sc13d

Dated: August 10, 2009

THORATEC CORPORATION

/s/ Gerhard F. Burbach

Gerhard F. Burbach

President and Chief Executive Officer

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SgY9/s2o/LEyH2D2Z2k6w8Zv4gpLy7rHZrnC5ptlEb9peyrcbgoyerMspJR1C07E PQH3xMaujd+ZLU8eaqA81Q== 0000950123-09-032876.txt : 20090810 0000950123-09-032876.hdr.sgml : 20090810 20090810161005 ACCESSION NUMBER: 0000950123-09-032876 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20090810 DATE AS OF CHANGE: 20090810 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HeartWare International, Inc. CENTRAL INDEX KEY: 0001389072 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 980498958 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-83026 FILM NUMBER: 091000016 BUSINESS ADDRESS: STREET 1: 14000 NW 57TH COURT CITY: MIAMI LAKES STATE: FL ZIP: 33014 BUSINESS PHONE: 508-739-0841 MAIL ADDRESS: STREET 1: 205 NEWBURY STREET STREET 2: SUITE 101 CITY: FRAMINGHAM STATE: MA ZIP: 01701 FORMER COMPANY: FORMER CONFORMED NAME: HeartWare LTD DATE OF NAME CHANGE: 20070206 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: THORATEC CORP CENTRAL INDEX KEY: 0000350907 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 942340464 STATE OF INCORPORATION: CA FISCAL YEAR END: 0102 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 6035 STONERIDGE DR CITY: PLEASANTON STATE: CA ZIP: 94588 BUSINESS PHONE: 9258478600 MAIL ADDRESS: STREET 1: 6035 STONERIDGE DR CITY: PLEASANTON STATE: CA ZIP: 94588 FORMER COMPANY: FORMER CONFORMED NAME: THORATEC CARDIOSYSTEMS INC DATE OF NAME CHANGE: 20010220 FORMER COMPANY: FORMER CONFORMED NAME: THORATEC LABORATORIES CORP DATE OF NAME CHANGE: 19920703 SC 13D 1 f53289sc13d.htm SCHEDULE 13D sc13d

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D

[Rule 13d-101]

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)

Under the Securities Exchange Act of 1934

(Amendment No. )^*

HEARTWARE INTERNATIONAL, INC.

(Name of Issuer)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

422368 100

(CUSIP Number)

David A. Lehman, Esq.
Senior Vice President and General Counsel
Thoratec Corporation
6035 Stoneridge Drive
Pleasanton, California 94588
Telephone: (925) 847-8600

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

July 31, 2009

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box o.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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CUSIP No.		422368 100

NAME OF REPORTING PERSON

THORATEC CORPORATION

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

(a) o

(b) o

SEC USE ONLY

SOURCE OF FUNDS (SEE INSTRUCTIONS)

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

CALIFORNIA

SOLE VOTING POWER

NUMBER OF

679,578 shares of Common Stock (1)

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

679,578 shares of Common Stock (1)

WITH

SHARED DISPOSITIVE POWER

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

679,578 shares of Common Stock (1)

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

7.6 % (1)

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

(1) Please see Item 5.

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Item 1. Security and Issuer.

This statement relates to shares of common stock, par value $0.001 per share (the “Common Stock”), issuable by HeartWare International, Inc. (the “Issuer”). The address of the principal executive offices of the Issuer is 205 Newbury Street, Suite 101, Framingham, Massachusetts 01701.

Item 2. Identity and Background.

(a)-(c), (f). This statement is being filed pursuant to Rule 13d-1 under the Securities Exchange Act of 1934 (the “Exchange Act”), by Thoratec Corporation, a California corporation (“Thoratec”). Thoratec’s principal business is the development of therapies and products to address advanced-stage heart failure. The address of the principal office and principal business of Thoratec is 6035 Stoneridge Drive, Pleasanton, California 94588.

The name, business address, present principal occupation or employment and citizenship of each director and executive officer (including a director and officer who may be a controlling person) of Thoratec is set forth on Schedule A attached hereto.

(d), (e). During the last five years, none of Thoratec nor any of the persons listed on Schedule A attached hereto has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

On February 12, 2009, Thoratec, the Issuer, Thomas Merger Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary of Thoratec, and Thomas Merger Sub II, Inc., a Delaware corporation and direct wholly owned subsidiary of Thoratec, entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Thoratec would acquire the Issuer (the “Transaction”). Thoratec and the Issuer mutually agreed effective July 31, 2009 to terminate the Merger Agreement.

As an inducement to enter into the Merger Agreement, and in consideration thereof, Thoratec entered into (i) a Loan Agreement with the Issuer and the subsidiaries of Issuer as guarantors, dated as of the date of the Merger Agreement (the “Loan Agreement”) and (ii) an Investor’s Rights Agreement with the Issuer, dated as of the date of the Merger Agreement (the “Investor’s Rights Agreement” and, together with the Loan Agreement, the “Loan Documents”).

Pursuant to the terms of the Loan Agreement, Thoratec deposited an aggregate of $20.0 million, which was provided from Thoratec’s working capital, into an escrow account (including accrued but unpaid interest thereon, the “Loan Amount”) on February 13, 2009 and agreed to loan such funds to the Issuer pursuant to the terms and conditions set forth in the Loan Agreement. The Loan Amount is available for borrowing by the Issuer at any time prior to the earlier of (i) November 1, 2011, (ii) the date on which the outstanding portion of the Loan Amount borrowed by the Issuer, including any accrued and unpaid interest, as well as the portion of the Loan Amount remaining in the escrow account that have not been loaned to the Issuer, are converted into shares of Common Stock as further described in this statement or (iii) the date on which the outstanding principal of the Loan Amount borrowed by the Issuer becomes due and payable in full, whether by acceleration or otherwise, pursuant to the terms of the Loan Agreement (such date, the “Maturity Date”). The source of funds for the Loan Amount was Thoratec’s working capital.

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Upon the termination of the Merger Agreement on July 31, 2009 by the parties thereto, Thoratec became entitled to convert the aggregate Loan Amount outstanding or available for borrowing under the Loan Agreement (including any portion of the Loan Amount held in the escrow account and any outstanding portion of the Loan Amount borrowed by the Issuer, including accrued but unpaid interest thereon) into shares of Common Stock at any time prior to the Maturity Date, at Thoratec’s option. The Loan Amount is convertible into shares of Common Stock at a conversion price equal to $35.00 Australian dollars per share of Common Stock, or $29.43 United States dollars per share of Common Stock, based on the currency exchange rate, as of the close of trading in the United States on August 5, 2009, of $0.8409 United States dollars for each Australian dollar. The conversion rate will be adjusted in the event of any stock split, dividend, distribution or other subdivision or other reclassification of the Common Stock.

A description of the Loan Documents is set forth below in Item 4.

Item 4. Purpose of Transaction.

The Loan Agreement

Concurrent with the execution and delivery of the Merger Agreement, Thoratec and the Issuer entered into the Loan Agreement. Under the terms of the Loan Agreement, as of July 31, 2009, the full Loan Amount is available for borrowing by the Issuer at any time prior to the Maturity Date.

Interest

The loans, once borrowed by the Issuer, bear interest at a rate per annum equal to 10%. Interest on each loan is payable in arrears on (i) March 31, June 30, September 30 and December 31 of each year, (ii) the Maturity Date, (iii) the date of repayment or prepayment made in respect thereof and (iv) the date of conversion of such loan as described below. Upon the occurrence and continuance of an event of default, as described below, the Issuer will be required to pay interest, to the extent permitted by law, on such defaulted amount to but excluding the date of actual payment at a rate equal to 12% per annum. Thoratec is entitled to convert any accrued and unpaid interest on the outstanding principle amount of the loans into shares of Common Stock at any time prior to the Maturity Date, at Thoratec’s option, as described below.

Repayment and Prepayment

All outstanding loans become due and payable in full in cash on the Maturity Date, together with accrued and unpaid interest on the principal amount to be paid to but excluding the date of payment. The Issuer 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 irrevocable written notice to Thoratec. Any partial prepayment must be in a minimum amount of $500,000 and integral multiples of $250,000 in excess thereof. Upon a change of control of the Issuer, the Issuer must repay all or any part of the loans at 100% of the outstanding principal amount of the loans plus accrued and unpaid interest to the date of repayment.

Conversion of Loans

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Australian dollars per share of Common Stock, or $29.43 United States dollars per share of Common Stock, based on the currency exchange rate, as of the close of trading in the United States on August 5, 2009, of $0.8409 United States dollars for each Australian dollar. The conversion rate will be adjusted in the event of any stock split, dividend, distribution or other subdivision or other reclassification of the Common Stock.

With respect to any conversion of any convertible portion of the loans or escrow funds into Common Stock that would be subject to a waiting period provided by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, no such conversion will be considered effective until the expiration or termination of such waiting period. Notwithstanding the foregoing, for so long as the Issuer’s Chess Depositary Interests representing shares of Common Stock are listed on the Australian Securities Exchange, 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 will be issued to Thoratec.

Conditions to Lending

The obligations of Thoratec to make the loans under the Loan Agreement are subject to the satisfaction or waiver of the following conditions: (i) the representations and warranties set forth in each Loan Document (without regard to references to materiality or material adverse effect) shall be true and correct in all material respects on and as of the date of each borrowing (except for any such representations and warranties which refer to an earlier date), except for such failures to be true and correct which do not have a material adverse effect on the Issuer, and (ii) at the time of and immediately after each borrowing, no event of default shall have occurred and be continuing, as further described below.

Guarantee of the Obligations

The subsidiaries of the Issuer jointly and severally irrevocably and unconditionally guaranty to Thoratec the due and punctual payment in full of the loans and all advances, debts, liabilities, obligations, covenants and duties owing by the Issuer and its subsidiaries to Thoratec or any of its affiliates of any kind or nature, arising under or in connection with the transactions contemplated under the Loan Documents, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise.

Events of Default

In the case of any event of default listed below, then in every such event and at any time thereafter during the continuance of such event, either or both of the following actions may be taken: (i) Thoratec may declare the loans then outstanding due and payable in whole or in part, including the principal of such loans, together with accrued interest thereon and all other liabilities of the Issuer accrued under the Loan Agreement and under any other Loan Document, shall become due and payable, and (ii) Thoratec shall have the right to take any actions available under the Loan Agreement, applicable law or in equity. The events of default with respect to which Thoratec has the foregoing rights include: (a) any representation or warranty proven to have been false or misleading in any material respect when so made by the Issuer in any Loan Document, (b) default by the Issuer of payment of any principal amount or interest of any loan when due, (c) failure of the Issuer to comply with any covenant, condition or agreement contained in any Loan Document, including any default in the observance or performance by the Issuer with respect to any covenant relating to conversion of the loans, (d) default by the Issuer in the observance or performance of any agreement or condition relating to indebtedness exceeding $5.0 million in aggregate principal and accrued interest, (e) judgments for payment by the Issuer that individually or in the aggregate would reasonably be expected to result in a material adverse effect on the Issuer or (f)

Page 6 of 10

failure by the Issuer to repay on the date required the entire principal amount of and accrued interest on the loans. The principal of the loans then outstanding, together with accrued interest thereon and all other liabilities of the Issuer accrued under the Loan Agreement and any other Loan Document, will automatically become due and payable in the case of any bankruptcy or insolvency of the Issuer, whether commenced voluntarily or involuntarily by the Issuer.

The Escrow Agreement

In connection with the Loan Agreement, the Issuer and Thoratec also entered into an escrow agreement (the “Escrow Agreement”), with U.S. Bank National Association (“U.S. Bank”), a national banking association, as escrow agent. Pursuant to the Escrow Agreement, U.S. Bank acts as escrow agent and, in such capacity, holds, administers and distributes the Loan Amount deposited in escrow in accordance with the terms of the Escrow Agreement.

The Investor’s Rights Agreement

Concurrent with the execution and delivery of the Loan Agreement, Thoratec and the Issuer entered into the Investor’s Rights Agreement. Pursuant to the Investor’s Rights Agreement, the Issuer has agreed to provide certain registration rights with respect to any shares of Common Stock to be issued to Thoratec upon the conversion of the Loan Amount as described above.

Demand Registration

If the Issuer receives a written request from Thoratec to file a Form S-3 shelf registration statement covering the registration of any and all of the shares of Common Stock issued or issuable from time to time upon conversion of the Loan Amount as described above, and any shares of Common Stock issued or issuable in respect of such Common Stock upon any stock split, stock dividend, recapitalization, reclassification, merger, consolidation or other similar event (collectively, the “Registrable Securities”), the Issuer will use commercially reasonable efforts to file, within thirty (30) days after the receipt of such request, a registration statement on Form S-3 and will use its commercially reasonable efforts to cause such shelf registration statement to be declared effective by the Securities and Exchange Commission as soon as reasonably practicable after the filing thereof. Upon the filing of such shelf registration statement, the Issuer will use its commercially reasonable efforts to keep such shelf registration statement effective with the Securities and Exchange Commission for nine (9) months following the date of the initial effectiveness of the shelf registration statement, as such period may be extended pursuant to the terms of the Investor’s Rights Agreement.

Piggyback Registration

Whenever the Issuer proposes to register any 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, and the registration form to be filed may be used for the registration or qualification for distribution of Registrable Securities by the Issuer, the Issuer will give prompt notice to Thoratec of its intention to effect such registration (but in no event less than ten (10) business days prior to the anticipated filing date) and will include in such registration all Registrable Securities with respect to which the Issuer has received written requests for inclusion from Thoratec within ten (10) business days after the date of the Issuer’s notice, subject to the terms of the Investor’s Rights Agreement.

Page 7 of 10

Registration Expenses

All registration, filing fees, fees and expenses of compliance with securities or blue sky laws and certain other associated expenses incidental to the Issuer’s compliance with the Investor’s Rights Agreement will be paid by the Issuer. Thoratec will pay all underwriting discounts, selling commissions and transfer taxes applicable to the sale of Registrable Securities by Thoratec and any other registration expenses required by law to be paid by Thoratec; provided, however, that in the event of a registration statement of Registrable Securities as described above under the section entitled, “Piggyback Registration”, such underwriting discounts, selling commissions and transfer taxes shall be payable by the Issuer and the holders of securities listed in such 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.

Standstill Obligations

In connection with a Confidential Disclosure Agreement (the “Confidential Disclosure Agreement”) entered into as of November 14, 2008 by and between the Issuer and Thoratec, Thoratec has agreed that for a period of twelve (12) months following the date of the Confidential Disclosure Agreement (the “Standstill Period”), unless Thoratec has been invited by the Issuer or the action is approved by the Issuer’s board of directors, neither Thoratec nor any of its representatives will (i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase, merger, exchange or otherwise, any securities or direct or indirect rights to acquire any securities, or any assets of the Issuer, (ii) seek or propose to influence or control the management or policies of the other party, make or participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote any securities of the Issuer or any subsidiary thereof, or seek to advise or influence any person or entity with respect to the voting of any voting securities of the Issuer or any subsidiary thereof, (iii) make any public announcement with respect to, or submit a proposal or offer of (with or without conditions), any merger, recapitalization, reorganization, business combination or other extraordinary transaction involving the other party or any subsidiary thereof or any of their securities or assets or (iv) otherwise act, alone or in concert with any third party with respect to any of the foregoing. Notwithstanding the foregoing, Thoratec is not prohibited from acquiring the securities of another medical device or medical technology company that beneficially owns any securities of the Issuer. The Loan Documents and the transactions contemplated thereby, including the conversion of the Loan Amounts discussed above, have been approved by the Issuer’s board of directors.

Thoratec may be deemed to have acquired beneficial ownership of the Common Stock through the conversion provisions contained in the Loan Agreement for investment purposes. Except as set forth above, neither Thoratec, nor to Thoratec’s knowledge, any person named in Schedule A attached hereto, currently has any plans or proposals which relate to or would result in any matters described in matters (a) through (j) of Item 4 of Schedule 13D. However, as part of the ongoing evaluation of this investment and depending on the factors discussed herein, Thoratec may, from time to time, investigate, evaluate, discuss, negotiate or agree to convert the Loan Amount to Common Stock and, subject to Thoratec’s obligations under the Confidential Disclosure Agreement discussed above, acquire additional shares of Common Stock from the Issuer or third parties and/or investigate, evaluate, discuss, negotiate or agree to retain and/or sell, exchange or dispose all or a portion of the Loan Amounts or the Common Stock issued upon conversion of the Loan Amounts, in the open market, in privately negotiated transactions to the Issuer or third parties, in change of control transactions or tender offers, or otherwise, in each case to the extent permitted by the Loan Documents and the Confidential Disclosure Agreement. Any actions Thoratec might undertake will be dependent upon Thoratec’s review of numerous factors, including, among other things, the price levels of the Common Stock; general market and economic conditions; ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; the relative attractiveness of alternative business and investment opportunities; and other future developments.

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The foregoing descriptions of the Loan Documents and other agreements are not complete and are qualified in their entirety by reference to such agreements. A copy of the Loan Agreement, listed as Exhibit 2.1 hereto, is incorporated by reference to Exhibit 10.3 to Thoratec’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13, 2009. A copy of the Investor’s Rights Agreement, listed as Exhibit 2.2 hereto, is incorporated by reference to Exhibit 10.4 to Thoratec’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13, 2009. Copies of the Escrow Agreement and Confidential Disclosure Agreement, listed as Exhibit 2.3 and Exhibit 2.4 hereto, respectively, are incorporated into this statement by reference.

Item 5. Interest in Securities of the Issuer.

(a), (b). Other than those shares of Common Stock that may be deemed to be beneficially owned pursuant to the Loan Agreement, Thoratec has not acquired and, for the purposes of Rule 13d-4 promulgated under the Exchange Act, does not beneficially own any shares of Common Stock. The information given below is based on 8,924,351 shares of Common Stock issued and outstanding as of June 25, 2009, as set forth in Amendment No. 2 to Thoratec’s Registration Statement on Form S-4, as filed on July 14, 2009.

As of the date of this statement, Thoratec beneficially owns, and would have the sole power to vote and dispose of, a total of 679,578 shares of Common Stock, representing the number of shares of Common Stock that Thoratec would receive upon conversion in full of the Loan Amount, based upon a conversion rate equal to $35.00 Australian dollars per share of Common Stock, or $29.43 United States dollars per share of Common Stock, based on the currency exchange rate, as of the close of trading in the United States on August 5, 2009, of $0.8409 United States dollars for each Australian dollar. The 679,578 shares of Common Stock beneficially owned by Thoratec represent approximately 7.6% of the issued and outstanding shares of Common Stock as of June 25, 2009.

To Thoratec’s knowledge, none of the persons named in Schedule A attached hereto beneficially owns any shares of Common Stock, and such individuals disclaim any beneficial ownership in the shares of Common Stock beneficially owned by Thoratec.

(c). Except as set forth herein, Thoratec has not effected any transaction in the Common Stock during the past 60 days.

(d). To the knowledge of Thoratec, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, Common Stock reported herein.

(e). Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Items 3 and 4 above summarize certain provisions of the Merger Agreement, the Loan Documents, the Escrow Agreement and the Confidential Disclosure Agreement. To Thoratec’s knowledge, except as set forth herein, there are no contracts, arrangements, understandings or relationships (legal or otherwise), including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, between the persons enumerated in Item 2, and any other person, with respect to any securities of the Issuer, including any securities pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

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Item 7. Material to be Filed as Exhibits.


Exhibit 2.1		Loan Agreement, dated as of February 12, 2009, by and among Thoratec Corporation, HeartWare International, Inc. and HeartWare Limited and HeartWare, Inc., as guarantors (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Thoratec Corporation with the SEC on February 13, 2009 Commission File No. 000-49798).

Exhibit 2.2		Investor’s Rights Agreement, dated as of February 12, 2009, by and between Thoratec Corporation and HeartWare International, Inc. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by Thoratec Corporation with the SEC on February 13, 2009, Commission File No. 000-49798).

Exhibit 2.3		Escrow Agreement, dated as of February 12, 2009, by and among Thoratec Corporation, HeartWare International, Inc. and U.S. Bank National Association, as escrow agent.

Exhibit 2.4		Confidential Disclosure Agreement, dated as of November 14, 2008, by and between Thoratec Corporation and HeartWare International, Inc.

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After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

EXHIBIT INDEX


Exhibit No.		Description

2.1		Loan Agreement, dated as of February 12, 2009, by and among Thoratec Corporation, HeartWare International, Inc. and HeartWare Limited and HeartWare, Inc., as guarantors (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by Thoratec Corporation with the SEC on February 13, 2009 Commission File No. 000-49798).

2.2		Investor’s Rights Agreement, dated as of February 12, 2009, by and between Thoratec Corporation and HeartWare International, Inc. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by Thoratec Corporation with the SEC on February 13, 2009, Commission File No. 000-49798).

2.3		Escrow Agreement, dated as of February 12, 2009, by and among Thoratec Corporation, HeartWare International, Inc. and U.S. Bank National Association, as escrow agent.

2.4		Confidential Disclosure Agreement, dated as of November 14, 2008, by and between Thoratec Corporation and HeartWare International, Inc.

SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF THORATEC CORPORATION

The name, business address, title, present principal occupation or employment of each of the directors and executive officers of Thoratec Corporation (“Thoratec”), are set forth below. If no business address is given, the director’s or executive officer’s business address is 6035 Stoneridge Drive, Pleasanton, CA 94588. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to Thoratec. Unless otherwise indicated below, all of the persons listed below are citizens of the United States of America.


		Present Principal Occupation Including Name and
Name		Address of Employer
Directors
Neil F. Dimick		Director
Gerhard F. Burbach		President, Chief Executive Officer
J. Daniel Cole		General Partner of Spray Venture Fund, 2330 Washington Street, Newton, MA 02462
Steven H. Collis		President of AmerisourceBergen Specialty Group, 3101 Gaylord Parkway, Frisco, TX 75034
Elisha W. Finney		Senior Vice President and Chief Financial Officer of Varian Medical Systems, Inc., 3100 Hansen Way, Palo Alto, CA 94304
D. Keith Grossman		Managing Director of TPG Biotech, L.P., 345 California Street, Suite 3300, San Francisco, CA 94104
Daniel M. Mulvena		Founder and Owner of Commodore Associates
Paul A. LaViolette		Venture Partner of SV Life Sciences Advisers LLP, 60 State Street, Suite 3650 Boston, MA 02109


		Present Principal Occupation Including Name and
Name		Address of Employer
Executive Officers
(Who Are Not Directors)
David V. Smith		Executive Vice President and Chief Financial Officer
Lawrence Cohen		President, International Technidyne Corporation (ITC)
David A. Lehman		Senior Vice President and General Counsel

EX-2.3 2 f53289exv2w3.htm EX-2.3 exv2w3

Exhibit 2.3

ESCROW AGREEMENT

This ESCROW AGREEMENT (this “Agreement”) is dated as of the 12th day of February, 2009, by and among HeartWare International, Inc., a Delaware corporation (“Borrower”), Thoratec Corporation, a California corporation (“Lender”), and U.S. Bank National Association, a national banking association (the “Escrow Agent”), as escrow agent. Borrower and Lender are sometimes referred to herein, collectively, as the “Interested Parties.”

WHEREAS, the Interested Parties have entered into that certain Agreement and Plan of Merger by and among Lender, Borrower, Thomas Merger Sub I, Inc. and Thomas Merger Sub II, Inc. (the “Merger Agreement”) and that certain Loan Agreement by and among Lender, Borrower and the Guarantors thereto (the “Loan Agreement”), each dated as of even date herewith, and pursuant to which certain amounts are to be placed in escrow pursuant to Section 2.02(b) of the Loan Agreement; and

WHEREAS, the Interested Parties wish to engage the Escrow Agent to act, and the Escrow Agent is willing to act, as escrow agent hereunder and, in that capacity, to hold, administer and distribute the amounts deposited in escrow hereunder in accordance with, and subject to, the terms of this Agreement;

NOW THEREFORE, for valuable consideration, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions.

The following terms not defined herein shall have the following meanings:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person.

“Borrowing Request” means a Borrowing Request (as defined in the Loan Agreement) delivered by Borrower to Lender in accordance with Section 2.02(a) of the Loan Agreement.

“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.

“Final Outside Date Extension Option” shall have the meaning assigned to such term in the Loan Agreement.

“First Disbursement Date” means May 1, 2009.

“Lender Termination” shall have the meaning assigned to such term in the Loan Agreement.

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

“Maturity Date” means the earlier of (a) November 1, 2011, (b) the date on which all the Loans made pursuant to the Loan Agreement and remaining amounts in the Escrow Funds have been

converted into shares of Borrower’s common stock in accordance with Section 2.10 and Section 2.11, respectively, of the Loan Agreement and (c) the date on which all Loans made pursuant to the Loan Agreement become due and payable in full thereunder, whether by acceleration or otherwise.

“Option Date” shall have the meaning assigned to such term in the Loan Agreement.

“Other Termination” means a termination of the Merger Agreement, other than a Lender Termination or a Superior Proposal Termination, by Lender, Borrower or mutually by the Interested Parties in accordance with the terms thereof.

“Outside Date” means (a) July 31, 2009 or (b) October 31, 2009, in the event that Lender or Borrower exercises its option to extend the Outside Date in accordance with Section 8.01(b)(i)(A) of the Merger Agreement or (c) January 31, 2010 in the event Lender exercises its option to extend the Outside Date in accordance with Section 8.01(b)(i)(B) of the Merger Agreement.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Second Disbursement Date” means July 31, 2009.

“Superior Proposal Termination” shall have the meaning assigned to such term in the Loan Agreement.

Section 2. Deposit of Escrow Funds.

(a) Lender shall deposit with the Escrow Agent the amount of twenty million dollars ($20,000,000) in immediately available funds (the “Escrow Amount”) no later than one (1) Business Day following the date of this Agreement.

(b) In the event Lender exercises the Final Outside Date Extension Option in accordance with the Merger Agreement, then upon the Option Date, Lender shall deposit with the Escrow Agent the additional amount of eight million dollars ($8,000,000) in immediately available funds (the “Additional Escrow Amount” and collectively, with the Escrow Amount, the “Escrow Funds”).

(c) Upon receipt of each of the Escrow Amount and the Additional Escrow Amount, the Escrow Agent shall send a notice to Lender and Borrower, in each case acknowledging receipt of the Escrow Amount or the Additional Escrow Amount, respectively, and the Escrow Agent shall hold such Escrow Funds in escrow pursuant to the terms of this Agreement. The Escrow Agent agrees to hold the Escrow Funds, together with any investment income or proceeds received by the Escrow Agent from the investment thereof from time to time pursuant to Section 4 (the “Escrow Earnings”, and, collectively, with the Escrow Funds, the “Escrow Property”) in a separate account established with the Escrow Agent (the “Escrow Account”), and to administer the Escrow Property in accordance with the terms of this Agreement. The

Interested Parties agree and acknowledge that Borrower shall have no ownership interest in the Escrow Account and Escrow Property other than with respect to the rights of payment in accordance with, and subject to, the terms and conditions of this Agreement.

Section 3. Disbursements from Escrow Funds; Termination of Escrow Account

(a) The Escrow Property shall be disbursed to the Interested Parties by the Escrow Agent only in accordance with this Section 3 and Section 4(e) or pursuant to joint written instructions executed by each of the Interested Parties and delivered to the Escrow Agent.

(b) At any time, and from time to time, on or after the First Disbursement Date, the Interested Parties, upon receipt by Lender of a duly completed Borrowing Request delivered by Borrower in accordance with and subject to the terms and conditions of the Loan Agreement, shall deliver to the Escrow Agent a written direction substantially in the form attached hereto as Exhibit A (a “Escrow Account Payment Notice”) executed by each of the Interested Parties setting forth the amount to be paid from the Escrow Funds to Borrower as provided in such Borrowing Request. Promptly, but in any event no later than two (2) Business Days following the date of receipt of an Escrow Account Payment Notice or on such later date as may be designated in such Escrow Account Payment Notice, the Escrow Agent shall pay out of the Escrow Funds to Borrower the amount specified in such Escrow Account Payment Notice in accordance with the payment instructions set forth in Section 13(b). Notwithstanding the foregoing, the aggregate amount that the Escrow Agent shall pay from the Escrow Funds to Borrower pursuant to the delivery of one or more Escrow Account Payment Notices shall not exceed (i) twelve million dollars ($12,000,000) on any date during the period beginning on the First Disbursement Date and ending on the last Business Day prior to the Second Disbursement Date and (ii) twenty million dollars ($20,000,000) on any date during the period beginning on the Second Disbursement Date and ending on the last Business Day prior to the Maturity Date, provided that, in the event the Additional Escrow Amount is deposited by Lender on the Option Date, the aggregate amount that the Escrow Agent shall pay from the Escrow Funds to Borrower pursuant to the delivery of one or more Escrow Account Payment Notices shall not exceed twenty-eight million dollars ($28,000,000) on any date during the period beginning on the Option Date and ending on the last Business Day prior to the Maturity Date. For the avoidance of doubt, the parties agree that (i) the maximum aggregate amount that the Escrow Agent shall pay from the Escrow Funds to Borrower pursuant to this Section 3(b) shall not exceed twenty eight million dollars ($28,000,000), (ii) more than one Escrow Account Payment Notice may be delivered to the Escrow Agent pursuant to this Section 3(b) and (iii) Borrower will not be entitled to receive any amounts pursuant to this Section 3(b) (A) prior to the First Disbursement Date, (B) on or after the occurrence of a Lender Termination or Superior Proposal Termination or (C) on or after the Maturity Date.

(c) In the event of any termination of the Merger Agreement, the Interested Parties shall provide written notice of such termination substantially in the form attached hereto as Exhibit B (a “Merger Agreement Termination Notice”) to the Escrow Agent, which shall specify whether such termination constitutes a Lender Termination, a Superior Proposal Termination or an Other Termination (a “Merger Agreement Termination”). Thereafter, if at any time Lender elects to convert all or a portion of the remaining Escrow Funds into Borrower’s

common stock in accordance with Section 2.11 of the Loan Agreement, Lender shall deliver a written direction substantially in the form attached hereto as Exhibit C (a “Conversion Payment Notice”) to the Escrow Agent, setting forth the amount to be released from the Escrow Funds in connection with such conversion. Promptly, but in any event no later than three (3) Business Days following the date of receipt of a Conversion Payment Notice or on such later date as may be designated in such Conversion Payment Notice, the Escrow Agent shall pay out of the Escrow Funds to Borrower the amount specified in such Conversion Payment Notice in accordance with the payment instructions set forth in Section 13(b).

(d) At any time, and from time to time, following (i) Lender’s delivery of a Merger Agreement Termination Notice specifying a Lender Termination or Superior Proposal Termination or (ii) the Maturity Date, if, in either case, any portion of the Escrow Property remain undistributed, Lender may deliver a written direction substantially in the form attached hereto as Exhibit D (a “Termination Notice”) to the Escrow Agent specifying either that the Merger Agreement has been terminated or that the Maturity Date has occurred and instructing the Escrow Agent to pay any remaining Escrow Property to Lender. Promptly, but in any event no later than two (2) Business Days following the date of receipt of a Termination Notice, the Escrow Agent shall pay all such amounts to Lender in accordance with the payment instructions set forth in Section 13(b).

(e) The Escrow Account shall be deemed dissolved and this Agreement shall terminate upon the written agreement of the Interested Parties hereto or upon the later of (i) payment to Lender of all of the remaining Escrow Property pursuant to Section 3(d) and (ii) the first Business Day after October 31, 2009 in which no Escrow Funds remain in the Escrow Account and all other Escrow Property has been paid to Lender pursuant to Section 3(d) and Section 4(e).

Section 4. Investment of Funds.

(a) Eligible Investments. During the term of this Agreement, the Escrow Property shall be invested and reinvested by the Escrow Agent in Eligible Investments as directed in writing by Lender and as shall be acceptable to the Escrow Agent. The Escrow Property shall initially be invested in the IMMA (as defined below). Any Escrow Earnings shall be distributed as set forth in Section 3(d) and Section 4(e).

“Eligible Investments” shall mean (i) marketable non-auction rate securities issued or guaranteed by the United States of America or the U.S. Treasury (provided that the full faith and credit of the United States is pledged in support thereof) or (ii) investment in a U.S. Bank Money Market account, which is FDIC insured, as fully described on the attached Exhibit E (the “IMMA”). Notwithstanding the foregoing, Eligible Investments shall be limited to those instruments readily obtainable and routinely offered by the Escrow Agent’s Corporate Trust Services division.

(b) Statement of Account. By the 10^th Business Day following the end of each month during which the Escrow Agent holds Escrow Property pursuant to this Agreement, commencing with the quarter ending March 31, 2009, the Escrow Agent shall provide to the Interested Parties

a statement detailing the total amount of Escrow Property, all transactions and investments involving the Escrow Property, all earnings, interest, and gains on the Escrow Property and any disbursements made pursuant to Section 3 or Section 4(e), in each case during such calendar quarter. This statement shall be provided without any additional cost to the Interested Parties.

(c) Escrow Agent Not Responsible For Investment Decisions. Subject to the obligations set forth in Section 4(a), the Escrow Agent shall have no obligation or duty to invest (or otherwise pay interest on) the Escrow Property; provided, however, that in the event the Escrow Agent shall not have received such written investment instruction, the Escrow Agent shall be authorized to invest any of the Escrow Property in the IMMA until such investment instruction is received. All earnings received from the investment of the Escrow Property shall be credited to, and shall become a part of, the Escrow Account (and any losses on such investments shall be debited to the Escrow Account). The Escrow Agent shall have the right to liquidate any investments held in order to provide funds necessary to make required payments under this Agreement. The Escrow Agent shall have no liability for any investment losses, including without limitation any market loss on any investment liquidated prior to maturity in order to make a payment required hereunder.

(d) Tax Treatment. The Interested Parties agree that, for tax purposes, the Escrow Property shall, unless and until distributed or paid from the Escrow Account, be treated as owned by Lender. All Escrow Earnings shall be reported by the Escrow Agent as income of Lender for tax purposes.

(e) Distribution of Income. The Escrow Agent shall distribute Escrow Earnings to Lender within two (2) Business Days following each March 31, June 30, September 30 and December 31 of each calendar year during which the Escrow Agent holds Escrow Property pursuant to this Agreement, beginning with the quarter ending March 31, 2009. Notwithstanding anything in this Agreement to the contrary, Escrow Earnings shall not be available for distribution or payment to Borrower.

(f) Certification of Taxpayer Identification Number. Each of the Interested Parties hereto agrees to provide the Escrow Agent with a certified tax identification number by signing and returning an IRS Form W-9 to the Escrow Agent upon the execution and delivery of this Agreement. The Escrow Agent will comply with applicable tax reporting and withholding laws, and the Interested Parties acknowledge that, in the event their tax identification numbers are not certified to the Escrow Agent, the Internal Revenue Code may require withholding of a portion of payments from the Escrow Account.

Section 5. Concerning the Escrow Agent.

(a) Each Interested Party acknowledges and agrees that the Escrow Agent (i) shall not be responsible for any of the other agreements referred to or described in this Agreement (including without limitation the Merger Agreement or the Loan Agreement), or for determining or compelling compliance therewith, and shall not otherwise be bound thereby, (ii) shall be obligated only for the performance of such duties as are expressly and specifically set forth in this Agreement on its part to be performed, each of which is ministerial (and shall not be

construed to be fiduciary) in nature, and no implied duties or obligations of any kind shall be read into this Agreement against or on the part of the Escrow Agent, (iii) shall not be obligated to take any legal or other action hereunder which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification, (iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction (including, without limitation, wire transfer instructions, whether incorporated herein or provided in a separate written instruction), instrument, statement, certificate, request or other document furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper person, and shall have no responsibility or duty to make inquiry as to or to determine the genuineness, accuracy or validity thereof (or any signature appearing thereon), or of the authority of the person signing or presenting the same, and (v) may consult counsel satisfactory to it, including in-house counsel, and the opinion or advice of such counsel in any instance shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the opinion or advice of such counsel, absent gross negligence or willful misconduct.

(b) The Escrow Agent shall not be liable to anyone for any action taken or omitted to be taken by it hereunder except in the case of the Escrow Agent’s gross negligence or willful misconduct. In no event shall the Escrow Agent be liable for indirect, punitive, or consequential damage or loss (including but not limited to lost profits) whatsoever, even if the Escrow Agent has been informed of the likelihood of such loss or damage and regardless of the form of action, absent gross negligence or willful misconduct.

(c) The Escrow Agent shall have no more or less responsibility or liability on account of any action or omission of any book-entry depository, securities intermediary or other subescrow agent employed by the Escrow Agent than any such book-entry depository, securities intermediary or other subescrow agent has to the Escrow Agent, except to the extent that such action or omission of any book-entry depository, securities intermediary or other subescrow agent was caused by the Escrow Agent’s own gross negligence or willful misconduct.

(d) The Escrow Agent is hereby authorized, in making or disposing of any investment permitted by this Agreement, to deal with itself (in its individual capacity) or with any one or more of its affiliates, whether it or such affiliate is acting as a subagent of the Escrow Agent or for any third person or dealing as principal for its own account, provided that neither it nor its affiliates incur any expense or become entitled to receive any payment payable from the Escrow Property or by any Interested Party in connection therewith.

(e) Notwithstanding any term appearing in this Agreement to the contrary, in no instance shall the Escrow Agent be required or obligated to distribute any Escrow Property (or take other action that may be called for hereunder to be taken by the Escrow Agent) sooner than (i) two (2) Business Days after it has received the applicable documents required under this Agreement, or (ii) passage of the applicable time period (or both, as applicable under the terms of this Agreement), as the case may be.

(f) Unless and except to the extent otherwise expressly set forth herein, all deposits and payments hereunder, or pursuant to the terms hereof, including without limitation all payments to the Escrow Agent pursuant to Section 6, shall be in U.S. dollars.

Section 6. Compensation, Expense Reimbursement and Indemnification.

(a) Each of Lender, on the one hand, and Borrower, on the other hand, shall pay, or reimburse as applicable, 50% (fifty percent) of (i) the Escrow Agent’s reasonable and documented attorney’s fees and expenses incurred in connection with the preparation of this Agreement and (ii) the Escrow Agent’s compensation for its normal services hereunder in accordance with the fee schedule attached hereto as Exhibit F and made a part hereof.

(b) Each of Lender, on the one hand, and Borrower, on the other hand, shall reimburse the Escrow Agent on demand for 50% (fifty percent) of all documented costs and expenses incurred in connection with the administration of this Agreement or the escrow created hereby or the performance or observance of its duties hereunder which are in excess of its compensation for normal services hereunder, including without limitation, payment of any reasonable and documented legal fees and expenses incurred by the Escrow Agent in connection with resolution of any claim by any party hereunder.

(c) Each of Lender, on the one hand, and Borrower, on the other hand, shall indemnify the Escrow Agent (and its directors, officers and employees) and hold it (and such directors, officers and employees) harmless from and against 50% (fifty percent) of any loss, liability, damage, cost and expense of any nature incurred by the Escrow Agent arising out of or in connection with this Agreement or with the administration of its duties hereunder, including but not limited to reasonable and documented attorney’s fees, tax liabilities (other than tax liabilities associated with the Escrow Agent’s fees), any liabilities or damages that may result from any inaccuracy or misrepresentation made in any tax certification provided to the Escrow Agent by Lender or Borrower (provided, however, that the party providing such tax certification shall be responsible for 100% of such liabilities or damages), and other documented costs and expenses of defending or preparing to defend against any claim of liability unless and except to the extent such loss, liability, damage, cost and expense shall be caused by the Escrow Agent’s gross negligence or willful misconduct. The foregoing indemnification and agreement to hold harmless shall survive the termination of this Agreement.

(d) Notwithstanding anything herein to the contrary, the Escrow Agent shall have and is hereby granted a possessory lien on and security interest in the Escrow Property, and all proceeds thereof, to secure payment of all amounts owing to it from time to time hereunder, whether now existing or hereafter arising, provided that amounts owing from Lender are first deducted from any interest or other income earned on the Escrow Property. The Escrow Agent shall have the right to deduct from the Escrow Property, and proceeds thereof, any such sums, upon three (3) Business Days’ notice to the Interested Parties of its intent to do so.

Section 7. Resignation.

The Escrow Agent may at any time resign as Escrow Agent hereunder by giving thirty (30) calendar days’ prior written notice of resignation to the Interested Parties. Prior to the effective date of the resignation as specified in such notice, Lender will issue to the Escrow Agent a written instruction authorizing redelivery of the Escrow Property to a bank or trust company that it selects as successor to the Escrow Agent hereunder, subject to the consent of Borrower (which consent shall not be unreasonably withheld or delayed). If, however, Lender shall fail to name such a successor escrow agent within thirty (30) calendar days after the notice of resignation from the Escrow Agent, the Escrow Agent may apply to a court of competent jurisdiction for appointment of a successor escrow agent.

Section 8. Removal.

The Escrow Agent may be removed (with or without cause) and a new escrow agent may be appointed upon the mutual agreement of Lender and Borrower. In such event, Lender and Borrower shall deliver a joint notice to the Escrow Agent of such removal together with joint written instructions authorizing delivery of the Escrow Funds to a successor escrow agent. All power, authority, duties and obligations of the Escrow Agent will apply to any successor escrow agent. The provisions of Section 6(c) shall survive the removal of the Escrow Agent.

Section 9. Dispute Resolution.

It is understood and agreed that, should any dispute arise with respect to the delivery, ownership, right of possession, and/or disposition of the Escrow Property, or should any claim be made upon the Escrow Agent or the Escrow Property by a third party, the Escrow Agent upon receipt of notice of such dispute or claim is authorized and shall be entitled (at its sole option and election and upon written notice to the Interested Parties) to retain in its possession without liability to anyone, all or any of the Escrow Property until such dispute shall have been settled either by the mutual written agreement of the parties involved or by a final order, decree or judgment of a court of competent jurisdiction in the United States of America, the time for perfection of an appeal of such order, decree or judgment having expired. The Escrow Agent may, but shall be under no duty whatsoever to, institute or defend any legal proceedings which relate to the Escrow Property.

Section 10. Consent to Jurisdiction and Service.

Each of the Interested Parties hereby absolutely and irrevocably consents and submits to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, and each of the Interested Parties 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. Each of the Interested Parties 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. The Interested Parties hereby irrevocably and unconditionally (a) waive, 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 and (b) agrees that the service thereof may be made to such party in accordance with Section 13.

Section 11. Waiver of Jury Trial.

THE ESCROW AGENT AND THE INTERESTED PARTIES HEREBY WAIVE A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF ITS PROVISIONS OR ANY NEGOTIATIONS IN CONNECTION HEREWITH.

Section 12. Force Majeure.

The Escrow Agent shall not be responsible for delays in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war or terrorism, epidemics, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.

Section 13. Notices; Wiring Instructions.

(a) Notice Addresses. Any notice permitted or required hereunder shall be in writing, and shall be sent (i) by personal delivery, overnight delivery by a recognized courier or delivery service, or (ii) mailed by registered or certified mail, return receipt requested, postage prepaid, or (iii) by confirmed telecopy accompanied by mailing of the original on the same day by first class mail, postage prepaid, in each case to the parties at their address set forth below (or to such other address as any such party may hereafter designate by written notice to the other parties).

If to Borrower:
HeartWare International, Inc.
14000-14050 NW 57^th 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

If to Lender:
Thoratec Corporation
6035 Stoneridge Drive
Pleasanton, CA 94588
Attention: Gary Burbach
Attention: Legal Department
Fax: (925) 738-0110
Email: gary.burbach@thortec.com
david.lehman@thortec.com

With a copy to:

Latham & Watkins LLP
650 Town Center Drive, 20^th Floor
Costa Mesa, CA 92626
Attention: Charles K. Ruck
Tad J. Freese
Fax: (714) 755-8290

If to Escrow Agent:

U.S. Bank National Association
Corporate Trust Services
One California Street Suite 2100
San Francisco, CA 94111
Attention: Sheila K. Soares
Ref: Heartware/Thoratec Escrow# 130190000
Tel. 415-273-4582

if by fax addressed as
above and sent to
the following telecopy
number:
Fax: (415) 273-4590
Email: sheila.soares@usbank.com

Notwithstanding the foregoing, notices addressed to the Escrow Agent shall be effective only upon receipt. The Escrow Agent shall confirm receipt to the sending party promptly, and in any event within two (2) Business Days, following receipt of any such notice. If any notice or document is required to be delivered to the Escrow Agent and any other Person, the Escrow Agent may assume without inquiry that each notice or document was received by such other Person when it is received by the Escrow Agent.

(b) Wiring Instructions. Any funds to be paid to or by the Escrow Agent hereunder shall be sent by wire transfer pursuant to the following instructions (or by such method of

payment and pursuant to such instruction as may have been given in advance and in writing to or by the Escrow Agent, as the case may be, in accordance with Section 13(a) above by Borrower, Lender or the Escrow Agent, as applicable):

If to Borrower:

Bank: Mellon Bank
ABA #: 0430-0026-1
(For International Wires add: Swift # MELN -US3P)
For Credit to Merrill Lynch Account No. 101-1730
Further Credit to HeartWare, Inc. Account No. 748-07520

If to Lender:

Bank: Bank of America
ABA #: 0260-0959-3
Acct. #: 1472802500
(International Wires: Swift: BOFAUS3N; CHIPS: 0959)

If to the Escrow Agent:

Bank: U.S. Bank N.A.
ABA : 091000022
BNF: U.S. Bank Trust
FBO: U.S. Bank Trust N.A.
A/C: 180121167365

Ref: Heartware/Thoratec Escrow# 130190000
Attn: Sheila K. Soares/Corporate Trust S.F.

Section 14. Miscellaneous.

(a) Binding Effect; Successors.

(1) 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, Lender or the Escrow Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns.

(2) If the Escrow Agent consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business (including the escrow contemplated by this

Agreement) to, another corporation, the successor corporation without any further act shall be the successor Escrow Agent.

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

(b) Modifications. This Agreement may not be altered or modified without the express written consent of the parties hereto. No course of conduct shall constitute a waiver of any of the terms and conditions of this Escrow Agreement, unless such waiver is specified in writing, and then only to the extent so specified. A waiver of any of the terms and conditions of this Escrow Agreement on one occasion shall not constitute a waiver of the other terms of this Escrow Agreement, or of such terms and conditions on any other occasion. Notwithstanding any other provision hereof, consent to an alteration or modification of this Agreement may not be signed by means of an e-mail address.

(c) 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.

(d) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, and (ii) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, optical disk, micro-card, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

(e) Counterparts and Facsimile Execution. This Escrow Agreement may be executed in several counterparts, each of which shall be deemed to be one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or .pdf shall be deemed to be their original signatures for all purposes.

(f) USA Patriot Act Compliance. To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity the Escrow Agent will ask for documentation to verify its formation and existence as a legal entity. The Escrow Agent may also ask to see financial statements, licenses, identification and authorization

documents from individuals claiming authority to represent the entity or other relevant documentation. The parties each agree to provide all such information and documentation as to themselves as reasonably requested by Escrow Agent to ensure compliance with federal law.

(Signature Page Follows)

IN WITNESS WHEREOF, each of the parties has caused this Escrow Agreement to be duly executed and delivered in its name and on its behalf as of the day and year first above written.


	HEARTWARE INTERNATIONAL, INC.
	By:	/s/ Douglas Godshall
		Title: President and Chief Executive Officer
		Name: Douglas Godshall

	THORATEC CORPORATION
	By:	/s/ Gerhard F. Burbach
		Title: President and Chief Executive Officer
		Name: Gerhard F. Burbach

	U.S. BANK NATIONAL ASSOCIATION, as Escrow Agent
	By:	/s/ Sheila K. Soares
		Title: Vice President
		Name: Sheila K. Soares

EX-2.4 3 f53289exv2w4.htm EX-2.4 exv2w4

Exhibit 2.4

CONFIDENTIAL DISCLOSURE AGREEMENT

This Confidential Disclosure Agreement (the “Agreement”) is entered into as of November 14, 2008 (the “Effective Date”), by and between Thoratec Corporation, 6035 Stoneridge Drive, Pleasanton, California 94588, United States of America, together with its affiliates and subsidiaries (“Thoratec”), and HeartWare International, Inc., Level 57, MLC Centre, 19-29 Martin Place, Sydney NSW 2000, Australia, together with its affiliates and subsidiaries (the “Company”).

WITNESSETH

WHEREAS, each party wishes to receive information which is confidential and proprietary to the other party for the purpose of evaluating a possible transaction (a “Possible Transaction”) involving the Company and Thoratec (the “Purpose”);

NOW, THEREFORE, in consideration of the premises and the mutual promises and agreements set forth herein, and each party agreeing to treat the other party’s Information (as defined below) in accordance with the provisions of this Agreement, the parties hereby agree as follows:

1. Definitions. For purposes of this Agreement:

(a) Each party hereto that discloses or otherwise furnishes (either directly or through a Representative (as defined below)) Information (as defined below) of such party is referred to herein as a “Disclosing Party,” and each party hereto that receives (either directly or through a Representative) Information disclosed or otherwise furnished by or on behalf of a Disclosing Party is referred to herein as a “Recipient.”

(b) The term “Information” shall mean all such information furnished by the Disclosing Party or its Representatives after the date hereof, whether oral or written, and regardless of the manner or form in which it is furnished. Information also includes all notes, analyses, compilations, studies, forecasts, interpretations or other documents prepared by the Recipient or its Representatives, which contain, reflect or are based upon, in whole or in part, the information furnished to the Recipient or its Representatives pursuant hereto.

(c) The term “person” shall be interpreted broadly to include, without limitation, any corporation, company, partnership, other entity, group or individual.

(d) “Representatives” shall mean, as to any person, such person’s affiliates and its and their directors, officers, employees, agents and advisors (including, without limitation, financial advisors, counsel and accountants).

2. Confidentiality. Each Recipient agrees that it and its Representatives will (a) hold in confidence Information disclosed or otherwise furnished by or on behalf of a Disclosing Party to the Recipient or its Representatives, (b) not disclose such Disclosing Party’s Information to any third party other than to Representatives who have a need to know such Information solely for the Purpose, and (c) not use such Disclosing Party’s Information for any purpose, other than the Purpose and as otherwise permitted under this Agreement. Each Recipient agrees that it shall protect Information disclosed or otherwise furnished by or on behalf of a Disclosing Party with at least the same degree of care as Recipient uses in protecting its own Information of a similar nature. Each party will be responsible for any breach of the terms of this Agreement by its Representatives

November 14, 2008

(including Representatives who, subsequent to the first date of disclosure of Information hereunder, become former Representatives).

3. Exceptions. Neither a Recipient nor any of its Representatives shall have any obligation of confidentiality or nonuse under this Agreement with respect to any portion of a Disclosing Party’s Information which:

	(a)		is or becomes generally available to the public, other than through disclosure by the Recipient or its Representatives in violation of this Agreement or other obligation of confidentiality; or

	(b)		is generally made available to third parties by the Disclosing Party without restriction on disclosure; or

	(c)		becomes available to the Recipient on a non-confidential basis from a person other than the Disclosing Party or its Representatives, provided that such source is not known by the Recipient to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Disclosing Party or any of its Representatives, with respect to such Information; or

	(d)		the Recipient possesses or developed prior to such Information being disclosed or otherwise furnished to the Recipient or its Representatives by or on behalf of the Disclosing Party hereunder, provided that the source of such Information is not known by the Recipient to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, the Disclosing Party or any of its Representatives, with respect to such information; or

	(e)		is independently discovered or developed by the Recipient without reference to or use of the Disclosing Party’s Information.

4. Residuals. Each party acknowledges that the other party is actively engaged in technical and scientific development fields related to the Possible Transaction, which may include the subject matter of the Disclosing Party’s Information. Each party, however, wishes the other party to consider entering into a Possible Transaction that may involve that subject matter, and therefore wishes to disclose Information to employees of the Recipient who are actively engaged in that technical and scientific development so that the Possible Transaction may be better assessed. Each party acknowledges and agrees that this disclosure may cause the incorporation of “Residuals” (as defined below) within the Recipient’s products. Each party acknowledges that the other party will not investigate or commence the Possible Transaction unless each party agrees that the Recipient is not exposing itself to any potential liability for misappropriation, breach of contract, or infringement of any intellectual property right (including but not limited to patent, copyright, mask work or trade secret rights) for any use, copying or exploitation of such Residuals. Therefore, each party covenants not to sue or bring any action, claim or proceeding against the Recipient, its officers, directors, employees, contractors, customers, distributors or suppliers based in whole or in part on the use, copying or other exploitation of any Residuals, and each party shall have the burden of demonstrating with tangible proof that any claimed improper use of Information involved more than the permitted use of Residuals. “Residuals” means any and all information in intangible form that may be incidentally retained in the unaided memory of a person having access to that information, including ideas, concepts, know-how or techniques contained therein but without the continuing use

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of or reliance on materials or tangible objects provided by the Disclosing Party to the Recipient. Memory is unaided, under the preceding sentence, if the Recipient has not intentionally memorized the Information for the purpose of retaining and subsequently using or disclosing it. A Recipient shall have no obligation to limit or restrict the assignment of such persons or to pay royalties for any work resulting from the use of Residuals.

5. Other Authorized Disclosure. Notwithstanding any other provision of this Agreement, a Recipient or its Representatives may disclose the Disclosing Party’s Information:

(a) in response to a valid order of a court or other governmental body, or law, regulation or stock exchange rule; provided however, that Recipient shall first have given prompt written notice of such required disclosure to the Disclosing Party, to the extent permitted by such order, law, regulation or rule and applicable law, so that the Disclosing Party may seek a protective order or other appropriate remedy, and the Recipient shall reasonably cooperate, if requested, with the Disclosing Party in any such effort; provided further, however, that if a protective order or other remedy is not obtained and disclosure of Information is required, the Recipient or its Representative, as the case may be, may so disclose only that portion of Information which it is advised by counsel is legally required to be disclosed; or

(b) to establish rights or enforce obligations under this Agreement, but only to the extent such disclosure is necessary and provided that the Recipient seeks confidential treatment of the Information to be disclosed.

6. Destruction of Information. Upon written request of the Disclosing Party, each Recipient shall promptly return or destroy, at the election of the Disclosing Party, any and all written Information or other materials in tangible or electronic form (including all copies, reproductions, summaries, analyses, extracts or other documents based on, derived from or otherwise reflecting Information in whatever form or medium, including electronic copies) in its possession or in the possession of any of its Representatives that was provided by such other party; provided however, that each Recipient shall be entitled to retain (a) in the possession of its independent counsel, a single archival copy of Information of the Disclosing Party solely for the purposes of establishing the extent of disclosure of Information by the Disclosing Party hereunder and monitoring Recipient’s compliance hereunder and (b) any materials provided to the Recipient’s board of directors in connection with its consideration of a Possible Transaction. Notwithstanding the retention or destruction of the Information, all Information shall continue to be subject to the terms of this Agreement.

7. Standstill. For a period of twelve (12) months after the Effective Date (the “Standstill Period”), unless Thoratec has been invited by the Company or the action is approved by the Company’s board of directors, neither Thoratec nor any of its Representatives will (a) acquire, offer to acquire, or agree to acquire, directly or indirectly, by purchase, merger, exchange or otherwise, any securities or direct or indirect rights to acquire any securities, or any assets of the Company; (b) seek or propose to influence or control the management or policies of the other party, make or participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) to vote any securities of the Company or any subsidiary thereof, or seek to advise or influence any person or entity with respect to the voting of any voting securities of the Company or any subsidiary thereof; (c) make any public announcement with respect to, or submit a proposal or offer of (with or without conditions), any merger, recapitalization, reorganization, business combination or other extraordinary transaction

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involving the other party or any subsidiary thereof or any of their securities or assets; or (d) otherwise act, alone or in concert with any third party with respect to any of the foregoing. Notwithstanding the foregoing, nothing contained herein shall prohibit Thoratec from acquiring the securities of another medical device or medical technology company that beneficially owns any securities of the Company.

8. Non-Solicitation. For a period of two (2) years following the Effective Date, without the express written consent of the other party, each party and such party’s affiliates (the “Soliciting Party”) agrees not to directly or indirectly solicit for employment any individual who is an employee of the other party or such party’s subsidiaries (the “Employing Party”). This section shall apply only to employees of the Employing Party who become known to the Soliciting Party as a result of its evaluation of a Possible Transaction involving the parties and who are employed by the Employing Party at the time of such solicitation. Nothing herein shall restrict or preclude the Soliciting Party’s right to (a) make generalized searches for employees by use of advertisements in any medium or to engage search firms for such purposes, so long as such search firms are not instructed by the Soliciting Party to target such employees of the Employing Party, (b) solicit for employment and hire any individual responding to such advertisements or search firm inquiries or who initiates contact with the Soliciting Party regarding employment with the Soliciting Party, or (c) solicit for employment and hire any individual with whom the Soliciting Party has had discussion regarding potential employment within six (6) months prior to the Effective Date.

9. Patent Rights and Licenses. It is understood that the Disclosing Party shall retain all rights to its Information and that no patent right or license or other right or license is hereby granted by or to either party by this Agreement and that the disclosure of Information shall not result in any obligation by the Disclosing Party to grant the Recipient any rights in or to such Information.

10. Publicity. Except in accordance with the procedures set forth in Section 2 hereof, each party agrees that, without the prior written consent of the other party, it and its Representatives will not disclose or reveal to any person any information about a Possible Transaction or the terms or conditions or any other facts relating thereto, including without limitation, the fact that investigations, discussions or negotiations are taking place with respect thereto or the status or termination thereof and the identity of the parties thereto, the fact that this Agreement exists or its terms, or the fact that Information has been made available; provided that either party may make such disclosure if it is advised by counsel that such disclosure is required by law or the applicable rules of any national securities exchange or interdealer quotation system, including without limitation the Australian Securities Exchange.

11. Term and Survival. Except as otherwise provided herein, all obligations imposed hereunder shall continue in force for a period of three (3) years from the Effective Date.

12. Warranties. The parties warrant and represent that they have the right to enter into this Agreement and that it is a valid and binding obligation of the parties relating to the matters herein. The parties further warrant and represent that the terms of this Agreement are not inconsistent with other contractual obligations, express or implied, which they may have.

13. No Agreement. Each party understands and agrees that (a) no contract or agreement providing for a transaction between the parties hereto will be deemed to exist unless and until the parties execute and deliver a definitive written agreement therefor, (b) neither party shall be under any obligation of any kind by virtue of this Agreement to negotiate or enter into any such definitive

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agreement or transaction with the other party, (c) except as set forth herein, neither party shall be under any obligation to make any particular Information available to the other party or its Representatives, or to supplement or update any Information that is furnished to the Recipient or its Representatives, (d) the Disclosing Parties have not made and are not making any representation or warranty, express or implied, as to the accuracy, completeness or fitness for any particular purpose of any Information of such Disclosing Party, and (e) a Disclosing Party shall not have any liability to the Recipient relating to or resulting from the Recipient’s use of any Information of such Disclosing Party or any inaccuracies or errors therein or omissions therefrom.

14. Insider Trading. Each Recipient hereby acknowledges that it is aware, and will advise its Representatives who are informed as to the matters which are the subject of this Agreement, that Information of the Disclosing Party may contain material non-public information and that applicable securities laws impose certain restrictions on trading securities of an issuer when in possession of material non-public information about such issuer and on communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to trade in such securities.

15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to the principles of conflicts of law thereof. The parties hereby unconditionally and irrevocably submit to the exclusive jurisdiction and venue of the courts located in the State of New York and the United States of America, in each case located in the County of New York, for any actions, suits or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby (and the parties agree not to commence any action, suit or proceeding relating thereto except in such courts). The parties hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby, in the courts located within the State of New York and the United States of America, in each case located in the County of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

16. Amendments. No modification of this Agreement shall be effective unless made in writing and signed by a duly authorized representative of each party. Each party understands and agrees that no failure or delay in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or of any other right, power or privilege hereunder.

17. Equitable Relief. Each party understands and agrees that money damages may not be a sufficient remedy for any breach of this Agreement and that the non-breaching party shall be entitled to seek specific performance, injunctive and/or other equitable relief as a remedy if any party or any of its Representatives breaches or threatens to breach any of the provisions of this Agreement. Such remedy shall not be deemed to be the exclusive remedy for a breach or threatened breach of this Agreement but shall be in addition to any and all other remedies available at law or in equity.

18. No Assignment. Neither party may assign or delegate all or any part of its rights or obligations under this Agreement (including by merger, operation of law or otherwise) without the prior written consent of the other party.

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19. Severability. If any provision of this Agreement is found by a proper authority to be unenforceable or invalid such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole and all other terms and provisions of this Agreement shall remain in full force and effect. If any term or provision of this Agreement is determined to be unenforceable by reason of its extent, duration, scope or otherwise, then the parties contemplate that such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law and applicable court decisions.

20. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument.

21. Entire Agreement. This Agreement contains the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, arrangements and discussions between the parties regarding such subject matter.

(signature page immediately follows)

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.


THORATEC CORPORATION		HEARTWARE INTERNATIONAL, INC.

By: Name:	/s/ Gerhard F. Burbach Gerhard F. Burbach	By: Name:	/s/ David McIntyre David McIntyre
Title:	President and CEO	Title:	Chief Financial Officer

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