company Material Adverse Effect” shall mean any event, change or occurrence which,
individually or together with any one or more other events, changes or occurrences (A) has had, or
is reasonably likely to have, a material adverse effect upon the business, assets, liabilities,
condition (financial or otherwise) or operating results of the Borrower and its Subsidiaries taken
as a whole; provided, that in no event shall any of the following events, changes, or occurrences
constitute a “Company Material Adverse Effect” or be considered in determining whether a “Company
Material Adverse Effect” has occurred or is reasonably likely to occur: (i) changes in general
economic, securities market or business conditions except to the extent that such changes have a
materially disproportionate effect (relative to other industry participants) on the Borrower and
its Subsidiaries, taken as a whole, (ii) changes in conditions generally affecting the industry in
which the Borrower and its Subsidiaries operate, except to the extent that such changes have a
materially disproportionate effect (relative to other industry participants that are development
stage companies at a similar stage of development as the Borrower and its Subsidiaries) on the
Borrower and its Subsidiaries, taken as a whole, (iii) any change in the trading price or trading
volume of the Borrower’s common stock or CDIs in and of itself or any failure to meet internal or
published projections or forecasts for any period in and of itself (in each case, as distinguished
from any change, event or occurrence giving rise or contributing to such change or failure),
(iv) changes in GAAP or Applicable Laws or (v) changes resulting from the announcement or the
existence of, or that result from the compliance by the Borrower with its obligations under, the
Definitive Agreement, or (B) would prevent the Borrower from consummating, or materially delay, the
Merger.

     “Control” shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ownership of
voting securities, by contract or otherwise, and the terms “Controls”,
“Controlling” and “Controlled” shall have the meanings correlative thereto.

     “Conversion Notice” shall have the meaning assigned to such term in Section
2.10.

     “Conversion Rate” shall mean (i) if the Acquisition is not consummated because of a
Superior Proposal Termination, $21.5355 per share of Common Stock and (ii) if the Acquisition is
not consummated for any reason other than a Superior Proposal Termination, AU$35.00 per share of
Common Stock, in each case, as such rate may be adjusted pursuant to Section 2.13.

     “Convertible Portion” shall mean, as at any date of determination, the outstanding
principal amount of the Loans as of such date plus the amount of any accrued and unpaid interest
thereon.

     “Credit Event” shall have the meaning assigned to such term in Section 5.01.

     “Default” shall mean any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would constitute an Event of Default.

6

 

     “Definitive Agreement” shall mean that certain Agreement and Plan of Merger by and
among Lender, Thomas Merger Sub I, Inc., Thomas Merger Sub II, Inc. and Borrower dated as of
February 12, 2009.

     “Definitive Agreement Termination Date” shall mean the date, if any, upon which the
Definitive Agreement is terminated in accordance with its terms.

     “Delayed Draw Loan” shall have the meaning assigned to such term in Section
2.01.

     “Disposition” with respect to any property, shall mean any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The terms
“Dispose” and “Disposed of” shall have correlative meanings

     “Dollars” or “$” shall mean lawful money of the United States of America.

     “Domestic Subsidiary” shall mean any Subsidiary organized under the laws of the United
States of America, any state thereof or the District of Columbia.

     “Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a trust or other
equity interests in any Person, or any obligations convertible into or exchangeable for, or giving
any Person a right, option or warrant to acquire, such equity interests or such convertible or
exchangeable obligations.

     “Escrow Account” shall have the meaning assigned to such term in the Escrow Agreement.

     “Escrow Agent” shall mean U.S. Bank, National Association, or any Person selected or
appointed as a successor thereto, as escrow agent under the Escrow Agreement.

     “Escrow Agreement” shall mean the Escrow Agreement dated as of February 12, 2009,
between the Lender, the Borrower and the Escrow Agent.

     “Escrow Amount Conversion Date” shall have the meaning assigned to such term in
Section 2.10.

     “Escrow Funds” shall have the meaning assigned to such term in the Escrow Agreement.

     “Event of Default” shall have the meaning assigned to such term in Article
VII.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Federal Funds Effective Rate” shall mean, for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such day is not a Business Day, for the Business Day preceding such day,
provided that if such rate is not so published for any day that is a Business Day, the
Federal Funds Effective Rate for such day shall be the average of the quotations for the

7

 

day for such transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.

     “Final Outside Date Extension Option” shall mean Lender’s option to extend the Outside
Date (as such term is defined in the Definitive Agreement) to January 31, 2010 in accordance with
Section 8.01(b)(i) of the Definitive Agreement.

     “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

     “GAAP” means generally accepted accounting principles in the United States.

     “Governmental Authority” means any transnational, domestic or foreign, federal, state
or local governmental authority, department, court, agency or official, including any political
subdivision thereof.

     “Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of (a) the guarantor or (b) another Person (including any bank under a
letter of credit) pursuant to which the guarantor has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or having the economic effect of guaranteeing any
Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation, contingent or otherwise, of the guarantor, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase or lease property, securities or services for
the purpose of assuring the owner of such Indebtedness of the payment of such Indebtedness,
(iii) to maintain working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness, (iv)
as an account party in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or (v) to otherwise assure or hold harmless the owner of such Indebtedness against
loss in respect thereof; provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of business.

     “Guaranteed Obligations” shall have the meaning assigned to such term in Section
7.01.

     “Guarantor” shall mean each Subsidiary of the Borrower.

     “Guaranty” shall mean the guarantees issued pursuant to Article VII by each of
the Guarantors.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

     “Indebtedness” of any Person shall mean, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention agreements relating to
property or assets acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (other than current trade accounts payable

8

 

incurred in the ordinary course of business), (e) all obligations of such Person, contingent
or otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity Interests in
such Person, (f) all Indebtedness secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired
by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all
Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances and bank guaranties. The Indebtedness of any Person
shall include the Indebtedness of any other Person (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result of such Person’s
ownership interest in, or other relationship with, such other Person, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

     “Initial Borrowing” shall mean the initial Borrowing of Loans in accordance with this
Agreement.

     “Interest Payment Date” shall mean, as to any Loan, (a) each March 31, June 30,
September 30 and December 31 of each year, commencing on the first such date to occur after the
Closing Date, (b) the Maturity Date, (c) the date of repayment or prepayment made in respect
thereof and (d) the date of conversion of such Loan pursuant to Section 2.10.

     “Investor’s Rights Agreement” shall mean the Investor’s Rights Agreement dated as of
February 12, 2009 by and among the Borrower and the Lender.

     “Lender” shall have the meaning assigned to such term in the preamble.

     “Lender Termination” shall mean a termination by the Lender of the Definitive
Agreement in accordance with (i) Section 8.01(c)(i)(A) of the Definitive Agreement, solely to the
extent that the underlying breach by the Borrower was intentional or (ii) Section 8.01(c)(i)(B) of
the Definitive Agreement.

     “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien
(statutory or otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a third party with
respect to such securities.

     “Loan Conversion Date” shall have the meaning assigned to such term in Section
2.10.

     “Loan Documents” shall mean this Agreement, any promissory note executed and delivered
in connection herewith, the Investor’s Rights Agreement and the Escrow Agreement.

     “Loan Parties” shall mean, collectively, Borrower and the Guarantors.

9

 

     “Loans” shall mean the Term Loans and Delayed Draw Loans made by the Lender to the
Borrower pursuant to Article II.

     “Margin Stock” shall have the meaning assigned to such term in Regulation U.

     “Maturity Date” shall mean the earlier of (i) November 1, 2011, (ii) the Termination
Date and (iii) the date on which all Loans shall become due and payable in full hereunder, whether
by acceleration or otherwise.

     “Maximum Delayed Draw Loan Amount” shall mean (a) from and after the Closing Date but
prior to the Option Date, $0 and (b) after the Option Date but prior to the Maturity Date,
$8,000,000, which amount may be reduced on a dollar for dollar basis by Escrow Funds that are
converted into Common Stock in accordance with Section 2.11.

     “Maximum Rate” shall have the meaning assigned to such term in Section 9.08.

     “Maximum Term Loan Amount” shall mean (i) from and after the Closing Date but prior to
May 1, 2009, $0, (ii) from and after May 1, 2009 but prior to July 31, 2009, $12,000,000 and (iii)
from and after July 31, 2009 but prior to the Maturity Date, $20,000,000, in the case of clauses
(ii) and (iii), as such amounts may be reduced by Escrow Funds that are converted into Common Stock
in accordance with Section 2.11.

     “Merger” shall mean the merger, in accordance with the General Corporation Law of the
State of Delaware, of Thomas Merger Sub I, Inc. with and into the Borrower, with the Borrower
continuing as the corporation surviving the Merger.

     “Obligations” shall mean the Loans and all advances, debts, liabilities, obligations,
covenants and duties owing by any Loan Party to the Lender or any Affiliate of the Lender, of any
kind or nature, present or future, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason of an extension of
credit, loan, guaranty, indemnification, foreign exchange contract or in any other manner, whether
direct or indirect (including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired arising under or in connection
with the transactions contemplated hereby. The term includes, without limitation, all interest
(including any interest that, but for the provisions of the Bankruptcy Code, would have accrued),
charges, expenses, fees, attorneys’ fees and disbursements and any other sum chargeable to any Loan
Party under this Agreement or any other Loan Document.

     “Obligee Guarantor” shall have the meaning assigned to such term in Section
7.06.

     “Option Date” shall mean the date, if any, on which the Lender exercises the Final
Outside Date Extension Option.

     “Other Taxes” shall mean any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies (including interest, fines, penalties
and additions to tax) arising from any payment made under any Loan Document or from the execution,
delivery, registration or enforcement of, or otherwise with respect to, any Loan Document.

10

 

     “Parent Material Adverse Effect” shall mean any event, change or occurrence which,
individually or together with any one or more other events, changes or occurrences (A) has had, or
is reasonably likely to have, a material adverse effect upon the business, assets, liabilities,
condition (financial or otherwise) or operating results of the Lender and its Subsidiaries taken as
a whole; provided, that in no event shall any of the following events, changes, or occurrences
constitute a “Parent Material Adverse Effect” or be considered in determining whether a “Parent
Material Adverse Effect” has occurred or is reasonably likely to occur: (i) changes in general
economic, securities market or business conditions except to the extent that such changes have a
materially disproportionate effect (relative to other industry participants) on the Lender and its
Subsidiaries, taken as a whole, (ii) changes in conditions generally affecting the industry in
which the Lender and its Subsidiaries operate, except to the extent that such changes have a
materially disproportionate effect (relative to other industry participants that are at a similar
stage of development as the Lender and its Subsidiaries) on the Lender and its Subsidiaries, taken
as a whole, (iii) any change in the trading price or trading volume of the Lender’s common stock in
and of itself or any failure to meet internal or published projections or forecasts for any period
in and of itself (in each case, as distinguished from any change, event or occurrence giving rise
or contributing to such change or failure), (iv) changes in GAAP or Applicable Laws or (v) changes
resulting from the announcement or the existence of, or that result from the compliance by the
Lender with its obligations under, the Definitive Agreement or (B) would prevent the Lender, Thomas
Merger Sub I, Inc. or Thomas Merger Sub II, Inc. from consummating, or materially delay, the
Merger.

     “Permit” shall mean any franchise, license, lease, permit, notification,
certification, registration, authorization, exemption, qualification, or approval granted by or
filed with a Governmental Authority.

     “Person” shall have the meaning assigned to such term in the Definitive Agreement.

     “Regulation T” shall mean Regulation T of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

     “Regulation U” shall mean Regulation U of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

     “Regulation X” shall mean Regulation X of the Board as from time to time in effect and
all official rulings and interpretations thereunder or thereof.

     “Related Parties” shall mean, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, trustees, employees, agents and advisors of such
Person and such Person’s Affiliates.

     “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

     “Subsidiary” means, with respect to any Person, any corporation, limited liability
company, partnership or other entity or organization of which such Person (either alone or through
or together with any other Subsidiary of such Person), owns, directly or indirectly, a majority of
the stock or other Equity Interests having ordinary voting power to elect a majority of

11

 

the board of directors or other persons performing similar functions of such entity or
organization.

     “Superior Proposal Termination” shall mean a termination of the Definitive Agreement
(a) by the Borrower in accordance with Section 8.01(d)(ii) of the Definitive Agreement or (b) by
the Lender in accordance with Section 8.01(c)(ii) of the Definitive Agreement.

     “Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     “Term Loans” shall have the meaning assigned to such term in Section 2.01.

     “Termination Date” shall mean the date on which all Loans and Escrow Funds shall have
been converted into Common Stock in accordance with Section 2.10 or Section 2.11,
as applicable, upon which date all commitments to make any Loans pursuant to this Agreement shall
terminate.

     “Third Party” shall mean any Person or “group” (within the meaning of Section 13(d)(3)
of the Exchange Act), other than the Borrower or any of its Subsidiaries or Lender or any of its
Subsidiaries.

     “Total Commitment” shall mean the sum of (i) all unfunded Commitments, (ii) all
outstanding and unpaid Loans and (iii) all Escrow Funds.

     “Transactions” shall mean, collectively, (a) the execution, delivery and performance
by each of the Loan Parties of the Loan Documents to which it is a party, (b) the Borrowings
hereunder and the use of proceeds thereof and (c) the deposit by the Lender of up to $28,000,000 in
the aggregate into the Escrow Account.

     SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The
words “include”, “includes” and “including”, and words of similar import, shall not be limiting and
shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall.” The words “asset” and
“property” shall be construed as having the same meaning and effect and to refer to any and all
rights and interests in tangible and intangible assets and properties of any kind whatsoever,
whether real, personal or mixed, including cash, securities, Equity Interests, accounts and
contract rights. The words “herein,” “hereof” and “hereunder,” and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any particular provision of this
Agreement unless the context shall otherwise require. All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any definition of, or reference to, any Loan Document or any other
agreement, instrument or document in this Agreement shall mean such Loan Document or other
agreement, instrument or document as amended, restated, supplemented or otherwise modified from
time to time (subject to any restrictions on such amendments, restatements, supplements or
modifications set forth herein) and (b) all terms of an accounting or

12

 

financial nature shall be construed in accordance with GAAP, as in effect from time to time;
provided, however, that if the Borrower notifies the Lender that the Borrower
wishes to amend any provision hereof to eliminate the effect of any change in GAAP occurring after
the date of this Agreement on the operation of such provision (or if the Lender notifies the
Borrower that it wishes to amend any provision hereof for such purpose), then the Borrower’s
compliance with such provision shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is withdrawn or such
provision is amended in a manner satisfactory to the Borrower and the Lender.

ARTICLE II.

The Credits

     SECTION 2.01. Commitments. Subject to the terms and conditions hereof (including,
without limitation, Article IV) and relying upon the representations and warranties set
forth herein, (i) the Lender agrees to make one or more term loans (collectively, the “Term
Loans” and each, individually, a “Term Loan”) to the Borrower from and after the
Closing Date but no later than the Maturity Date in an aggregate principal amount up to the Maximum
Term Loan Amount and (ii) if the Lender exercises the Final Outside Date Extension Option, the
Lender agrees to make one or more delayed draw loans (collectively, the “Delayed Draw
Loans” and each, individually, a “Delayed Draw Loan”) to the Borrower up to an
aggregate principal amount not to exceed the Maximum Delayed Draw Loan Amount on or after the
Option Date but no later than the Maturity Date. Amounts paid or prepaid in respect of any Loans
may not be reborrowed.

     SECTION 2.02. Borrowing Request; Loans. (a) The Borrower may borrow a Loan in
accordance with this Agreement by delivery to the Lender of a duly completed Borrowing Request not
later than 10:00 a.m. New York time on the date three (3) Business Days prior to the proposed date
of the Borrowing. Each Borrowing Request is irrevocable and will not be regarded as having been
duly completed unless: (i) it identifies the Loan or Loans to be borrowed and (ii) the proposed
date of Borrowing is a Business Day prior to the Maturity Date.

     (b) No later than one (1) Business Day following the Closing Date, the Lender shall fund
$20,000,000 into the Escrow Account and, if the Lender exercises the Final Outside Date Extension
Option, then on the Option Date, the Lender shall fund an additional $8,000,000 into the Escrow
Account. The Lender shall direct the Escrow Agent to fund the Loans to be made hereunder from the
Escrow Account pursuant to and in accordance with the terms of Section 3 of the Escrow Agreement.

     SECTION 2.03. Repayment of Loans; Evidence of Debt.

     (a) The Borrower hereby unconditionally promises to pay to the Lender the principal amount of
each Loan made to the Borrower by the Lender as provided in Section 2.06.

     (b) The Lender may maintain an accounting evidencing the indebtedness of the Borrower to the
Lender resulting from the Loans made by the Lender to the Borrower under this

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Agreement from time to time, including the amounts of principal and interest payable and paid
to the Lender from time to time under this Agreement.

     (c) The entries made in the accounting maintained pursuant to paragraph (b) of this Section
shall be prima facie evidence of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of the Lender to maintain such accounts or any error therein
shall not in any manner affect the obligations of the Borrower to repay the Loans made to the
Borrower in accordance with the terms of this Agreement.

     (d) The Lender may request that the Loans made by it hereunder be evidenced by one or more
promissory notes. In such event, the Borrower shall execute and deliver to the Lender one or more
promissory notes payable to the Lender in a form and substance reasonably acceptable to the Lender.
Notwithstanding any other provision of this Agreement, in the event the Lender shall request and
receive such a promissory note, the interests represented by such note shall at all times
(including after any assignment of all or part of such interests pursuant to Section 9.04)
be represented by one or more promissory notes payable to the payee named therein.

     SECTION 2.04. Interest on Loans. (a) Subject to the provisions of Section
2.05, the Loans shall bear interest (computed on the basis of a year of 365 days (or 366 days
in a leap year)) at a rate per annum equal to the Applicable Rate.

     (b) Interest on each Loan shall be payable in arrears on the Interest Payment Dates, except as
otherwise provided in this Agreement, in an amount equal to the interest accrued and unpaid since
the previous Interest Payment Date.

     SECTION 2.05. Default Interest. Upon the occurrence and during the continuance of an
Event of Default, the Borrower shall on demand from time to time pay interest in cash, to the
extent permitted by law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) at the rate otherwise applicable to Loans hereunder pursuant to
Section 2.04 plus 2.00% per annum.

     SECTION 2.06. Repayment of Loans. All Loans then outstanding shall be due and payable
in full in cash on the Maturity Date (solely for purposes of this Section, excluding the
Termination Date), together with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of payment. All repayments pursuant to this Section 2.06 shall be
without premium or penalty.

     SECTION 2.07. Voluntary Prepayments. Subject to the last sentence of this Section
2.07, the Borrower may, at any time and from time to time, prepay the Loans in whole or in part
upon at least five (5) Business Days’ prior written notice to the Lender; provided,
however, that any partial prepayment shall be in the minimum amount of $500,000 and
integral multiples of $250,000 in excess thereof. Any notice of prepayment given to the Lender
under this Section 2.07 shall specify (i) the date (which shall be a Business Day) of
prepayment and (ii) the aggregate principal amount of the prepayment. When notice of prepayment is
delivered as provided herein, the principal amount of the Loans specified in such notice, and all
accrued and unpaid interest with respect to such principal amount, shall become due and payable on
the

14

 

prepayment date specified in such notice and such notice shall be irrevocable.
Notwithstanding anything in this Section 2.07 to the contrary, the Borrower may not
voluntarily prepay the Loans (i) prior to the Definitive Agreement Termination Date or (ii) at any
time prior to the consummation of a Change of Control, if a Superior Proposal Termination shall
have occurred.

     SECTION 2.08. Mandatory Prepayments. (a) Upon a Change of Control, the Borrower shall
repay all or any part of the Loans at 100% of the outstanding principal amount of the Loans plus
accrued and unpaid interest, if any, to the date of repayment.

     (b) On a repayment date under paragraph (a), the Borrower shall repay the Loans to be repaid
to the Lender, and, in the case of Loans evidenced by promissory notes, the Lender shall surrender
all such promissory notes.

     SECTION 2.09. Payments. (a) The Borrower shall make each payment (including principal
of or interest on the Loans or other amounts) hereunder and under any other Loan Document not later
than 12:00 p.m. New York time, on the date when due in immediately available funds, without setoff,
defense or counterclaim. For purposes of computing interest, funds received by the Lender after
that time on such due date shall be deemed to have been paid by the Borrower on the next succeeding
Business Day, in the Lender’s sole discretion. Each such payment shall be made to the Lender at
its address specified in Section 9.01. All payments hereunder and under each other Loan
Document shall be made in Dollars.

     (b) Except as otherwise expressly provided herein, whenever any payment (including principal
of or interest on any Loan or other amounts) hereunder or under any other Loan Document shall
become due, or otherwise would occur, on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in such case be included in
the computation of interest, if applicable.

     SECTION 2.10. Conversion of Loans. (a) From and after the Definitive Agreement Termination
Date, the Lender may convert the Convertible Portion of its Loans in whole or in part into Common
Stock at any time prior to 5:00 p.m. New York time on the Business Day immediately preceding the
Maturity Date into a number of whole shares of Common Stock equal to the Convertible Portion of the
Loans divided by the applicable Conversion Rate in effect on the date the Conversion Notice is
delivered; provided that with respect to any conversion of the Convertible Portion of the Loans
into Common Stock that would be subject to a waiting period provided by the HSR Act, no such
conversion shall be considered effective until the expiration or termination of such waiting
period; provided further that the Borrower agrees to use its commercially reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties hereto in doing, all things necessary to consummate and make
effective the conversion contemplated by this Section 2.10.

     (b) The Convertible Portion of the Loans delivered for conversion will be deemed to have been
converted immediately prior to 5:00 p.m. New York time on the Loan Conversion Date. The Lender
shall be entitled to rights with regard to the Common Stock only to the extent such Convertible
Portion of Loans has been converted (or deemed to have converted) into Common Stock pursuant
hereto.

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     (c) The right of conversion attaching to the Convertible Portion of any Loan may be exercised
(i) if such Loan is not represented by a promissory note, by book-entry transfer by the Lender, or
(ii) if such Loan is represented by a promissory note, by delivery of such promissory note to the
Borrower, accompanied, in either case, by: (1) a duly signed and completed Conversion Notice, in
the form as set forth as Exhibit B (a “Conversion Notice”), which Conversion Notice
shall specify the Convertible Portion of such Loan to be converted; (2) if any promissory note has
been lost, stolen, destroyed or mutilated, a notice to the Borrower regarding the loss, theft,
destruction or mutilation of the promissory note together with reasonable indemnity for the
Borrower; (3) appropriate endorsements and transfer documents if reasonably required by the
Borrower; and (4) payment of any transfer tax due that is payable solely as a result of the issue,
delivery or registration of the Common Stock in the name of a Person other than the Lender. The
date on which the Lender satisfies all of the requirements in the immediately preceding sentence is
the “Loan Conversion Date.” Notwithstanding any other provision of this Agreement, the
Borrower may not, and shall not, redeem or prepay any Loans (or any portion thereof) with respect
to which a Conversion Notice has been delivered to the Borrower. The Borrower shall deliver to the
Lender the number of whole shares of Common Stock issuable upon the conversion of the Convertible
Portion of the Loans in accordance with Section 2.10(a) (and cash in lieu of any fractional
shares) no later than five (5) Business Days following the relevant Loan Conversion Date. All such
shares shall be fully paid, duly authorized and issued and nonassesable.

     (d) Upon conversion of a Loan and receipt of Common Stock issued upon conversion of the
Convertible Portion of the Loans, the recipient of such Common Stock shall no longer be the Lender
to the extent of such converted Loan. No adjustment will be made to the Conversion Rate for
accrued and unpaid interest on a converted Loan except as provided herein.

     (e) Upon surrender of a Loan evidenced by a promissory note that is converted in part, the
Borrower shall execute and deliver to the Lender a new note evidencing the Loan equal in principal
amount to the unconverted portion of the Loan promissory note surrendered.

     SECTION 2.11. Conversion of Escrow Funds . (a) From and after the Definitive Agreement
Termination Date, the Lender may convert any Escrow Funds in whole or in part into Common Stock at
any time prior to 5:00 p.m. New York time on the Business Day immediately preceding the Maturity
Date into a number of whole shares of Common Stock equal to the Escrow Funds delivered for
conversion divided by the applicable Conversion Rate; provided that with respect to any conversion
of any Escrow Funds into Common Stock that would be subject to a waiting period provided by the HSR
Act, no such conversion shall be considered effective until the expiration or termination of such
waiting period; provided further that the Borrower agrees to use its commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties hereto in doing, all things necessary to consummate and make
effective the conversion contemplated by this Section 2.11.

     (b) Any Escrow Funds delivered for conversion will be deemed to have been converted
immediately prior to 5:00 p.m. New York time on Escrow Amount Conversion Date. The Lender shall be
entitled to rights with regard to the Common Stock only to the extent such

16

 

Escrow Funds have been converted (or deemed to have converted) into Common Stock pursuant hereto.

     (c) The right of conversion attaching to any Escrow Funds may be exercised if the Lender shall
have delivered (i) a Conversion Notice, which Conversion Notice shall specify the Escrow Funds to
be converted and (ii) payment of any transfer tax due that is payable solely as a result of the
issue, delivery or registration of the Common Stock in the name of a Person other than the Lender.
The date on which the Lender satisfies all of the requirements in the immediately preceding
sentence is the “Escrow Amount Conversion Date.” Upon receipt by the Borrower of the
Escrow Funds delivered for conversion in accordance with Section 2.11(a), the Borrower
shall deliver to the Lender the number of whole shares of Common Stock issuable upon the conversion
thereof (and cash in lieu of any fractional shares) no later than five (5) Business Days following
the relevant Escrow Amount Conversion Date. All such shares shall be fully paid, duly authorized
and issued and nonassesable.

     (d) Upon delivery of the Escrow Funds to Borrower and receipt of Common Stock by the Lender,
(i) the Commitment of the Lender shall be reduced by the amounts so converted and (ii) such amounts
shall no longer be available to the Borrower for Borrowings hereunder.

     SECTION 2.12. Maximum Amount of Converted Common Stock . Notwithstanding anything in
Section 2.10, Section 2.11 or in any other Loan Document, for so long as the
Borrower’s CHESS Depositary Receipts are listed on the ASX, no more than 14.99% in the aggregate of
the then authorized and outstanding shares of Common Stock as of the date of any conversion in
accordance with Section 2.10 or Section 2.11 (without giving effect to such
conversion) shall be issued to the Lender hereunder.

     SECTION 2.13. Adjustment of Conversion Rate . If at any time between (i) the execution of
this Agreement and (ii) the date on which all amounts outstanding under this Agreement are paid by
Borrower and/or all of the Loans and any Escrow Funds have been converted into Common Stock as
provided herein, the number of outstanding shares of Common Stock shall (A) increase by virtue of
or in connection with any dividend or distribution on the Common Stock or any stock split or other
subdivision of the outstanding shares of Common Stock or a reclassification, then the Conversion
Rate in effect immediately prior to such dividend, distribution, stock split or other subdivision
shall, concurrently with the effectiveness of such increase, be adjusted to a Conversion Rate that
would entitle the holder of any Loans and any Escrow Funds delivered for conversion to receive,
from time to time upon conversion thereof, the same percentage of the outstanding shares of Common
Stock that such holder would have received on conversion thereof had such Loan or Escrow Funds been
outstanding and converted immediately prior to such increase and (B) decrease by virtue of or in
connection with any combination or consolidation, by reclassification or otherwise, into a lesser
number of shares of Common Stock (including, without limitation, pursuant to a reverse stock
split), then the Conversion Rate in effect immediately prior to such combination, consolidation,
reclassification, stock split or other process shall, concurrently with the effectiveness of such
decrease, be adjusted to a Conversion Rate that would entitle the holder of any Loans and any
Escrow Funds delivered for conversion to receive, from time to time upon conversion, the same
percentage of the outstanding shares of Common Stock that such holder would have received on
conversion

17

 

thereof had such Loan or Escrow Funds been outstanding and converted immediately prior to such
decrease.

ARTICLE III.

Representations and Warranties of the Loan Parties

     Each Loan Party represents and warrants to the Lender that:

     SECTION 3.01. Organization; Powers. Such Loan Party (a) is duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its organization or
formation, (b) has all corporate power and authority, and the legal right, to own and operate its
property and assets, to lease the property it operates as lessee and to carry on its business as
now conducted and as proposed to be conducted, except where any failure of a Loan Party to have
such power, authority and legal right would not have a Company Material Adverse Effect, (c) is
qualified to do business in, and is in good standing in, every jurisdiction where such
qualification is required, except where any failure to have such qualification would not have a
Company Material Adverse Effect and (d) has the corporate power and authority, and the legal right,
to execute, deliver and perform its obligations under this Agreement and each of the other Loan
Documents.

     SECTION 3.02. Authorization; No Conflicts. The Transactions: (a) have been duly
authorized by all requisite corporate action of such Loan Party and (b) will not (i) violate
(A) any provision of law, statute, rule or regulation, or of the certificate or articles of
incorporation or other constitutive documents or by-laws of such Loan Party, (B) any order of any
Governmental Authority or (C) any provision of any indenture, agreement or other instrument to
which such Loan Party is a party or by which it or any of its property is or may be bound, (ii) be
in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under, or give rise to any right to accelerate or to require the prepayment,
repurchase or redemption of any obligation under any such indenture, agreement or other instrument
or (iii) result in the creation or imposition of any Lien upon or with respect to any property or
assets of such Loan Party, except in the case of any of clauses (b)(i)(C), (b)(ii) and (b)(iii) for
matters that would not have a Company Material Adverse Effect.

     SECTION 3.03. Enforceability. This Agreement has been duly executed and delivered by
such Loan Party, and assuming this Agreement is a valid and binding obligation of the Lender,
constitutes, and each other Loan Document when executed and delivered by such Loan Party, and
assuming each other Loan Document is a valid and binding obligation of the Lender, will constitute,
a legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

     SECTION 3.04. Governmental Approvals. No action, consent or approval of, registration
or filing with, Permit from, notice to, or any other action by, any Governmental Authority is or
will be required in connection with the Transactions as they relate to such Loan Party, except for
(a) filings required by applicable federal and state securities laws, (b) such as have been made or

18

 

obtained and are in full force and effect and (c) for such other actions, consents, approvals,
registrations, filings, and notifications, which if not obtained or made would not cause a Company
Material Adverse Effect.

     SECTION 3.05. Senior Ranking. The obligations of such Loan Party under the Loan
Documents are its direct, general and unconditional obligations and, as of the date of this
Agreement, rank senior and prior to all its other secured and unsecured obligations and
liabilities, whether actual or contingent.

     SECTION 3.06. Federal Reserve Regulations. (a) Such Loan Party is not engaged
principally, or as one of its important activities, in the business of purchasing or carrying
Margin Stock or extending credit for the purpose of buying or carrying Margin Stock.

     (b) No part of the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, by such Loan Party for the purpose of purchasing,
carrying or trading in any securities under such circumstances as to involve any of the Loan
Parties in a violation of Regulation X or to involve any broker or dealer in a violation of
Regulation T. None of the transactions contemplated by this Agreement will violate or result in
the violation of any of the provisions of the Regulations of the Board, including Regulation T, U
or X.

     SECTION 3.07. Investment Company Act. Such Loan Party is not an “investment company”
as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

     SECTION 3.08. Solvency. Immediately after the consummation of the Transactions to
occur on the Closing Date and immediately following the making of the Loans and after giving effect
to the application of the proceeds of the Loans: (a) the value of the assets of each of the Loan
Parties at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value of the property of each of the Loan Parties will be
greater than the amount that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become
absolute and matured; (c) each of the Loan Parties expects to be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured; and (d) no Loan Party will have unreasonably small capital resources with which to
conduct the business in which it is engaged as such business is now conducted and is proposed to be
conducted following the Closing Date.

ARTICLE IV.

Representations and Warranties of the Lender

     The Lender represents and warrants to each Loan Party that:

     SECTION 4.01. Organization; Powers. The Lender (a) is duly organized or formed,
validly existing and in good standing under the laws of the jurisdiction of its organization or
formation and (b) has the corporate power and authority to execute, deliver and perform its
obligations under this Agreement.

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     SECTION 4.02. Authorization; No Conflicts. The Transactions: (a) have been duly
authorized by all necessary corporate action of the Lender and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of the Lender, (B) any order of any Governmental
Authority, or (C) any provision of any indenture, agreement or other instrument to which the Lender
is a party or by which it or any of its property is or may be bound, (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to any property or
assets of the Lender, except with respect to clauses (b)(i)(C), (b)(ii) and (b)(iii) of this
Section 4.02 for matters that would not have a Parent Material Adverse Effect.

     SECTION 4.03. Enforceability. This Agreement has been duly executed and delivered by
the Lender, and assuming this Agreement is a valid and binding obligation of each of the Loan
Parties, constitutes, and each other Loan Document when executed and delivered by the Lender, and
assuming each other Loan Document is a valid and binding obligation of each of the Loan Parties,
will constitute, a legal, valid and binding obligation of the Lender enforceable against such the
Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

     SECTION 4.04. Governmental Approvals. No action, consent or approval of, registration
or filing with, Permit from, notice to, or any other action by, any Governmental Authority is or
will be required in connection with the Transactions as they relate to the Lender, except for (a)
filings required by applicable federal and state securities laws, (b) such as have been made or
obtained and are in full force and effect and (c) for such other actions, consents, approvals,
registrations, filings, and notifications, which if not obtained or made would not cause a Parent
Material Adverse Effect.

     SECTION 4.05. Capital Resources. The Lender has, or will have prior to the Closing
Date, sufficient cash or other sources of immediately available funds to enable it to fund
$20,000,000 into the Escrow Account and, if the Lender exercises the Final Outside Date Extension
Option, on or prior to the Option Date, the Lender will have sufficient cash or other sources of
immediately available funds to enable it to fund and additional $8,000,000 into the Escrow Account.

ARTICLE V.

Conditions of Lending

     The obligations of the Lender to make the Loans hereunder are subject to the satisfaction (or
waiver in accordance with Section 9.07) of the following conditions:

     SECTION 5.01. All Credit Events. In respect of any Borrowing, the Lender will only be
obliged to comply with Article II if, on or as of the date of such Borrowing (each such
event being a “Credit Event”):

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     (a) The representations and warranties set forth in each Loan Document (disregarding any
exception in such representations and warranties relating to materiality or a Company Material
Adverse Effect) shall be true and correct in all material respects on and as of the date of such
Credit Event with the same effect as though made on and as of such date (except for any such
representations and warranties which address matters only as of an earlier date, which shall be
true and correct in all material respects as of such earlier date), except for such failures to be
true and correct which do not have a Company Material Adverse Effect.

     (b) At the time of and immediately after such Borrowing, no Event of Default or Default shall
have occurred and be continuing.

     (c) A Superior Proposal Termination shall not have occurred.

     (d) A Lender Termination shall not have occurred.

     (e) Prior to the Initial Borrowing, the Lender shall have received (i) a copy of the
certificate or articles of incorporation or other formation documents, including all amendments
thereto, of each Loan Party, certified as of a recent date by the Secretary of State of the state
of its organization, and a certificate as to the good standing of such Loan Party as of a recent
date, from such Secretary of State; (ii) a certificate of the Secretary or Assistant Secretary of
each Loan Party dated the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws, limited partnership agreement, operating agreement or other governing
document of such Loan Party as in effect on the Closing Date and at all times since a date prior to
the date of the resolutions described in clause (B) below (such by-laws, limited partnership
agreement, operating agreement or other governing document to be in form and substance reasonably
satisfactory to the Lender), (B) that attached thereto is a true and complete copy of resolutions
duly adopted by the board of directors of the Borrower authorizing the execution, delivery and
performance of the Loan Documents to which such Person is a party and, in the case of the Borrower,
the Borrowings hereunder, and that such resolutions have not been modified, rescinded or amended
and are in full force and effect, (C) that the certificate or articles of incorporation or other
formation documents of such Loan Party have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of the such Loan Party; and (iii) a certificate
of another officer as to the incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above.

     (f) Prior to the Initial Borrowing, the Lender shall have received (i) this Agreement and each
of the other Loan Documents, each executed and delivered by a duly authorized officer of each Loan
Party thereto, and (ii) if requested by the Lender pursuant to Section 2.03, a promissory
note or notes conforming to the requirements of such Section and executed and delivered by a duly
authorized officer of the Borrower.

     SECTION 5.02. Delayed Draw Loans. In addition to the satisfaction (or waiver in
accordance with Section 9.07) of the conditions set forth in Section 5.01 hereof,
the Lender shall

21

 

not be obligated to fund any Delayed Draw Loans unless the Lender shall have first exercised
the Final Outside Date Extension Option.

ARTICLE VI.

Covenants

     Each Loan Party covenants and agrees with the Lender that so long as this Agreement shall
remain in effect and until the principal of and interest on each Loan and all other expenses or
amounts payable under any Loan Document shall have been satisfied in full, that:

     SECTION 6.01. Notices. (a) Such Loan Party will furnish to the Lender promptly, and
in any event no later than five (5) Business Days after such Loan Party has knowledge of an Event
of Default or Default, written notice of any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to be taken with respect
thereto.

     (b) Such Loan Party shall give the Lender written notice, at least ten (10) Business Days
prior to the consummation of any Change of Control, of the anticipated date of consummation of such
Change of Control and the material terms and conditions thereof.

     (c) Whenever the Conversion Rate is adjusted pursuant to Section 2.13, the Borrower
shall promptly notify, and in no event later than five (5) Business Days after such an adjustment,
the Lender in writing of the adjustment, which notice shall briefly state the facts requiring the
adjustment, the manner of computing such adjustment and the adjusted Conversion Rate.

     SECTION 6.02. Use of Proceeds. At all times prior to the termination of the
Definitive Agreement in accordance with its terms, the Borrower shall use the proceeds of the Loans
only (i) in the ordinary course of its business consistent with past practice, and to pay NASDAQ
related expenses and any expenses incurred in connection with the transactions contemplated by the
Definitive Agreement and (ii) to lend money directly to any Subsidiary for use by such Subsidiary
only in the ordinary course of business in accordance with the Capital Expenditure and Loan
Proceeds Budget (as such term is defined in the Definitive Agreement) and shall not authorize any
expenditures of the proceeds of the Loans that, in the aggregate, exceed any specific line item set
forth in the Capital Expenditure and Loan Proceeds Budget (as such term is defined in the
Definitive Agreement).

     SECTION 6.03. Further Assurances. Each Loan Party shall, from time to time, duly
authorize, execute and deliver, or cause to be duly authorized, executed and delivered, such
additional instruments, certificates, agreements or documents, and take all such actions, as the
Lender may reasonably request or as may be necessary, for the purposes of implementing or
effectuating the provisions of this Agreement and the other Loan Documents. Upon the exercise by
the Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or authorization of any
Governmental Authority, each Loan Party will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments and other documents and

22

 

papers that the Lender may be required to obtain from it for such governmental consent,
approval, recording, qualification or authorization.

     SECTION 6.04. Taxes. (a) All sums payable by or on behalf of any Loan Party hereunder and
under the other Loan Documents shall (except to the extent required by law) be paid free and clear
of, and without any deduction or withholding on account of, any Tax (excluding any income or
franchise Tax imposed on the net income of the Lender by the United States of America or any
political subdivision thereof). So long as Thoratec Corporation is the Lender and the Lender has
complied with Section 6.04(b), if the Borrower shall be required to deduct any such
non-excluded Taxes from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to additional sums
payable under this Section) the Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.

     (b) On or prior to the Closing Date, the Lender shall deliver to the Borrower a properly
completed and duly executed Internal Revenue Service Form W-9 (or any subsequent versions thereof
or successors thereto). Any permitted assignee pursuant to Section 9.04(b) shall, on or
prior to such assignment, deliver to the Borrower a properly completed and duly executed Internal
Revenue Service Form W-9 (or any subsequent versions thereof or successors thereto) or applicable
Internal Revenue Service Form W-8 (or any subsequent versions thereof or successors thereto).

     (c) The Borrower shall pay any Other Taxes.

     SECTION 6.05. Compliance with Laws. Each Loan Party will comply in all material respects
with the requirements of all applicable laws, rules, regulations and orders of any Governmental
Authority in performing its obligations under this Agreement and the other Loan Documents.

     SECTION 6.06. Common Stock. (a) The Borrower shall, at all times prior to the Maturity
Date, and from time to time thereafter as may be necessary, reserve at all times and keep
available, free from preemptive rights, out of its authorized but unissued Common Stock, a
sufficient number of shares of Common Stock such that the Borrower shall be able to deliver at any
time and from time to time following the date hereof all of the shares of Common Stock that would
be deliverable upon conversion of all of the Convertible Portion of the Loans and Escrow Funds
pursuant to Section 2.10 and Section 2.11.

     (b) The Borrower shall take all actions necessary to ensure that all shares of Common Stock
that may be issued upon conversion of any Loans and/or Escrow Funds shall be (i) newly issued
shares or shares held in the treasury of the Borrower, (ii) duly authorized, validly issued, fully
paid and nonassessable and (iii) free of any preemptive rights, lien or adverse claim.

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ARTICLE VII.

Guaranty

     SECTION 7.01. Guaranty of the Obligations. (a) Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty to the Lender the due and punctual payment in full of all
Obligations when the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code) (collectively, the
“Guaranteed Obligations”).

     (b) Each Guarantor and the Lender hereby confirms that it is the intention of all such Persons
that this Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent
transfer or conveyance for purposes of any law related to fraudulent transfer or conveyance to the
extent applicable to this Guaranty and the Obligations of the Guarantor hereunder. To effectuate
the foregoing intention, the Lender and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum
amount as will result in the Obligations of such Guarantor under this Guaranty not constituting a
fraudulent transfer or conveyance.

     SECTION 7.02. Payment by Guarantors. Guarantors hereby jointly and severally agree, in
furtherance of the foregoing and not in limitation of any other right which the Lender may have at
law or in equity against any Guarantor by virtue hereof, that upon the failure of Borrower to pay
any of the Guaranteed Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code), Guarantors will upon demand pay, or cause to be paid, in cash, to the Lender, an
amount equal to the sum of the unpaid principal amount of all Guaranteed Obligations then due as
aforesaid, accrued and unpaid interest on such Guaranteed Obligations (including interest which,
but for Borrower’s becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against Borrower for such interest
in the related bankruptcy case) and all other Guaranteed Obligations then owed to the Lenders as
aforesaid.

     SECTION 7.03. Liability of Guarantors Absolute. Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than
payment in full of the Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:

          (a) this Guaranty is a guaranty of payment when due and not of collectability. This Guaranty
is a primary obligation of each Guarantor and not merely a contract of surety;

          (b) the Lender may enforce this Guaranty upon the occurrence of an Event of Default
notwithstanding the existence of any dispute between Borrower and the Lender with respect to the
existence of such Event of Default;

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          (c) the obligations of each Guarantor hereunder are independent of the obligations of
Borrower and the obligations of any other guarantor (including any other Guarantor) of the
obligations of Borrower, and a separate action or actions may be brought and prosecuted against
such Guarantor whether or not any action is brought against Borrower or any of such other
guarantors and whether or not Borrower is joined in any such action or actions;

          (d) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall
in no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the
Guaranteed Obligations which has not been paid. Without limiting the generality of the foregoing,
if the Lender is awarded a judgment in any suit brought to enforce any Guarantor’s covenant to pay
a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent satisfied by such
Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of
the Guaranteed Obligations;

          (e) the Lender, upon such terms as it deems appropriate, without notice or demand and without
affecting the validity or enforceability hereof or giving rise to any reduction, limitation,
impairment, discharge or termination of any Guarantor’s liability hereunder, from time to time may
(i) renew, extend, accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise, release
or discharge, or accept or refuse any offer of performance with respect to, or substitutions for,
the Guaranteed Obligations or any agreement relating thereto and/or subordinate the payment of the
same to the payment of any other obligations; (iii) request and accept other guaranties of the
Guaranteed Obligations and take and hold security for the payment hereof or the Guaranteed
Obligations; and (iv) exercise any other rights available to it under the Loan Documents; and

          (f) this Guaranty and the obligations of Guarantors hereunder shall be valid and enforceable
and shall not be subject to any reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any
of the following, whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not to assert or enforce,
or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any
agreement relating thereto, or with respect to any other guaranty of the payment of the Guaranteed
Obligations; (ii) any rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to Events of Default) hereof,
any of the other Loan Documents or any agreement or instrument executed pursuant thereto, or of any
other guaranty for the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Loan Document or any agreement relating to such other guaranty; (iii) the
Guaranteed Obligations, or any agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of payments received from any source
(other than payments received pursuant to the other Loan Documents) to the payment of indebtedness
other than the Guaranteed Obligations, even though the Lender might have elected to apply such
payment to

25

 

any part or all of the Guaranteed Obligations; (v) the Lender’s consent to the change,
reorganization or termination of the corporate structure or existence of Borrower or any of its
Subsidiaries and to any corresponding restructuring of the Guaranteed Obligations; (vi) any
defenses, set offs or counterclaims which Borrower may allege or assert against the Lender in
respect of the Guaranteed Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and usury; and (vii)
any other act or thing or omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor as an obligor in respect of the
Guaranteed Obligations.

     SECTION 7.04. Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of the
Lender: (a) any right to require the Lender, as a condition of payment or performance by such
Guarantor, to (i) proceed against Borrower, any other guarantor (including any other Guarantor) of
the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held
from Borrower, any such other guarantor or any other Person, (iii) proceed against or have resort
to any balance of any deposit account or credit on the books of the Lender in favor of Borrower or
any other Person, or (iv) pursue any other remedy in the power of the Lender whatsoever; (b) any
defense arising by reason of the incapacity, lack of authority or any disability or other defense
of Borrower or any other Guarantor including any defense based on or arising out of the lack of
validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Borrower or any other Guarantor
from any cause other than payment in full of the Guaranteed Obligations; (c) any defense based upon
any statute or rule of law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any defense based upon
the Lender’s errors or omissions in the administration of the Guaranteed Obligations, except
behavior which amounts to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any statute of limitations
affecting such Guarantor’s liability hereunder or the enforcement hereof, and (iii) any rights to
set offs, recoupments and counterclaims; (f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit to Borrower and
notices of any of the matters referred to in Section 7.03 and any right to consent to any
thereof; and (g) any defenses or benefits that may be derived from or afforded by law which limit
the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.

     SECTION 7.05. Guarantors’ Rights of Subrogation, Contribution, Etc. Until the Guaranteed
Obligations shall have been indefeasibly paid in full and the Commitments shall have terminated,
each Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Guarantor
now has or may hereafter have against Borrower or any other Guarantor or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against Borrower with respect to
the Guaranteed Obligations, and (b) any right to enforce, or to

26

 

participate in, any claim, right or remedy that the Lender now has or may hereafter have against
Borrower. In addition, until the Guaranteed Obligations shall have been indefeasibly paid in full
and the Commitments shall have terminated, each Guarantor shall withhold exercise of any right of
contribution such Guarantor may have against any other guarantor (including any other Guarantor) of
the Guaranteed Obligations. Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or indemnification such Guarantor
may have against Borrower, and any rights of contribution such Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights the Lender may have against Borrower
to any right the Lender may have against such other guarantor. If any amount shall be paid to any
Guarantor on account of any such subrogation, reimbursement, indemnification or contribution rights
at any time when all Guaranteed Obligations shall not have been finally and indefeasibly paid in
full, such amount shall be held in trust for the Lender and shall forthwith be paid over to the
Lender to be credited and applied against the Guaranteed Obligations, whether matured or unmatured,
in accordance with the terms hereof.

     SECTION 7.06. Subordination of Other Obligations. Any Indebtedness of Borrower or any
Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is hereby
subordinated in right of payment to the Guaranteed Obligations, and any such Indebtedness collected
or received by the Obligee Guarantor after an Event of Default has occurred and is continuing shall
be held in trust for the Lender and shall forthwith be paid over to the Lender to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or limiting in any
manner the liability of the Obligee Guarantor under any other provision hereof.

     SECTION 7.07. Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain
in effect until all of the Guaranteed Obligations shall have been paid in full and the Commitments
shall have terminated. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty
as to future transactions giving rise to any Guaranteed Obligations.

     SECTION 7.08. Authority of Guarantors or Borrower. It is not necessary for the Lender to
inquire into the capacity or powers of any Guarantor or Borrower or the officers, directors or any
agents acting or purporting to act on behalf of any of them.

     SECTION 7.09. Financial Condition of Borrower. Any Loan may be made to Borrower or
continued from time to time without notice to or authorization from any Guarantor regardless of the
financial or other condition of Borrower at the time of any such grant or continuation. The Lender
shall have no obligation to disclose or discuss with any Guarantor its assessment, or any
Guarantor’s assessment, of the financial condition of Borrower. Each Guarantor has adequate means
to obtain information from Borrower on a continuing basis concerning the financial condition of
Borrower and its ability to perform its obligations under the Loan Documents and each Guarantor
assumes the responsibility for being and keeping informed of the financial condition of Borrower
and of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of the Lender to disclose any matter,
fact or thing relating to the business, operations or conditions of Borrower now known or hereafter
known by the Lender.

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     SECTION 7.10. Bankruptcy, Etc. (a) So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of the Lender, commence or join
with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding
of or against Borrower or any other Guarantor. The obligations of Guarantors hereunder shall not
be reduced, limited, impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Borrower or any other Guarantor or by any defense
which Borrower or any other Guarantor may have by reason of the order, decree or decision of any
court or administrative body resulting from any such proceeding.

          (b) Each Guarantor acknowledges and agrees that any interest on any portion of the
Guaranteed Obligations which accrues after the commencement of any case or proceeding referred to
in clause (a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue
by operation of law by reason of the commencement of such case or proceeding, such interest as
would have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not
been commenced) shall be included in the Guaranteed Obligations because it is the intention of
Guarantors and the Lender that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order which may relieve
Borrower of any portion of such Guaranteed Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar Person
to pay the Lender, or allow the claim of the Lender in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.

          (c) In the event that all or any portion of the Guaranteed Obligations are paid by Borrower,
the obligations of Guarantors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded
or recovered directly or indirectly from the Lender as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed
Obligations for all purposes hereunder.

ARTICLE VIII.

Events of Default

     In case of the happening of any of the following events (“Events of Default”):

     (a) any representation or warranty made in any Loan Document, shall prove to have been false
or misleading in any material respect when so made, deemed made or furnished;

     (b) default shall be made in the payment of any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;

     (c) default shall be made in the payment of any interest on any Loan or any other amount
(other than an amount referred to in (b) above) due under any Loan Document, when and

28

 

as the same shall become due and payable, and such default shall continue unremedied for a
period of three (3) Business Days;

     (d) default shall be made in the due observance or performance by the Borrower of any
covenant, condition or agreement contained in Section 2.10 or Section 2.11, and
such default shall continue unremedied for a period of three (3) Business Days;

     (e) the Borrower shall fail to comply in all material respects with any covenant, condition or
agreement contained in any Loan Document (other than those specified in clauses (b), (c) or (d)
above) and such default shall continue unremedied for a period of 30 days;

     (f) the Borrower shall default in the observance or performance of any agreement or condition
relating to any Indebtedness (including any Guarantee of Indebtedness) exceeding $5,000,000 in
aggregate principal and accrued interest, or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist (other than (x) any
disposition of assets giving rise to a repayment or prepayment obligation on Indebtedness secured
by such assets and (y) the issuance of Equity Interests or Indebtedness giving rise to a repayment
obligation with respect to the proceeds of such issuance, provided in each case such payment is
timely made), the effect of which default or other event or condition is to cause such Indebtedness
to become due prior to its stated maturity or (in the case of any Guarantee of Indebtedness) to
become due or payable in respect of any such accelerated Indebtedness;

     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in
a court of competent jurisdiction seeking (i) relief in respect of the Borrower , or of a
substantial part of the property or assets of the Borrower under the Bankruptcy Code, as now
constituted or hereafter amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or for a substantial part of the property or
assets of the Borrower or (iii) the winding-up or liquidation of the Borrower; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;

     (h) the Borrower shall (i) voluntarily commence any proceeding or file any petition seeking
relief under the Bankruptcy Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing
of any petition described in (g) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or for
a substantial part of the property or assets of the Borrower, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, (vi) admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the purpose of effecting any of the
foregoing;

     (i) one or more judgments for the payment of money that, individually or in the aggregate,
would reasonably be expected to result in a Company Material Adverse Effect shall

29

 

be rendered against the Borrower or any combination thereof and the same shall remain
undischarged for a period of thirty (30) consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets
or properties of the Borrower to enforce any such judgment; or

     (j) the Borrower shall fail to repay on the date required pursuant to Section 2.06 the
entire principal amount of and accrued interest on the Loans,

then, and in every such event (other than an event with respect to the Borrower described in
paragraph (g) or (h) above), and at any time thereafter during the continuance of such event either
or both of the following actions may be taken: the Lender by notice to the Borrower may declare
the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued interest thereon
and all other liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall become forthwith due and payable, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by the Borrower, anything contained herein or in
any other Loan Document to the contrary notwithstanding, and the Lender shall have the right to
take all or any actions and exercise any remedies available to them under this Agreement,
applicable law or in equity; and in any event with respect to the Borrower described in
paragraph (g) or (h) above, the principal of the Loans then outstanding, together with accrued
interest thereon and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding, and the Lender
shall have the right to take all or any actions and exercise any remedies available to them under
this Agreement, applicable law or in equity.

ARTICLE IX.

Miscellaneous

     SECTION 9.01. Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) of this Section
9.01), notices and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or registered mail or sent by
fax, as follows:

	 	(i)	 	if to the Borrower to:

HeartWare International, Inc.

14000-14050 NW 57th Court

Miami Lakes, FL 33014

Attention: David McIntyre

Fax: (305) 818-4123

Email: dmcintyre@heartwareinc.com

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	 	 	 	with a copy (which shall not constitute notice) to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022

Attention: Clare O’Brien

Robert M. Katz

Fax: (212) 848-7179

	 	(ii)	 	if to the Lender to:

Thoratec Corporation

6035 Stoneridge Drive

Pleasanton, CA 94588

Attention: Gary Burbach

Fax: (925) 264-4341

Email: gary.burbach@thortec.com

	 	 	 	with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, CA 92626

Attn: Charles K. Ruck

Tad J. Freese

Fax: (714) 755-8290

provided that, upon receipt of prior consent from the Lender, any notice delivered by the
Borrower pursuant to Article II may be delivered via email (to be promptly confirmed by
written or fax notice).

All such notices and other communications (i) sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when received or (ii) sent by
fax shall be deemed to have been given when sent and when receipt has been confirmed by telephone;
provided that if not given during normal business hours for the recipient, shall be deemed
to have been given at the opening of business on the next Business Day for the recipient. Notices
delivered through electronic communications to the extent provided in paragraph (b) below, shall be
effective as provided in such paragraph (b).

     (b) Notices and other communications to the Lender hereunder may be delivered or furnished by
electronic communications (including e-mail) pursuant to procedures approved by the Lender;
provided that the foregoing shall not apply to notices to the Lender pursuant to
Article II. The Lender or the Borrower may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to procedures approved
by it; provided that approval of such procedures may be limited to particular notices or

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communications. All such notices and other communications (i) sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, return e-mail or other written
acknowledgment); provided that if not given during the normal business hours of the
recipient, such notice or communication shall be deemed to have been given at the opening of
business on the next Business Day for the recipient, and (ii) posted to an internet or intranet
website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (b)(i) of notification that such notice or
communication is available and identifying the website address therefor.

     (c) Any party hereto may change its address or fax number for notices and other communications
hereunder by notice to the other parties hereto in accordance with the provisions hereof.

     SECTION 9.02. Survival of Agreement. All rights, covenants, agreements,
representations and warranties made by the Borrower in this Agreement shall be considered to have
been relied upon by the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any such other party may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is extended hereunder,
and shall continue in full force and effect as long as (i) the principal of or any accrued interest
on any Loan or any other amount payable under this Agreement is outstanding and unpaid, (ii) any
Convertible Portion of the Loans has not been converted into Common Stock and (iii) any amount
remains in the Escrow Account that has not been converted into Common Stock.

     SECTION 9.03. Binding Effect. This Agreement shall become effective when it shall
have been executed by each of the parties hereto and thereto and when the Lender shall have
received counterparts hereof and thereof which, when taken together, bear the signatures of each of
the other parties hereto and thereto.

     SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the permitted successors
and assigns of such party; and all covenants, promises and agreements by or on behalf of the
Borrower or the Lender that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.

     (b) Neither the Lender nor the Borrower shall assign or delegate any of its rights or duties
hereunder to any Person (other than with respect to the Borrower by operation of law to Thomas
Merger Sub I, Inc. and Thomas Merger Sub II, Inc., or their respective successors and assigns, in
the Acquisition) without the prior written consent of the Lender or the Borrower, as applicable,
and any attempted assignment without such prior written consent shall be null and void.

     (c) The Borrower and the Lender intend that the Loans (including any promissory notes
evidencing such Loans) shall be obligations in “registered form” within the meaning of section
163(f) of the Internal Revenue Code of 1986, as amended, and section 5f.103-1(c) of the

32

 

Treasury Regulations (and any successor provisions) at all times during which the Loans remain
in effect. Neither the Borrower nor the Lender shall take any action or otherwise permit such
obligation to become an obligation that is not in “registered form.” The Borrower shall maintain a
register for the recordation of the name and address of the Lender (and any permitted assignees
pursuant to Section 9.04(b)) and principal and interest shall only be paid to such persons
recorded in the register. The register is intended to function as a “book entry” system within the
meaning of sections 5f.103-1(c)(1)(ii) and 5f.103–1(c)(2) of the Treasury Regulations (and any
successor provisions).

     SECTION 9.05. Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender is hereby authorized at any time and from time to time, except to the extent
prohibited by law, to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by the Lender to or
for the credit or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement and other Loan Documents held by the
Lender, irrespective of whether or not the Lender shall have made any demand under this Agreement
or such other Loan Document and although such obligations may be unmatured. The rights of the
Lender under this Section 9.05 are in addition to other rights and remedies (including
other rights of setoff) which the Lender may have.

     SECTION 9.06. Applicable Law. THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF.

     SECTION 9.07. Waivers; Amendment. (a) No failure or delay of the Lender in exercising
any power or right hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the Lender
hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that it would otherwise have. No waiver of any provision of this Agreement or any other
Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No notice or demand
on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.

     (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender.

     SECTION 9.08. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan or

33

 

participation in accordance with applicable law, the rate of interest payable in respect of
such Loan or participation hereunder, together with all Charges payable in respect thereof, shall
be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan or participation but were not payable as a result of the
operation of this Section 9.08 shall be cumulated and the interest and Charges payable to
the Lender in respect of other Loans or participations or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by the Lender.

     SECTION 9.09. Entire Agreement. This Agreement, the other Loan Documents, the
Definitive Agreement and the other documents contemplated hereby and thereby constitute the entire
contract between the parties relative to the subject matter hereof. Any other previous agreement
among the parties with respect to the subject matter hereof is superseded by this Agreement, the
other Loan Documents, the Definitive Agreement and the other documents contemplated hereby and
thereby. Nothing in this Agreement or in the other Loan Documents, expressed or implied, is
intended to confer upon any person (other than the parties hereto and thereto, their respective
successors and assigns permitted hereunder and, to the extent expressly contemplated hereby, the
Related Parties of the Lender) any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.

     SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.10.

     SECTION 9.11. Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and therein shall not in
any way be affected or impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

     SECTION 9.12. Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall constitute an original but
all of which when taken together shall constitute a single contract, and shall become effective as
provided in Section 9.03. Delivery of an executed signature page to this Agreement by
facsimile

34

 

or other electronic transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

     SECTION 9.13. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and are not to affect
the construction of, or to be taken into consideration in interpreting, this Agreement.

     SECTION 9.14. Jurisdiction; Consent to Service of Process. (a) The Borrower and the
Lender each irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States of America sitting
in the Borough of Manhattan, New York, New York and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in
such New York State or, to the extent permitted by law, in such Federal court sitting in the
Borough of Manhattan, New York, New York. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

     (a) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement in any New
York State or Federal court sitting in the Borough of Manhattan, New York, New York. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such court.

     (b) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law.

     SECTION 9.15. No Fiduciary Duty. The Lender and its Affiliates (collectively, solely
for purposes of this paragraph, the “Lender”), may have economic interests that conflict
with those of the Borrower. The Borrower agrees that nothing in the Loan Documents or otherwise
will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other
implied duty between the Lender and the Borrower, its stockholders or its affiliates. The Borrower
acknowledge and agree that (i) the transactions contemplated by the Loan Documents are arm’s-length
commercial transactions between the Lender, on the one hand, and the Borrower, on the other, (ii)
in connection therewith and with the process leading to such transaction the Lender is acting
solely as a principal and not the agent or fiduciary of the Borrower, its management, stockholders,
creditors or any other Person, (iii) the Lender has not assumed an advisory or fiduciary
responsibility in favor of the Borrower with respect to the transactions contemplated hereby or the
process leading thereto (irrespective of whether the Lender or any of its affiliates has advised or
is currently advising the Borrower on other matters) or any other obligation to the Borrower except
the obligations expressly set forth in the Loan Documents and (iv) the Borrower has consulted its
own legal and financial advisors to the extent they deemed appropriate. The Borrower further
acknowledges and agrees that it is responsible for making its own independent

35

 

judgment with respect to such transactions and the process leading thereto. The Borrower
agrees that it will not claim that the Lender has rendered advisory services of any nature or
respect, or owes a fiduciary or similar duty to the Borrower, in connection with such transaction
or the process leading thereto.

     SECTION 9.16. Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Lender, or the Lender exercises its right of setoff, and such payment
or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any settlement entered
into by the Lender in its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any bankruptcy or insolvency law or otherwise, then to the
extent of such recovery, the obligation or part thereof originally intended to be satisfied shall
be revived and continued in full force and effect as if such payment had not been made or such
setoff had not occurred.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

36

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	HEARTWARE INTERNATIONAL, INC., as Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Douglas Godshall
 

Douglas Godshall
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	HEARTWARE LIMITED, as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Douglas Godshall
 

Douglas Godshall
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	HEARTWARE, INC., as a Guarantor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Douglas Godshall
 

Douglas Godshall
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THORATEC CORPORATION, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Gerhard F. Burbach
 

Gerhard F. Burbach
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

 

 

APPENDIX A

Commitments

	 	 	 	 	 	 	 	 	 
	Lender	 	Commitment	 	Pro Rata Share
	Thoratec Corporation
	 	$	28,000,000.00	 	 	 	100	%
	 	 	 	 	 	 	 	 	 
	Total
	 	$	28,000,000.00	 	 	 	100	%EX-10.3

Exhibit 10.3

INVESTOR’S RIGHTS AGREEMENT

between

THORATEC CORPORATION

and

HEARTWARE INTERNATIONAL, INC.

Dated as of February 12, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	1 Definitions

	 	 	1	 
	 
	2 Corporate Governance

	 	 	3	 
	 
	3 Legends; Securities Law Compliance

	 	 	4	 
	 
	4 Registration Rights

	 	 	4	 
	 
	5 Indemnification

	 	 	15	 
	 
	6 Miscellaneous

	 	 	19	 
	 

i

 

INVESTOR’S RIGHTS AGREEMENT

INVESTOR’S RIGHTS AGREEMENT, dated as of February 12, 2009 (this “Agreement”), by and among
HEARTWARE INTERNATIONAL, INC., a Delaware corporation (the “Company”), and THORATEC CORPORATION, a
California corporation (the “Investor”).

WITNESSETH:

WHEREAS, reference is made to that certain Loan Agreement, dated as of February 12, 2009 among the
Company, as borrower, all of the subsidiaries of Company, as guarantors, and the Investor, as
lender (as amended, amended and restated, extended or otherwise modified from time to time, the
“Loan Agreement”);

WHEREAS, the Convertible Loans are convertible into shares of Common Stock as provided in the Loan
Agreement; and

WHEREAS, the parties believe that it is in the best interests of the Company and its stockholders
to set forth their agreements on certain matters regarding the Investor’s ownership and rights with
respect to Common Stock of the Company beneficially owned by the Investor from and after the time
of any conversion of any Convertible Loans.

NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this
Agreement, and intending to be legally bound, the parties agree as follows:

	1	 	Definitions

	 	1.1	 	Definitions of Certain Terms

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Loan Agreement.

For purposes of this Agreement, the following terms have the indicated meanings:

“Agreement” is defined in the preamble to this Agreement.

“ASIC” means the Australian Securities and Investments Commission.

“Board” means the board of directors of the Company.

“Bylaws” means the Bylaws of the Company, as amended from time-to-time (or any similar
governing document of any successor).

“Certificate of Incorporation” means the Certificate of Incorporation of the Company, as
amended from time-to-time (or any similar governing document of any successor).

“Common Stock” means the common stock, par value $0.001 per share, of the Company.

“Company” is defined in the preamble to this Agreement.

1

 

“Company Indemnified Parties” is defined in Section 5.1.1.

“Convertible Loans” means, collectively, the Convertible Portion of the Loans and any Escrow
Funds delivered for conversion in accordance with Section 2.10 or Section 2.11, as
applicable, of the Loan Agreement.

“Corporations Act” means the Australian Corporations Act 2001 (Cth), as amended and the
Corporations Regulations made under it.

“Definitive Agreement” means the Agreement and Plan of Merger, dated as of February 12, 2009
by and among the Investor, Thomas Merger Sub I, Inc., Thomas Merger Sub II, Inc. and the
Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and
the rules and regulations promulgated thereunder.

“Indemnified Party” is defined in Section 5.1.3.

“Indemnifying Party” is defined in Section 5.1.3.

“Investor” is defined in the preamble to this Agreement.

“Investor’s Counsel” is defined in Section 4.3.5.

“Investor Indemnified Parties” is defined in Section 5.1.2.

“Loan Agreement” is defined in the preamble to this Agreement.

“Piggyback Registration Statement” is defined in Section 4.2.1.

“register”, “registered” and “registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.

“Registrable Securities” means (i) any and all Common Stock issued or issuable from time to
time upon conversion of the Convertible Loans and (ii) any Common Stock issued or issuable
in respect of the securities described in clause (i) above, or this clause (ii), upon any
stock split, stock dividend, recapitalization, reclassification, merger, consolidation or
similar event; provided that, such Common Stock shall cease to be Registrable Securities
when a registration statement covering such Common Stock has been declared effective under
the Securities Act by the SEC and such Common Stock has been disposed of pursuant to such
effective registration statement.

“Registration Expenses” is defined in Section 4.4.1.

“Registration Statement” means a registration statement including the prospectus and other
documents filed with the SEC to effect a registration under the Securities Act.

“Resale Effectiveness Period” is defined in Section 4.1.1.

2

 

“Resale Shelf Registration Statement” is defined in Section 4.1.1.

“SEC” means the United States Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.

     “Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules
and regulations promulgated thereunder.

“Subsequent Shelf Registration” is defined in Section 4.1.2.

“Termination Date” means the date, if any, upon which the Definitive Agreement is terminated
in accordance with its terms.

	 	1.2	 	Headings; Table of Contents

Headings and table of contents should be ignored in construing this Agreement.

	 	1.3	 	Interpretation

The definitions in Section 1.1 shall apply equally to both the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including”, and words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed to have the
same meaning and effect as the word “shall.” The word “property” shall be construed to
refer to any and all rights and interests in tangible and intangible assets and properties
of any kind whatsoever, whether real, personal or mixed, including cash, securities, Equity
Interests, accounts and contract rights. The words “herein,” “hereof” and “hereunder,” and
words of similar import, shall be construed to refer to this Agreement in its entirety and
not to any particular provision of this Agreement unless the context shall otherwise
require. All references herein to Sections shall be deemed references to Sections of this
Agreement unless the context shall otherwise require. Except as otherwise expressly
provided herein, any definition of, or reference to, any agreement, instrument or document
in this Agreement shall mean such agreement, instrument or document as amended, restated,
supplemented or otherwise modified from time to time (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein).

	2  Corporate Governance

	 	2.1	 	Neither the Certificate of Incorporation nor the Bylaws shall be amended in a
manner inconsistent with the terms of this Agreement without the prior written consent
of the Investor.

	 	2.2	 	The Company shall not enter into any contract, agreement or arrangement or take
any action which would limit or materially delay the Company’s performance of its
obligations hereunder.

3

 

	3	 	Legends; Securities Law Compliance

	 	3.1	 	Each certificate representing Registrable Securities that is restricted stock
as defined in Rule 144 under the Securities Act shall bear the following legend:
	 
	 	 	 	“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS SUCH DISPOSITION IS
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR AN EXEMPTION THEREFROM.”

	 	3.2	 	When (i) any Registrable Securities have been registered under the Securities
Act and such Registrable Securities have been sold pursuant to such registration or
(ii) any Registrable Securities have been sold pursuant to Rule 144 under the
Securities Act or are eligible to be sold pursuant to such rule without volume
limitations or other restrictions, the holder of such Registrable Securities shall be
entitled to exchange the certificate representing such Registrable Securities for a
certificate not bearing the legend required by Section 3.1.

	4	 	Registration Rights

	 	4.1	 	Shelf Registration

	 	4.1.1	 	If the Company shall receive at any time after the Termination
Date a written request from the Investor to file a registration statement on
Form S-3 or an equivalent form or forms covering the registration of the
Registrable Securities, the Company will use its commercially reasonable
efforts to file, within thirty (30) days after the receipt of such request, a
registration statement on Form S-3 or any equivalent form or forms (the “Resale
Shelf Registration Statement”) and shall use its commercially reasonable
efforts to cause such Resale Shelf Registration Statement to be declared
effective by the SEC as soon as reasonably practicable after the filing
thereof, and such Resale Shelf Registration Statement (i) will be a “shelf”
registration statement providing for the registration, and the sale on a
continuous or delayed basis, of all of the Registrable Securities pursuant to
Rule 415 under the Securities Act and (ii) will not provide for the
registration, and the sale on a continuous or delayed basis, of any Common
Stock other than the Registrable Securities. Upon filing a Resale Shelf
Registration Statement, the Company will, if applicable, use its commercially
reasonable efforts to keep such Resale Shelf Registration Statement effective
with the SEC for nine months following the date of the initial effectiveness of
the Resale Shelf Registration Statement; provided that such nine month period
shall be extended by any period or periods of time during which the Resale
Registration Statement (taken together with any Subsequent Shelf Registration)
is unavailable for sales of Registrable

4

 

	 	 	 	Securities, whether as provided in Section 4.1.2, Section
4.5 or otherwise (such nine month period, as extended, the “Resale
Effectiveness Period”).

	 	4.1.2	 	If any Resale Shelf Registration Statement or subsequent
Registration Statement (a “Subsequent Shelf Registration”) ceases to be
effective under the Securities Act for any reason at any time within the Resale
Effectiveness Period, including the expiration thereof, the Company shall use
its commercially reasonable efforts to cause such Resale Shelf Registration
Statement or Subsequent Shelf Registration, respectively, to again become
effective under the Securities Act (including obtaining the prompt withdrawal
of any order suspending the effectiveness of such Resale Shelf Registration
Statement), and in any event shall within thirty (30) days of such cessation of
effectiveness, amend such Resale Shelf Registration Statement or Subsequent
Shelf Registration, respectively, in a manner reasonably expected to obtain the
withdrawal of any order suspending the effectiveness of such Resale Shelf
Registration Statement or Subsequent Shelf Registration, respectively, or file
an additional registration statement providing for the registration, and the
sale on a continuous or delayed basis, of all of the Registrable Securities
pursuant to Rule 415 under the Securities Act; provided that such Subsequent
Shelf Registration will not provide for the registration, and the sale on a
continuous or delayed basis, of any Common Stock other than the Registrable
Securities. If a Subsequent Shelf Registration is filed, the Company shall use
its commercially reasonable efforts to (x) cause such Subsequent Shelf
Registration to become effective under the Securities Act as soon as reasonably
practicable after such filing and (y) keep such Subsequent Shelf Registration
(or another Subsequent Shelf Registration) continuously effective with the SEC
at all times during the Resale Effectiveness Period. Any such Subsequent Shelf
Registration shall be a registration statement on Form S-3 to the extent that
the Company is eligible to use such form. For the avoidance of doubt, the
Company shall not be required to maintain a Resale Shelf Registration Statement
or Subsequent Shelf Registration after the end of the Resale Effectiveness
Period.
	 
	 	4.1.3	 	If for any reason the Company is unable to qualify as a
registrant to register the Registrable Securities on Form S-3 or any equivalent
form or forms or any similar registration in accordance with Section
4.1.1 or Section 4.1.2, as applicable, the Company shall use
commercially reasonable efforts to file a registration statement on Form S-1 or
any equivalent form or forms within thirty (30) days of such failure to qualify
in order to provide for the registration of such Registrable Securities for
resale by the Investor in accordance with any reasonable method of distribution
elected by the Investor.

5

 

	 	4.1.4	 	If the Investor intends that any Registrable Securities
covered by any registration pursuant to Section 4.1 shall be
distributed by means of an underwritten offering, the Investor will so advise
the Company. In such event, the managing underwriter to administer the
offering will be chosen by the Investor, subject to the prior written consent
of the Company, such consent not to be unreasonably withheld, conditioned or
delayed. Unless otherwise mutually agreed by the Company and the Investor, the
Company and the Investor shall enter into an underwriting agreement in such
reasonable and customary form as shall have been negotiated and agreed to by
the Company with the underwriter or underwriters selected for such
underwriting. If the Investor disapproves of the terms of the underwriting,
the Investor may promptly elect to withdraw therefrom by written notice to the
Company and the managing underwriter.
	 
	 	4.1.5	 	If the managing underwriter in any underwritten offering
pursuant to this Section 4.1, advises the Company that in its
reasonable opinion the number of securities requested by the Investor to be
included in such distribution exceeds the number which can be sold without
adversely affecting the marketability of such offering (including an adverse
effect on the per share offering price), the Investor will include in such
distribution only such number of securities that in the reasonable opinion of
such underwriter can be sold without adversely affecting the marketability of
the offering (including an adverse effect on the per share offering price).
	 
	 	4.1.6	 	Notwithstanding the foregoing, if the Company shall furnish to
the Investor a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board it would be detrimental to
the Company and its stockholders for such Resale Shelf Registration Statement
to be filed, the Company shall have the right to defer such filing for a period
of not more than sixty (60) days after receipt of the request by the Investor;
provided, however, that the Company shall not register any securities for the
account of itself or any other stockholder during such sixty (60) day period.
	 
	 	4.1.7	 	In addition, the Company shall not be obligated to effect or
to take any action to effect, any registration pursuant to this Section
4.1 after the Company has effected one (1) registration pursuant to this
Section 4.1; provided, however, that such registration has been
declared or ordered effective and has been available for sales of Registrable
Securities for the entire Resale Effectiveness Period.

	 	4.2	 	Piggyback Registrations

	 	4.2.1	 	Whenever the Company proposes to register any of its Common
Stock in connection with an underwritten public offering of such securities
solely for cash, other than a registration on Form S-4 or Form S-8 (or any
successor form), and the registration form to be filed may be used for the

6

 

	 	 	 	registration or qualification for distribution of Registrable Securities by
the Company, the Company will give prompt written notice to the Investor of
its intention to effect such a registration (but in no event less than ten
(10) Business Days prior to the anticipated filing date) and, subject to
Section 4.2.3, will include in such registration all Registrable
Securities with respect to which the Company has received written requests
for inclusion therein from the Investor within ten (10) Business Days after
the date of the Company’s notice (a “Piggyback Registration Statement”).
The Investor may withdraw its Registrable Securities from such Piggyback
Registration Statement by giving prompt written notice to the Company and
the managing underwriter, if any, on or before the fifth (5th) Business Day
prior to the planned effective date of such Piggyback Registration
Statement. The Company may terminate or withdraw any registration under
this Section 4.2.1 prior to the effectiveness of such registration,
whether or not the Investor has elected to include Registrable Securities in
such registration.

	 	4.2.2	 	The right of the Investor to registration pursuant to this
Section 4.2 will be conditioned upon the Investor’s participation in
the underwriting and the inclusion of the Investor’s Registrable Securities in
the underwriting, and the Company and the Investor will (together with any
other Persons distributing their securities through such underwriting) enter
into an underwriting agreement (including all reasonable and customary
questionnaires, powers of attorney, indemnities, lock-up letters and other
documents required under the terms of such underwriting agreement) in such
reasonable and customary form as shall have been negotiated and agreed to by
the Company with the underwriter or underwriters selected for such underwriting
by the Company. If the Investor disapproves of the terms of the underwriting,
the Investor may elect to withdraw therefrom by written notice to the Company
and the managing underwriter.
	 
	 	4.2.3	 	If the managing underwriter in any underwritten offering
pursuant to a Piggyback Registration Statement advises the Company that in its
sole and reasonable opinion the number of securities requested to be included
in such registration exceeds the number which can be sold without adversely
affecting the marketability of such offering (including an adverse effect on
the per share offering price), the Company will include in such registration
only such number of securities that in the reasonable opinion of such
underwriter can be sold without adversely affecting the marketability of the
offering (including an adverse effect on the per share offering price), which
securities will be so included in the following order of priority: (i) first,
the securities the Company proposes to sell and (ii) second, the Registrable
Securities of the Investor and any other securities of the Company that have
been requested by other holders of Common Stock having registration rights to
be so included, on a pro rata basis, up to the maximum number of securities the
managing underwriter advises the

7

 

	 	 	 	Company may be sold without adversely affecting the marketability of such
offering.

	 	4.3	 	Registration Procedures

Whenever any Registrable Securities are to be registered pursuant to Section 4.1,
the Company will use its commercially reasonable efforts to effect the registration and sale
of such Registrable Securities as soon as reasonably practicable in accordance with the
intended method of disposition thereof and pursuant thereto. The Company shall, without
limitation of its other obligations set forth in this Agreement:

	 	4.3.1	 	Prepare and file, within thirty (30) days after receipt by the
Company of a request by the Investor to file with the SEC a Registration
Statement with respect to such Registrable Securities required to be filed
pursuant to Section 4.1, together with any notices or regulatory
filings required to be made in connection therewith (including filing a copy of
the Registration Statement and any amendments or supplements thereto, with
ASX), and thereafter use its commercially reasonable efforts to cause such
Registration Statement to become effective as soon as reasonably practicable
after the filing thereof (with a copy of the Registration Statement once
effective to be lodged with ASIC if required); provided that, before filing a
Registration Statement or any amendments or supplements thereto, the Company
will, at the Company’s expense, furnish or otherwise make available to the
Investor and the Investor’s Counsel copies of all such documents proposed to be
filed and such other documents reasonably requested by the Investor and the
Investor’s Counsel, which documents will be subject to the review and/or
reasonable comment, as applicable, of the Investor and the Investor’s Counsel,
including any comment letter from the SEC with respect to such filing or the
documents incorporated by reference therein and any response to such comment
letter, and provide the Investor and the Investor’s Counsel reasonable
opportunity to participate in the preparation of such Registration Statement
and the opportunity to conduct a reasonable investigation within the meaning of
the Securities Act, including reasonable access to the Company’s financial
books and records, officers, accountants and other advisors, as the Investor or
the Investor’s Counsel may reasonably request; provided, that, it shall be a
condition to such review of such information that the inspecting person enter
into a customary confidentiality agreement in form and substance reasonably
satisfactory to the Company;
	 
	 	4.3.2	 	Prepare and file with the SEC (with a copy to be lodged with
ASIC if required) such amendments and supplements to such Registration
Statement as may be necessary to keep such Registration Statement effective for
a period of either (i) not less than, if such Registration Statement is a
Piggyback Registration Statement relating to an underwritten offering, such
period as, based upon the opinion of counsel

8

 

	 	 	 	for the underwriters, a prospectus is required by law to be delivered in
connection with sales of Registrable Securities by an underwriter or dealer
or such shorter period as will terminate when all of the securities covered
by such Registration Statement have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth
in such Registration Statement (but in any event not before the expiration
of any longer period required under the Securities Act) or (ii) continuously
in the case of shelf registration statements, including the Resale Shelf
Registration Statement and any Subsequent Shelf Registration, and any shelf
registration statement, including the Resale Shelf Registration Statement
and any Subsequent Shelf Registration, shall be re-filed upon its expiration
(or in each case, such shorter period ending on the date that the securities
covered by such shelf registration statement cease to constitute Registrable
Securities), and cause the related prospectus to be supplemented by any
prospectus supplement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of the securities covered
by such Registration Statement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities
Act; provided that the Company shall not be required to maintain a Resale
Shelf Registration Statement or Subsequent Shelf Registration after the end
of the Resale Effectiveness Period;

	 	4.3.3	 	Furnish to the Investor, and each managing underwriter, if
any, such number of copies, without charge, of such Registration Statement,
each amendment and supplement thereto, including each preliminary prospectus,
final prospectus, any other prospectus (including any prospectus filed under
Rule 424, Rule 430A or Rule 430B under the Securities Act and any “issuer free
writing prospectus” as such term is defined under Rule 433 under the Securities
Act), all exhibits and other documents filed therewith and such other documents
as the Investor or such managing underwriter may reasonably request including
in order to facilitate the disposition of the Registrable Securities owned by
the Investor, and upon request a copy of any and all transmittal letters or
other correspondence to or received from, the SEC or any other Governmental
Authority relating to such offer;
	 
	 	4.3.4	 	Use commercially reasonable efforts to register or qualify (or
exempt from registration or qualification) such Registrable Securities, and
keep such registration or qualification (or exemption therefrom) effective,
under such other securities or blue sky laws of such United States
jurisdictions as the Investor reasonably requests and do any and all other acts
and things that may be reasonably necessary or reasonably advisable to enable
the Investor to consummate the disposition in such jurisdictions of the
Registrable Securities owned by the Investor (provided that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this

9

 

	 	 	 	subsection or (ii) consent to general service of process in suits or to
taxation in any such jurisdiction);

	 	4.3.5	 	Notify the Investor, the outside counsel to the Investor (the
“Investor’s Counsel”) and the managing underwriter(s), if any, at any time when
a prospectus relating thereto is required to be delivered under the Securities
Act, upon discovery that, or upon the discovery of the happening of any event
that makes, any statement made in the Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference includes any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing or that otherwise requires the making of any changes in such
Registration Statement, prospectus or documents;
	 
	 	4.3.6	 	Notify the Investor, the Investor’s Counsel and the managing
underwriter(s), if any, (i) when such Registration Statement or the prospectus
or any prospectus supplement or post-effective amendment has been filed and,
with respect to such Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC for
amendments or supplements to such Registration Statement or to amend or to
supplement such prospectus or for additional information, (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for such purpose, to the extent
that it is aware of such proceedings and (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose;
	 
	 	4.3.7	 	Upon the occurrence of an event contemplated in Section
4.3.5 or in Section 4.3.6(ii), 4.3.6(iii) or
4.3.6(iv), as soon as reasonably practicable, (i) prepare and furnish
to the Investor a reasonable number of copies of a supplement or amendment to
the Registration Statement or supplement to the related prospectus or any
document incorporated or deemed to be incorporated therein by reference, or
file any other required document so that, in the case of a Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading and
that, in the case of any prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statement therein, in light of the circumstances in which they were
made, not misleading or (ii) advise the Investor in writing that the
Registration Statement may be used for the sale of Registrable Securities;

10

 

	 	4.3.8	 	Use commercially reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on which Common
Stock issued by the Company is then listed or, if no similar securities issued
by the Company are then listed on any securities exchange, use its commercially
reasonable efforts to cause all such Registrable Securities to be listed on the
NASDAQ Global Market;
	 
	 	4.3.9	 	Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such Registration
Statement;
	 
	 	4.3.10	 	Enter into such customary agreements (including underwriting agreements and
lock-up agreements in customary form (excluding any lock-up of Registrable
Securities), including provisions with respect to indemnification and
contribution in customary form) and take all such other customary actions as
the Investor or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;
	 
	 	4.3.11	 	In connection with any underwritten offering, make such representations and
warranties to the Investor and the managing underwriter(s), if any, with
respect to the business of the Company and the Company’s Subsidiaries, and the
Registration Statement, prospectus, and documents incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and scope
as are customarily made by the issuer in underwritten offerings, and, if true,
make customary confirmations of the same if and when reasonably requested;
	 
	 	4.3.12	 	If requested by the Investor, or the managing underwriter(s), if any,
promptly include in a prospectus supplement or amendment such information as
the Investor or managing underwriter(s), if any, may reasonably request in
order to permit the intended method of distribution of such securities and make
all required filings of such prospectus supplement or such amendment as soon as
reasonably practicable after the Company has received such request;
	 
	 	4.3.13	 	In the case of certificated Registrable Securities, cooperate with the
Investor and the managing underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates (not bearing any legends) representing
Registrable Securities to be sold after receiving written representations from
the Investor that the Registrable Securities represented by the certificates so
delivered by the Investor will be transferred in accordance with the
Registration Statement and applicable law, and enable such Registrable
Securities to be in such denominations and registered in such names as the
Investor or managing underwriters, if any, may request at least two (2)
Business Days prior to any sale of such Registrable Securities;

11

 

	 	4.3.14	 	Make available for inspection by the Investor and the Investor’s Counsel, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by the Investor
or underwriter, to the extent reasonably necessary and solely for conducting
customary due diligence, all financial and other records, pertinent corporate
documents and documents relating to the business of the Company, provided that,
it shall be a condition to such inspection and receipt of such information that
the inspecting person enter into a customary confidentiality agreement in form
and substance reasonably satisfactory to the Company;
	 
	 	4.3.15	 	Otherwise use its commercially reasonable efforts to comply with (i) all
applicable rules and regulations of the SEC, (ii) all applicable Australian
securities laws (including any ASIC class orders, policies and requirements),
including the lodgment of any effective Registration Statement with ASIC, with
an Australian offer document if required, and (iii) all applicable rules and
regulations of any applicable securities exchange, including while the Company
is admitted to the official list of ASX, the listing rules of the ASX,
including (A) notifying ASX of the issue of the Registrable Securities in the
form of an Appendix 3B and (B) if any of the Registrable Securites were issued
in reliance on an exception in section 708 of the Corporations Act, providing
the ASX with a notice that complies with section 708A(6) of the Corporations
Act in respect of the Registrable Securities;
	 
	 	4.3.16	 	Timely provide to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(which need not be audited);
	 
	 	4.3.17	 	In the event of the issuance of any stop order suspending the effectiveness
of a Registration Statement, or of any order suspending or preventing the use
of any related prospectus or ceasing trading of any securities included in such
Registration Statement for sale in any jurisdiction, use every commercially
reasonable effort to promptly obtain the withdrawal of such order;
	 
	 	4.3.18	 	In connection with any underwritten offering, obtain one or more comfort
letters, addressed to the underwriters, if any, dated the effective date of
such Registration Statement and the date of the closing under the underwriting
agreement for such offering, signed by the Company’s independent registered
public accountants (and if necessary, any other independent registered public
accountants of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the
Registration Statement) in customary form and covering such matters of the type
customarily covered by comfort letters as such underwriters shall reasonably
request;

12

 

	 	4.3.19	 	In connection with any underwritten offering, provide legal opinions of the
Company’s counsel, addressed to the underwriters, if any, dated the date of the
closing under the underwriting agreement, with respect to the Registration
Statement, each amendment and supplement thereto (including the preliminary
prospectus) and such other documents relating thereto as the underwriter shall
reasonably request in customary form and covering such matters of the type
customarily covered by legal opinions of such nature; and
	 
	 	4.3.20	 	Obtain any required regulatory approval necessary for the Investor to sell
its Registrable Securities in an offering, other than regulatory approvals
required solely as a result of the nature of the Investor.

As a condition to registering Registrable Securities, the Company may require the Investor
to furnish the Company with such information (including information regarding the Investor,
the Registrable Securities held by the Investor and the intended method of distribution)
reasonably necessary to comply with the disclosure requirements relating to the registration
and the distribution of such securities as the Company may from time to time reasonably
request in writing.

	 	4.4	 	Registration Expenses

	 	4.4.1	 	Except as otherwise provided in this Agreement, all fees,
costs and expenses incidental to the Company’s performance of or compliance
with this Agreement, including all registration and filing fees, fees and
expenses of compliance with securities or blue sky laws, word processing,
duplicating and printing expenses, messenger, telephone and delivery expenses,
expenses incurred in connection with any road show, and fees, costs and
expenses of counsel for the Company and all independent certified public
accountants and other persons retained by the Company (all such expenses,
“Registration Expenses”), will be borne by the Company. The Company will, in
any event, pay its internal expenses (including all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit or quarterly review, the expenses of any liability
insurance and the expenses and fees for listing the securities to be registered
on each securities exchange on which they are required to be listed hereunder.
The Investor shall pay all underwriting discounts, selling commissions and
transfer taxes applicable to the sale of Registrable Securities by the Investor
hereunder and any other Registration Expenses required by law to be paid by the
Investor, provided that, in the event of a registration of Registrable
Securities pursuant to a Piggyback Registration Statement, such underwriting
discounts, selling commissions and transfer taxes shall be payable by the
Company and the holders of securities listed in such Piggyback Registration
Statement pro rata on the basis of the amount of proceeds received from the
sale of such securities so registered and sold in such sale.

13

 

	 	 4.4.2	 	In connection with any registration, the Company will
reimburse the Investor for its reasonable costs, fees and expenses (other than
underwriters’ discounts and commissions), including the reasonable fees and
disbursements of the Investor’s Counsel.

	 	4.5	 	Discontinuance of Use of Prospectus

	 	4.5.1	 	The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
4.3.5, Section 4.3.6(ii), Section 4.3.6(iii) and
Section 4.3.6(iv), the Investor will forthwith discontinue the
disposition of its Registrable Securities pursuant to the Registration
Statement until the Investor receives copies of a supplemented or amended
prospectus as contemplated by Section 4.3.7 or until the Company
advises the Investor in writing that the disposition of the Registrable
Securities may resume.
	 
	 	4.5.2	 	Notwithstanding any other provision of this Agreement, if the
Board of Directors of the Company has determined in good faith that (i) the
disclosure necessary for continued use of the prospectus or Registration
Statement by the Investor could be materially detrimental to the Company or
(ii) the Company is undergoing, or the Board of Directors of the Company has
determined in good faith to evaluate whether there is a need for, a restatement
of its audited financial statements and, as a result thereof, the Company’s
historical financial statements included or incorporated by reference (or to be
included or incorporated by reference) in the Registration Statement or
prospectus may not be relied upon (or the Company believes that it may so
determine), then the Company shall have the right not to file or not to cause
the effectiveness of any registration covering any Registrable Securities and
to suspend the use of the prospectus and the Registration Statement covering
any Registrable Security for such period of time as (x) its use could be
materially detrimental to the Company or (y) is reasonably necessary to
complete such restatement, in either case by delivering written notice of such
suspension to the Investor; provided, however, that during the Resale
Effectiveness Period, the Company may exercise the right to such suspension not
more than twice and for not more than an aggregate of 90 days. From and after
the date of a notice of suspension under this Section 4.4.1, the Investor
agrees not to use the prospectus or Registration Statement until the earlier of
(1) notice from the Company that such suspension has been lifted or (2) the day
following the 60th day of suspension.

	 	4.6	 	Rule 144

The Company will use its commercially reasonable efforts to timely file all reports and
other documents required to be filed by it under the Securities Act and the Exchange Act
(or, if the Company is not required to file such reports, it will, upon the request of the

14

 

Investor, make publicly available such information as necessary to permit sales pursuant to
Rule 144 or Regulation S under the Securities Act), and it will take such further action as
the Investor may reasonably request, to the extent required from time to time to enable the
Investor to sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 or Regulation S under
the Securities Act, as such rules may be amended from time to time, or (ii) any similar rule
or regulation hereafter adopted by the SEC. Upon the reasonable request of the Investor,
the Company will deliver to the Investor a written statement as to whether it has complied
with such information requirements, and, if not, the specifics thereof.

	 	4.7	 	Additional Interest

In the event the Company fails to file the Resale Shelf Registration Statement within sixty
(60) days of receipt by the Company of a request from the Investor pursuant to Section
4.1.1 (or ninety (90) days to the extent the Company exercises its righs under
Section 4.1.6), the Company will pay to the Investor (i) if prior to the Maturity
Date, on the next applicable Interest Payment Date, an amount equivalent to 0.5% per annum
on the principal amount of the Convertible Loans that have been converted into Registrable
Securities and (ii) if from and after the Maturity Date, on the last day of each fiscal
month of the Company, 1.0% per annum on the principal amount of the Convertible Loans that
have been converted into Registrable Securities, in each case, for each day that such filing
is late.

	5 	Indemnification

	 	5.1.1	 	The Company will, with respect to any Registrable Securities
as to which registration or qualification or compliance under applicable “blue
sky” laws has been effected pursuant to this Agreement, indemnify and hold
harmless the Investor, the Investor’s officers, directors, partners and
members, and each person controlling the Investor within the meaning of Section
15 of the Securities Act, and each underwriter thereof, if any, and each person
who controls any such underwriter within the meaning of Section 15 of the
Securities Act (collectively, the “Company Indemnified Parties”), against all
expenses, claims, losses, damages and liabilities, joint or several (or actions
in respect thereof) arising out of or based on (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, preliminary prospectus, offering circular or other
document, or any amendment or supplement thereto incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or (ii) any violation by the Company of
any rule or regulation promulgated under the Securities Act, Exchange Act or
other federal or state securities laws applicable to the Company in connection
with any such registration, qualification or compliance, and, in each such

15

 

	 	 	 	case, the Company will reimburse each of the Company Indemnified Parties for
any reasonable legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, as such expenses are incurred, in each case.
The indemnity agreement contained in this Section 5.1.1 shall not
apply to amounts paid in settlement of any loss, claim, damage, liability or
action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld, conditioned or delayed),
nor shall the Company be liable to the Company Indemnified Parties in any
such case for any such loss, claim, damage, liability or action (i) to the
extent that it arises out of or is based upon a violation or alleged
violation of any state or federal law (including any claim arising out of or
based on any untrue statement or alleged untrue statement or omission or
alleged omission in the registration statement or prospectus) which occurs
in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by or on behalf of a
Company Indemnified Party or (ii) in the case of a sale directly by the
Investor of Registrable Securities (including a sale of such Registrable
Securities through any underwriter retained by the Investor engaging in a
distribution solely on behalf of the Investor), such untrue statement or
alleged untrue statement or omission or alleged omission was corrected in a
final or amended prospectus delivered to the Investor prior to the
confirmation of the sale of the Registrable Securities to the person
asserting any such loss, claim, damage or liability, and the Investor failed
to deliver a copy of the final or amended prospectus at or prior to the
confirmation of the sale of the Registrable Securities to the person
asserting any such loss, claim, damage or liability in any case in which
such delivery is required by the Securities Act.

	 	5.1.2	 	The Investor will, if Registrable Securities held by the
Investor are included in the securities as to which such registration or
qualification or compliance under applicable “blue sky” laws is being effected,
indemnify and hold harmless the Company, each of its directors, officers,
partners and members, each underwriter, if any, of the Company’s securities
covered by such a registration, and each person who controls the Company or
such underwriter within the meaning of Section 15 of the Securities Act
(collectively, the “Investor Indemnified Parties”), against all expenses,
claims, losses, damages and liabilities, joint or several (or actions in
respect thereof) arising out of or based on (i) any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, preliminary prospectus, offering circular or other
document, or any amendment or supplement thereto incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement)

16

 

or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of the Investor and stated to be specifically for use therein, or (ii) any
violation by the Investor of any rule or regulation promulgated under the
Securities Act, Exchange Act or state securities law applicable to the
Investor in connection with such registration, qualification or compliance,
and in each such case the Investor will reimburse each of the Investor
Indemnified Parties for any reasonable legal or any other expenses
reasonably incurred in connection with investigating, preparing or defending
any such claim, loss, damage, liability or action, as such expenses are
incurred, in each case, provided, however, that in no event shall any
indemnity under this Section 5.1.2 payable by the Investor exceed
the amount by which (x) the net proceeds actually received by the Investor
from the sale of Registrable Securities included in such registration
exceeds (y) the amount of any other losses, expenses, settlements, damages,
claims and liabilities that the Investor has been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission
or violation. The indemnity agreement contained in this Section
5.1.2 shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Investor (which consent shall not be unreasonably withheld,
conditioned or delayed), nor shall the Investor be liable to any Investor
Indemnified Party for any such loss, claim, damage, liability or action
where such untrue statement or alleged untrue statement or omission or
alleged omission was corrected in a final or amended prospectus prior to the
confirmation of the sale of the Registrable Securities to the person
asserting any such loss, claim, damage or liability, and the Company or the
underwriters failed to deliver a copy of the final or amended prospectus at
or prior to the confirmation of the sale of the Registrable Securities to
the person asserting any such loss, claim, damage or liability in any case
in which such delivery is required by the Securities Act.

	 	5.1.3	 	Each party entitled to indemnification under this Section
5 (the “Indemnified Party”) shall give written notice to the party required
to provide indemnification (the “Indemnifying Party”) promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to participate or to assume
the defense of any such claim or any litigation resulting therefrom, provided,
however, that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified Party (whose
approval shall not unreasonably be withheld, conditioned or delayed), and the
Indemnified Party may participate in such defense at such party’s expense;
provided, further, however, that an Indemnified Party (together with all other
Indemnified Parties which may be represented without conflict by one

17

 

	 	 	 	counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to conflicting interests
between such Indemnified Party and any other party represented by such
counsel in such proceeding. The failure of any Indemnified Party to give
notice as provided herein shall relieve the Indemnifying Party of its
obligations under this Section 5 only to the extent that the failure
to give such notice is materially prejudicial or harmful to an Indemnifying
Party’s ability to defend such action. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld,
conditioned or delayed), consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation. The indemnity
agreements contained in this Section 5 shall not apply to amounts
paid in settlement of any loss, claim, damage, liability or action if such
settlement is effected without the consent of the Indemnifying Party, which
consent shall not be unreasonably withheld, conditioned or delayed. The
indemnification set forth in this Section 5 shall be in addition to
any other indemnification rights or agreements that an Indemnified Party may
have.

	 	5.1.4	 	If the indemnification provided for in this Section 5
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party, other than pursuant to its terms, with respect to any claim,
loss, damage, liability or action referred to therein, then, subject to the
limitations contained in the last sentence of this Section 5.1.4, the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such claim, loss, damage, liability or action in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on the
one hand and the Indemnified Party on the other in connection with the actions
that resulted in such claims, loss, damage, liability or action, as well as any
other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact related
to information supplied by the Indemnifying Party or by the Indemnified Party
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Investor agree that it would not be just and equitable if contribution
pursuant to this Section 5.1.4 were based solely upon the number of
entities from whom contribution was requested or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 5.1.4. In no event shall the Investor’s
contribution obligation under this Section 5.1.4 exceed (i) the

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	 	 	 	amount by which the net proceeds actually received by the Investor from the
sale of Registrable Securities included in such registration exceeds (ii)
the amount of any other losses, expenses, settlements, damages, claims and
liabilities that the Investor has been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission or
violation. No person guilty of fraudulent misrepresentation (within the
meaning of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

	 	5.1.5	 	Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in an underwriting
agreement entered into in connection with an underwritten public offering are
in conflict with the foregoing provisions, the provisions in such underwriting
agreement shall control.

	6	 	Miscellaneous

	 	6.1	 	Notices

	 	6.1.1	 	Notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by fax, as follows:

	 	6.1.1.1	 	if to the Company to:

HeartWare International, Inc.

14000-14050 NW 57th Court

Miami Lakes, FL 33014

Attention: David McIntyre

Fax: (305) 818-4123

Email: dmcintyre@heartwareinc.com

	 	 	 	with a copy (which shall not constitute notice) to:

Shearman & Sterling LLP

599 Lexington Avenue

New York, NY 10022

Attention: Clare O’Brien

               Robert M. Katz

Fax: (212) 848-7179

	 	6.1.1.2	 	if to the Investor to:

Thoratec Corporation

6035 Stoneridge Drive

Pleasanton, CA 94588

Attention: Gary Burbach

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Fax: (925) 264-4341

Email: gary.burbach@thortec.com

	 	 	 	with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

650 Town Center Drive, 20th Floor

Costa Mesa, CA 92626

Attn: Charles K. Ruck

Tad J. Freese

Fax: (714) 755-8290

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by fax shall be deemed to have been given when sent
with confirmation of receipt; provided that if not given during normal
business hours for the recipient, shall be deemed to have been given at the opening
of business on the next Business Day for the recipient.

	 	6.1.2	 	Any party hereto may change its address or fax number for
notices and other communications hereunder by notice to the other parties
hereto in accordance with the provisions hereof.

	 	6.2	 	Termination

This Agreement shall be effective as of the date hereof and shall terminate with respect to
the Investor with respect to all provisions (other than Section 4, Section 5
or Section 6), unless otherwise provided herein, on the date on which (i) no Loans
remain outstanding and/or available for Borrowing and no amounts remain in the Escrow
Account and (ii) there cease to be any Registrable Securities outstanding.

	 	6.3	 	Governing Law

THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.

	 	6.4	 	Submission to Jurisdiction

	 	6.4.1	 	The Company and the Investor each irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in the Borough of Manhattan, New York, New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or

20

 

	 	 	 	proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

	 	6.4.2	 	The Company and the Investor each irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any New York State court or Federal court of the United States of America
sitting in the Borough of Manhattan, New York, New York. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
	 
	 	6.4.3	 	Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 6.1. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

	 	6.5	 	Waiver of Jury Trial

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 6.5.

	 	6.6	 	Severability

In the event any one or more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

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	 	6.7	 	Entire Agreement

This Agreement, the other Loan Documents, the Definitive Agreement and the other documents
contemplated hereby and thereby constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties with respect
to the subject matter hereof is superseded by this Agreement, the other Loan Documents, the
Definitive Agreement and the other documents contemplated hereby and thereby. Nothing in
this Agreement or in the other Loan Documents, expressed or implied, is intended to confer
upon any person (other than the parties hereto and thereto, their respective successors and
assigns permitted hereunder and, to the extent expressly contemplated hereby, the Related
Parties of the Investor) any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.

	 	6.8	 	Amendment and Waiver

	 	6.8.1	 	No failure or delay of the Investor in exercising any power or
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Investor hereunder are cumulative and are not
exclusive of any rights or remedies that it would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Company
therefrom shall in any event be effective unless the same shall be permitted by
Section 6.8.2, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. No notice or
demand on the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances.
	 
	 	6.8.2	 	Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Company and the Investor.

	 	6.9	 	Successors and Assigns

	 	6.9.1	 	This Agreement will be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. Any purported
assignment or delegation in violation of this Agreement shall be null and void
ab initio.

22

 

	 	6.9.2	 	The Company shall not assign any or all of its rights or
obligations under this Agreement without the prior written consent of the
Investor.
	 
	 	6.9.3	 	All or a portion of the rights and obligations of the Investor
under this Agreement in proportion, and to the extent applicable, to the Loans,
Commitments, Escrow Funds or Registrable Securities so transferred or assigned
may be assigned to a transferee or assignee in connection with any transfer or
assignment of Loans, Commitments, Escrow Funds or Registrable Securities under
the Loan Agreement; provided, however, that (a) such transfer must otherwise be
effected in accordance with applicable securities laws, (b) prior written
notice of such assignment is given to the Company, (c) the Company is, within a
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the Registrable Securities with
respect to which such registration rights are being assigned and (d) such
transferee or assignee agrees to be bound by, and subject to, this Agreement
with respect to the rights and obligations so assigned to the same extent as
the Investor, pursuant to a written instrument in form and substance reasonably
acceptable to the Company. In the event any transfer of rights and obligations
pursuant to this Agreement occurs, the transferee or assignee shall be treated
as the Investor for all purposes hereunder with respect to such rights and
obligations so assigned and each reference to the “Investor” herein shall be
deemed to be a reference to the Investor taken together with such assignee or
transferee, mutatis mutandis, and any rights exercisable, or determination or
appointments to be made, by the Investor hereunder shall be exercisable by the
holders of a majority of the Registrable Securities hereunder at the time such
determination is made. Each party to this Agreement shall have the absolute
right to exercise or refrain from exercising any right or rights that such
party may have by reason of this Agreement, and such party shall not incur any
liability to any other party or other holder of any securities of the Company
as a result of exercising or refraining from exercising any such right or
rights.
	 
	 	6.10	 	No Third-Party Beneficiaries

Nothing in this Agreement is intended to or shall confer any rights or benefits upon any
Person other than the parties hereto.

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	 	6.11	 	Expenses

Except as provided in Section 4.4, all fees, costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby, including
accounting and legal fees shall be paid by the party incurring such expenses.

	 	6.12	 	Binding Effect

This Agreement shall become effective when it shall have been executed by each of the
parties hereto and thereto and when the Investor shall have received counterparts hereof and
thereof which, when taken together, bear the signatures of each of the other parties hereto
and thereto.

	 	6.13	 	Counterparts

This Agreement may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original but all of which when taken
together shall constitute a single contract, and shall become effective as provided in
Section 6.12. Delivery of an executed signature page to this Agreement by facsimile
or other electronic transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

[Remainder of Page Intentionally Left Blank]

24

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

HEARTWARE INTERNATIONAL, INC., as the Company

	 	 	 	 	 
	By:

	 	/s/ Douglas Godshall
 

	 	 
	Name:
	 	Douglas Godshall	 	 
	Title:

	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 
	THORATEC CORPORATION, as the Investor	 	 
	 
	 	 	 	 
	By:

	 	/s/ Gerhard F. Burbach
 

	 	 
	Name:
	 	Gerhard F. Burbach	 	 
	Title:
	 	President and Chief Executive Officer

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