CYBX (MM)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) 
of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2015

Cyberonics, Inc.

(Exact name of registrant as specified in its charter)

100 Cyberonics Blvd.
Houston, TX 77058
(Address of principal executive offices)

Registrant’s Telephone Number, Including Area Code:  281-228-7200

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

x                                  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 1.01                                           Entry into a Material Definitive Agreement.

Letter of Intent

On February 26, 2015, Cyberonics, Inc., a Delaware corporation (the “Company”), entered into a binding letter of intent (the “LOI”) with Sorin S.p.A., a joint stock company organized under the laws of Italy (“Sorin”), Sand Holdco Limited, a private limited company incorporated under the laws of England and Wales and a wholly owned subsidiary of Sorin (“Holdco”), and Cypher Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Holdco (“Merger Sub”).  The LOI provides that, subject only to completion of the employee consultation procedures required under French law, the parties to the LOI will enter into a definitive agreement, attached as an exhibit to the LOI (the “Transaction Agreement”), providing for a business combination transaction between the Company and Sorin on the terms contained in the Transaction Agreement.

In connection with entry into the LOI, each party designated the same individual as its agent and attorney-in-fact (the “AIF”) and irrevocably authorized and empowered the AIF to execute and deliver the Transaction Agreement on such party’s behalf.  On the date on which the employee consultation process required under French law is completed, or one month after the date of entry into the LOI if the employee consultation process is not completed prior to such date, following expiration of an additional five-day “consideration period”, each party to the LOI will have the sole power to cause the AIF to execute and deliver the Transaction Agreement on behalf of all parties.  If the Company or Sorin takes any action to revoke, rescind, withdraw or otherwise limit the powers granted to the AIF, the other party will be entitled to terminate the LOI and receive a termination fee ($50 million in the case of a termination by Sorin under such circumstances and $75 million in the case of a termination by the Company under such circumstances) from the party taking such action.

The representations and warranties contained in the Transaction Agreement are incorporated into, and were made as of the date of entry into, the LOI.  In addition, the LOI incorporates certain covenants contained in the Transaction Agreement, including, among others, covenants relating to the conduct of the parties’ respective businesses between the date of entry into the LOI and the consummation of the transactions contemplated by the Transaction Agreement, and prohibitions on the solicitation of competing proposals.

The LOI provides for certain termination rights, including, among others, the ability of the Company or Sorin to terminate the LOI if (i) the other party attempts to revoke, rescind or limit the powers granted to the AIF, (ii) the other party’s board of directors changes its recommendation with respect to the proposed transaction or (iii) the other party materially breaches or fails to perform any of its representations, warranties or covenants contained in the LOI. Under certain circumstances in connection with the termination of the LOI, including if the LOI is terminated because the Company attempts to revoke, rescind or limit the powers granted to the AIF or if the LOI is terminated because the Company board of directors changes its recommendation with respect to the proposed transaction, the Company will be required to pay Sorin a termination fee of $50 million, and under other circumstances, including if the LOI is terminated because Sorin attempts to revoke, rescind or limit the powers granted to the AIF or if the LOI is terminated because the Sorin board of directors changes its recommendation with respect to the proposed transaction, Sorin will be required to pay the Company a termination fee of $75 million.

The foregoing description of the Letter of Intent and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Letter of Intent, a copy of which is filed herewith as Exhibit 2.1 and is hereby incorporated by reference herein.

Transaction Agreement

The Transaction Agreement provides for (i) the merger of Sorin with and into Holdco (the “Sorin Merger”), with Holdco surviving the merger, and immediately thereafter, (ii) the merger of Merger Sub with and into the Company (the “Company Merger” and, together with the Sorin Merger, the “Mergers”), with the Company surviving as a wholly owned subsidiary of Holdco, in each case subject to the terms and conditions of the Transaction Agreement.  At the effective time of the Sorin Merger, each issued and outstanding ordinary share of Sorin (“Sorin Shares”), other than Sorin Shares owned by the Company, Sorin, Holdco, Merger Sub or any of their respective subsidiaries, will be converted into the right to receive 0.0472 ordinary shares of Holdco (“Holdco

Shares”).  At the effective time of the Company Merger, each share of common stock of the Company (each, a “Company Share”), other than Company Shares owned by the Company, Sorin, Holdco, Merger Sub or any of their respective subsidiaries, will be converted into the right to receive one Holdco share.  Holdco will apply to list the Holdco Shares to be issued in the Mergers on the NASDAQ stock market and the London Stock Exchange (the “LSE”).  Following consummation of the Mergers, assuming no withdrawal rights under Italian law are exercised by Sorin shareholders with respect to the Sorin Merger, former Sorin shareholders will own approximately 46 percent of Holdco and former stockholders of the Company will own approximately 54 percent of Holdco, on a fully diluted basis.

Closing of the Mergers is subject to certain conditions, including (i) Company and Sorin shareholder approvals, (ii) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) the absence of any law, injunction, order or other judgment prohibiting the mergers, (iv) effectiveness of the registration statement for the Holdco Shares, (v) NASDAQ listing approval for the Holdco Shares and the absence of any written indication from the UK Financial Conduct Authority (“FCA”) or the LSE that they will not be willing to admit the Holdco Shares to listing, (vi) the expiration of a sixty-day Sorin creditor opposition period, (vii) subject to certain materiality exceptions, the accuracy of the other party’s representations and warranties in the Transaction Agreement and performance by the other party of its obligations under the Transaction Agreement; (viii) delivery of a pre-merger compliance certificate to the High Court of England and Wales and (ix) approval by the FCA of the prospectus to be published by Holdco in connection with the issuance and listing on the LSE of the Holdco shares to be issued in connection with the Mergers, or the absence of an indication in writing by the UK Listing Authority that such approval will not be obtained.

The Transaction Agreement contains customary representations and warranties of the parties.  In addition, the Transaction Agreement contains certain customary covenants regarding the operation of the Company’s and Sorin’s respective businesses during the period prior to the closing of the Mergers, including, among others, limitations on their respective ability to (i) issue or grant shares of capital stock or other equity interests; (ii) acquire shares of their or their subsidiaries’ capital stock or other equity interests; (iii) incur new indebtedness and (iv) solicit, or enter into negotiations with respect to, competing proposals, in each case subject to certain exceptions contained in the Transaction Agreement.

The Company and Sorin may each terminate the Transaction Agreement under certain circumstances, including, among others, in order to enter into an agreement with respect to a proposal that is determined by the terminating party’s board of directors to be superior to the Transaction Agreement, subject to the terms and conditions of the Transaction Agreement (including a requirement to notify and negotiate with the Sorin board of directors or the Company board of directors, as the case may be, before entering into such an agreement).  In connection with the termination of the Transaction Agreement under specified circumstances, the Company or Sorin may be required to pay the other party a termination fee of $50 million or may be required to reimburse the other party for out-of-pocket expenses incurred in connection with the Transaction Agreement up to $15 million.

From closing through the date of the first annual meeting of the members of Holdco following the completion of its second full fiscal year (the “Initial Period”), the Holdco board will be comprised of nine (9) directors in total, consisting of four (4) individuals designated by the Company prior to closing, four (4) individuals designated by Sorin prior to closing and (iii) one (1) director, mutually agreed to by Sorin and the Company, who will be required to meet the independence standards of NASDAQ applicable to non-controlled domestic U.S. issuers.  From closing until the end of the Initial Period, (i) the Chief Executive Officer of Sorin as of immediately prior to closing will serve as the Chief Executive Officer of Holdco, (ii) the Chief Executive Officer of the Company as of immediately prior to closing will serve as the Chairman of the Holdco board, (iii) one of the Company designees will serve as chairman of the audit and compensation committees, (iv) each committee of the board will have at least three members and (v) one of the Sorin designees will serve as a member of each committee of the board.  The Company and Sorin will agree upon a new name for the combined business prior to closing.

The foregoing description of the Transaction Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Transaction Agreement, a copy of which is attached as Exhibit A to the Letter of Intent filed herewith as Exhibit 2.1 and is hereby incorporated by reference herein.

The Letter of Intent, including the Transaction Agreement included as Exhibit A thereto, has been included to provide investors with information regarding its terms. It is not intended to provide any other factual information

with respect to the Company, Merger Sub, Holdco or Sorin. There are representations and warranties contained in the Letter of Intent and the Transaction Agreement that were made by the parties to each other as of specific dates. The assertions embodied in these representations and warranties were made solely for purposes of the Letter of Intent and the Transaction Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover, certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to stockholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, you should not rely on the representations and warranties as statements of factual information. In addition, information concerning the subject matter of the representations and warranties may change after the date of the Letter of Intent, which subsequent information may or may not be reflected in the Company’s public disclosures. Investors should read the Letter of Intent and the Transaction Agreement with the other information concerning the Company that it publicly files in reports and statements with the Securities and Exchange Commission.

Support Agreements

In connection with entry into the Letter of Intent, on February 26, 2015, the Company entered into a Support Agreement (the “Shareholder Support Agreement”) with certain record and beneficial shareholders of Sorin which collectively held approximately 25% of the outstanding shares of Sorin as of February 26, 2015. Under the terms of the Shareholder Support Agreement, the Sorin shareholders party thereto have agreed to vote their shares in favor of the transactions contemplated by the Transaction Agreement and against any competing transaction and have agreed, until the effective time of the Sorin Merger, not to transfer any shares of capital stock or other equity interests in Sorin owned by them.

In addition to the Shareholder Support Agreement, the Company entered into support agreements with the Chairman of the board of directors of Sorin and the Chief Executive Officer of Sorin, and Sorin entered into support agreements with the Chairman of the board of directors of the Company and the Chief Executive Officer of the Company, in each case which contain similar obligations and restrictions with respect to voting and transferring shares of capital stock or equity interests in the Company or Sorin, as applicable, as those contained in the Shareholder Support Agreement.

All of the support agreements described herein, including the Shareholder Support Agreement, will terminate upon the earlier of (i) the effective time of the Mergers, (ii) termination of the LOI in accordance with its terms or, if the Transaction Agreement is executed, termination of the Transaction Agreement in accordance with its terms and (iii) February 26, 2016. In addition, pursuant to a mandatory provision of Italian law, the Sorin shareholders are entitled to terminate the support agreement in order to tender their shares into a competing public tender offer.

The foregoing description of the Shareholder Support Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of such agreement, a copy of which is filed herewith as Exhibits 10.1, and is hereby incorporated by reference herein.

Item 8.01                                           Other Events.

On February 26, 2015, the Company and Sorin issued a joint press release announcing they had entered into the Letter of Intent. A copy of such joint press release is attached hereto as Exhibit 99.1, and is incorporated by reference herein.

Important Information for Investors and Securityholders

This communication is for informational purposes only and is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and applicable European regulations. Subject to certain exceptions to be approved by the relevant regulators or certain facts to be ascertained, the public offer will not be made directly or

indirectly, in or into any jurisdiction where to do so would constitute a violation of the laws of such jurisdiction, or by use of the mails or by any means or instrumentality (including without limitation, facsimile transmission, telephone and the internet) of interstate or foreign commerce, or any facility of a national securities exchange, of any such jurisdiction.

Holdco will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4, which will include a proxy statement of the Company that also constitutes a prospectus of Holdco (the “proxy statement/prospectus”). INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, SORIN, HOLDCO, THE PROPOSED TRANSACTIONS AND RELATED MATTERS.

Investors and shareholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC by the parties through the website maintained by the SEC at www.sec.gov. In addition, investors and shareholders will be able to obtain free copies of the proxy statement/prospectus and other documents filed with the SEC on the Company’s website at www.cyberonics.com within the “Investor Relations” section or by contacting the Company’s Investor Relations through its website at www.cyberonics.com (for documents filed with the SEC by the Company) or Sorin through its website at www.sorin.com (for documents filed with the SEC by Holdco).

The release, publication or distribution of this communication in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this communication is released, published or distributed should inform themselves about and observe such restrictions.

Participants in the Distribution

The Company, Sorin and Holdco and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company with respect to the proposed transactions contemplated by the proxy statement/prospectus. Information regarding the persons who are, under the rules of the SEC, participants in the solicitation of proxies from the shareholders of the Company in connection with the proposed transactions, including a description of their direct or indirect interests, on account of security holdings or otherwise, will be set forth in the proxy statement/prospectus when it is filed with the SEC. Information regarding the Company’s directors and executive officers is contained in the Company’s Annual Report on Form 10-K for the year ended on April 25,2014  and its Proxy Statement on Schedule 14A, dated July 30, 2014, which are filed with the SEC and can be obtained free of charge from the sources indicated above.

Cautionary Statement Regarding Forward Looking Statements

This communication contains forward-looking statements (including within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”)) concerning the Company, Sorin, Holdco, the proposed transactions and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise. They are based on current beliefs of the management of the Company and Sorin as well as assumptions made by, and information currently available to, such management, and therefore, you are cautioned not to place undue reliance on them. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the parties’ control. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. None of the Company, Sorin or Holdco undertake any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law.  Forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about the business and future financial results of the medical device industry, and other legal, regulatory and economic developments.  We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe harbor provisions of the PSLRA. Factors that could cause actual results to differ materially from those in the forward-looking statements include the failure to obtain applicable regulatory or shareholder approvals in a timely manner or otherwise, or the requirement to accept

conditions that could reduce the anticipated benefits of the proposed transactions as a condition to obtaining regulatory approvals; the failure to satisfy other closing conditions to the proposed transactions; the length of time necessary to consummate the proposed transactions, which may be longer than anticipated for various reasons; risks that the new businesses will not be integrated successfully or that the combined companies will not realize estimated cost savings, value of certain tax assets, synergies and growth, or that such benefits may take longer to realize than expected; the inability of the Company and Sorin to meet expectations regarding the timing, completion and accounting and tax treatments with respect to the proposed transactions; risks relating to unanticipated costs of integration, including operating costs, customer loss or business disruption being greater than expected; reductions in customer spending, a slowdown in customer payments and changes in customer demand for products and services; unanticipated changes relating to competitive factors in the industries in which the companies operate; the ability to hire and retain key personnel; the potential impact of announcement or consummation of the proposed transactions on relationships with third parties, including customers, employees and competitors; the ability to attract new customers and retain existing customers in the manner anticipated; reliance on and integration of information technology systems; changes in legislation or governmental regulations affecting the companies; international, national or local economic, social or political conditions that could adversely affect the companies or their customers; conditions in the credit markets; risks to the industries in which the Company and Sorin operate that are described in the “Risk Factors” section of the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC by the Company and Holdco and the analogous section from Sorin’s annual reports and other documents filed from time to time with the Italian financial market regulator (CONSOB); risks associated with assumptions the parties make in connection with the parties’ critical accounting estimates and legal proceedings; the parties’ international operations, which are subject to the risks of currency fluctuations and foreign exchange controls; and the potential of international unrest, economic downturn or effects of currencies, tax assessments, tax adjustments, anticipated tax rates, raw material costs or availability, benefit or retirement plan costs, or other regulatory compliance costs. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the parties’ businesses, including those described in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the SEC and those described in Sorin’s annual reports, registration documents and other documents filed from time to time with CONSOB. Nothing in this communication is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per Sorin share or Company share for the current or any future financial years or those of the combined group, will necessarily match or exceed the historical published earnings per Sorin share or Company share, as applicable. Neither the Company nor Sorin gives any assurance (1) that either the Company, Sorin or Holdco will achieve its expectations, or (2) concerning any result or the timing thereof, in each case, with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, consent decree, cost reductions, business strategies, earnings or revenue trends or future financial results.

Item 9.01                                           Financial Statements and Exhibits.

(d)                                 Exhibits.

Exhibit 2.1.                      Letter of Intent, dated as of February 26, 2015, by and among Cyberonics, Inc., Sorin S.p.A., Sand Holdco Limited and Cypher Merger Sub, Inc.

Exhibit 10.1.               Support Agreement, dated as of February 26, 2015, by and among Cyberonics, Inc., Mittel S.p.A., Equinox Two S.c.a., Tower 6 S. à r.l., Ghea S.r.l., Bios S.p.A. and Tower 6Bis S.àr.l.

Exhibit 99.1.               Press Release, dated as of February 26, 2015, jointly issued by Cyberonics, Inc. and Sorin S.p.A.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 2.1

EXECUTION VERSION

February 26, 2015

STRICTLY CONFIDENTIAL

Sorin S.p.A.

Via Benigno Crespi, 17

20159 Milan, Italy

Re:  Letter of Intent Regarding Proposed Business Combination Between Cyberonics and Sorin

Ladies and Gentlemen:

The Parties (as defined below) desire to enter into this letter agreement governed exclusively by the laws of the State of Delaware to provide for the exclusive jurisdiction of the courts of the State of Delaware over any legal action or proceeding arising out of or relating to this letter.  This letter confirms the intention of Cyberonics, Inc., a Delaware corporation  (“Cyberonics”), Sorin S.p.A., a joint stock company organized under the laws of Italy (“Sorin”), Sand Holdco Limited, a private limited company incorporated under the laws of the United Kingdom and a wholly owned subsidiary of Sorin (“Holdco”), and Cypher Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Sorin (“Merger Sub,” and together with Cyberonics, Sorin and Holdco, collectively, the “Parties” and each of them, individually, a “Party”) to enter into an agreement (the “Transaction Agreement”), attached hereto as  Exhibit A, providing for the business combination transaction (the “Proposed Transaction”) contemplated therein. Capitalized terms not otherwise defined herein have the respective meanings ascribed to them in the Transaction Agreement.

The Parties hereby agree as follows:

1.                                             Consultations with Works Council.

(a)                                        Promptly following the execution and delivery by the Parties of this letter (and in any event no later than twenty-four (24) hours after the execution of this letter), Sorin shall commence such procedures to “inform and consult with” the works council (comité d’entreprise) of Sorin CRM SAS, a French société par actions simplifiée and a wholly owned subsidiary of Sorin S.p.A. (the “Works Council”) as may be required by applicable Law in connection with the Proposed Transaction and shall exercise its best efforts to obtain the Opinion (as defined below) from the Works Council in regards to the Proposed Transaction as soon as possible following the date on which such information and consultation process has been commenced.  For purposes of this letter, “Opinion” means the opinion, whether positive or negative, of the Works Council in respect of the Proposed Transaction, which may be rendered by delivery of a written opinion by the

Works’ Council or by any other action which, under applicable Law, would cause the Works Council to be deemed to have rendered such opinion.

(b)                                 Sorin shall (i) permit Cyberonics to participate in any meetings with the Works Council, (ii) keep Cyberonics regularly informed of the status of the Works Council information and consultation process (including providing Cyberonics with copies of any correspondence or other documentation received by Sorin from the Works Council no later than 24 hours following the receipt of any such correspondence or documents) and (iii) promptly provide Cyberonics with a true and certified copy of the Opinion.  Sorin shall (i) permit Cyberonics to review in advance any written correspondence, notices or communications (including any supporting materials) to be made by Sorin to the Works Council, (ii) consult Cyberonics in connection with any such communications and give Cyberonics a reasonable opportunity to comment thereon, and take into account in good faith any comments that Cyberonics may make with respect thereto and (iii) except as otherwise provided, and in accordance with, the provisions of Section 5.04 of the Transaction Agreement, support in all respects the Proposed Transaction throughout the information and consultation process with the Works Council.  Cyberonics shall promptly furnish to Sorin such information as may be reasonably requested by Sorin in connection with such consultation process or the preparation of any filing or submission to the Works Council required in connection therewith.  Sorin shall not, and shall cause its Representatives not to, make any commitment to the Works Council or any Governmental Authority or representative thereof in connection with the information and consultation process, including with respect to modifications to the terms of the Proposed Transaction or the future business or operations of Holdco, Sorin or Cyberonics, in each case without the prior written consent of Cyberonics.

(c)                                  For purposes of this letter, “Consultation Period” means the period beginning on the date of this letter and ending on the earlier of (i) the date one calendar month later and (ii) the date upon which the Opinion has been rendered or deemed to have been rendered.

2.                                      Execution of Transaction Agreement.

(a)                                 Concurrently with the execution of this letter, each Party has irrevocably delivered a duly executed instrument (the “Agent and Attorney-in-Fact Agreement”) designating Former Chief Justice E. Norman Veasey as its agent and attorney-in-fact (the “Attorney-in-Fact”) irrevocably authorizing, directing and empowering the Attorney-in-Fact to execute and deliver the Transaction Agreement on such Party’s behalf in accordance with Section 2(b).  NEITHER PARTY SHALL TAKE ANY ACTION OR ATTEMPT TO TAKE ANY ACTION TO REVOKE, RESCIND, WITHDRAW, IMPAIR OR OTHERWISE LIMIT THE POWERS GRANTED TO THE ATTORNEY-IN-FACT PURSUANT TO THE AGENT AND ATTORNEY-IN-FACT AGREEMENT (ANY SUCH ACTION, A “PROHIBITED ACTION”).

(b)                                 From and after 12:01 am Eastern Time on the sixth calendar day following the expiration of the Consultation Period, either Cyberonics or Sorin may, by delivery of a written notice (an “Execution Notice”) to the Attorney-in-Fact in accordance with

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Article II (in the case of delivery by Sorin), Article III (in the case of delivery by Cyberonics) and Section 9.02 of the Agent and Attorney-in-Fact Agreement, cause the Attorney-in-Fact to execute and deliver the Transaction Agreement on behalf of all of the parties thereto; provided, however, that during the five-calendar-day period following the expiration of the Consultation Period (such period, the “Consideration Period”), the Parties will give due consideration to any recommendations made by the Works Council in the Opinion and will consider such changes to the Transaction Agreement as the Parties may mutually agree to reflect such recommendations.  Notwithstanding the generality of the foregoing, the Parties acknowledge and agree that the right of each of Cyberonics and Sorin to cause the execution and delivery of the Transaction Agreement on behalf of all of the parties thereto is not subject to any condition other than the expiration of the Consideration Period, and furthermore, that no Party is under any obligation to agree to any change to the Transaction Agreement in order to address any recommendations made in the Opinion or otherwise.

3.                                      Representations and Warranties and Covenants(a)              Article III of the Transaction Agreement (including the preamble thereto) is hereby incorporated by reference into this letter as if such representations and warranties are fully set forth herein.  Article IV of the Transaction Agreement (including the preamble thereto) is hereby incorporated by reference into this letter as if such representations and warranties are fully set forth herein.

(b)                                 The covenants set forth in Sections 5.01, the second sentence of Section 5.02(a), 5.02(b), 5.03 through 5.09, 5.12, 5.13 and 8.07 and Annex I of the Transaction Agreement shall apply mutatis mutandis to the Parties during the term of this letter as if such covenants were fully set forth herein; provided, however, that (a) Sorin is not required to call, convene or hold the Sorin Shareholder Meeting during the pendency of the Consultation Period, (b) Cyberonics is not required to call, convene or hold the Cyberonics Stockholder Meeting during the pendency of the Consultation Period and (c) Sorin shall not have the right to terminate this letter in order to enter into a Sorin Acquisition Agreement providing for a Sorin Superior Proposal.

(b)                                 Prior to execution of this letter, Sorin has delivered to Cyberonics the Sorin Disclosure Letter and Cyberonics has delivered to Sorin the Cyberonics Disclosure Letter.

4.                                      Termination.

(a)                                                         Notwithstanding anything in this letter to the contrary;

(i)                                                             Cyberonics shall not be obligated to execute and deliver the Transaction Agreement and may, by written notice to Sorin, terminate this letter at any time if:

(A) (1) the Attorney-in-Fact fails to execute and deliver the Transaction Agreement within twenty-four (24) hours following receipt of an

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Execution Notice properly delivered by Cyberonics under Section 2(b) or (2) Sorin shall have taken a Prohibited Action;

(B) (1) Holdco, Merger Sub or Sorin has breached or failed to perform any of its representations, warranties, covenants or agreements contained in this letter, in any case, which would give rise to the failure of a condition contained in Sections 6.03(a) or 6.03(b) of the Transaction Agreement; (2) Cyberonics shall have delivered to Sorin written notice of such breach or failure to perform; and (3) such breach or failure to perform is either not capable of being cured prior to the expiration of the Consultation Period or, if capable of being so cured, is not cured by the expiration of the Consultation Period; provided, however, that Cyberonics shall not be permitted to terminate this letter pursuant to this clause (B) if Cyberonics is then in material breach of any of its obligations under this letter;

(C) any of the events set forth in Section 7.01(e) of the Transaction Agreement shall have occurred; provided, however, that Cyberonics shall not be permitted to terminate this letter pursuant to this clause (C) if Cyberonics would not be permitted to terminate the Transaction Agreement under Section 7.01(e) thereof;

(D) the Sorin board of directors shall have effected a Sorin Change of Recommendation; or

(E) in connection with entering into a Cyberonics Acquisition Agreement in compliance with Section 5.03(d) of the Transaction Agreement; provided that prior to or concurrently with such termination Cyberonics pays the amounts due under Section 5(b)(v) hereof;

and

(ii)                                  Cyberonics shall not be obligated to execute and deliver the Transaction Agreement if any of the conditions to the consummation of the transactions contemplated by the Transaction Agreement and set forth in Sections 6.01(g), 6.03(a) or 6.03(b) thereof would not be satisfied as of such time.

(b)                                                         Notwithstanding anything in this letter to the contrary:

(i)                                                             Sorin shall not be obligated to execute and deliver the Transaction Agreement and may, by written notice to Cyberonics, terminate this letter at any time if:

(A)(1) the Attorney-in-Fact fails to execute and deliver the Transaction Agreement within twenty-four (24) hours following receipt of an Execution Notice properly delivered by Sorin under Section 2(b) or (2) Cyberonics shall have taken a Prohibited Action;

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(B)(1) Cyberonics has breached or failed to perform any of its representations, warranties, covenants or agreements contained in this letter, in any case, which would give rise to the failure of a condition contained in Sections 6.02(a) or 6.02(b) of the Transaction Agreement; (2) Sorin shall have delivered to Cyberonics written notice of such breach or failure to perform; and (3) such breach or failure to perform is either not capable of being cured prior to the expiration of the Consideration Period or, if capable of being so cured, is not cured by the 30th day after delivery of such written notice to Cyberonics; provided, however, that Sorin shall not be permitted to terminate this letter pursuant to this clause (B) if Sorin, Holdco or Merger Sub is then in material breach of any of its respective obligations under this letter;

(C) any of the events set forth in Section 7.01(e) of the Transaction Agreement shall have occurred; provided, however, that Sorin shall not be permitted to terminate this letter pursuant to this clause (C) if Sorin would not be permitted to terminate the Transaction Agreement under Section 7.01(e) thereof; or

(D) the Cyberonics board of directors shall have effected a Cyberonics Change of Recommendation;

and

(ii)                                  Sorin shall not be obligated to execute and deliver the Transaction Agreement if any of the conditions to the consummation of the transactions contemplated by the Transaction Agreement and set forth in Sections 6.01(g), 6.02(a) or 6.02(b) thereof would not be satisfied as of such time.

5.                                      Effect of Termination.

(a)                                 In the event of termination of this letter by either Cyberonics or Sorin as provided in Section 4, this letter shall forthwith become void and have no effect and there shall be no liability or obligation on the part of Cyberonics, Sorin, Holdco or Merger Sub or any of their respective Subsidiaries, officers or directors, in each case, except with respect to Section 5.13 of the Transaction Agreement as incorporated herein by reference; provided, however, that (a) subject to Section 5(d), nothing herein shall relieve any party hereto from liability for any breach of any of its representations, warranties, covenants or agreements set forth in this letter and the aggrieved party will be entitled to all rights and remedies available at law or in equity and (b) the Confidentiality Agreement shall survive termination in accordance with its terms.

(b)  In the event that this letter is terminated:

(i) by Cyberonics pursuant to Section 4(a)(i)(A)(2) or Section 4(a)(i)(D), then Sorin shall pay to Cyberonics or its designee, within two (2) Business Days

5

following the date of such termination by Cyberonics, $ 75,000,000 (the “Business Termination Fee”) by wire transfer of immediately available funds;

(ii) by Sorin pursuant to Section 4(b)(i)(A)(2) or Section 4(b)(i)(D), then Cyberonics shall pay to Sorin or its designee, within two (2) Business Days following the date of such termination by Sorin, the Cyberonics Termination Fee by wire transfer of immediately available funds; and

(iii) by Cyberonics pursuant to Section 4(a)(i)(E), then Cyberonics shall pay to Sorin or its designee prior to or concurrently with such termination, the Cyberonics Termination Fee by wire transfer of immediately available funds.

Sorin and Cyberonics acknowledge and agree that neither the Cyberonics Termination Fee nor the Business Termination Fee is a penalty but rather is a reasonable estimate of damages necessary to compensate Cyberonics or Sorin, as the case may be, in the circumstances in which the Cyberonics Termination Fee or Business Termination Fee, as applicable, is payable, including, in the circumstances in which the Business Termination Fee is payable, damages attributable to the loss of opportunities resulting from entry by Cyberonics into and termination of this letter.  Sorin and Cyberonics hereby acknowledge and agree that the amount of the Cyberonics Termination Fee or Business Termination Fee, if and as applicable, is fair, after taking into account the value of the Sorin Merger and Cyberonics Merger, the other transactions contemplated hereby and all the costs and expenses already incurred by the Parties before entering into this letter.  In no event shall Cyberonics, on the one hand, or Sorin, on the other hand, be required to pay to the other party more than one Cyberonics Termination Fee or Business Termination Fee, if and as applicable, pursuant to this Section 5(b).

(c)  In the event that this letter is terminated by Sorin pursuant to Section 4(b)(i)(B), then Cyberonics shall pay to Sorin, by wire transfer of immediately available funds, the Cyberonics Expense Reimbursement.  In the event that this Agreement is terminated by Cyberonics pursuant to Section 4(a)(i)(B), then Sorin shall pay to Cyberonics, by wire transfer of immediately available funds, the Sorin Expense Reimbursement.

(d)                                 The Parties expressly acknowledge and agree that upon any termination of this letter where either the Cyberonics Termination Fee or Business Termination Fee becomes due and payable, the payment of the Cyberonics Termination Fee or Business Termination Fee, as applicable, pursuant to Section 5(b) shall be in full and complete satisfaction of any and all monetary damages of the party to which such Cyberonics Termination Fee or Business Termination Fee, as applicable, is paid and its affiliates, and their respective directors, officers and other Representatives, arising out of or related to this letter or the Proposed Transaction, including as a result of any breach of this letter, the termination of this letter, the failure to consummate the Proposed Transaction, and any claims or actions under applicable Law arising out of such breach, termination or failure.

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(e)                                  Each of the Parties acknowledges that (i) the agreements contained in this Section 5 are an integral part of the transactions contemplated by this letter and that, without these agreements, the parties would not have entered into this letter; accordingly, if a Party fails promptly to pay any amount due pursuant to Section 5(b) or 5(c) and, in order to obtain such payment, another Party commences a suit that results in a judgment against the first Party for the payment set forth in Section 5(b) or 5(c) or any portion thereof, such first Party shall pay to the other Party the other Party’s costs and expenses (including reasonable attorneys’ fees and expenses) in connection with such suit, together with interest on such amount from the date such payment was required to be made until the date of payment at the prime rate as published in The Wall Street Journal in effect on the date such payment was required to be made.

6.                                      Confidentiality.  This letter and the transactions contemplated hereby shall be subject to the terms of the Confidentiality Agreement.

7.                                      General Provisions.

(a)                                 This letter may be amended by the Parties at any time prior to the termination hereof.  This letter may not be amended except by an instrument in writing signed by each of the Parties.  For the avoidance of doubt, this Section 7(a) shall survive the termination hereof.  At any time prior to the termination of this letter, Sorin, Holdco and Merger Sub, on the one hand, and Cyberonics, on the other hand, may (a) extend the time for the performance of any of the obligations or other acts of the other, (b) waive any breach of the representations and warranties of the other contained herein or in any document delivered pursuant hereto and (c) to the extent permitted by Law, waive compliance by the other with any of the covenants or conditions contained herein.  Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party or parties to be bound thereby, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.  The failure of any Party to assert any of its rights under this letter or otherwise shall not constitute a waiver of such rights.

(b)                                 All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be deemed given if delivered personally, faxed (with confirmation), electronically mailed in portable document format (PDF) (with confirmation) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

if to Sorin, Holdco or Merger Sub:

Sorin S.p.A.

Via Benigno Crespi, 17

7

20159 Milan, Italy

Fax: +39 02 69969.790

Attention:  Brian Sheridan

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

Latham & Watkins LLP

140 Scott Drive

Menlo Park, CA, USA 94025

Fax:           (650) 463-2600

(212) 751-4864

Attention:                                         Luke Bergstrom

Adel Aslani-Far

if to Cyberonics:

Cyberonics, Inc.

100 Cyberonics Boulevard

Houston, Texas 77058

Fax: (281) 283-5555

Attention:                                         Chief Executive Officer

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

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Fax: (212) 558-3588

Attention:                                         Matthew G. Hurd

Krishna Veeraraghavan

(c)                                  If any term or other provision of this letter is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and provisions of this letter shall nevertheless remain in full force and effect.  Upon such determination that any term or other provision is invalid, illegal, unenforceable or incapable of being enforced, the court or other tribunal making such determination is authorized and instructed to modify this letter so as to effect the original intent of the Parties as closely as possible so that the transactions and agreements contemplated herein are consummated as originally contemplated to the fullest extent possible.

(d)                                 This letter (including those provisions of the Transaction Agreement incorporated herein by reference) and the Confidentiality Agreement constitute the entire agreement of the parties and supersede all prior agreements and undertakings, both written and oral, among the Parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other person any rights or remedies hereunder.

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(e)                                  Neither this letter nor any of the rights, interests or obligations under this letter shall be assigned or transferred, in whole or in part, by operation of Law or otherwise by any of the Parties without the prior written consent of the other Parties.  Any assignment or transfer in violation of the preceding sentence shall be void.

(f)                                   This letter shall be binding upon and inure solely to the benefit of each Party and its successors and permitted assigns, and nothing in this letter, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this letter.  The representations and warranties referenced in this letter are the product of negotiations among the Parties and are for the sole benefit of the Parties.  Any inaccuracies in such representations and warranties are subject to waiver by the Parties in accordance with Section 7(a) without notice or liability to any other person.  In some instances, the representations and warranties referenced in this letter may represent an allocation among the Parties of risks associated with particular matters regardless of the knowledge of any of the Parties.  Consequently, persons other than the Parties may not rely upon such representations and warranties as characterizations of actual facts or circumstances as of the date of this letter or as of any other date.  For the avoidance of doubt, this Section 7(f) shall survive the termination of the letter.

(g)                                  Each Party has participated in the drafting of this letter (including those provisions of the Transaction Agreement incorporated herein by reference), which each Party acknowledges is the result of extensive negotiations between the parties.  If an ambiguity or question of intent or interpretation arises, this letter (including those provisions of the Transaction Agreement incorporated herein by reference) shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision.  For purposes of this letter (including those provisions of the Transaction Agreement incorporated herein by reference), whenever the context requires the singular number shall include the plural, and vice versa.  As used in this letter (including those provisions of the Transaction Agreement incorporated herein by reference), the words “include” and “including,” and words of similar meaning, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words “without limitation.” Except as otherwise indicated, all references in this letter to “Sections” are intended to refer to Sections of this letter.  Unless otherwise specifically provided for herein, the term “or” shall not be deemed to be exclusive.  The words “hereof,” “herein,” “hereunder” and words of similar import, when used in this letter, refer to this letter as a whole and not to any particular provision of this letter.  The headings contained in this letter are for reference purposes only and shall not affect in any way the meaning or interpretation of this letter.

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(h)

(i) This letter shall be governed by, and construed in accordance with, the Laws of the State of Delaware, without regard to Laws that may be applicable under conflicts of laws principles that would cause the application of the Laws of any jurisdiction.  The Parties hereby declare that it is their intention that this letter shall be regarded as made under the Laws of the State of Delaware and that the Laws of said State shall be applied in interpreting its provisions in all cases where legal interpretation shall be required.  Each of the Parties agrees (a) that this letter involves at least $100,000.00, and (b) that this letter has been entered into by the Parties in express reliance upon 6 Del. C. § 2708.  Each of the Parties irrevocably and unconditionally (a) agrees that any legal action or proceeding arising out of or relating to this letter brought by any other Party or its successors or assigns shall be brought and determined in the Court of Chancery of the State of Delaware (or, if such court shall be unavailable, any state or Federal court sitting in the State of Delaware); (b) submits to the exclusive jurisdiction of the aforesaid courts; and (c)(1) agrees, to the extent any of the Parties is not otherwise subject to service of process in the State of Delaware, such Party agrees to appoint and maintain an agent in the State of Delaware as such Party’s agent for acceptance of legal process; and (2) agrees that, to the fullest extent permitted by applicable Law, service of process may also be made on such Party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service, and that service made pursuant to this Section 7(h)(i) shall, to the fullest extent permitted by applicable Law, have the same legal force and effect as if served upon such Party personally within the State of Delaware.  For purposes of implementing the Parties’ agreement to appoint and maintain an agent for service of process in the State of Delaware, each such Party that has not as of the date hereof already duly appointed such an agent does hereby appoint RL&F Service Corp., One Rodney Square, Tenth Floor, Wilmington, New Castle County, Delaware 19801, as such agent.  Each of the Parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court as described herein.  Each of the Parties further agrees that notice as provided herein shall constitute sufficient service of process and the Parties further waive any argument that such service is insufficient.  Each of the Parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this letter or the transactions contemplated hereby, (a) any claim that it is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding

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is improper or (iii) this letter, or the subject matter hereof, may not be enforced in or by such courts.

(ii) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER OR RELATE TO THIS LETTER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LETTER, OR THE TRANSACTIONS CONTEMPLATED BY THIS LETTER.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) 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, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO EXECUTE THIS LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7(h).

(i)                                     This letter may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  The exchange of a fully executed letter (in counterparts or otherwise) by facsimile or by electronic delivery in .pdf format shall be sufficient to bind the Parties to the terms and conditions of this letter.

(j)

(i) The Parties agree that irreparable damage would occur in the event that any Party does not perform the provisions of this letter in accordance with its terms or otherwise breach such provisions.  Accordingly, subject to Section 7(j)(iii), the Parties acknowledge and agree that Sorin, Cyberonics and the Attorney-in-Fact shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of this letter and to enforce specifically the terms and provisions hereof, this being in addition subject to Section 5(d) and Section 7(j)(iii), to any other remedy to which they are entitled at Law or in equity.

(ii) Subject to Section 7(j)(iii), each of the Parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that (A) it has an adequate remedy at Law or (B) an award of specific performance is not an appropriate remedy for any reason at Law or equity.  Any Party seeking an injunction or injunctions to prevent breaches of this letter and to enforce specifically the terms and provisions of this

11

letter shall not be required to provide any bond or other security in connection with any such order or injunction.

(iii) In no event shall Cyberonics’s or Sorin’s right to seek specific performance pursuant to this Section 7(j) reduce, restrict or otherwise limit any right of such Party to terminate this letter and to be paid the Cyberonics Termination Fee or Business Termination Fee, as and if applicable; provided that in no event shall Cyberonics or Sorin be entitled to both specific performance pursuant to this Section 7(j) and payment of the Business Termination Fee or the Cyberonics Termination Fee, as applicable.

[Remainder of page intentionally left blank]

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Please acknowledge your agreement to the foregoing by executing and returning to the undersigned a copy of this letter.

EXHIBIT A

Transaction Agreement

EXECUTION VERSION

TRANSACTION AGREEMENT

among

SORIN S.P.A.,

SAND HOLDCO LIMITED,

CYPHER MERGER SUB, INC.

and

CYBERONICS, INC.

Dated as of

[·]

TABLE OF CONTENTS

ARTICLE I
THE MERGERS

i

ii

iii

iv

This TRANSACTION AGREEMENT, dated as of [·] (this “Agreement”), is entered into by and among Cyberonics, Inc., a Delaware corporation (“Cyberonics”), Sorin S.p.A., a joint stock company organized under the laws of Italy (“Sorin”), Sand Holdco Limited, a private limited company incorporated under the laws of England and Wales and a wholly owned subsidiary of Sorin (“Holdco”), and Cypher Merger Sub, Inc., a Delaware corporation and wholly owned (whether directly or indirectly through a wholly owned subsidiary or subsidiaries) subsidiary of Holdco (“Merger Sub”).  Certain capitalized terms used in this Agreement are defined in Annex I and other capitalized terms used in this Agreement are defined elsewhere in this Agreement as indicated in Annex I.

RECITALS

WHEREAS, the board of directors of Sorin and the board of directors of Holdco have each unanimously approved this Agreement and the proposed merger of Sorin with and into Holdco (the “Sorin Merger”) upon the terms and subject to the conditions set forth in this Agreement and in accordance with the Laws of England and Wales and Italy, whereby each issued and outstanding ordinary share, par value €1 per share, of Sorin (the “Sorin Shares”), other than Sorin Shares owned by Cyberonics, Sorin, Holdco, Merger Sub or any of their respective Subsidiaries, will be converted into the right to receive the Sorin Merger Consideration;

WHEREAS, following the execution and delivery of this Agreement, the board of directors of each of Holdco and Sorin desires to adopt common cross-border merger terms for the Sorin Merger to reflect the terms of this Agreement (the “Sorin Merger Terms”) pursuant to the Directive on Cross-Border Mergers of Limited Liability Companies (2005/56/EC) of the European Parliament and of the Council of the European Union and, in the case of Holdco, the Companies (Cross-Border Mergers) Regulations 2007 (as amended) (the “UK Merger Regulations”) and, in the case of Sorin, Articles 2501ff of the Italian Civil Code and the Italian Legislative Decree 30 May 2008, No. 108 (the “Italian Merger Regulations”);

WHEREAS, the board of directors of each of Holdco, Cyberonics and Merger Sub has unanimously approved this Agreement and the merger of Merger Sub with and into Cyberonics (the “Cyberonics Merger” and, together with the Sorin Merger, the “Mergers”) upon the terms and subject to the conditions set forth in this Agreement and in accordance with the General Corporation Law of the State of Delaware (the “DGCL”), whereby each issued and outstanding share of common stock, par value $0.01 per share, of Cyberonics (the “Cyberonics Common Stock” and each share of Cyberonics Common Stock, a “Cyberonics Share”), other than Cyberonics Shares owned by Cyberonics, Sorin, Holdco, Merger Sub or any of their respective wholly owned Subsidiaries, will be converted into the right to receive the Cyberonics Merger Consideration;

WHEREAS, (i) the board of directors of Holdco has declared advisable and in the best interests of Holdco, and resolved to recommend to its shareholder the adoption of, this Agreement and the Mergers, (ii) the board of directors of Sorin has determined that this Agreement and the Sorin Merger are advisable and in the best interests of Sorin and its shareholders and has proposed that the Sorin shareholders approve the Sorin Merger, and (iii) the boards of directors of each of Cyberonics and Merger Sub has declared advisable and in the best

interests of such corporation and its respective stockholders, and has resolved to recommend to its respective stockholders the adoption of, this Agreement and the Cyberonics Merger; and

WHEREAS, concurrently with the execution and delivery of this Agreement, Cyberonics and certain shareholders of Sorin (the “Principal Sorin Shareholders”) are entering into agreements pursuant to which such shareholders will agree to take specified actions in furtherance of the Sorin Merger (the “Sorin Support Agreements”); and

WHEREAS, concurrently with the execution and delivery of this Agreement, Sorin and certain shareholders of Cyberonics are entering into agreements pursuant to which such shareholders will agree to take specified actions in furtherance of the Cyberonics Merger (the “Cyberonics Support Agreements”).

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties and covenants and subject to the conditions set forth herein, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

ARTICLE I
THE MERGERS

SECTION 1.01            The Mergers.

(a)           Upon the terms and subject to the conditions set forth in this Agreement (i) at the Sorin Merger Effective Time, Sorin shall be merged with and into Holdco in accordance with the Laws of England and Wales and Italy, whereupon the separate existence of Sorin shall cease, and Holdco shall continue as the surviving company in the Sorin Merger (the “Sorin Merger Surviving Company”), and (ii) at the Cyberonics Merger Effective Time, Merger Sub shall be merged with and into Cyberonics in accordance with the DGCL, whereupon the separate existence of Merger Sub shall cease, and Cyberonics shall continue as the surviving corporation in the Cyberonics Merger (the “Cyberonics Merger Surviving Corporation”).  The Sorin Merger shall have the effects prescribed by the applicable provisions of the UK Merger Regulations and the Italian Merger Regulations and this Agreement, and the Cyberonics Merger shall have the effects prescribed by the applicable provisions of the DGCL and this Agreement.

(b)           Without limiting the generality of the foregoing and subject thereto, (i) at the Sorin Merger Effective Time, all the property, rights, privileges, immunities, powers and franchises of Holdco and Sorin shall vest in Holdco as the Sorin Merger Surviving Company, and all debts, liabilities, obligations and duties of Holdco and Sorin shall become the debts, liabilities, obligations and duties of the Sorin Merger Surviving Company, and (ii) at the Cyberonics Merger Effective Time, all the property, rights, privileges, immunities, powers and franchises of Cyberonics and Merger Sub shall vest in Cyberonics as the Cyberonics Merger Surviving Corporation, and all debts, liabilities, obligations and duties of Cyberonics and Merger Sub shall become the debts, liabilities, obligations and duties of the Cyberonics Merger Surviving Corporation.  After the Mergers, the Cyberonics Merger Surviving Corporation shall be a wholly owned

2

subsidiary (whether directly or indirectly through a wholly owned subsidiary or subsidiaries) of the Sorin Merger Surviving Company.

SECTION 1.02            Closing Date.  Holdco and Sorin shall use their respective reasonable best efforts to obtain the Sorin Merger Order as promptly as practicable after the receipt of the Pre-Merger Certificates and the satisfaction or waiver by them of  the conditions set forth in Article VI, (including, without limitation, by promptly making all necessary applications under, and otherwise satisfying the requirements of, the UK Merger Regulations) and, subject to the satisfaction or waiver by them of the conditions set forth in Sections 6.01 and 6.02, will appear by Sorin Merger Counsel at the Hearing to seek the Sorin Merger Order.  The date on which the Sorin Merger Order is obtained shall be the “Closing Date.”  Following the receipt of the Sorin Merger Order, the parties shall not take any action to amend, modify, rescind or terminate the Sorin Merger Order.

SECTION 1.03            Effective Times.  On the date on which the Sorin Merger Order is obtained, and as soon as reasonably practicable after such time, and in no event prior thereto, Cyberonics shall, subject to the satisfaction or waiver by it of the conditions set forth in Sections 6.01 and 6.03, file a certificate of merger with respect to the Cyberonics Merger (the “Certificate of Cyberonics Merger”) with the Secretary of State of the State of Delaware in such form as required by, and executed and acknowledged in accordance with, the relevant provisions of the DGCL and shall make all other filings and recordings required under the DGCL.  The Certificate of Cyberonics Merger shall provide that the Cyberonics Merger shall become effective at a time which falls on the date of the Sorin Merger Effective Time but subsequent to the Sorin Merger Effective Time and in no event prior to the Sorin Merger Effective Time (such date and time, the “Cyberonics Merger Effective Time” and, together with the Sorin Merger Effective Time, the “Effective Times”).  In the event that the Sorin Merger Order is amended, modified, rescinded or terminated prior to the Sorin Merger Effective Time, Cyberonics shall file with the Secretary of State of the State of Delaware an executed Certificate of Termination terminating the Certificate of Cyberonics Merger.

SECTION 1.04            Organizational Documents; Directors and Officers.

(a)           Organizational Documents of the Sorin Merger Surviving Company.  Prior to the Sorin Merger Effective Time, Sorin, as the sole shareholder of Holdco, shall adopt the Articles of Association of the Sorin Merger Surviving Company (the “Holdco Articles”), substantially in the form set forth as Exhibit A, the final form of which shall be subject to the consent of Cyberonics, to take effect as of the Sorin Merger Effective Time, or prior to the Sorin Merger Effective Time if mutually agreed by Sorin and Cyberonics.  The Holdco Articles shall remain in effect as of the Cyberonics Merger Effective Time.

(b)           Organizational Documents of the Cyberonics Merger Surviving Corporation.  At the Cyberonics Merger Effective Time (i) the certificate of incorporation of the Cyberonics Merger Surviving Corporation, as in effect immediately prior to the Cyberonics Merger Effective Time, shall be amended and restated in the form set forth as Exhibit B and (ii) the bylaws of Merger Sub, as in effect immediately prior to the Cyberonics Merger Effective Time, shall be the bylaws of the Cyberonics Merger Surviving Corporation (except that references therein to the name of Merger Sub shall be

3

replaced by references to the name of the Cyberonics Merger Surviving Corporation, which shall be mutually agreed upon by Cyberonics and Sorin) until thereafter amended in accordance with the DGCL and the applicable provisions of the certificate of incorporation and bylaws of the Cyberonics Merger Surviving Corporation.

(c)           Directors of the Cyberonics Merger Surviving Corporation.  Subject to applicable Law, as of the Cyberonics Merger Effective Time, the members of the board of directors of Merger Sub immediately prior to the Cyberonics Merger Effective Time shall be the members of the board of directors of the Cyberonics Merger Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Cyberonics Merger Surviving Corporation, subject to Section 5.18(f).

(d)           Officers of the Cyberonics Merger Surviving Corporation.  As of the Cyberonics Merger Effective Time, the officers of Merger Sub immediately prior to the Cyberonics Merger Effective Time shall be the officers of the Cyberonics Merger Surviving Corporation, each to hold office in accordance with the certificate of incorporation and bylaws of the Cyberonics Merger Surviving Corporation.

ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK

SECTION 2.01            Conversion of Securities in the Sorin Merger.  At the Sorin Merger Effective Time, by virtue of the Sorin Merger and without any action on the part of Holdco, Sorin or the holders of any Sorin Shares:

(a)           Conversion of Sorin Shares.  Subject to Sections 2.03, 2.04 and 2.09 and in accordance with the Sorin Merger Terms, and subject to the granting by the Court of the Sorin Merger Order, Holdco shall, at the Sorin Merger Effective Time, allot for each Sorin Share issued and outstanding immediately prior to the Sorin Merger Effective Time, other than any Excluded Sorin Shares and any Sorin Rescission Shares which have not been purchased by holders of other Sorin Shares or by third parties pursuant to Article 2437-quater of the Italian Civil Code (the “Excluded Sorin Rescission Shares”), 0.0472 (the “Sorin Exchange Ratio”) validly issued, fully paid and non-assessable Holdco Shares (the “Sorin Merger Consideration”) and all such Sorin Shares shall cease to be outstanding, shall be cancelled and shall cease to exist, and each such Sorin Share (other than the Excluded Sorin Shares and the Excluded Sorin Rescission Shares) shall thereafter represent only the right to receive the Sorin Merger Consideration.

(b)           Cancellation of Excluded Sorin Shares.  All Sorin Shares that are held in the treasury of Sorin or owned of record by Holdco, Merger Sub or Cyberonics, or any of their respective wholly owned Subsidiaries as of immediately prior to the Sorin Merger Effective Time (the “Excluded Sorin Shares”) shall immediately following the Sorin Merger Effective Time be cancelled and shall cease to exist, with no consideration being paid with respect thereto.

(c)           Cancellation of Holdco Shares. Each Holdco Share issued and outstanding immediately prior to the Sorin Merger Effective Time shall immediately following the

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Sorin Merger Effective Time be cancelled and shall cease to exist, with no consideration being paid with respect thereto.  The parties shall discuss in good faith any alternative treatment proposed by Sorin or Holdco in respect of this Section 2.01(c) to the extent such treatment is permitted under applicable Law.

SECTION 2.02            Conversion of Securities in the Cyberonics Merger.  At the Cyberonics Merger Effective Time, by virtue of the Cyberonics Merger and without any action on the part of Holdco, Merger Sub, Cyberonics or the holders of any shares of capital stock of Cyberonics or Merger Sub:

(a)           Conversion of Cyberonics Common Stock.  Subject to Sections 2.03, 2.05 and 2.09, each Cyberonics Share issued and outstanding immediately prior to the Cyberonics Merger Effective Time, other than Excluded Cyberonics Shares, shall automatically be converted into the right to receive one (1) (the “Cyberonics Exchange Ratio”) validly issued, fully paid and non-assessable Holdco Share (the “Cyberonics Merger Consideration”) and all such Cyberonics Shares shall cease to be outstanding, shall be cancelled and shall cease to exist, and each such Cyberonics Share that immediately prior to the Cyberonics Merger Effective Time was represented by a certificate (each, a “Cyberonics Certificate”) or was a non-certificated Cyberonics Share represented by book-entry (each, a “Cyberonics Book-Entry Share”) (in each case, other than Excluded Cyberonics Shares) shall thereafter represent only the right to receive the Cyberonics Merger Consideration, subject to Sections 2.05 and 2.09.

(b)           Cancellation of Excluded Cyberonics Shares.  All Cyberonics Shares that are held in the treasury of Cyberonics or owned of record by Sorin, Holdco or Merger Sub, or any of their respective wholly owned Subsidiaries (the “Excluded Cyberonics Shares”) shall be cancelled and shall cease to exist, with no consideration being paid with respect thereto.

(c)           Conversion of Capital Stock of Merger Sub.  Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Cyberonics Merger Effective Time shall be automatically converted into and become one validly issued, fully paid and non-assessable share of common stock, par value $0.01 per share, of the Cyberonics Merger Surviving Corporation.

SECTION 2.03            Merger Consideration Adjustment.  Notwithstanding anything in this Agreement to the contrary, if, from the date of this Agreement until the Sorin Merger Effective Time, the outstanding Sorin Shares or Cyberonics Shares or the securities convertible into, or exercisable or exchangeable for, Sorin Shares or Cyberonics Shares shall have been changed into a different number of shares or a different class by reason of any reclassification, share split (including a reverse share split), recapitalization, split-up, combination, exchange of shares, readjustment or other similar transaction (but not including the Excluded Sorin Rescission Shares), or a share dividend or share distribution thereon shall be declared with a record date within said period, the Sorin Merger Consideration shall be appropriately adjusted, without duplication, to provide the holders of Cyberonics Shares and Sorin Shares the same economic effect as contemplated by this Agreement prior to such event.

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SECTION 2.04            Exchange of Sorin Shares.

(a)           Sorin Shares shall be exchanged for Holdco Shares in accordance with the Sorin Merger Terms, the rules and procedures of any depositary or clearing agency through which such Sorin Shares are held or traded or through which the Holdco Shares to be issued as Sorin Merger Consideration are to be held or traded, and applicable Law.

(b)           As of the Sorin Merger Effective Time, to the extent permitted under applicable Law and the rules and regulations of the MSE, the share transfer books of Sorin shall be closed, and there shall be no further registration of transfers on the share transfer books of the Sorin Merger Surviving Company of the Sorin Shares that were outstanding immediately prior to the Sorin Merger Effective Time.  The Sorin Merger Consideration issued in accordance with the terms of this Article II shall represent full satisfaction of all rights pertaining to the Sorin Shares, other than the Excluded Sorin Rescission Shares, that were outstanding immediately prior to the Sorin Merger Effective Time.  From and after the Sorin Merger Effective Time, the holders of Sorin Shares outstanding immediately prior thereto shall cease to have any rights with respect thereto except as otherwise provided for herein or by applicable Law.

(c)           Notwithstanding anything to the contrary in this Article II, (i) no certificates or scrip representing fractional shares or book-entry credit of Holdco Shares shall be issued upon the conversion of Sorin Shares pursuant to this Article II, (ii) no Holdco dividend or other distribution or share split shall relate to any such fractional share interest and (iii) no such fractional share interest shall entitle the owner thereof to vote or to any other rights of a shareholder of Holdco.

(d)           Prior to the Sorin Merger Effective Time, Cyberonics and Sorin shall select, and Holdco shall enter into an agreement (in form and substance reasonably satisfactory to Cyberonics and Sorin) with, a financial intermediary or a bank which participates in Monte Titoli designated by the parties to act as exchange agent (the “Sorin Exchange Agent”).  Holdco and the Sorin Exchange Agent shall determine suitable procedures for the treatment of fractional Holdco Shares that would have been issued in respect of Sorin Shares in the Sorin Merger but for Section 2.04(c), which procedures shall be (i) in accordance with market practice in Italy and with the rules and practice of Monte Titoli and (ii) reasonably acceptable to Cyberonics and Sorin.  Holdco shall pay all commissions, transfer taxes and other out-of-pocket transaction costs of, and compensation to, the Sorin Exchange Agent incurred in connection with dealing with any such fractional Holdco Shares.

SECTION 2.05            Exchange of Cyberonics Certificates; Payment for Cyberonics Shares.

(a)           Cyberonics Exchange Agent.  Holdco shall deposit, or shall procure the deposit, with a U.S.-based nationally recognized financial institution designated by Cyberonics and reasonably acceptable to Cyberonics and Sorin (the “Cyberonics Exchange Agent”) for the benefit of the holders of Cyberonics Shares (other than Excluded Cyberonics Shares), for exchange in accordance with this Article II, (i) at or prior to the Cyberonics Merger Effective Time, certificates (or, at Holdco’s option,

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uncertificated shares) representing the aggregate number of Holdco Shares required to be delivered pursuant to Section 2.02 and (ii) as necessary from time to time from and after the Cyberonics Merger Effective Time, any dividends or other distributions payable pursuant to Section 2.05(c) with respect to the Holdco Shares with a record and payment date prior to the surrender of such Cyberonics Shares (such certificates for shares of Holdco Shares or uncertificated Holdco shares, together with the amount of any dividends or other distributions payable with respect thereto being hereinafter referred to as the “Exchange Fund”).  The Exchange Fund shall not be used for any purpose other than to fund payments pursuant to Section 2.02, except as expressly provided for in this Agreement.  Holdco shall enter into an agreement with the Cyberonics Exchange Agent in a form reasonably acceptable to Cyberonics and Sorin.  Any or all of the obligations of Holdco contained in this Section 2.05 may be performed, satisfied or fulfilled by one or more Sorin Subsidiaries or New Entities reasonably acceptable to Cyberonics; provided that Holdco shall not be relieved of its obligations under this Section 2.05 to the extent not performed, satisfied or fulfilled in full by such Sorin Subsidiaries or New Entities.

(b)           Procedures for Surrender.

(i)            Cyberonics Certificates.  Promptly after the Cyberonics Merger Effective Time (and in any event within three (3) Business Days thereafter), Holdco shall cause the Cyberonics Exchange Agent to mail to each holder of record of a Cyberonics Certificate, (a) a letter of transmittal (which shall notify holders of the effectiveness of the Cyberonics Merger and specify that delivery shall be effected, and that risk of loss and title to the Cyberonics Certificates shall pass, only upon delivery of the Cyberonics Certificates (or affidavit of loss in lieu thereof as provided in Section 2.05(f)) to the Cyberonics Exchange Agent), and (b) instructions for effecting the surrender of the Cyberonics Certificates (or affidavit of loss in lieu thereof as provided in Section 2.05(f)) to the Cyberonics Exchange Agent in exchange for delivery of the Cyberonics Merger Consideration therefor.  Upon surrender of Cyberonics Certificates (or an affidavit of loss in lieu thereof as provided in Section 2.05(f)) for cancellation to the Cyberonics Exchange Agent, together with such letter of transmittal, duly completed and validly executed in accordance with such instructions, and such other documents as may reasonably be required by the Cyberonics Exchange Agent, the holder of such Cyberonics Certificates shall be entitled to receive in exchange therefor:  (1) certificates (or, at Holdco’s option, uncertificated shares) representing the Holdco Shares into which the Cyberonics Shares represented by such holder’s Cyberonics Certificates were converted pursuant to Section 2.02, and the Cyberonics Certificates so surrendered shall forthwith be cancelled, and (2) a check in United States dollars equal to the amount of any cash dividends or other distributions that such holder has the right to receive pursuant to Section 2.05(c), in each case, after giving effect to any required Tax withholdings as provided in Section 2.09 and without interest thereon.

(ii)           Cyberonics Book-Entry Shares.  Promptly after the Cyberonics Merger Effective Time, Holdco shall cause the Cyberonics Exchange Agent to (a) mail to each holder of Cyberonics Book-Entry Shares materials advising such

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holder of the effectiveness of the Cyberonics Merger and the conversion of their Cyberonics Shares into the right to receive the Cyberonics Merger Consideration and (b) deliver (1) in registered form to each holder of Cyberonics Book-Entry Shares that number of Holdco Shares that such holder is entitled to receive in respect of each such Cyberonics Book-Entry Share pursuant to Section 2.02 and (2) a check in United States dollars equal to the amount of any cash dividends or other distributions that such holder has the right to receive pursuant to Section 2.05(c), in each case, after giving effect to any required Tax withholdings as provided in Section 2.09 and without interest thereon.

(c)           Dividends and Distributions with Respect to Unexchanged Cyberonics Shares.  All Holdco Shares to be issued pursuant to the Cyberonics Merger shall be issued and outstanding as of the Cyberonics Merger Effective Time and whenever a dividend or other distribution is declared by Holdco in respect of the Holdco Shares, the record date for which is after the Cyberonics Merger Effective Time, that declaration shall include dividends or other distributions in respect of all Holdco Shares issued in the Cyberonics Merger.  Subject to Section 2.05(e), the Cyberonics Exchange Agent shall hold any Holdco Shares in respect of any unsurrendered Cyberonics Certificate in trust for the holder of such Cyberonics Certificate until such Cyberonics Certificate (or affidavit of loss in lieu thereof as provided in Section 2.05(f)) has been surrendered for exchange in accordance with this Article II.  No dividends or other distributions in respect of the Holdco Shares shall be paid to any holder of any unsurrendered Cyberonics Certificate until such Cyberonics Certificate (or affidavit of loss in lieu thereof as provided in Section 2.05(f)) has been surrendered for exchange in accordance with this Article II.  Subject to applicable Law and the provisions of this Article II, following surrender of any such Cyberonics Certificate (or affidavit of loss in lieu thereof as provided in Section 2.05(f)), there shall be delivered to the record holder of the certificate representing shares of Holdco Shares issued in exchange therefor, without interest and after giving effect to any required Tax withholdings as provided in Section 2.09, (i) at the time of such surrender, the dividends or other distributions with a record date after the Cyberonics Merger Effective Time with respect to such Holdco Shares and not theretofore paid and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to such Holdco Shares with a record date after the Cyberonics Merger Effective Time, but with a payment date subsequent to such surrender.

(d)           Transfer Books; No Further Ownership Rights in Shares.  As of the Cyberonics Merger Effective Time, the stock transfer books of Cyberonics shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Cyberonics Merger Surviving Corporation of the Cyberonics Shares that were outstanding immediately prior to the Cyberonics Merger Effective Time.  The Cyberonics Merger Consideration issued in accordance with the terms of this Article II, together with any dividends or other distributions payable pursuant to Section 2.05(c), shall represent full satisfaction of all rights pertaining to the Cyberonics Shares that were outstanding immediately prior to the Cyberonics Merger Effective Time.  From and after the Cyberonics Merger Effective Time, the holders of Cyberonics Shares outstanding immediately prior thereto shall cease to have any rights with respect thereto except as otherwise provided for herein or by applicable Law.

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(e)           Termination of Exchange Fund; Abandoned Property; No Liability.  At any time following the first anniversary of the Cyberonics Merger Effective Time (or such earlier date immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Entity), Holdco shall be entitled to require the Cyberonics Exchange Agent to deliver to it all or any portion of the Exchange Fund (including any interest or investment income received with respect thereto) not transferred to holders of Cyberonics Shares, and thereafter such holders shall be entitled to look only to Holdco (subject to abandoned property, escheat or other similar Laws) as general creditors thereof with respect to the Cyberonics Merger Consideration payable upon due surrender of their Cyberonics Certificates and compliance with the procedures set forth in Section 2.05(b), without interest.  Notwithstanding the foregoing, none of the Cyberonics Merger Surviving Corporation, the Sorin Merger Surviving Company, Holdco, the Cyberonics Exchange Agent or any other person shall be liable to any former holder of Cyberonics Shares or Sorin Shares for any amount properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(f)            Transferred Certificates; Lost, Stolen or Destroyed Certificates.  In the event any Cyberonics Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Cyberonics Certificate to be lost, stolen or destroyed and compliance with the replacement requirements established by the Cyberonics Exchange Agent including the posting by such person of a bond in customary amount and upon such terms as may be required by Holdco or the Cyberonics Exchange Agent as indemnity against any claim with respect to such Cyberonics Certificate that may be made against Holdco, the Cyberonics Merger Surviving Corporation or the Cyberonics Exchange Agent, such person (or its designee) shall be entitled to receive, in exchange for such lost, stolen or destroyed Cyberonics Certificate, the Cyberonics Merger Consideration, plus any dividends and other distributions in respect of the Holdco Shares that would have been delivered pursuant to the provisions of this Article II (after giving effect to any required Tax withholdings as provided in Section 2.09) had such lost, stolen or destroyed Cyberonics Certificate been surrendered.  If delivery of the Cyberonics Merger Consideration is to be made to a person other than the person in whose name the surrendered Cyberonics Certificate is registered, it shall be a condition of delivery that the Cyberonics Certificate so surrendered be properly endorsed or be otherwise in proper form for transfer and that the person requesting such delivery shall have paid to the Cyberonics Exchange Agent any transfer and other Taxes required by reason of the delivery of the Cyberonics Merger Consideration to a person other than the record holder of the Cyberonics Certificate surrendered or shall have established to the satisfaction of Holdco that such Tax either has been paid or is not applicable.

SECTION 2.06            Treatment of Cyberonics Equity Awards.

(a)           Treatment of Cyberonics Options.

(i)            As of the Cyberonics Merger Effective Time, (A) each option to purchase Cyberonics Shares granted under a Cyberonics Stock Plan (the “Cyberonics Options”) that is outstanding immediately prior to the Cyberonics

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Merger Effective Time shall be fully vested and (B) each Cyberonics Option shall be cancelled and cease to represent an option to purchase Cyberonics Shares and shall be converted into an option to purchase a number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (i) the number of Cyberonics Shares subject to such Cyberonics Option immediately prior to the Cyberonics Merger Effective Time by (ii) the Cyberonics Exchange Ratio, at an exercise price per share equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (A) the per share exercise price specified in such Cyberonics Option immediately prior to the Cyberonics Merger Effective Time by (B) the Cyberonics Exchange Ratio; provided, however, that the exercise price and the number of shares of Holdco Shares purchasable pursuant to such Cyberonics Option will be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Cyberonics Option to which Section 422 of the Code applies, the exercise price and the number of shares of Holdco Shares purchasable pursuant to such Cyberonics Option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code.  Except as specifically provided above, following the Cyberonics Merger Effective Time, each Cyberonics Option shall continue to be governed by the same terms and conditions (including exercisability terms) as were applicable to such Cyberonics Option immediately prior to the Cyberonics Merger Effective Time.

(ii)           Notwithstanding Section 2.06(a)(i) or anything else to the contrary, with respect to any Cyberonics Options that were granted prior to January 1, 2013 and are held by a Section 16 Person, each such Cyberonics Option that is outstanding immediately prior to the Cyberonics Merger Effective Time (whether vested or unvested) shall, as of the Cyberonics Merger Effective Time, be cancelled and shall only entitle the holder of such Cyberonics Option to receive (without interest), on the date on which the Cyberonics Merger Effective Time occurs, an amount in cash equal to the product (rounded down to the nearest cent) obtained by multiplying (i) the number of Cyberonics Shares subject to such Cyberonics Option immediately prior to the Cyberonics Merger Effective Time by (ii) the excess, if any, of (A) the Cyberonics Trading Price over (B) the per share exercise price specified in such Cyberonics Option immediately prior to the Cyberonics Merger Effective Time, less applicable Taxes required to be withheld with respect to such payment.  For the avoidance of doubt, any Cyberonics Option which has a per share exercise price that is greater than or equal to the Cyberonics Trading Price shall be cancelled at the Cyberonics Merger Effective Time for no consideration or payment.

(iii)          “Cyberonics Trading Price” means the average of the volume-weighted average prices, rounded to four decimal points, of Cyberonics Shares on NASDAQ for ten individual (10) trading days within the twenty (20) consecutive trading days ending on (and including) the second full trading day prior to the Cyberonics Merger Effective Time (with such ten (10) trading days to be selected by random lottery in the presence of senior executives of each of Sorin and

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Cyberonics), in each case as reported by Bloomberg Financial Markets, or any successor thereto, through its “Volume Weighted Average Price” function (or, if not reported therein, in another authoritative source mutually selected by Sorin and Cyberonics), subject to appropriate adjustments for any stock dividend, stock split or other similar transactions that occur during such period.  If the volume-weighted average price cannot be calculated for Cyberonics Shares on any such date, the volume-weighted average price for such date shall be the fair market value as mutually agreed upon by Sorin and Cyberonics.

(b)           Treatment of Restricted Cyberonics Shares.  Each outstanding Cyberonics Share subject to vesting or other lapse restrictions pursuant to the Cyberonics Stock Plans immediately prior to the Cyberonics Merger Effective Time (each, a “Restricted Cyberonics Share”) shall, as of the Cyberonics Merger Effective Time, accelerate and become fully vested (with performance-based Restricted Cyberonics Shares vesting at 100% of the target level) and shall be converted into, and become exchanged for the Cyberonics Merger Consideration (less applicable Taxes required to be withheld with respect to such vesting) in accordance with Section 2.02.  Except as otherwise agreed to by Cyberonics and Sorin, with respect to each Section 16 Person who is an officer of Cyberonics (other than the individual whose name is set forth on Section 2.06 of the Cyberonics Disclosure Letter), 50% of the Holdco Shares payable to such Section 16 Person pursuant to this Section 2.06(b) shall be subject to an 18-month lock-up period, which will terminate on termination of employment of the holder for any reason, and the remaining 50% of the Holdco Shares payable to such Section 16 Person pursuant to this Section 2.06(b) shall not be subject to any lock-up period.

(c)           Treatment of Cyberonics RSUs.  As of the Cyberonics Merger Effective Time, (A) any vesting conditions applicable to each outstanding restricted stock unit pursuant to the Cyberonics Stock Plans immediately prior to the Cyberonics Merger Effective Time (each, a “Cyberonics RSU”) shall accelerate (with performance-based Cyberonics RSUs vesting at 100% of the target level), and (B) each Cyberonics RSU shall be cancelled and shall only entitle the holder of such Cyberonics RSU to receive (without interest), as promptly as practicable after the Cyberonics Merger Effective Time (but in any event no later than three (3) Business Days after the Cyberonics Merger Effective Time), a number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (i) the number of Cyberonics Shares subject to such Cyberonics RSU immediately prior to the Cyberonics Merger Effective Time by (ii) the Cyberonics Exchange Ratio (less applicable Taxes required to be withheld with respect to such payment); provided, that notwithstanding anything to the contrary, with respect to any Cyberonics RSU held by a Section 16 Person, the amount determined in accordance with this Section 2.06(c) will be paid to such Section 16 Person on the date on which the Cyberonics Merger Effective Time occurs; provided, further, that with respect to any Cyberonics RSUs that constitute nonqualified deferred compensation subject to Section 409A of the Code and that are not permitted to be paid at the Cyberonics Merger Effective Time without triggering a Tax or penalty under Section 409A of the Code, such payment shall be made at the earliest time permitted under the applicable Cyberonics Stock Plan and award agreement that will not trigger a Tax or penalty under Section 409A of the Code.  Except as otherwise agreed to by

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Cyberonics and Sorin, with respect to each Section 16 Person who is an officer of Cyberonics (other than the individual whose name is set forth on Section 2.06 of the Cyberonics Disclosure Letter), 50% of the Holdco Shares payable to such Section 16 Person pursuant to this Section 2.06(c) shall be subject to an 18-month lock-up period, which will terminate on termination of employment of the holder for any reason, and the remaining 50% of the Holdco Shares payable to such Section 16 Person pursuant to this Section 2.06(c) shall not be subject to any lock-up period.

(d)           Employee Stock Purchase Plan.  As soon as reasonably practicable following the date of this Agreement and in any event prior to the Cyberonics Merger Effective Time, Cyberonics shall take all actions, including obtaining any necessary determinations and/or resolutions of Cyberonics’s board of directors or a committee thereof and, if appropriate, amending the terms of Cyberonics’s 1991 Employee Stock Purchase Plan (the “ESPP”) that may be necessary or required under the ESPP and applicable Laws to ensure that (A) except for the six (6) month offering period under the ESPP that commenced on December 1, 2014 (the “Final Offering”), no offering period shall be authorized or commenced on or after the date of this Agreement (unless this Agreement is terminated), (B) if the Cyberonics Merger Effective Time shall occur prior to the end of the Final Offering as scheduled as of immediately prior to the date of this Agreement, (i) each individual participating in the Final Offering shall receive notice of the transactions contemplated by this Agreement no later than ten (10) Business Days prior to the Cyberonics Merger Effective Time and shall have an opportunity to terminate his or her outstanding purchase rights under the ESPP and (ii) the Final Offering shall end at the Cyberonics Merger Effective Time, (C) each ESPP participant’s accumulated contributions under the ESPP shall be used to purchase Cyberonics Shares in accordance with the ESPP as of the end of the Final Offering, (D) the applicable purchase price for Cyberonics Shares shall not be decreased below the levels set forth in the ESPP as of the date of this Agreement, (E) no individual shall be permitted to increase his or her rate of contribution under the ESPP following the date of this Agreement and (F) the ESPP shall terminate in its entirety at the Cyberonics Merger Effective Time and no further rights shall be granted or exercised under the ESPP thereafter.

(e)           Cyberonics Actions.  Prior to the Cyberonics Merger Effective Time, Cyberonics and Holdco shall adopt any resolutions and take all action necessary to (i) effectuate the treatment of the Cyberonics Options, Restricted Cyberonics Shares and Cyberonics RSUs (the “Cyberonics Equity Awards”) pursuant to this Section 2.06 and (ii) ensure that from and after the Cyberonics Merger Effective Time, neither Holdco nor any other party to this Agreement will be required to deliver Cyberonics Shares or other capital stock of Cyberonics to any person pursuant to or in settlement of the Cyberonics Equity Awards.

(f)            Holdco Actions.  Holdco shall take all action necessary for the assumption, at the Cyberonics Merger Effective Time, by Holdco of all the obligations of Cyberonics under the Cyberonics Stock Plans and each outstanding Cyberonics Option and the agreements evidencing the grant thereof, as necessary to effect the transactions contemplated by this Section 2.06.  At the Cyberonics Merger Effective Time, the number and kind of shares available for issuance under each Cyberonics Stock Plan shall

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be adjusted to reflect Holdco Shares in accordance with the provisions of the applicable Cyberonics Stock Plan.  Holdco shall take all corporate action necessary to reserve for issuance a sufficient number of Holdco Shares for delivery with respect to the Cyberonics Options assumed by it and shall, no later than the tenth (10th) day following the Cyberonics Merger Effective Time, file a registration statement on Form S-8 (or any successor or other appropriate form) with respect to the Holdco Shares subject to such Cyberonics Options, and shall use its reasonable best efforts to maintain the effectiveness of such registration statement for so long as the relevant Cyberonics Stock Plans remain in effect and such registration of interests therein or the Holdco Shares issuable thereunder continues to be required.

SECTION 2.07            Treatment of Sorin Equity Awards.

(a)           Assumption of Sorin Stock Plans.  As of the Sorin Merger Effective Time, Holdco shall assume, or shall cause one of its Subsidiaries to assume, all Sorin Stock Plans and the Sorin Options granted thereunder in accordance with this Section 2.07 and Holdco shall be able to grant stock awards, to the extent permissible by applicable Laws, the Listing Rules and NASDAQ regulations, under the terms of the Sorin Stock Plans covering the reserved but unissued Sorin Shares, except that (i) Sorin Shares covered by such awards will be Holdco Shares and (ii) all references to a number of Sorin Shares will be changed to references to Holdco Shares.  Prior to the Sorin Merger Effective Time, Sorin and Holdco shall adopt such resolutions and take such other actions as may be reasonably required to effectuate the foregoing provisions of this Section 2.07(a), subject to any adjustments that may be required by the Laws of England and Wales or Italy.

(b)           Sorin Options.  As of the Sorin Merger Effective Time, (i) each option or stock appreciation right to acquire Sorin Shares or to receive a cash payment based on the value thereof granted under any Sorin Stock Plan (each, a “Sorin Option”) that is outstanding immediately prior to the Sorin Merger Effective Time shall be fully vested and (ii) each Sorin Option shall be cancelled and cease to represent an option or stock appreciation right based on Sorin Shares and shall be converted into an option or stock appreciation right based on that number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (A) the number of Sorin Shares subject to such Sorin Option immediately prior to the Sorin Merger Effective Time by (B) the Sorin Exchange Ratio, at an exercise price per share equal to the quotient (rounded up to the nearest whole cent) obtained by dividing (x) the per share exercise price specified in such Sorin Option immediately prior to the Sorin Merger Effective Time by (y) the Sorin Exchange Ratio (which exercise price may be converted into dollars or pounds based on the applicable currency exchange rates); provided, however, in the case of any Sorin Option to which Section 409A of the Code applies, that the exercise price and the number of shares of Holdco Shares purchasable pursuant to such Sorin Option will be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Sorin Option to which Section 422 of the Code applies, the exercise price and the number of shares of Holdco Shares purchasable pursuant to such Sorin Option shall be determined in accordance with the foregoing, subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code.  Except as specifically provided above,

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following the Sorin Merger Effective Time, each Sorin Option shall continue to be governed by the same terms and conditions (including exercisability terms) as were applicable to such Sorin Option immediately prior to the Sorin Merger Effective Time (but taking into account any changes thereto provided for in the applicable Sorin Stock Plan or in any applicable award agreement and any restrictions on replicating such terms and conditions under the Laws of England and Wales or Italy).

(c)           Sorin RSUs and Sorin Performance Shares.  As of the Sorin Merger Effective Time, (i) any vesting conditions applicable to each outstanding restricted stock unit pursuant to the Sorin Stock Plans other than the 2012-2014 Long Term Incentive Plan of Sorin immediately prior to the Sorin Merger Effective Time (each, a “Sorin RSU”) and each outstanding performance share pursuant to the Sorin Stock Plans other than the 2012-2014 Long Term Incentive Plan of Sorin immediately prior to Sorin Merger Effective Time (each, a “Sorin Performance Share “ and each award of Sorin RSUs or Sorin Performance Shares, a “Sorin LTI Award”) shall accelerate at 100% of the target level and (ii) each Sorin LTI Award shall be cancelled and shall only entitle the holder of such Sorin LTI Award to receive (without interest), at the times set forth in the remainder of this Section 2.07(c), a number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (A) the number of Sorin Shares subject to such Sorin LTI Award immediately prior to the Sorin Merger Effective Time by (B) the Sorin Exchange Ratio.  Except as otherwise agreed by Cyberonics and Sorin, with respect to each Sorin LTI Award, the terms of which currently provide for a lock-up period and, except as otherwise determined by Sorin, each other Sorin LTI Award (collectively, the “Modified Sorin LTI Awards”), a portion of the Holdco Shares payable pursuant to this Section 2.07(c) shall be paid as promptly as practicable after the Sorin Merger Effective Time (but in any event no later than three (3) Business Days after the Sorin Merger Effective Time), with such portion equal to the number of Holdco Shares that would have been payable with respect to such award based on (x) the actual level of performance achieved for the 2012-2014 performance period (which is expected to be 30.57%) and (y) the portion of the applicable performance period completed as of the Sorin Merger Effective Time.  Of the remaining Holdco Shares payable pursuant to each such Modified Sorin LTI Award, 50% shall be paid on the first anniversary of the date hereof and 50% shall be paid on the second anniversary of the date hereof, in each case subject to the continued employment with Sorin or Holdco or any of their respective affiliates of the holder of such Modified Sorin LTI Award through the applicable payment date; provided that any holder of a Modified Sorin LTI Award whose employment is terminated in a “good leaver” or similar termination shall remain entitled to receive such Holdco Shares promptly following such termination.  The Holdco Shares payable with respect to each Sorin LTI Award other than the Modified Sorin LTI Awards shall be paid as promptly as practicable after the Sorin Merger Effective Time (but in any event no later than three (3) Business Days after the Sorin Merger Effective Time).  No Holdco Shares payable with respect to any Sorin LTI Award shall be subject to any lock-up period.

(d)           Sorin Deferred Bonus Shares.  As of the Sorin Merger Effective Time, (i) any vesting conditions applicable to each outstanding deferred bonus share pursuant to the Sorin Stock Plans immediately prior to the Sorin Merger Effective Time (each, a

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“Sorin Deferred Bonus Share”) shall accelerate and (ii) each Sorin Deferred Bonus Share shall be cancelled and shall only entitle the holder of such Sorin Deferred Bonus Share to receive (without interest), as promptly as practicable after the Sorin Merger Effective Time (but in any event no later than three (3) Business Days after the Sorin Merger Effective Time), a number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (A) the number of Sorin Shares subject to such Sorin Deferred Bonus Share immediately prior to the Sorin Merger Effective Time by (B) the Sorin Exchange Ratio.  No Holdco Shares payable with respect to any Sorin Deferred Bonus Share shall be subject to any lock-up period.

(e)           2012-2014 Sorin Performance Shares.  Each individual who, as of the date of this Agreement, holds any performance shares under the 2012-2014 Long Term Incentive Plan of Sorin (“2012-2014 Participant”) shall be entitled to receive (without interest), as promptly as practicable after the Sorin Merger Effective Time (but in any event no later than three (3) Business Days after Sorin Merger Effective Time), a number of Holdco Shares equal to the product (rounded down to the nearest whole number) obtained by multiplying (i) 69.43% of the number of Sorin Shares that would have been payable to such individual with respect to such performance shares pursuant to the terms of such 2012-2014 Long Term Incentive Plan if the respective target levels of performance had been achieved at 100% with respect to such awards by (ii) the Sorin Exchange Ratio.  Unless otherwise agreed by Cyberonics and Sorin, with respect to each 2012-2014 Participant who holds performance shares under the 2012-2014 Long Term Incentive Plan the terms of which provide that the Sorin Shares payable with respect to such performance shares would be subject to a lock-up period following settlement, and, except as otherwise determined by Sorin, each other performance share under the 2012-2014 Long Term Incentive Plan (collectively, the “Modified 2012-2014 LTI Awards”), 50% of the Holdco Shares payable to such individual pursuant to this Section 2.07(e) shall be subject to an 18-month lock-up period (on the same terms otherwise applicable and which shall terminate upon termination of employment of the holder), and 50%  of such Holdco Shares shall not be subject to such lock-up period.  With respect to the performance shares under the 2012-2014 Long Term Incentive Plan other than the Modified 2012-2014 LTI Awards, no lock-up period shall apply to the Holdco Shares payable pursuant to this Section 2.07(e).

(f)            Notices.  As soon as practicable after the Sorin Merger Effective Time, Holdco shall deliver to the holders of Sorin Options appropriate notices setting forth such holders’ rights pursuant to the Sorin Stock Plans, and the agreements evidencing the grants of such Sorin Options, as the case may be, shall continue in effect on the same terms and conditions (subject to the acceleration of vesting and other adjustments required by this Section 2.07 after giving effect to the Sorin Merger and the assumption by Holdco as set forth above).

(g)           Holdco Actions.  Holdco shall take all corporate action necessary to ensure that a sufficient number of Holdco Shares can be delivered with respect to the Sorin Options assumed by it in accordance with this Section 2.07.  If requested by Sorin prior to the Sorin Merger Effective Time, Holdco shall, no later than the tenth (10th) day following the Sorin Merger Effective Time, file a registration statement on Form S-8 (or

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any successor or other appropriate form) with respect to the Holdco Shares subject to such converted Sorin Options, and shall use its reasonable best efforts to maintain the effectiveness of such registration statement for so long as the relevant Sorin Stock Plans or any successor equity plans, as applicable, remain in effect and such registration of interests therein or the Holdco Shares issuable thereunder continues to be required.  With respect to those individuals who subsequent to the Sorin Merger will be subject to the reporting requirements under Section 16(a) of the Exchange Act, where applicable, Holdco shall administer the Sorin Stock Plans or any successor equity plans in a manner that complies with Rule 16b-3 promulgated under the Exchange Act to the extent the applicable Sorin Stock Plan complied with such rule prior to the Sorin Merger.

(h)           Sorin Actions.  The Sorin shareholders’ meeting and the Sorin board of directors (or, if appropriate, any committee thereof) shall adopt any resolutions and take all action (including obtaining the consent of the Sorin Equity Awards’ beneficiaries, to the extent required) necessary to (i) effectuate the treatment of the Sorin Equity Awards pursuant to this Section 2.07 and (ii) ensure that from and after the Sorin Merger Effective Time neither Holdco nor any other party to this Agreement will be required to deliver Sorin Shares or other capital stock of Sorin to any person pursuant to or in settlement of the Sorin Equity Awards. The actions related to the Sorin Equity Awards, as regulated under this Section 2.07, shall be described in the Sorin Merger Terms to be submitted to the approval of Sorin Shareholder Meeting.  “Sorin Equity Awards” means the Sorin Options, Sorin LTI Awards, Sorin Deferred Bonus Shares and performance Shares under the 2012-2014 Long Term Incentive Plan of Sorin.

SECTION 2.08            Sorin Rescission Shares.  If the Sorin Merger is consummated pursuant to the terms and conditions of this Agreement, Sorin Shares outstanding immediately prior to the Sorin Merger Effective Time and held by a holder who has exercised and perfected his or her rescission rights in accordance with Italian Law (the “Sorin Rescission Shares”), and to be reallocated to other shareholders or third parties who have purchased such Sorin Shares in accordance with Article 2437-quater of the Italian Civil Code, shall be converted into or exchanged for the Sorin Merger Consideration effective on or about the Sorin Merger Effective Time or at any other time determined by Sorin and Holdco in accordance with applicable Law, and such Sorin Merger Consideration shall be promptly allotted to such other shareholders or third parties.  Effective as of the Sorin Merger Effective Time and in accordance with applicable Laws, the holders of Excluded Sorin Rescission Shares shall be entitled to receive an amount of cash per Sorin Share to the extent required by Article 2437-quater (5) of the Italian Civil Code.  Sorin shall deliver prompt notice to Cyberonics of any purported exercise of rescission rights of any Sorin Shares, to the extent permitted by applicable Law.  The Sorin board of directors shall submit to the relevant Sorin Shareholders Meeting the proposal for the Sorin Merger specifying that the cash exit right will be effective only upon effectiveness of the Sorin Merger.

SECTION 2.09            Withholding Rights.  Each of Sorin, Holdco, Merger Sub, the Sorin Merger Surviving Company, the Cyberonics Merger Surviving Corporation, the Sorin Exchange Agent and the Cyberonics Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement, such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code or any other applicable state, local or foreign Tax Law.  Any such withheld amounts (i) shall be remitted by

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Sorin, Holdco, Merger Sub, the Sorin Merger Surviving Company, the Cyberonics Merger Surviving Corporation, the Sorin Exchange Agent or the Cyberonics Exchange Agent, as applicable, to the applicable Governmental Entity, and (ii) shall be treated for all purposes of this Agreement as having been paid to the holder of Sorin Shares, Cyberonics Shares, Sorin Equity Awards and Cyberonics Equity Awards in respect of which such deduction and withholding was made by Sorin, Holdco, Merger Sub, the Sorin Merger Surviving Company, the Cyberonics Merger Surviving Corporation, the Sorin Exchange Agent or the Cyberonics Exchange Agent, as the case may be.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF CYBERONICS

Except (a) as disclosed in the Cyberonics SEC Documents publicly filed prior to the date hereof and since March 31, 2013 (but excluding any disclosure contained in such Cyberonics SEC Documents under the heading “Risk Factors” or “Cautionary Statement About Forward-Looking Statements” or similar heading and any other disclosures contained or referenced therein of factors or risks that are predictive, cautionary or forward-looking in nature), or (b) as disclosed in the Cyberonics Disclosure Letter (it being agreed that disclosure of any item in any section or subsection of the Cyberonics Disclosure Letter shall also be deemed to be disclosed with respect to any other section or subsection in this Agreement to which the relevance of such item is reasonably apparent on the face of such disclosure), Cyberonics hereby represents and warrants to Sorin, Holdco and Merger Sub as follows:

SECTION 3.01            Organization and Qualification; Subsidiaries.

(a)           Cyberonics is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to carry on its business as presently conducted and is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  Each of the Cyberonics Subsidiaries is duly organized, validly existing and in good standing (where such concept is recognized under applicable Law) under the Laws of its jurisdiction of organization and has all requisite corporate or similar power and authority to carry on its business as presently conducted and each of the Cyberonics Subsidiaries is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

(b)           Cyberonics has made available to Sorin true and complete copies of the Amended and Restated Certificate of Incorporation, as amended, of Cyberonics (the “Cyberonics Charter”), the Amended and Restated Bylaws of Cyberonics (the

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“Cyberonics Bylaws”) and the certificates of incorporation and bylaws, or equivalent organizational documents, of each Cyberonics Significant Subsidiary, in each case as amended through, and in full force and effect, as of the date hereof, and neither Cyberonics nor any such Cyberonics Significant Subsidiary is in violation of any of the provisions of such documents.

SECTION 3.02            Capitalization.

(a)           The authorized capital stock of Cyberonics consists of 50,000,000 shares of Cyberonics Common Stock.  As of the close of business on February 24, 2015, (i) 26,018,867 shares of Cyberonics Common Stock were issued and outstanding, all of which are (and all such shares which may be issued prior to the Cyberonics Merger Effective Time in accordance with the terms of this Agreement will be when issued) duly authorized, validly issued, fully paid and non-assessable, free of preemptive rights, and (ii) 6,025,138 shares of Cyberonics Common Stock were held in treasury.

(b)           As of the close of business on February 24, 2015, Cyberonics had no shares of Cyberonics Common Stock reserved for issuance, except for 1,948,529 shares of Cyberonics Common Stock reserved for issuance pursuant to the Cyberonics Stock Plans.

(c)           Section 3.02(c) of the Cyberonics Disclosure Letter sets forth a list of each Cyberonics Equity Award, the number of Cyberonics Shares issuable thereunder (or, in the case of Cyberonics Equity Awards subject to performance-based vesting conditions, the target number of Cyberonics Shares issuable thereunder) and the expiration date and exercise price relating thereto (if applicable), which list is true and complete as of February 24, 2015.

(d)           As of the date hereof, except as provided in Sections 3.02(a), (b), (c) and (f), there are no (i) shares of capital stock of, or other equity or voting interests in, Cyberonics issued, reserved for issuance or outstanding, (ii) securities of Cyberonics convertible into or exchangeable for one or more shares of capital stock of, or other equity or voting interests in, Cyberonics, in each case issued, reserved for issuance or outstanding, (iii) options, warrants or other rights relating to or based on the value of the equity securities of Cyberonics, (iv) agreements, commitments or arrangements of any character that are binding on Cyberonics that obligate Cyberonics to issue, deliver, acquire or sell, or cause to be issued, delivered, acquired or sold, any capital stock of, or other equity or voting interests in, Cyberonics, (v) obligations of Cyberonics to grant, extend or enter into a subscription, warrant, right, convertible or exchangeable security or other similar Contract relating to any capital stock of, or other equity or voting interest in, Cyberonics, or (vi) outstanding restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, Cyberonics (the items in clauses (i) - (vi), together with the capital stock of, or other equity interest in, Cyberonics or any Cyberonics Subsidiary, being referred to collectively as “Cyberonics Securities”).  Since the close of business on February 24,

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2015 through the date hereof, Cyberonics has not issued any Cyberonics Securities (other than Cyberonics Shares issued in respect of Cyberonics Equity Awards that were outstanding as of February 24, 2015).

(e)           Except with respect to the Cyberonics Equity Awards and the related award agreements, there are no outstanding obligations of Cyberonics or any Cyberonics Subsidiary (i) requiring the repurchase, redemption, acquisition or disposition of, or containing any right of first refusal with respect to, (ii) requiring the registration for sale of or (iii) granting any antidilutive rights or other similar rights with respect to any Cyberonics Securities.

(f)            There are no outstanding bonds, debentures, notes or other Indebtedness of Cyberonics or any Cyberonics Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which stockholders of Cyberonics or any Cyberonics Subsidiary may vote or be entitled to vote.  There are no voting trusts or other agreements or understandings to which Cyberonics or any Cyberonics Subsidiary is a party with respect to the voting of capital stock of or equity interests in Cyberonics or any Cyberonics Subsidiary.

(g)           Section 3.02(g) of the Cyberonics Disclosure Letter sets forth (x) each of Cyberonics’s Subsidiaries and the ownership interest of Cyberonics in each such Subsidiary, as well as the ownership interest of any other person or persons in each such Subsidiary and (y) Cyberonics’s or its Subsidiaries’ capital stock, equity interest or other direct or indirect ownership interest in any other person other than securities in a publicly traded company held for investment by Cyberonics or any of its Subsidiaries and consisting of less than 1% of the outstanding capital stock of such company.  Cyberonics does not own, directly or indirectly, any voting interest in any person that requires an additional filing by Cyberonics under the HSR Act or comparable foreign antitrust or competition law.

(h)           Cyberonics or another Cyberonics Subsidiary owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity interests of each of the Cyberonics Subsidiaries, free and clear of any Liens (other than transfer and other restrictions under applicable federal and state securities Laws), and all of such outstanding shares of capital stock or other equity interests are (and all such shares or interests which may be issued prior to the Cyberonics Merger Effective Time in accordance with the terms of this Agreement will be when issued) duly authorized, validly issued, fully paid and non-assessable and free of preemptive rights (other than preemptive rights provided under applicable Law).  Except for equity interests in the Cyberonics Subsidiaries and as set forth in Section 3.02(h) of the Cyberonics Disclosure Letter, neither Cyberonics nor any Cyberonics Subsidiary owns, directly or indirectly, any shares of capital stock or other equity interests in any person, or has any material obligation to acquire any such shares of capital stock or other equity interests, or to provide material funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Cyberonics Subsidiary or any other person.  There are no outstanding material obligations to which Cyberonics or any Cyberonics Subsidiary is a party (i) restricting the transfer of or (ii) limiting the exercise of voting rights with

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respect to any shares of capital stock or other equity interests in any Cyberonics Subsidiary.

SECTION 3.03            Authority.

(a)           Cyberonics has the requisite corporate power and authority to execute and deliver the LOI, the POA and this Agreement and, subject in the case of the Cyberonics Merger to receipt of the Cyberonics Stockholder Approval, to perform its obligations thereunder and to consummate the transactions contemplated hereby (including the Cyberonics Merger).  The execution, delivery and performance of the LOI, the POA and this Agreement by Cyberonics and the consummation by Cyberonics of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Cyberonics’s board of directors and, other than the Cyberonics Stockholder Approval and the filing of the Certificate of Cyberonics Merger with the Secretary of State of the State of Delaware, no additional corporate proceedings on the part of Cyberonics are necessary to authorize the execution, delivery and performance of the LOI, the POA and this Agreement or the consummation of the transactions contemplated hereby.  The LOI, the POA and this Agreement have been duly executed and delivered by Cyberonics and (assuming the valid authorization, execution and delivery of the LOI, the POA and this Agreement by Sorin, Holdco and Merger Sub) constitutes the legal, valid and binding obligation of Cyberonics enforceable against Cyberonics in accordance with their terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(b)           Except as permitted by Section 5.03 after the date hereof, Cyberonics’s board of directors, by resolutions unanimously adopted at a meeting duly called and held, has (i) determined that the Mergers are in the best interests of Cyberonics, approved and declared advisable the LOI, the POA and this Agreement and the Cyberonics Merger and the other transactions contemplated hereby and (ii) resolved to recommend that the stockholders of Cyberonics adopt this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way as of the date hereof.

SECTION 3.04            No Conflict; Required Filings and Consents.

(a)           None of the execution, delivery or performance of the LOI, the POA or this Agreement by Cyberonics or the consummation by Cyberonics of the transactions contemplated by the LOI, the POA and this Agreement (including the Mergers) will: (i) subject to obtaining the Cyberonics Stockholder Approval, conflict with or violate any provision of the Cyberonics Charter or the Cyberonics Bylaws or any equivalent organizational or governing documents of any Cyberonics Subsidiary; (ii) assuming that all consents, approvals and authorizations described in Section 3.04(b) have been obtained and all filings and notifications described in Section 3.04(b) have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to Cyberonics or any Cyberonics Subsidiary or any of their respective

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properties or assets; or (iii) require any consent or approval under, violate, conflict with, result in any breach of or any loss of any benefit under, or constitute a default under (with or without notice or lapse of time, or both), or result in termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than a Cyberonics Permitted Lien) upon any of the respective properties or assets of Cyberonics or any Cyberonics Subsidiary pursuant to any Contract to which Cyberonics or any Cyberonics Subsidiary is a party or by which any property or asset of Cyberonics or any Cyberonics Subsidiary is bound or affected or any Cyberonics Permit, except with respect to clauses (ii) and (iii), for any such conflicts, violations, consents, breaches, losses, changes of control, defaults, other occurrences or Liens that would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

(b)           None of the execution, delivery or performance of the LOI, the POA or this Agreement by Cyberonics or the consummation by Cyberonics of the transactions contemplated by the LOI, the POA or this Agreement (including the Mergers) will require (with or without notice or lapse of time, or both) any consent, approval, authorization or permit of, or filing or registration with or notification to, any Governmental Entity with respect to Cyberonics or any Cyberonics Subsidiary or any of their respective assets, other than (i) the filing of the Certificate of Cyberonics Merger with the Secretary of State of the State of Delaware, (ii) the filing of a premerger notification and report form under the HSR Act with the related attachments and exhibits (the “HSR Act Filing”) and the receipt, termination or expiration, as applicable, of waivers, consents, approvals, waiting periods or agreements required under the HSR Act, the Competition Act or any other applicable U.S. or foreign competition, antitrust, merger control or investment Laws (together with the HSR Act and the Competition Act, “Antitrust Laws”), (iii) compliance with the applicable requirements of the Exchange Act, (iv) filings as may be required under the rules and regulations of the NASDAQ and (v) where the failure to obtain such consents, approvals, authorizations or permits of, or to make such filings, registrations with or notifications to, any Governmental Entity would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

SECTION 3.05            Permits; Compliance with Laws.

(a)           Cyberonics and each Cyberonics Subsidiary is in possession of all material authorizations, licenses, franchises, grants, permits, certificates, variances, exemptions, approvals, findings of suitability, consents, orders, registrations and clearances of any Governmental Entity including, without limitation, those necessary to permit the design, development, pre-clinical and clinical testing, manufacture, labeling, sale, shipment, distribution and promotion of medical device products in the relevant jurisdictions (each, a “Permit”) necessary for Cyberonics and each Cyberonics Subsidiary to own, lease and operate its properties and assets, and to carry on and operate its businesses as currently conducted (the “Cyberonics Permits”), except where the failure to possess such Cyberonics Permits, individually or in the aggregate, would not reasonably be expected to have a Cyberonics Material Adverse Effect.  All Cyberonics Permits are in full force and effect, except where the failure to be in full force and effect of any Cyberonics

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Permits, individually or in the aggregate, would not reasonably be expected to have a Cyberonics Material Adverse Effect, and none of Cyberonics or the Cyberonics Subsidiaries is in default or violation of any such Cyberonics Permit, except where such default or violation, individually or in the aggregate, would not reasonably be expected to have a Cyberonics Material Adverse Effect.  Neither Cyberonics nor any Cyberonics Subsidiary has received any written notice during the period beginning on the date that is three (3) years prior to the date of this Agreement from any Governmental Entity (i) threatening to suspend, revoke, withdraw, modify or limit in any material and adverse respect any Cyberonics Permit or (ii) that would reasonably be expected to lead to the denial of any application for marketing approval or clearance currently pending before the FDA or any other Governmental Entity, except where such notice, individually or in the aggregate, would not reasonably be expected to have a Cyberonics Material Adverse Effect.

(b)           Cyberonics and each Cyberonics Subsidiary is in compliance with (and since January 1, 2012 or, if later, its respective date of formation or organization, has been in compliance with) all Laws applicable to their respective businesses or operations, including, to the extent applicable to their respective businesses or operations, (A) the Federal Health Care Program Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b) (known as the “Anti-Kickback Statute”), (B) the civil False Claim Act, 31 U.S.C. § 3729 et seq., (C) the administrative False Claims Law, 42 U.S.C. § 1320a-7b(a), (D) the Occupational Safety and Health Act (known as “OSHA”), (E) the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. § 17921 et seq.) (collectively known as “HIPAA”) and the exclusion laws (42 U.S.C. § 1320a-7), (F) the Sunshine/Open Payments Law (42 U.S.C. § 1320a-7h), (G) the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 321 et seq.), (H) all criminal laws relating to health care fraud and abuse, including but not limited to 18 U.S.C. Sections 286 and 287, the health care fraud criminal provisions under HIPAA and the criminal Health Care Fraud statute (18 U.S.C. § 1347), (I) the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), (J) applicable Laws of the United States Drug Enforcement Administration, (K) the Medicare, Medicaid, and the federal TRICARE statutes, (L) the Council Directive 93/42/EEC of the European Union concerning medical devices, as amended, and its implementing rules and guidance documents, (M) any state, local and foreign Laws in any jurisdiction where Cyberonics or any of the Cyberonics Subsidiaries conducts business that are comparable to any of the Laws referred to in clauses (A) through (L), (N) Information Privacy and Security Laws, (O) state Laws governing fraud and abuse, kickbacks, self-referral and the licensure and business of medical device manufacturers, and (P) any regulations promulgated pursuant to any Laws referred to in clauses (A) through (O) and any other federal, state or foreign Law that regulates the design, development, testing, studying, manufacturing, processing, storing, importing or exporting, licensing, labeling or packaging, advertising, distributing, selling or marketing of medical device products, or that is related to remuneration (including ownership) to or by physicians or other health care providers (including kickbacks) or the disclosure or reporting of the same, patient or program charges, record-keeping, claims processing, documentation requirements, medical necessity, referrals, the hiring of employees or acquisition of services or supplies from those who have been excluded from government health care programs, quality,

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safety, privacy, security, licensure, accreditation or any other aspect of providing health care products or services (the Laws referred to in clauses (A) through (P), collectively, “Health Care Laws”), except where the failure to be so in compliance would not, individually or in the aggregate, reasonably be expected to have a Cyberonics Material Adverse Effect.

(c)           Except as has not and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, the design, development, investigation, manufacture, testing, sale, marketing and distribution of medical devices by or, to the knowledge of Cyberonics, on behalf of Cyberonics is being, and has been since January 1, 2012, conducted in material compliance with all applicable Health Care Laws, including, without limitation, requirements relating to clinical and non-clinical research, product approval or clearance, premarketing notification, labeling, advertising and promotion, record-keeping, adverse event reporting, reporting of corrections and removals, and current good manufacturing practices for medical device products.

(d)           Since January 1, 2012, all reports, documents, claims, permits, notices and reports of adverse events required to be filed, maintained or furnished to the FDA or any other Governmental Entity by Cyberonics and the Cyberonics Subsidiaries have been so filed, maintained or furnished in a timely manner, except where failure to file, maintain or furnish such reports, documents, claims, permits, notices or adverse event reports has not had and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  All such reports, documents, claims, permits and notices were complete and accurate in all respects on the date filed (or were corrected in or supplemented by a subsequent filing), except as would not, individually or in the aggregate, reasonably be expected to have a Cyberonics Material Adverse Effect.  To the knowledge of Cyberonics, neither  Cyberonics nor any of the Cyberonics Subsidiaries, nor any officer, employee, agent or distributor of Cyberonics or any of the Cyberonics Subsidiaries, has made an untrue statement of a material fact or a fraudulent statement to the FDA or any other Governmental Entity, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Entity, or committed an act, made a statement, or failed to make a statement, in each such case, related to the business of Cyberonics or any of the Cyberonics Subsidiaries, that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the FDA or any other Governmental Entity to invoke any similar policy.  Neither Cyberonics nor any of the Cyberonics Subsidiaries, nor, to the knowledge of Cyberonics, any officer, employee, agent or distributor of Cyberonics or any of the Cyberonics Subsidiaries, has been debarred or convicted of any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar Law or authorized by 21 U.S.C. § 335a(b) or any similar Law.  Neither Cyberonics nor any of the Cyberonics Subsidiaries, nor, to the knowledge of Cyberonics, any officer, employee, agent or distributor of Cyberonics or any of the Cyberonics Subsidiaries, has been debarred, suspended, or excluded from participation in any federal health care program or convicted of any crime or engaged in any conduct for which such person could be excluded from participating in

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any federal health care program under Section 1128 of the Social Security Act of 1935, as amended, or any similar Law or program.  Neither Cyberonics nor any of the Cyberonics Subsidiaries is party to or has any reporting or disclosure obligations under any Corporate Integrity Agreement (“CIA”), Deferred Prosecution Agreement (“DPA”), Non-Prosecution Agreement (“NPA”), monitoring agreement, consent decree, plans of correction, settlement order, or similar agreement with or imposed by a Governmental Entity.

(e)           None of Cyberonics, any of the Cyberonics Subsidiaries or, to the knowledge of Cyberonics, any of their respective Representatives, have engaged in any activities which are cause for or have resulted in criminal or material civil penalties against, or mandatory or permissive exclusion of, Cyberonics or any of the Cyberonics Subsidiaries from Medicare, Medicaid, or any other federal health care program under any Health Care Law, the Federal Employees Health Benefits Program statute, or the regulations promulgated pursuant to such statutes or related foreign, state or local statutes or regulations.

(f)            Cyberonics and to Cyberonics’s knowledge, any contract manufacturers assisting in the manufacture of medical devices or medical device components are, and, since January 1, 2012, have been, in compliance with FDA’s device registration and listing requirements to the extent required by applicable Health Care Laws insofar as they pertain to the manufacture of medical devices or medical device components for Cyberonics, except as has not and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  Cyberonics has not received written notification of any pending or threatened claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Entity, including, without limitation, the Centers for Medicare & Medicaid Services, the U.S. Department of Health and Human Services Office of Inspector General, the U.S. Department of Health and Human Services Office for Civil Rights, the U.S. Department of Justice, or any comparable state or federal Governmental Entity alleging potential or actual non-compliance by, or liability of, Cyberonics under any Health Care Law.

(g)           Cyberonics has not received any written notice or other communication from the FDA or any other Governmental Entity contesting the pre-market clearance or approval of any of the Cyberonics medical device products, or alleging that the labeling and promotion of any of the Cyberonics medical device products fail to comply with Health Care Laws, except as would not, individually or in the aggregate, reasonably be expected to have a Cyberonics Material Adverse Effect.  No manufacturing site for the manufacture of the Cyberonics medical device products or their components (whether Cyberonics-owned or operated or that of a contract manufacturer for any medical device products or related components) has, since January 1, 2012, been subject to a Governmental Entity (including the FDA) shutdown or import or export prohibition.  Neither Cyberonics nor, to Cyberonics’s knowledge, any manufacturing site for the manufacture of any Cyberonics medical device products or related components of Cyberonics medical device products (whether Cyberonics-owned or operated or that of a contract manufacturer for the medical device products or related components) has received, since January 1, 2012, any FDA Form 483 or other Governmental Entity notice

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of inspectional observations or adverse findings, “warning letters,” “untitled letters” or similar correspondence or notice from the FDA or other Governmental Entity alleging or asserting noncompliance with any applicable Health Care Laws or Cyberonics Permits or alleging a lack of safety or effectiveness from the FDA or any other Governmental Entity, in each case except as would not, individually or in the aggregate, reasonably be expected to have a Cyberonics Material Adverse Effect, and to Cyberonics’s knowledge, there is no such action or proceeding pending or threatened.

(h)           Since January 1, 2012, to the knowledge of Cyberonics, in no clinical trial directly conducted or sponsored by Cyberonics or any of the Cyberonics Subsidiaries, or in which Cyberonics or any of the Cyberonics Subsidiaries has participated, has the FDA, Institutional Review Board or equivalent approval, to the extent such approval is required to be obtained or maintained by Cyberonics or any of the Cyberonics Subsidiaries, been suspended or terminated for material safety reasons.

(i)            Since January 1, 2012, each of Cyberonics and the Cyberonics Subsidiaries have neither voluntarily nor involuntarily initiated, conducted or issued, caused to be initiated, conducted or issued any “Class I” recall or material field corrective action, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator notice, or similar notice or action to wholesalers, distributors, retailers, healthcare professionals or patients relating to an alleged lack of material safety, efficacy or regulatory compliance of any Cyberonics medical device products nor is Cyberonics or any Cyberonics Subsidiary currently considering initiating, conducting or issuing any “Class I” recall of any Cyberonics medical device product.  To the knowledge of Cyberonics, there are no facts which are reasonably likely to cause, and Cyberonics has not received since January 1, 2012 any written notice from the FDA or any other Governmental Entity (i) requesting or requiring a “Class I” recall of any Cyberonics medical device products sold or intended to be sold by Cyberonics or the Cyberonics Subsidiaries, (ii) proposing or instituting a change in the marketing classification or a material change in the labelling of any such Cyberonics medical device products, (iii) requiring a termination, enjoinment or suspension of the manufacturing, marketing, or distribution of such Cyberonics medical device products, or (iv) implementing an adverse change in reimbursement status of a Cyberonics medical device product; in each case, except as would not reasonably be expected to have a Cyberonics Material Adverse Effect.

(j)            Cyberonics’s and the Cyberonics Subsidiaries’ past and present collection, use, analysis, disclosure, retention, storage, security and dissemination of Personal Information comply (and since January 1, 2012 have complied) with (i) any and all applicable Laws, including Information Privacy and Security Laws, (ii) business associate agreements to which Cyberonics or any of its Subsidiaries is a party and (iii) Cyberonics’s and the Cyberonics Subsidiaries’ privacy policies, except, in each case, as would not reasonably be expected to have a Cyberonics Material Adverse Effect.  To the extent required by applicable Law, each of Cyberonics and the Cyberonics Subsidiaries have posted in accordance with Information Privacy and Security Laws a privacy policy governing its use of Personal Information on its website and has complied at all times

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with such privacy policy, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

(k)                                 Cyberonics and the Cyberonics Subsidiaries are in compliance with all applicable Laws relating to (i) the privacy of users of Cyberonics products or services and all Internet websites owned, maintained or operated by Cyberonics or any Cyberonics Subsidiary and (ii) the collection, storage, processing, use and transfer of, and provision of notice of breach regarding, any personally identifiable information, except in the case of each of clause (i) and (ii), where the failure to be in compliance with such applicable Laws would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  No claims are pending or, to the knowledge of Cyberonics, are threatened in writing against Cyberonics or any of the Cyberonics Subsidiaries by any person alleging a violation of such applicable Laws referred to in the foregoing sentence or by any person alleging a violation of such person’s privacy or confidentiality rights or rights relating to Personal Information, except for any such claim that would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

SECTION 3.06                                   Cyberonics SEC Documents; Financial Statements.

(a)                                 Since January 1, 2013, Cyberonics has filed with or otherwise furnished to (as applicable) the SEC all registration statements, prospectuses, forms, reports, definitive proxy statements, schedules and other documents required to be filed or furnished by it under the Securities Act or the Exchange Act, as the case may be, together with all certifications required pursuant to the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”) (such documents and any other documents filed by Cyberonics with the SEC, as have been supplemented, modified or amended since the time of filing, collectively, the “Cyberonics SEC Documents”).  As of their respective filing dates or, if supplemented, modified or amended since the time of filing, as of the date of the most recent supplement, modification or amendment, the Cyberonics SEC Documents (i) did not at the time each such document was filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and (ii) complied in all material respects with all applicable requirements of the Exchange Act or the Securities Act, as the case may be, and the Sarbanes-Oxley Act, and the rules and regulations promulgated thereunder, in each case as in effect on the date each such document was filed.  The audited consolidated financial statements and unaudited consolidated interim financial statements of Cyberonics (including, in each case, any notes thereto) and the consolidated Cyberonics Subsidiaries included in or incorporated by reference into the Cyberonics SEC Documents (collectively, the “Cyberonics Financial Statements”) (x) complied as of their respective dates of filing in all material respects with the then applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, (y) were prepared in all material respects in accordance with GAAP (as in effect in the United States on the date of such Cyberonics Financial Statement) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments and

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as may be permitted by the SEC on Form 10-Q, Form 8-K or any successor or like form under the Exchange Act) and (z) present fairly, in all material respects, the consolidated financial position and the consolidated comprehensive income, results of operations, cash flows and equity of Cyberonics and the consolidated Cyberonics Subsidiaries as of the dates and for the periods referred to therein (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments and as may be permitted by the SEC on Form 10-Q, Form 8-K or any successor or like form under the Exchange Act).  As of the date of this Agreement, to the knowledge of Cyberonics, there are no outstanding or unresolved comments in any comment letters received by Cyberonics from the SEC.  As of the date of this Agreement, to the knowledge of Cyberonics, none of the Cyberonics SEC Documents is the subject of any ongoing review by the SEC.  No Cyberonics Subsidiary is, or since January 1, 2013 has been, required to file periodic reports with the SEC pursuant to the Exchange Act.

(b)                                 From January 1, 2013 to the date hereof, (i) neither Cyberonics nor any Cyberonics Subsidiary has received, in writing, any material complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Cyberonics or any of the Cyberonics Subsidiaries or their respective internal accounting controls, and (ii) to the knowledge of Cyberonics, no attorney representing Cyberonics or any of the Cyberonics Subsidiaries has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by Cyberonics or any of the Cyberonics Subsidiaries or any of their respective officers, directors, employees or agents to Cyberonics’s board of directors or any committee thereof pursuant to the rules of the SEC adopted under Section 307 of the Sarbanes-Oxley Act.

(c)                                  Cyberonics has established and maintains disclosure controls and procedures over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 promulgated under the Exchange Act) as required by Rule 13a-15 promulgated under the Exchange Act designed to ensure that (i) all material information required to be disclosed by Cyberonics in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and (ii) material information relating to Cyberonics, including its consolidated Cyberonics Subsidiaries, is made known to the management of Cyberonics by others within those entities, as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.  Since January 1, 2013 to the date hereof, Cyberonics has disclosed, based on its most recent evaluation of internal controls prior to the date hereof, to Cyberonics’s auditors and the audit committee of Cyberonics’s board of directors (i) any “significant deficiencies” or “material weakness” in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect in any material respect Cyberonics’s ability to record, process, summarize and report financial data and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Cyberonics’s internal controls.  As and to the extent described in the Cyberonics SEC Documents, Cyberonics and the Cyberonics Subsidiaries have devised and maintain a system of

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internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

SECTION 3.07                                   Information Supplied.  None of the information supplied or to be supplied by Cyberonics specifically for inclusion or incorporation by reference in the Registration Statement or the proxy statement relating to the Cyberonics Stockholder Meeting (such proxy statement, together with any amendments or supplements thereto, the “Proxy Statement”) will (a) in the case of the Registration Statement, at the time it becomes effective, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (b) in the case of the Proxy Statement, at the time the Proxy Statement is first mailed to Cyberonics’s stockholders or at the time of the Cyberonics Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by Cyberonics with respect to statements made or incorporated by reference in the Registration Statement or the Proxy Statement based on information supplied by Sorin, Holdco or Merger Sub or any of their respective Representatives specifically for inclusion or incorporation by reference therein.

SECTION 3.08                                   Absence of Certain Changes.

(a)                                 From April 25, 2014 through the date of this Agreement, except as otherwise contemplated or permitted by this Agreement, the businesses of Cyberonics and the Cyberonics Subsidiaries have been conducted in all material respects in the ordinary course of business consistent with past practice.

(b)                                 Since April 25, 2014, there has not been any event, effect, development or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

SECTION 3.09                                   Undisclosed Liabilities.  Neither Cyberonics nor any of the Cyberonics Subsidiaries is subject to any material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on a consolidated balance sheet of Cyberonics and the Cyberonics Subsidiaries or in the notes thereto, other than liabilities and obligations (a) disclosed, reserved against or provided for in the consolidated balance sheet of Cyberonics as of October 24, 2014 or in the notes thereto, (b) incurred since October 24, 2014 in the ordinary course of business consistent with past practice or (c) incurred under this Agreement or in connection with the transactions contemplated hereby.

SECTION 3.10                                   Litigation.  There is no suit, claim, litigation, arbitration, mediation, action, proceeding or investigation (each, a “Proceeding”) to which Cyberonics or any Cyberonics Subsidiary is a party pending or, to the knowledge of Cyberonics, threatened that would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  Neither Cyberonics nor any Cyberonics Subsidiary is subject to any outstanding order, writ, injunction, judgment or decree of any Governmental Entity that would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

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Immediately prior to the execution of this Agreement, to the knowledge of Cyberonics, there are no Proceedings pending or threatened against Cyberonics or any of its Subsidiaries challenging or seeking to prohibit the execution, delivery or performance of the LOI, the POA and this Agreement or any of the transactions contemplated hereby.

SECTION 3.11                                   Employee Benefits.

(a)                                 Section 3.11(a) of the Cyberonics Disclosure Letter sets forth a true and complete list of each material Cyberonics Benefit Plan (which, for the avoidance of doubt, does not include any (i) employment contracts or consultancy agreements for employees or consultants outside the United States where the employee or consultant’s base compensation is less than $200,000 per annum and (ii) any plan, program or policy for employees outside the United States that applies to or in respect of which benefits are provided to less than 10 employees).  For purposes of this Agreement, “Cyberonics Benefit Plan” means any benefit or compensation plan, program, policy, practice, agreement, contract, arrangement or other obligation, whether or not in writing and whether or not funded, in each case, which is sponsored or maintained by, or required to be contributed to, or with respect to which any potential liability is borne by Cyberonics or any Cyberonics Subsidiary.  Cyberonics Benefit Plans include, but are not limited to, “employee benefit plans” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), employment, consulting, retirement, severance, termination or change in control agreements, agreements providing for exceptional advantages, deferred compensation, equity-based, incentive, bonus, supplemental retirement, profit sharing, insurance, medical, welfare, fringe or other benefits or remuneration of any kind.

(b)                                 With respect to each material Cyberonics Benefit Plan, to the extent applicable, Cyberonics has made available to Sorin true and complete copies of (i) such Cyberonics Benefit Plan, including any amendment thereto, or a written description if such Cyberonics Benefit Plan is not set forth in a written document, (ii) each trust, insurance annuity or other funding Contract related thereto, and (iii) all material correspondence to or from any Governmental Entity received in the last three (3) years with respect to any such Cyberonics Benefit Plan.

(c)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (i) each Cyberonics Benefit Plan (including any related trusts), other than Cyberonics Benefit Plans subject to the Laws of any jurisdiction outside the United States, has been established, operated and administered in compliance with its terms and all applicable Laws, including ERISA and the Code, (ii)  Cyberonics and each Cyberonics Subsidiary is in compliance with all Laws applicable to such Cyberonics Benefit Plans, including ERISA and the Code, (iii) all contributions or other amounts payable by Cyberonics or a Cyberonics Subsidiary with respect to each such Cyberonics Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP and (iv) there are no claims, actions, suits, proceedings, investigations, arbitrations, audits or hearings (other than for routine claims for benefits) pending or, to the knowledge of Cyberonics, threatened with respect to any such Cyberonics Benefit Plan.

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(d)                                 Each Cyberonics Benefit Plan which is intended to qualify under Section 401(a) of the Code has either received a favorable determination letter from the IRS as to its qualified status, or has timely filed an application for a favorable determination letter, or may rely upon an opinion letter for a prototype or volume submitter plan, and, to the knowledge of Cyberonics, no circumstance exists that would materially jeopardize the qualified status of any such Cyberonics Benefit Plan, except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

(e)                                  No Cyberonics Benefit Plan provides health, life insurance or other welfare benefits after retirement or other termination of employment, other than (i) as required by Law, (ii) coverage or benefits the full cost of which is borne by the employee or former employee (or any beneficiary of the employee or former employee) or (iii) benefits provided for a period of less than eighteen (18) months following termination of employment or during any period during which the former employee is receiving severance pay.

(f)                                   Neither Cyberonics nor any of its ERISA Affiliates has maintained or contributed or has had any obligation of any sort in the last six (6) years (i) under any employee benefit subject to Section 302 or Title IV of ERISA or Section 412 of the Code or any similar provision of state, local or foreign law or that is otherwise a defined benefit pension plan, or (ii) to any “multiemployer plan” (as defined in Section 3(37) of ERISA).  No Cyberonics Benefit Plan is a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

(g)                                  None of the execution and delivery of this Agreement or the consummation of the Mergers or any other transaction contemplated by this Agreement (alone or in conjunction with any other event, including any termination of employment) will (i) entitle any current or former employee, officer, director or independent contractor of Cyberonics or any Cyberonics Subsidiary to any severance pay or any material increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any such employee, director, officer or independent contractor, (iii) directly or indirectly cause Cyberonics to transfer or set aside any assets to fund any material benefits under any Cyberonics Benefit Plan, (iv) trigger any other material obligation under any Cyberonics Benefit Plan or (v) result in any material breach or violation of or default under, or limit Cyberonics’s right to materially amend or terminate, any Cyberonics Benefit Plan.

(h)                                 None of the execution and delivery of this Agreement or the consummation of the Mergers or any other transaction contemplated by this Agreement will result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

(i)                                     Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, all Cyberonics Benefit Plans subject to the Laws of any jurisdiction outside the United States (i) have been maintained and

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operated in accordance with, and are compliant with, their terms, all applicable Laws, government taxation, social security and funding requirements and with any agreement entered into with a union or labor organization, (ii) to the extent required to be registered or approved by a foreign Governmental Entity, has been registered with, or approved by, a foreign Governmental Entity and, to the knowledge of Cyberonics, nothing has occurred that would adversely affect such registration or approval, (iii) if such Cyberonics Benefit Plans are intended to qualify for special Tax treatment, meet all the requirements for such treatment, (iv) if such Cyberonics Benefit Plans are intended or required to be funded and/or book-reserved, are fully funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions and in accordance with any applicable requirements and (v) there is no pending or threatened litigation relating to any such Cyberonics Benefit Plan.

(j)                                    Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, with respect to each Cyberonics Benefit Plan subject to the Laws of any jurisdiction outside the United States, (i) if required to be funded, the assets of such Cyberonics Benefit Plan are sufficient under applicable local Law to provide for the payment of the relevant benefits in full or (ii) if not required to be funded, the book reserves (determined in accordance with GAAP) are sufficient to provide for the payment of the relevant benefits.

SECTION 3.12                                   Labor.

(a)                                 As of the date hereof, (i) neither Cyberonics nor any Cyberonics Subsidiary is a party to, or bound by, any collective bargaining agreement or other agreement with a labor union, works council or similar organization and (ii) to the knowledge of Cyberonics, no union or other labor organizational campaign is in progress with respect to the employees of Cyberonics or any Cyberonics Subsidiary.

(b)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (i) during the three (3) years immediately preceding the date hereof, there is no, and has not been any, strike, lockout, slowdown, work stoppage, unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceedings pending or, to the knowledge of Cyberonics, threatened with respect to employees of Cyberonics or any Cyberonics Subsidiary, (ii) there are no social security disputes or claims pending or, to the knowledge of Cyberonics, threatened in writing against Sorin and/or the Subsidiaries, (iii) Cyberonics and each Cyberonics Subsidiary is in compliance, with respect to both present and former employees and personnel, with all applicable Laws pertaining to employment, employment practices and labor, including all such Laws relating to labor relations, terms and conditions of employment, payment of wages and salaries, payment of social security contributions, mandatory accrual of statutory leaving allowances, hours, overtime, classification of employees and assignment of duties, immigration, secondment, health and safety, mandatory hiring of disabled people, workers’/executives’/directors’ compensation, the use of labor contracts other than ordinary open-term employment, self-employment agreements, and staff leasing, registration in any mandatory books, termination of employment, collective redundancy or work suspension procedures, and

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the use of social and welfare schemes and (iv) Cyberonics and each Cyberonics Subsidiary is in compliance with all applicable individual labor contracts.

(c)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (i) none of the non-employed personnel working or having worked for Cyberonics and/or its Subsidiaries is in a position to legitimately claim the status of employee of Cyberonics and/or its Subsidiaries, (ii) Cyberonics and its Subsidiaries have made all filings and taken all actions and made all payments required to be made or taken, under applicable social security, insurance, pension and welfare Laws, with respect to each of the present and former employees and any other self-employed personnel, (iii) all mandatory social security, health insurance, tax withholdings and pension charges due under such Laws with respect to its present and former employees and any other self-employed personnel have been fully paid-in and (iv) all mandatory pension plans/funds, insurance plans/funds, health care funds and severance funds required to be funded and/or allocated in relation to present and former employees have been funded in accordance with all applicable Laws.  Neither Cyberonics nor any Cyberonics Subsidiary has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act and the regulations promulgated thereunder or any similar state or local Law that remains unsatisfied.

(d)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (i) all commercial agency agreements entered into by Cyberonics and/or its Subsidiaries have been executed in compliance with all applicable Laws, economic collective agreements and individual agreements, (ii) Cyberonics and/or the Subsidiaries have fulfilled all their obligations related to the payments of commissions and social security contributions for agents, (iii) the agents are not entitled to be treated as, or recognized as having the status of, an employee of Cyberonics and/or the Subsidiaries, (iv) all contracts for the supply of works or services entered into by Cyberonics and its Subsidiaries have been executed and performed in compliance with applicable Laws and do not entitle any individual performing services or works in favor of Cyberonics and/or its Subsidiaries to be treated as, or recognized as having the status of, an employee thereof and (v) all of Cyberonics’s and its Subsidiaries’ contractors (and sub-contractors) have regularly paid wages, taxes and social security contributions in favor of their personnel and complied with their health and safety obligations.

(e)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, Cyberonics and its Subsidiaries have fully complied with applicable Laws when transferring employees to third parties in connection with transfers of going concerns, mergers or any other corporate transactions.

SECTION 3.13                                   Tax Matters.

(a)                                 Cyberonics and each Cyberonics Subsidiary properly maintains the mandatory tax books and accounts and has timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by it and all such filed Tax Returns are correct, complete and accurate, and has paid all Taxes due

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(whether or not shown as due on such filed Tax Returns), subject in each case to such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  All Taxes which Cyberonics or any Cyberonics Subsidiary has been required by law to withhold or to collect for payment on or prior to the date hereof have been duly withheld and collected and have been paid to the appropriate Governmental Entity, subject to such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  There are no material Liens related to Taxes upon any property or assets of Cyberonics or any Cyberonics Subsidiary, except for Cyberonics Permitted Liens.

(b)                                 Neither Cyberonics nor any Cyberonics Subsidiary has in effect any waiver of any statute of limitations with respect to any material amount of Taxes.  Neither Cyberonics nor any Cyberonics Subsidiary has agreed to any extension of time with respect to an assessment or deficiency for Taxes.  As of the date hereof, there is no action, suit, investigation, audit, claim, assessment or other proceeding pending with respect to Taxes for which Cyberonics or any Cyberonics Subsidiary may be liable that would, if determined adversely, reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  No material deficiency with respect to Taxes has been asserted or assessed in writing against Cyberonics or any Cyberonics Subsidiary which has not been fully paid or adequately reserved in Cyberonics Financial Statements in accordance with GAAP.

(c)                                  Neither Cyberonics nor any Cyberonics Subsidiary has been a member of an affiliated group of corporations filing a consolidated federal income Tax Return (other than a group the common parent of which is Cyberonics) or has any liability for Taxes of another person (other than Cyberonics or a Cyberonics Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law).

(d)                                 Neither Cyberonics nor any Cyberonics Subsidiary has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the Closing Date that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).

(e)                                  Neither Cyberonics nor any Cyberonics Subsidiary is a party to, or bound by, or has any obligation under, any Tax sharing, indemnification or similar Contract other than (i) Contracts solely among Cyberonics and the Cyberonics Subsidiaries and (ii) customary Tax indemnification provisions in Contracts entered into in the ordinary course of business and the primary purpose of which does not relate to Taxes.

(f)                                   Neither Cyberonics nor any Cyberonics Subsidiary has participated in any “listed transaction” required to be disclosed by any of them on any Tax Return in accordance with Treasury Regulation Section 1.6011-4(a).

(g)                                  Cyberonics has not been a “United States real property holding corporation” within the meaning of Section 897 of the Code during the five-year period ending on the Closing Date.

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(h)                                 Neither Cyberonics nor any Cyberonics Subsidiary has knowledge of any facts or of any reason that would reasonably be expected to cause Holdco to be treated under current Law, as a result of the transactions contemplated by this Agreement, as a “domestic corporation” within the meaning of the Code.

SECTION 3.14                                   Real Property.

(a)                                 Section 3.14(a) of the Cyberonics Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of all material real property owned in fee by Cyberonics or any Cyberonics Subsidiary (the “Cyberonics Owned Real Property”).  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (i) Cyberonics or a Cyberonics Subsidiary has good and marketable title to the Cyberonics Owned Real Property, in each case free and clear of all Liens except for Cyberonics Permitted Liens and (ii) no Cyberonics Owned Real Property is subject to any option, obligation or right of first refusal or contractual right to purchase, lease or acquire any interest in any Cyberonics Owned Real Property.

(b)                                 Section 3.14(b) of the Cyberonics Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of all material real property that is leased, subleased or licensed by Cyberonics or any Cyberonics Subsidiary (the “Cyberonics Leased Real Property”, and together with the Cyberonics Owned Real Property, collectively, the “Cyberonics Real Property”).  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, Cyberonics or a Cyberonics Subsidiary has a valid leasehold estate in each Cyberonics Leased Real Property, in each case free and clear of all Liens except for Cyberonics Permitted Liens.  Each Contract of Cyberonics or the Cyberonics Subsidiaries for any Cyberonics Leased Real Property is legal, valid, enforceable and binding on Cyberonics and each Cyberonics Subsidiary that is a party thereto and, to the knowledge of Cyberonics, each other party thereto and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and except for such failures to be valid and binding or to be in full force and effect that would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, and neither Cyberonics nor any of the Cyberonics Subsidiaries is in breach of or default under, or has received written notice of any breach of or default under, and no condition exists which (with notice or lapse of time or both) would constitute a default under, any lease of Cyberonics Leased Real Property where such breach or default would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  Cyberonics has made available to Sorin a true and complete copy of all Contracts for Cyberonics Leased Real Property.  There are no outstanding options or rights of any third party to acquire any of Cyberonics’s or Cyberonics Subsidiary’s interests in such Cyberonics Leased Real Property.  Neither Cyberonics nor any Cyberonics Subsidiary has subleased or otherwise granted any person the right to use or occupy any Cyberonics Leased Real Property.

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Neither Cyberonics nor any Cyberonics Subsidiary has collaterally assigned or granted any other security interest in any Cyberonics Leased Real Property or any interest therein.

SECTION 3.15                                   Environmental Matters.  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect:

(a)                                 Cyberonics and each Cyberonics Subsidiary is, and has at all times been, in compliance with those Environmental Laws applicable to their respective assets, properties and operations (including possessing and complying with any required Environmental Permits), and there are no administrative or judicial proceedings, actions or investigations pending against Cyberonics or any Cyberonics Subsidiary and none of Cyberonics or any Cyberonics Subsidiary has received any written notice, demand, letter or claim, in either case, alleging that Cyberonics or such Cyberonics Subsidiary is in violation of, or has liability under, any Environmental Law.

(b)                                 To the knowledge of Cyberonics, there are no Hazardous Substances present in, at, on, or under any Cyberonics Owned Real Property, Cyberonics Leased Real Property or any other location that requires remediation or has resulted in a liability under Environmental Laws on the part of Cyberonics or any Cyberonics Subsidiary.

SECTION 3.16                                   Intellectual Property.

(a)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, Cyberonics and the Cyberonics Subsidiaries (i) own all right, title and interest in or (ii) have the valid right or license to use all Patents, Trademarks (including for the avoidance of doubt third-party brands), Copyrights (including for the avoidance of doubt Copyrights in third-party software), Internet domain names and Trade Secrets (collectively, the “Intellectual Property Rights”) that are used in the conduct of the business of Cyberonics and the Cyberonics Subsidiaries as currently conducted (the “Cyberonics Intellectual Property Rights”).  Cyberonics has made available to Sorin a list of all Cyberonics Intellectual Property Rights that are both owned by Cyberonics or a Cyberonics Subsidiary and registered with any Governmental Entity (the “Cyberonics Registered Intellectual Property Rights”), which list is, to the knowledge of Cyberonics, true and complete in all material respects as of the date hereof.  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, Cyberonics and the Cyberonics Subsidiaries are the sole and exclusive owners of all applications and registrations included in the Cyberonics Registered Intellectual Property Rights, free and clear of all Liens, except for Cyberonics Permitted Liens.  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, all Cyberonics Registered Intellectual Property Rights are subsisting and, to Cyberonics’s knowledge, valid and enforceable.

(b)                                 As of the date of this Agreement, there is no pending, or to the knowledge of Cyberonics, threatened Proceeding against Cyberonics or any of the Cyberonics Subsidiaries concerning the validity, enforceability or ownership of any Cyberonics Intellectual Property Rights or the right of Cyberonics to use or otherwise exploit any

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Cyberonics Intellectual Property Rights, except for such Proceedings that would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect if determined adversely to Cyberonics or any of the Cyberonics Subsidiaries.  To the knowledge of Cyberonics, Cyberonics is not subject to any order pertaining to the Cyberonics Intellectual Property Rights restricting in any material manner the use, transfer, licensing or other exploitation by Cyberonics or any of the Cyberonics Subsidiaries of any Cyberonics Intellectual Property Rights or Cyberonics’s (or the applicable Cyberonics Subsidiary’s) ownership thereof.  Neither Cyberonics nor any of the Cyberonics Subsidiaries has received, during the period beginning on the date that is two (2) years prior to the date of this Agreement, any written charge, complaint, claim, demand or notice challenging the validity of any of the Cyberonics Intellectual Property Rights, except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect if determined adversely to Cyberonics or any of the Cyberonics Subsidiaries.

(c)                                  Neither the execution, delivery and performance of this Agreement nor the consummation of the Mergers and other transactions contemplated by this Agreement will impair the right of Cyberonics to use, develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, perform, display, distribute, license, or dispose of any Cyberonics Intellectual Property Rights or any portion thereof as currently used or exploited by Cyberonics and the Cyberonics Subsidiaries, except as would not reasonably be expected, individually or in the aggregate, to be material to Cyberonics and the Cyberonics Subsidiaries, taken as a whole.

(d)                                 To Cyberonics’s knowledge, as of the date hereof, the conduct of the business of Cyberonics and the Cyberonics Subsidiaries as currently conducted does not infringe upon any Intellectual Property Rights of any other person, except for any such infringement that would not reasonably be expected to be material to Cyberonics and the Cyberonics Subsidiaries, taken as a whole.  None of Cyberonics or any of the Cyberonics Subsidiaries has received, during the period beginning on the date that is two (2) years prior to the date of this Agreement, any written charge, complaint, claim, demand or notice alleging any such infringement by Cyberonics or any of the Cyberonics Subsidiaries that has not been settled or otherwise fully resolved, except for any such infringement that would not reasonably be expected to be material to Cyberonics and the Cyberonics Subsidiaries, taken as a whole.  To Cyberonics’s knowledge, no other person is infringing, or has infringed during the period beginning on the date that is two (2) years prior to the date of this Agreement, any Cyberonics Intellectual Property Rights owned by Cyberonics, except for any such infringement as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.

(e)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, each of Cyberonics and the Cyberonics Subsidiaries has taken commercially reasonable steps to protect, preserve and maintain the secrecy and confidentiality of all Trade Secrets included in the Cyberonics Intellectual Property Rights that are both owned by Cyberonics or the Cyberonics Subsidiaries and material to the business of Cyberonics or the Cyberonics Subsidiaries as currently conducted.  To Cyberonics’s knowledge, there have been no breaches of

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security that resulted in the disclosure of any such material Trade Secrets, except for any such disclosure that would not reasonably be expected to be material to Cyberonics and the Cyberonics Subsidiaries, taken as a whole.

SECTION 3.17                                   Contracts.

(a)                                 Section 3.17(a) of the Cyberonics Disclosure Letter sets forth a true and complete list of all Cyberonics Material Contracts in effect as of the date hereof.  For the purposes of this Agreement, “Cyberonics Material Contract” means each Contract to which Cyberonics or any of the Cyberonics Subsidiaries is a party or by which it is bound (other than any of the foregoing solely between Cyberonics and any of the Cyberonics Subsidiaries or between any wholly owned Cyberonics Subsidiaries or any Cyberonics Benefit Plan) that:

(i)                                     relates to a partnership, collaboration agreement, joint venture or similar agreement or arrangement of Cyberonics or any of the Cyberonics Subsidiaries;

(ii)                                  relates to outstanding Indebtedness of Cyberonics or any Cyberonics Subsidiary in an amount in excess of $5 million;

(iii)                               by its terms calls for aggregate payments by Cyberonics or any of its Subsidiaries of more than $2 million in any fiscal year period, except for any such Contract that may be canceled by Cyberonics, without any material penalty or other liability to Cyberonics or any of its Subsidiaries, upon notice of 90 days or less;

(iv)                              by its terms calls for aggregate payments to Cyberonics or any of its Subsidiaries of more than $2 million in any fiscal year period;

(v)                                 is a definitive agreement providing for the acquisition from another person or disposition to another person, directly or indirectly (by merger, purchase or similar transaction), of assets or capital stock or other equity interests of another person (A) that involves aggregate consideration (alone or as a series of related Contracts) in excess of $3 million (other than acquisitions or dispositions of inventory in the ordinary course of business) and which has not been consummated or (B) under which Cyberonics or any Cyberonics Subsidiary has outstanding “earn-out” or other similar contingent payment obligations;

(vi)                              prohibits Cyberonics or any of its affiliates (including the Sorin Merger Surviving Company and its affiliates from and after the Effective Times) from (A) engaging or competing in any line of business in any geographical location or with any person or (B) selling any products or services (including Cyberonics products or services) of or to any other person or in any geographic region;

(vii)                           involves any material exchange traded, over-the-counter or other swap, cap, floor, collar, futures contract, forward contract, option or any other

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derivative financial instrument or contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including commodities, emissions allowances, renewable energy credits, currencies, interest rates, foreign currency and other indices;

(viii)                        obligates Cyberonics or any of the Cyberonics Subsidiaries to make any capital expenditures (including pursuant to any development project, partnership or joint venture) in excess of $2 million in any fiscal year;

(ix)                              obligates Cyberonics or any of the Cyberonics Subsidiaries to provide indemnification or a guarantee (other than in the ordinary course of business in connection with sales of products or services to customers) that, to the knowledge of Cyberonics, would reasonably be expected to result in payments in excess of $5 million as of the date hereof;

(x)                                 constitutes a Contract for Cyberonics Intellectual Property Rights (other than with respect to licenses for commercially available software or hardware) that would reasonably be expected to result in payments by Cyberonics in excess of $2 million per fiscal year;

(xi)                              is a Contract that grants “most favored nation” status or similar preferential pricing rights to any third party;

(xii)                           is a material Contract with a Governmental Entity;

(xiii)                        (A) obligates Cyberonics to purchase or otherwise obtain any product or service exclusively from a single party or sell any product or service exclusively to a single party or (B) under which any person has been granted the right to manufacture, sell, market or distribute any product of Cyberonics on an exclusive basis to any person or group of persons or in any geographical area; and

(xiv)                       any lease with respect to Cyberonics Leased Real Property.

(b)                                 Neither Cyberonics nor any Cyberonics Subsidiary is in breach of or default under the terms of any Cyberonics Material Contract (nor, to the knowledge of Cyberonics, is there any condition or event which, with notice or lapse of time or both, would constitute such a breach or default) where such breach or default would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  To the knowledge of Cyberonics, no other party to any Cyberonics Material Contract is in breach of or default (nor, to the knowledge of Cyberonics, is there any condition or event which, with notice or lapse of time or both, would constitute such a breach or default) under the terms of any Cyberonics Material Contract where such breach or default would reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect.  Each Cyberonics Material Contract is a valid and binding obligation of, and enforceable in accordance with its terms against, Cyberonics or the relevant Cyberonics Subsidiary party thereto, as applicable, and, to the knowledge of Cyberonics, each other party thereto and is in full force and effect, except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material

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Adverse Effect; provided, however, that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c)                                  Prior to the date hereof, Cyberonics has heretofore delivered or made available to Sorin correct and complete copies of each Cyberonics Material Contract, together with any and all amendments and supplements thereto.

SECTION 3.18                                   Insurance.  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, (a) all insurance policies maintained by Cyberonics and the Cyberonics Subsidiaries are in full force and effect and provide insurance in such amounts and against such risks as the management of Cyberonics reasonably has determined to be prudent in accordance with industry practices or as is required by Law or regulation, and all premiums due and payable thereon have been paid; and (b) neither Cyberonics nor any Cyberonics Subsidiary is in breach or default of any of the insurance policies, and neither Cyberonics nor any Cyberonics Subsidiary has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default or permit termination or material modification of any of the insurance policies.  Except as would not reasonably be expected to have, individually or in the aggregate, a Cyberonics Material Adverse Effect, Cyberonics has not received any notice of termination or cancellation or denial of coverage with respect to any insurance policy.

SECTION 3.19                                   Anti-Money Laundering and Economic Sanctions Laws.

(a)                                 None of Cyberonics, the Cyberonics Subsidiaries, any of their respective officers, directors, employees or, to the knowledge of Cyberonics, agents designated by Cyberonics to act on behalf of Cyberonics and solely when acting in such capacity (collectively, the “Cyberonics Group,” it being acknowledged and agreed that any representation or warranty in this Agreement with respect to the Cyberonics Group shall, to the extent it applies to such agents, be deemed made to the knowledge of Cyberonics and solely when acting in such capacity), (i) is, or in the five (5) years prior to the date of this Agreement has been, in violation of any applicable anti-money laundering law or (ii) engages in, or in the five (5) years prior to the date of this Agreement has engaged in, any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any applicable law, regulation or other binding measure implementing the “Forty Recommendations” and “Nine Special Recommendations” published by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering.

(b)                                 Except as otherwise authorized by OFAC, no member of the Cyberonics Group (i) conducts, or in the five (5) years prior to the date of this Agreement has conducted, any business or engages in, or in the five (5) years prior to the date of this Agreement has engaged in, making or receiving any contribution of funds, goods or services to or for the benefit of any Embargoed Person, (ii) deals in, or otherwise engages

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in, or in the five (5) years prior to the date of this Agreement has dealt in or otherwise engaged in, any transaction related to any property or interests in property blocked pursuant to any applicable Economic Sanctions Laws or (iii) engages in or conspires to engage in, or in the five (5) years prior to the date of this Agreement has engaged in or conspired to engage in, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the applicable prohibitions set forth in any Economic Sanctions Laws.

SECTION 3.20                                   FCPA and Anti-Corruption.

(a)                                 No member of the Cyberonics Group has in the five (5) years prior to the date of this Agreement, in connection with the business of Cyberonics or any Cyberonics Subsidiary, itself or, to the knowledge of Cyberonics, any other third party, in each case, acting on behalf of Cyberonics or any Cyberonics Subsidiary, taken any action in violation of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or any other applicable anti-bribery or anti-corruption related provisions in criminal and anti-competition laws (collectively, “Bribery Legislation”).

(b)                                 No member of the Cyberonics Group is, or in the five (5) years prior to the date of this Agreement has been, subject to any actual, pending, or threatened civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings, demand letters, settlements, or enforcement actions, or made any voluntary disclosures to any Governmental Entity, involving Cyberonics or any Cyberonics Subsidiary in any way relating to applicable Bribery Legislation, including the FCPA.

(c)                                  The Cyberonics Group has, for the five (5) years prior to the date of this Agreement, had in place an effective compliance and ethics program in accordance with Chapter 8 of the United States Sentencing Guidelines.

SECTION 3.21                                   Customers.  To the knowledge of Cyberonics, as of the date of this Agreement, neither Cyberonics nor any of the Cyberonics Subsidiaries (a) has been notified in writing of any breach of any Contract with any of Cyberonics’s top twenty (20) customers (the “Cyberonics Material Customers”), measured by revenue generated in fiscal year 2014, that would be material and adverse to Cyberonics and the Cyberonics Subsidiaries, taken as a whole or (b) has been notified in writing by any such Cyberonics Material Customers that it intends to terminate or otherwise materially and adversely alter the terms of its business with Cyberonics or any of the Cyberonics Subsidiaries, in each case, in a manner that would be material and adverse to Cyberonics and the Cyberonics Subsidiaries, taken as a whole.  As of the date of this Agreement, neither Cyberonics nor any of the Cyberonics Subsidiaries has notified any such Cyberonics Material Customers in writing of any material breach of any material Contract by such Cyberonics Material Customers.

SECTION 3.22                                   Opinion of Financial Advisor.  Cyberonics’s board of directors has received the opinion of Piper Jaffray & Co. on or prior to the date of this Agreement, to the effect that, as of the date of such opinion and subject to the assumptions, qualifications and limitations set forth therein, the Cyberonics Exchange Ratio (after giving effect to the

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consummation of the Sorin Merger) is fair from a financial point of view to the holders of Cyberonics Shares (other than the holders of Excluded Cyberonics Shares).  Cyberonics will make a true and complete copy of such opinion available to Sorin, for informational purposes only, after receipt of such opinion by Cyberonics’s board of directors, and it is agreed and understood that such opinion may not be relied on by Sorin, Holdco or Merger Sub.

SECTION 3.23                                   Anti-Takeover Provisions.  Assuming the accuracy of the representations contained in Sections 4.02(h) and 4.02(i), Cyberonics has taken all actions necessary to render inapplicable to the Cyberonics Merger the provisions of Section 203 of the DGCL to the extent, if any, such Section would otherwise be applicable to the Cyberonics Merger, and no “fair price”, “moratorium”, “control share acquisition” or other takeover statute or regulation of any state or jurisdiction (collectively, “Takeover Statutes”), and no such Takeover Statute applies or will apply to Cyberonics or any of its Subsidiaries with respect to the Cyberonics Merger.

SECTION 3.24                                   Vote Required.  The affirmative vote of the holders of shares having a majority of the voting power of the outstanding shares of the Cyberonics Common Stock entitled to vote at the Cyberonics Stockholder Meeting is the only vote required (under applicable Law, the Cyberonics Charter, the Cyberonics Bylaws or otherwise) of the holders of any class or series of capital stock or other equity securities of Cyberonics to adopt this Agreement and approve the transactions contemplated hereby (including the Mergers) (the “Cyberonics Stockholder Approval”).

SECTION 3.25                                   Brokers.  No broker, finder or investment banker other than Piper Jaffray & Co. is entitled to any brokerage, finder’s or other fee or commission from Cyberonics or any Cyberonics Subsidiary in connection with the transactions contemplated by this Agreement.

SECTION 3.26                                   Absence of Certain Arrangements.  Other than this Agreement and the Sorin Support Agreements and the Management Retention Agreements, there are no Contracts or any commitments to enter into any Contract between Cyberonics or any of its affiliates, on the one hand, and any director, officer, employee or shareholder of Sorin, on the other hand, relating to the transactions contemplated by this Agreement or the operations of the Sorin Merger Surviving Company or the Cyberonics Merger Surviving Corporation after the Effective Times.

SECTION 3.27                                   Acknowledgement of No Other Representations or Warranties.  Except for the representations and warranties contained in Article IV, Cyberonics acknowledges and agrees that none of Sorin, Holdco, Merger Sub, the Sorin Subsidiaries or any of their respective Representatives (such Representatives, collectively, the “Sorin Representatives”) makes or has made any representation or warranty, either express or implied, concerning Sorin, Holdco, Merger Sub or any of their respective Subsidiaries or any of their respective assets or properties or the transactions contemplated by this Agreement.  Cyberonics and its Representatives (“Cyberonics Representatives”) have received from Sorin or its Representatives certain estimates, projections and other forecasts for Sorin and its Subsidiaries and certain estimates, plans and budget information.  Cyberonics acknowledges and agrees that there are uncertainties inherent in attempting to make such projections, forecasts, estimates, plans and budgets; that Sorin makes no representations or warranties with respect thereto except to the extent of any representations and

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warranties made by Sorin, Holdco or Merger Sub in Article IV relating thereto; that Cyberonics is familiar with such uncertainties; and that, except to the extent the representations and warranties in Article IV speak to such estimates, projections, forecasts, plans and budgets, Cyberonics is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, forecasts, plans and budgets so furnished to it or its Representatives.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SORIN

Except (a) as publicly disclosed in the Sorin CONSOB Documents filed prior to the date hereof and since March 31, 2013 (but excluding any disclosure contained in such Sorin CONSOB Documents under the heading “Risk Factors” or “Disclaimer” or similar heading and any other disclosures contained or referenced therein of factors or risks that are predictive, cautionary or forward-looking in nature), or (b) as disclosed in the Sorin Disclosure Letter (it being agreed that disclosure of any item in any section or subsection of the Sorin Disclosure Letter shall also be deemed to be disclosed with respect to any other section or subsection in this Agreement to which the relevance of such item is reasonably apparent on the face of such disclosure), Sorin hereby represents and warrants to Cyberonics as follows:

SECTION 4.01                                   Organization and Qualification; Subsidiaries.

(a)                                 Each of Sorin, Holdco and Merger Sub is duly organized, and each is validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite corporate power and authority to carry on its business as presently conducted and is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  Each of the respective Subsidiaries of Sorin, Holdco and Merger Sub is duly organized, validly existing and in good standing (where such concept is recognized under applicable Law) under the Laws of its jurisdiction of organization and has all requisite corporate or similar power and authority to carry on its business as presently conducted and each of the respective Subsidiaries of Sorin, Holdco and Merger Sub is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

(b)                                 Sorin has made available to Cyberonics true and complete copies of the deed of incorporation, as amended, of Sorin (the “Sorin Charter”), the Bylaws of Sorin (the “Sorin Bylaws”) and the charter and bylaws, or equivalent organizational documents, of each Sorin Significant Subsidiary and of Holdco and Merger Sub, in each case as amended through, and in full force and effect, as of the date hereof, and neither Sorin,

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Holdco, Merger Sub nor any of their respective Subsidiaries is in violation of any of the provisions of such documents.

SECTION 4.02                                   Capitalization.

(a)                                 The share capital authorized to be issued pursuant to the Sorin Bylaws in force as of the date hereof (“capital sociale deliberato”), is equal to an amount of 478,738,144 Euros of which 478,738,144 Euros have been issued, fully paid and registered in the form of 478,738,144 Sorin Shares.  As of the close of business on February 25, 2015, (i) 478,738,144 Sorin Shares were issued and fully paid, all of which are (and all such shares which may be issued prior to the Sorin Merger Effective Time in accordance with the terms of this Agreement will be when issued) duly authorized, validly issued and free of preemptive rights (other than preemptive rights provided under applicable Law) and not issued in violation of any preemptive rights under applicable Law, the Sorin Charter or the Sorin Bylaws in effect at the time of such issuance or any Sorin Material Contract, of which 475,981,999 Sorin Shares were issued and outstanding (excluding treasury shares) and 2,756,145 Sorin Shares were held in treasury.  As of the date of this Agreement, the share capital of Holdco consists of one (1) Holdco Share, which is validly issued and outstanding and held of record by Sorin, and the authorized share capital of Merger Sub consists of 100 shares of common stock, par value $0.01 per share, all of which are validly issued and outstanding.  All of the issued and outstanding share capital of Merger Sub is, and at Cyberonics Merger Effective Time will be, owned by Holdco.  Each of Holdco and Merger Sub was formed solely for the purpose of engaging in the transactions contemplated hereby, and has not conducted any business prior to the date hereof and has no, and prior to the Sorin Merger Effective Time (in the case of Holdco) and the Cyberonics Merger Effective Time (in the case of Merger Sub), will have no, assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and the transactions contemplated by this Agreement.

(b)                                 As of the close of business on February 25, 2015, Sorin had no Sorin Shares reserved for issuance, except for 23,000,000 Sorin Shares reserved for issuance pursuant to the Sorin Stock Plans.

(c)                                  Section 4.02(c) of the Sorin Disclosure Letter sets forth a list of each Sorin Equity Award, the number of Sorin Shares issuable thereunder (or, in the case of Sorin Equity Awards subject to performance-based vesting conditions, the target number of Sorin Shares issuable thereunder) and the expiration date and exercise price relating thereto (if applicable), which list is true and complete as of February 25, 2015.

(d)                                 As of the date hereof, except as provided in Sections 4.02(a), (b), (c) and (f), there are no (i) shares of capital stock of, or other equity or voting interests in, Sorin, Holdco or Merger Sub issued, reserved for issuance or outstanding, (ii) securities of Sorin, Holdco or Merger Sub convertible into or exchangeable for one or more shares of capital stock of, or other equity or voting interests in, Sorin, Holdco or Merger Sub, in each case issued, reserved for issuance or outstanding, (iii) options, warrants or other rights relating to or based on the value of the equity securities of Sorin, Holdco or Merger Sub to which

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any of Sorin, Holdco or Merger Sub is party, (iv) agreements, commitments or arrangements of any character that are binding on Sorin, Holdco or Merger Sub that obligate Sorin, Holdco or Merger Sub to issue, deliver, acquire or sell, or cause to be issued, delivered, acquired or sold, any capital stock of, or other equity or voting interests in, Sorin, Holdco or Merger Sub, (v) obligations of Sorin, Holdco or Merger Sub to grant, extend or enter into a subscription, warrant, right, convertible or exchangeable security or other similar Contract relating to any capital stock of, or other equity or voting interest in, Sorin, Holdco or Merger Sub, or (vi) outstanding restricted shares, restricted share units, stock appreciation rights, performance shares, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities or ownership interests in, Sorin, Holdco or Merger Sub (the items in clauses (i) — (vi), together with the capital stock of, or other equity interest in, Sorin, Holdco, Merger Sub or any of their respective Subsidiaries, being referred to collectively as “Sorin Securities”).  Since the close of business on February 25, 2015 through the date hereof, Sorin has not issued any Sorin Securities (other than Sorin Shares issued in respect of Sorin Equity Awards that were outstanding as of February 25, 2015).

(e)                                  Except with respect to the Sorin Equity Awards and the related award agreements, there are no outstanding obligations of Sorin or any Sorin Subsidiary (i) requiring the repurchase, redemption, acquisition or disposition of, or containing any right of first refusal with respect to, (ii) requiring the registration for sale of or (iii) granting any antidilutive rights or other similar rights with respect to any Sorin Securities.

(f)                                   There are no outstanding bonds, debentures, notes or other Indebtedness of Sorin or any Sorin Subsidiary having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matter on which shareholders of Sorin or any Sorin Subsidiary may vote or be entitled to vote.  There are no voting trusts or other agreements or understandings to which Sorin, Holdco, Merger Sub or any of their respective Subsidiaries is a party with respect to the voting of capital stock of or equity interests in Sorin, Holdco, Merger Sub or any of their respective Subsidiaries.

(g)                                  Section 4.02(g) of the Sorin Disclosure Letter sets forth (x) each of Sorin’s Subsidiaries and the ownership interest of Sorin in each such Subsidiary, as well as the ownership interest of any other person or persons in each such Subsidiary and (y) Sorin’s or its Subsidiaries’ capital stock, equity interest or other direct or indirect ownership interest in any other person other than securities in a publicly traded company held for investment by Sorin or any of its Subsidiaries and consisting of less than 1% of the outstanding capital stock of such company.  Sorin does not own, directly or indirectly, any voting interest in any person that requires an additional filing by Sorin under the HSR Act or comparable foreign antitrust or competition law.

(h)                                 Sorin or another Sorin Subsidiary owns, directly or indirectly, all of the issued and outstanding shares of capital stock or other equity interests of each of the Sorin Subsidiaries, and Holdco owns all of the issued and outstanding shares of capital

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stock or other equity securities of Merger Sub, in each case free and clear of any Liens (other than transfer and other restrictions under applicable federal and state securities Laws), and all of such outstanding shares of capital stock or other equity interests are (and all such shares or interests which may be issued prior to the Sorin Merger Effective Time in accordance with the terms of this Agreement will be when issued) duly authorized, validly issued, fully paid and, where applicable, non-assessable and free of preemptive rights (other than preemptive rights provided under applicable Law).  Except for equity interests in the Sorin Subsidiaries and as set forth in Section 4.02(h) of the Sorin Disclosure Letter, neither Sorin nor any Sorin Subsidiary owns, directly or indirectly, any shares of capital stock or other equity interests in any person, or has any material obligation to acquire any such shares of capital stock or other equity interests, or to provide material funds to or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Sorin Subsidiary or any other person.  There are no outstanding material obligations to which Sorin or any Sorin Subsidiary is a party (i) restricting the transfer of or (ii) limiting the exercise of voting rights with respect to any shares of capital stock or other equity interests in any Sorin Subsidiary.

(i)                                     None of Sorin, Holdco, Merger Sub or any of their respective Subsidiaries or affiliates, or any persons acting in association with them beneficially owns (as defined by Rule 13d-3 under the Exchange Act) any Cyberonics Shares or any securities that are convertible into or exchangeable or exercisable for Cyberonics Shares, or holds any rights to acquire or vote any Cyberonics Shares, other than pursuant to this Agreement.  None of Sorin, Holdco, Merger Sub, any of their respective Subsidiaries, or the “affiliates” or “associates” (as each such terms is defined in Section 203 of the DGCL) of any such person is, and at no time during the last three (3) years has been, an “interested stockholder” of Cyberonics, as such term is defined in Section 203 of the DGCL.

SECTION 4.03                                   Authority.

(a)                                 Each of Sorin, Holdco and Merger Sub has the requisite corporate power and authority to execute and deliver the LOI, the POA and this Agreement and, following the approval of the Sorin Merger Terms by the respective boards of directors of Sorin and Holdco and Merger Sub, and subject to the receipt of Sorin Shareholder Approval, the Holdco Shareholder Approval and the Merger Sub Shareholder Approval, to perform their respective obligations thereunder and to consummate the transactions contemplated hereby (including the Mergers).  The execution, delivery and performance of the LOI, the POA and this Agreement by Sorin, Holdco and Merger Sub and the consummation by Sorin, Holdco and Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Sorin’s, Holdco’s and Merger Sub’s respective boards of directors and, other than the approval of the Sorin Merger Terms by the respective boards of directors of Sorin and Holdco, the Sorin Shareholder Approval, the Holdco Shareholder Approval and the Merger Sub Shareholder Approval, no additional corporate proceedings on the part of Sorin, Holdco or Merger Sub are necessary to authorize the execution, delivery and performance of the LOI, the POA and this Agreement or the consummation of the transactions contemplated hereby.  The LOI, the POA and this Agreement have been duly executed and delivered by each of Sorin, Holdco and Merger Sub, and (assuming the valid authorization, execution and delivery of

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the LOI, the POA and this Agreement by Cyberonics) constitutes the legal, valid and binding obligation of each of Sorin, Holdco and Merger Sub enforceable against each of them in accordance with their terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(b)                                 Except as permitted by Section 5.04 after the date hereof, Sorin’s board of directors, by resolutions unanimously adopted at a meeting duly called and held, has (i) determined that the Mergers are in the best interests of Sorin, adopted and declared advisable the LOI, the POA and this Agreement and the Mergers and the other transactions contemplated hereby and resolved to recommend approval of the LOI, the POA and this Agreement to the holders of Sorin Shares, (ii) directed that the Mergers contemplated by the LOI, the POA and this Agreement, and documented in the Sorin Merger Terms to be approved pursuant to the Italian Merger Regulations, be submitted to the holders of Sorin Shares for their approval or adoption, and (iii) resolved to recommend that the Sorin shareholders adopt this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way as of the date hereof.

SECTION 4.04                                   No Conflict; Required Filings and Consents.

(a)                                 None of the execution, delivery or performance of the LOI, the POA or this Agreement by Sorin or the consummation by Sorin of the transactions contemplated by the LOI, the POA and this Agreement (including the Mergers) will: (i) subject to obtaining Sorin Shareholder Approval, conflict with or violate any provision of the Sorin Charter or the Sorin Bylaws or any equivalent organizational or governing documents of any Sorin Subsidiary; (ii) assuming that all consents, approvals and authorizations described in Section 4.04(b) have been obtained and all filings and notifications described in Section 4.04(b) have been made and any waiting periods thereunder have terminated or expired, conflict with or violate any Law applicable to Sorin or any Sorin Subsidiary or any of their respective properties or assets; or (iii) require any consent or approval under, violate, conflict with, result in any breach of or any loss of any benefit under, or constitute a default under (with or without notice or lapse of time, or both), or result in termination or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in the creation of a Lien (other than a Sorin Permitted Lien) upon any of the respective properties or assets of Sorin or any Sorin Subsidiary pursuant to any Contract to which Sorin or any Sorin Subsidiary is a party or by which any property or asset of Sorin, Holdco, Merger Sub or any of their respective Subsidiaries is bound or affected or any Sorin Permit, except with respect to clauses (ii) and (iii), for any such conflicts, violations, consents, breaches, losses, changes of control, defaults, other occurrences or Liens that would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

(b)                                 None of the execution, delivery or performance of the LOI, the POA or this Agreement by Sorin, Holdco or Merger Sub or the consummation by Sorin, Holdco or Merger Sub of the transactions contemplated by the LOI, the POA or this Agreement

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(including the Mergers) will require (with or without notice or lapse of time, or both) any consent, approval, authorization or permit of, or filing or registration with or notification to, any Governmental Entity with respect to Sorin or any Sorin Subsidiary or any of their respective assets, other than (i) the filings required to effect the Sorin Merger with the relevant authorities of the United Kingdom and Italy, (ii)  an HSR Act Filing and the receipt, termination or expiration, as applicable, of waivers, consents, approvals, waiting periods or agreements required under applicable Antitrust Laws, (iii) compliance with the applicable requirements of securities Laws in Italy, (iv) filings as may be required under the rules and regulations of the MSE and (v) where the failure to obtain such consents, approvals, authorizations or permits of, or to make such filings, registrations with or notifications to, any Governmental Entity would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

SECTION 4.05                                   Permits; Compliance with Laws.

(a)                                 Sorin and each Sorin Subsidiary is in possession of all material Permits necessary for Sorin and each Sorin Subsidiary to own, lease and operate its properties and assets, and to carry on and operate its businesses as currently conducted (the “Sorin Permits”), except where the failure to possess such Sorin Permits, individually or in the aggregate, would not reasonably be expected to have a Sorin Material Adverse Effect.  All Sorin Permits are in full force and effect, except where the failure to be in full force and effect of any Sorin Permits, individually or in the aggregate, would not reasonably be expected to have a Sorin Material Adverse Effect, and none of Sorin or the Sorin Subsidiaries is in default or violation of any such Sorin Permit, except where such default or violation, individually or in the aggregate, would not reasonably be expected to have a Sorin Material Adverse Effect.  Neither Sorin nor any Sorin Subsidiary has received any written notice during the period beginning on the date that is three (3) years prior to the date of this Agreement from any Governmental Entity (i) threatening to suspend, revoke, withdraw, modify or limit in any material and adverse respect any Sorin Permit or (ii) that would reasonably be expected to lead to the denial of any application for marketing approval or clearance currently pending before the FDA or any other Governmental Entity, except where such notice, individually or in the aggregate, would not reasonably be expected to have a Sorin Material Adverse Effect.

(b)                                 Sorin and each Sorin Subsidiary is in compliance with (and since January 1, 2012 or, if later, its respective date of formation or organization, has been in compliance with) all Health Care Laws applicable to their respective businesses or operations, except where the failure to be so in compliance would not, individually or in the aggregate, reasonably be expected to have a Sorin Material Adverse Effect.

(c)                                  Except as has not and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, the design, development, investigation, manufacture, testing, sale, marketing and distribution of medical devices by or, to the knowledge of Sorin, on behalf of Sorin is being, and has been since January 1, 2012, conducted in material compliance with all applicable Health Care Laws, including, without limitation, requirements relating to clinical and non-clinical research, product approval or clearance, premarketing notification, labeling,

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advertising and promotion, record-keeping, adverse event reporting, reporting of corrections and removals, and current good manufacturing practices for medical device products.

(d)                                 Since January 1, 2012, all reports, documents, claims, permits, notices and reports of adverse events required to be filed, maintained or furnished to the FDA or any other Governmental Entity by Sorin and the Sorin Subsidiaries have been so filed, maintained or furnished in a timely manner, except where failure to file, maintain or furnish such reports, documents, claims, permits, notices or adverse event reports has not had and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  All such reports, documents, claims, permits and notices were complete and accurate in all respects on the date filed (or were corrected in or supplemented by a subsequent filing), except as would not, individually or in the aggregate, reasonably be expected to have a Sorin Material Adverse Effect.  To the knowledge of Sorin, neither Sorin nor any of the Sorin Subsidiaries, nor any officer, employee, agent or distributor of Sorin or any of the Sorin Subsidiaries, has made an untrue statement of a material fact or a fraudulent statement to the FDA or any other Governmental Entity, failed to disclose a material fact required to be disclosed to the FDA or any other Governmental Entity, or committed an act, made a statement, or failed to make a statement, in each such case, related to the business of Sorin or any of the Sorin Subsidiaries, that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the FDA or any other Governmental Entity to invoke any similar policy.  Neither Sorin nor any of the Sorin Subsidiaries, nor, to the knowledge of Sorin, any officer, employee, agent or distributor of Sorin or any of the Sorin Subsidiaries, has been debarred or convicted of any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar Law or authorized by 21 U.S.C. § 335a(b) or any similar Law.  Neither Sorin nor any of the Sorin Subsidiaries, nor, to the knowledge of Sorin, any officer, employee, agent or distributor of Sorin or any of the Sorin Subsidiaries, has been debarred, suspended, or excluded from participation in any federal health care program or convicted of any crime or engaged in any conduct for which such person could be excluded from participating in any federal health care program under Section 1128 of the Social Security Act of 1935, as amended, or any similar Law or program.  Neither Sorin nor any of the Sorin Subsidiaries is party to or has any reporting or disclosure obligations under any CIA, DPA, NPA, monitoring agreement, consent decree, plans of correction, settlement order, or similar agreement with or imposed by a Governmental Entity.

(e)                                  None of Sorin, any of the Sorin Subsidiaries or, to the knowledge of Sorin, any of their respective Representatives, have engaged in any activities which are cause for or have resulted in criminal or material civil penalties against, or mandatory or permissive exclusion of, Sorin or any of the Sorin Subsidiaries from Medicare, Medicaid, or any other federal health care program under any Health Care Law, the Federal Employees Health Benefits Program statute, or the regulations promulgated pursuant to such statutes or related foreign, state or local statutes or regulations.

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(f)                                   Sorin and, to Sorin’s knowledge, any contract manufacturers assisting in the manufacture of medical devices or medical device components are, and, since January 1, 2012, have been, in compliance with FDA’s device registration and listing requirements to the extent required by applicable Health Care Laws insofar as they pertain to the manufacture of medical devices or medical device components for Sorin, except as has not and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  Sorin has not received written notification of any pending or threatened claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Entity, including, without limitation, the Centers for Medicare & Medicaid Services, the U.S. Department of Health and Human Services Office of Inspector General, the U.S. Department of Health and Human Services Office for Civil Rights, the U.S. Department of Justice, or any comparable state or federal Governmental Entity alleging potential or actual non-compliance by, or liability of, Sorin under any Health Care Law.

(g)                                  Sorin has not received any written notice or other communication from the FDA or any other Governmental Entity contesting the pre-market clearance or approval of any of the Sorin medical device products, or alleging that the labeling and promotion of any of the Sorin medical device products fail to comply with Health Care Laws, except as would not, individually or in the aggregate, reasonably be expected to have a Sorin Material Adverse Effect.  No manufacturing site for the manufacture of the Sorin medical device products or their components (whether Sorin-owned or operated or that of a contract manufacturer for any medical device products or related components) has, since January 1, 2012, been subject to a Governmental Entity (including the FDA) shutdown or import or export prohibition.  Neither Sorin nor, to Sorin’s knowledge, any manufacturing site for the manufacture of any Sorin medical device products or related components of Sorin medical device products (whether Sorin-owned or operated or that of a contract manufacturer for the medical device products or related components) has received, since January 1, 2012, any FDA Form 483 or other Governmental Entity notice of inspectional observations or adverse findings, “warning letters,” “untitled letters” or similar correspondence or notice from the FDA or other Governmental Entity alleging or asserting noncompliance with any applicable Health Care Laws or Sorin Permits or alleging a lack of safety or effectiveness from the FDA or any other Governmental Entity, in each case except as would not, individually or in the aggregate, reasonably be expected to have a Sorin Material Adverse Effect, and to Sorin’s knowledge, there is no such action or proceeding pending or threatened.

(h)                                 Since January 1, 2012, to the knowledge of Sorin, in no clinical trial directly conducted or sponsored by Sorin or any of the Sorin Subsidiaries, or in which Sorin or any of the Sorin Subsidiaries has participated, has the FDA, Institutional Review Board or equivalent approval, to the extent such approval is required to be obtained or maintained by Sorin or any of the Sorin Subsidiaries, been suspended or terminated for material safety reasons.

(i)                                     Since January 1, 2012, each of Sorin and the Sorin Subsidiaries have neither voluntarily nor involuntarily initiated, conducted or issued, caused to be initiated, conducted or issued any “Class I” recall or material field corrective action, market

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withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator notice, or similar notice or action to wholesalers, distributors, retailers, healthcare professionals or patients relating to an alleged lack of material safety, efficacy or regulatory compliance of any Sorin medical device products nor is Sorin or any Sorin Subsidiary currently considering initiating, conducting or issuing any “Class I” recall of any Sorin medical device product.  To the knowledge of Sorin, there are no facts which are reasonably likely to cause, and Sorin has not received since January 1, 2012 any written notice from the FDA or any other Governmental Entity (i) requesting or requiring a “Class I” recall of any Sorin medical device products sold or intended to be sold by Sorin or the Sorin Subsidiaries, (ii) proposing or instituting a change in the marketing classification or a material change in the labelling of any such Sorin medical device products, (iii) requiring a termination, enjoinment or suspension of the manufacturing, marketing, or distribution of such Sorin medical device products, or (iv) implementing an adverse change in reimbursement status of a Sorin medical device product; in each case, except as would not reasonably be expected to have a Sorin Material Adverse Effect.

(j)                                    Sorin’s and the Sorin Subsidiaries’ past and present collection, use, analysis, disclosure, retention, storage, security and dissemination of Personal Information comply (and since January 1, 2012 have complied) with (i) any and all applicable Laws, including Information Privacy and Security Laws, (ii) business associate agreements to which Sorin or any of its Subsidiaries is a party and (iii) Sorin’s and the Sorin Subsidiaries’ privacy policies, except, in each case, as would not reasonably be expected to have a Cyberonics Material Adverse Effect.  To the extent required by applicable Law, each of Sorin and the Sorin Subsidiaries have posted in accordance with Information Privacy and Security Laws a privacy policy governing its use of Personal Information on its website and has complied at all times with such privacy policy, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

(k)                                 Sorin and the Sorin Subsidiaries are in compliance with all applicable Laws relating to (i) the privacy of users of Sorin products or services and all Internet websites owned, maintained or operated by Sorin or any Sorin Subsidiary and (ii) the collection, storage, processing, use and transfer of, and provision of notice of breach regarding, any personally identifiable information, except in the case of each of clause (i) and (ii), where the failure to be in compliance with such applicable Laws would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  No claims are pending or, to the knowledge of Sorin, are threatened in writing against Sorin or any of the Sorin Subsidiaries by any person alleging a violation of such applicable Laws referred to in the foregoing sentence or by any person alleging a violation of such person’s privacy or confidentiality rights or rights relating to Personal Information, except for any such claim that would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

SECTION 4.06                                   Sorin CONSOB Documents; Financial Statements.

(a)                                 Since January 1, 2013, Sorin has filed with or otherwise furnished to (as applicable) the CONSOB and/or the MSE, all registration statements, prospectuses,

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forms, reports, definitive proxy statements, schedules and other documents required to be filed or furnished by it under the securities Laws of Italy, as applicable (such documents and any other documents filed by Sorin with the CONSOB and/or the MSE, as have been supplemented, modified or amended since the time of filing, collectively, the “Sorin CONSOB Documents”).  As of their respective filing dates or, if supplemented, modified or amended since the time of filing, as of the date of the most recent supplement, modification or amendment, the Sorin CONSOB Documents (i) did not at the time each such document was filed contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading and (ii) complied in all material respects with all applicable requirements of the securities Laws of Italy, in each case as in effect on the date each such document was filed.  The audited consolidated financial statements and unaudited consolidated interim financial statements of Sorin (including, in each case, any notes thereto) and the consolidated Sorin Subsidiaries included in or incorporated by reference into the Sorin CONSOB Documents (collectively, the “Sorin Financial Statements”) (x) complied as of their respective dates of filing in all material respects with the then applicable accounting requirements and the published rules and regulations of the CONSOB with respect thereto, (y) were prepared in all material respects in accordance with IFRS (as adopted by the European Union and in accordance with legislative decree in effect in Italy on the date of such Sorin Financial Statement) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments) and (z) present fairly, in all material respects, the consolidated financial position and the consolidated comprehensive income, results of operations, cash flows and equity of Sorin and the consolidated Sorin Subsidiaries as of the dates and for the periods referred to therein (except as may be indicated in the notes thereto or, in the case of interim financial statements, for normal and recurring year-end adjustments).  As of the date of this Agreement, to the knowledge of Sorin, there are no outstanding or unresolved comments in any comment letters received by Sorin from the CONSOB.  As of the date of this Agreement, to the knowledge of Sorin, none of the Sorin CONSOB Documents is the subject of any ongoing review by the CONSOB.  No Sorin Subsidiary is, or since January 1, 2013 has been, required to file periodic reports with the SEC or CONSOB pursuant to applicable securities Laws.

(b)                                 From January 1, 2013 to the date hereof, (i) neither Sorin nor any Sorin Subsidiary has received, in writing, any material complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Sorin or any of the Sorin Subsidiaries or their respective internal accounting controls, and (ii) to the knowledge of Sorin, no attorney representing Sorin or any of the Sorin Subsidiaries has reported evidence of a material violation of securities Laws, breach of fiduciary duty or similar violation by Sorin or any of the Sorin Subsidiaries or any of their respective officers, directors, employees or agents to Sorin’s board of directors or any committee thereof.

(c)                                  Sorin has established and maintains internal control mechanisms and internal audit procedures in compliance with Legislative Decree No. 58 of 24 February

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1998 and the Italian Corporate Governance Code issued by Borsa Italiana S.p.A. (to the extent described in the Sorin Corporate Governance Report as of December 31, 2013) designed to ensure that (i) all material information required to be disclosed by Sorin in the reports that it files or submits with the CONSOB is recorded, processed, summarized and reported within the time periods specified in the rules and forms of CONSOB and (ii) material information relating to Sorin, including its consolidated Sorin Subsidiaries, is made known to the directors of Sorin as appropriate to allow timely decisions regarding required disclosure and to prepare the documentation required pursuant to the securities Laws of Italy.  Since January 1, 2013 to the date hereof, Sorin has disclosed, based on its most recent evaluation of internal controls prior to the date hereof, to Sorin’s auditors and the audit committee of Sorin (i) any significant weakness in the internal control reviews system in relation to the financial reporting process which are reasonably likely to adversely affect in any material respect Sorin’s ability to record, process, summarize and report financial data and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Cyberonics’s internal controls.  As and to the extent described in the Sorin CONSOB Documents, Sorin and the Sorin Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.

SECTION 4.07                                   Information Supplied.  None of the information supplied or to be supplied by Sorin, Holdco or Merger Sub specifically for inclusion or incorporation by reference in the Registration Statement, the Proxy Statement or the Sorin Information Document (a) will in the case of the Registration Statement, at the time it becomes effective, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (b) in the case of the Proxy Statement and the Sorin Information Document, will, at the time the Proxy Statement is first mailed to Cyberonics’s stockholders or the Sorin Information Document is first mailed to Sorin’s shareholders, as applicable, or at the time of the Cyberonics Stockholder Meeting or the Sorin Shareholder Meeting, as applicable, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by Sorin with respect to statements made or incorporated by reference therein based on information supplied by Cyberonics or any of its Representatives specifically for inclusion or incorporation by reference therein.

SECTION 4.08                                   Absence of Certain Changes.

(a)                                 From December 31, 2013 through the date of this Agreement, except as otherwise contemplated or permitted by this Agreement, the businesses of Sorin and the Sorin Subsidiaries have been conducted in all material respects in the ordinary course of business consistent with past practice.

(b)                                 Since December 31, 2013, there has not been any event, effect, development or circumstance that has had or would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

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SECTION 4.09                                   Undisclosed Liabilities.  Neither Sorin nor any of the Sorin Subsidiaries is subject to any material liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by IFRS to be set forth on a consolidated balance sheet of Sorin and the Sorin Subsidiaries or in the notes thereto, other than liabilities and obligations (a) disclosed, reserved against or provided for in the consolidated balance sheet of Sorin as of September 30, 2014 or in the notes thereto, (b) incurred since September 30, 2014 in the ordinary course of business consistent with past practice or (c) incurred under this Agreement or in connection with the transactions contemplated hereby.

SECTION 4.10                                   Litigation.  There is no Proceeding to which Sorin, Holdco, Merger Sub or any of their respective Subsidiaries is a party pending or, to the knowledge of Sorin, threatened that would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  None of Sorin, Holdco, Merger Sub or any of their respective Subsidiaries is subject to any outstanding order, writ, injunction, judgment or decree of any Governmental Entity that would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  Immediately prior to the execution of this Agreement, to the knowledge of Sorin, there are no Proceedings pending or threatened against Sorin or any of its Subsidiaries challenging or seeking to prohibit the execution, delivery or performance of this the LOI, the POA or this Agreement or any of the transactions contemplated hereby.

SECTION 4.11                                   Employee Benefits.

(a)                                 Section 4.11(a) of the Sorin Disclosure Letter sets forth a true and complete list of each material Sorin Benefit Plan (which, for the avoidance of doubt, does not include any (i) employment contracts or consultancy agreements for employees or consultants outside the United States where the employee or consultant’s base compensation is less than $200,000 per annum and (ii) any plan, program or policy for employees outside the United States that applies to or in respect of which benefits are provided to less than 10 employees).  For purposes of this Agreement, “Sorin Benefit Plan” means any benefit or compensation plan, program, policy, practice, agreement, contract, arrangement or other obligation, whether or not in writing and whether or not funded, in each case, which is sponsored or maintained by, or required to be contributed to, or with respect to which any potential liability is borne by Sorin or any Sorin Subsidiary.  Sorin Benefit Plans include, but are not limited to, “employee benefit plans” within the meaning of Section 3(3) of ERISA, employment, consulting, retirement, severance, termination or change in control agreements, agreements providing for exceptional advantages, deferred compensation, equity-based, incentive, bonus, supplemental retirement, profit sharing, insurance, medical, welfare, fringe or other benefits or remuneration of any kind.

(b)                                 With respect to each material Sorin Benefit Plan, to the extent applicable, Sorin has made available to Cyberonics true and complete copies of (i) such Sorin Benefit Plan, including any amendment thereto, or a written description if such Sorin Benefit Plan is not set forth in a written document, (ii) each trust, insurance annuity or other funding Contract related thereto, and (iii) all material correspondence to or from any Governmental Entity received in the last three (3) years with respect to any such Sorin Benefit Plan.

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(c)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (i) each Sorin Benefit Plan (including any related trusts), other than Sorin Benefit Plans subject to the Laws of any jurisdiction outside the United States, has been established, operated and administered in compliance with its terms and all applicable Laws, including ERISA and the Code, (ii) Sorin and each Sorin Subsidiary is in compliance with all Laws applicable to such Sorin Benefit Plans, including ERISA and the Code, (iii) all contributions or other amounts payable by Sorin or any Sorin Subsidiary with respect to each Sorin Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP and (iv) there are no claims, actions, suits, proceedings, investigations, arbitrations, audits or hearings (other than for routine claims for benefits) pending or, to the knowledge of Sorin, threatened with respect to any such Sorin Benefit Plan.

(d)                                 Each Sorin Benefit Plan which is intended to qualify under Section 401(a) of the Code has either received a favorable determination letter from the IRS as to its qualified status, or has timely filed an application for a favorable determination letter, or may rely upon an opinion letter for a prototype or volume submitter plan, and, to the knowledge of Sorin, no circumstance exists that would materially jeopardize the qualified status of any such Sorin Benefit Plan, except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

(e)                                  No Sorin Benefit Plan provides health, life insurance or other welfare benefits after retirement or other termination of employment, other than (i) as required by Law, (ii) coverage or benefits the full cost of which is borne by the employee or former employee (or any beneficiary of the employee or former employee) or (iii) benefits provided for a period of less than eighteen (18) months following termination of employment or during any period during which the former employee is receiving severance pay.

(f)                                   Neither Sorin nor any Sorin Subsidiary has or is expected to incur any material liability under subtitles C or D of Title IV of ERISA with respect to any ongoing, frozen or terminated “single-employer plan”, within the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any of them or any of their ERISA Affiliates.  With respect to any Sorin Benefit Plan subject to the minimum funding requirements of Section 412 of the Code or Title IV of ERISA, (i) no such plan is, or is expected to be, in “at-risk” status (within the meaning of Section 303(i)(4)(A) of ERISA or Section 430(i)(4)(A) of the Code), (ii) as of the last day of the most recent plan year ended prior to the date hereof, the actuarially determined present value of all “benefit liabilities” within the meaning of Section 4001(a)(16) of ERISA did not exceed the then current value of assets of such Sorin Benefit Plan, (iii) no unsatisfied liability (other than for premiums to the PBGC) under Title IV of ERISA has been, or is expected to be, incurred by Sorin or any of its Subsidiaries, (iv) the PBGC has not instituted proceedings to terminate any such Sorin Benefit Plan and (v) no “reportable event” within the meaning of Section 4043 of ERISA (excluding any such event for which the thirty (30) day notice requirement has been waived under the regulations to Section 4043 of ERISA) has occurred, nor has any event described in Sections 4062, 4063 or 4041 of ERISA occurred.  Neither Sorin nor any of its ERISA Affiliates has maintained or contributed or

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has had any obligation of any sort in the last six (6) years to any “multiemployer plan” (as defined in Section 3(37) of ERISA).  No Sorin Benefit Plan is a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).

(g)                                  None of the execution and delivery of this Agreement or the consummation of the Mergers or any other transaction contemplated by this Agreement (alone or in conjunction with any other event, including any termination of employment) will (i) entitle any current or former employee, officer, director or independent contractor of Sorin or any Sorin Subsidiary to any severance pay or any material increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any such employee, director, officer or independent contractor, (iii) directly or indirectly cause Sorin to transfer or set aside any assets to fund any material benefits under any Sorin Benefit Plan, (iv) trigger any other material obligation under any Sorin Benefit Plan or (v) result in any material breach or violation of or default under, or limit Sorin’s right to materially amend or terminate, any Sorin Benefit Plan.

(h)                                 None of the execution and delivery of this Agreement or the consummation of the Mergers or any other transaction contemplated by this Agreement will result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

(i)                                     Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, all Sorin Benefit Plans subject to the Laws of any jurisdiction outside the United States (i) have been maintained and operated in accordance with, and are compliant with, their terms, all applicable Laws, government taxation, social security and funding requirements and with any agreement entered into with a union or labor organization, (ii) to the extent required to be registered or approved by a foreign Governmental Entity, has been registered with, or approved by, a foreign Governmental Entity and, to the knowledge of Sorin, nothing has occurred that would adversely affect such registration or approval, (iii) if such Sorin Benefit Plans are intended to qualify for special Tax treatment, meet all the requirements for such treatment, (iv) if such Sorin Benefit Plans are intended or required to be funded and/or book-reserved, are fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions and in accordance with any applicable requirements and (v) there is no pending or threatened litigation relating to any such Sorin Benefit Plan.

(j)                                    Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, with respect to each Sorin Benefit Plan subject to the Laws of any jurisdiction outside the United States, (i) if required to be funded, the assets of such Sorin Benefit Plan are sufficient under applicable local Law to provide for the payment of the relevant benefits in full or (ii) if not required to be funded, the book reserves (determined in accordance with GAAP) are sufficient to provide for the payment of the relevant benefits.

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SECTION 4.12                                   Labor.

(a)                                 Section 4.12(a) of the Sorin Disclosure Letter sets forth a true and complete list of any collective bargaining agreement or other material agreement, including at a national and company level, with a labor union, works council or similar organization that Sorin or any of its Subsidiaries is a party to or otherwise bound by (collectively, but without reference to materiality, the “Sorin Labor Agreements”), and to Sorin’s knowledge, no union or other labor organizational campaign is in progress with respect to the employees of Sorin or any Sorin Subsidiary.  Sorin has made available to Cyberonics true and complete copies of each Sorin Labor Agreement.  None of the execution and delivery of this Agreement or the consummation of the Mergers or any other transaction contemplated by this Agreement (alone or in conjunction with any other event, including any termination of employment) will entitle any third party (including any labor organization or Governmental Entity) to any payments under any of the Sorin Labor Agreements, and Sorin and its Subsidiaries are in compliance in all material respect with their obligations pursuant to all notification and bargaining obligations arising under any Sorin Labor Agreements. None of the Sorin Labor Agreements guarantee minimum employment levels at Sorin and/or its Subsidiaries or may in any way prevent, for reasons other than the existing statutory limits and restrictions, the implementation of restructuring or redundancy programs.

(b)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (i) during the three (3) years immediately preceding the date hereof, there is no, and has not been any, strike, lockout, slowdown, work stoppage, unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceedings pending or, to the knowledge of Sorin, threatened with respect to employees of Sorin or any Sorin Subsidiary, (ii) there are no social security disputes or claims pending or, to the knowledge of Sorin, threatened in writing against Sorin and/or the Subsidiaries, (iii) Sorin and each Sorin Subsidiary is in compliance, with respect to both present and former employees and personnel, with all applicable Laws pertaining to employment, employment practices and labor, including all such Laws relating to labor relations, terms and conditions of employment, payment of wages and salaries, payment of social security contributions, mandatory accrual of statutory leaving allowances, hours, overtime, classification of employees and assignment of duties, immigration, secondment, health and safety, mandatory hiring of disabled people, workers’/executives’/directors’ compensation, the use of labor contracts other than ordinary open-term employment, self-employment agreements, and staff leasing, registration in any mandatory books, termination of employment, collective redundancy or work suspension procedures, and the use of social and welfare schemes and (iv) Sorin and each Sorin Subsidiary is in compliance with all applicable Sorin Labor Agreements and individual labor contracts.

(c)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (i) none of the non-employed personnel working or having worked for Sorin and/or its Subsidiaries is in a position to legitimately claim the status of employee of Sorin and/or its Subsidiaries, (ii) Sorin and its Subsidiaries have made all filings and taken all actions and made all payments required to

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be made or taken, under applicable social security, insurance, pension and welfare Laws, with respect to each of the present and former employees and any other self-employed personnel, (iii) all mandatory social security, health insurance, tax withholdings and pension charges due under such Laws with respect to its present and former employees and any other self-employed personnel have been fully paid-in and (iv) all mandatory pension plans/funds, insurance plans/funds, health care funds and severance funds required to be funded and/or allocated in relation to present and former employees have been funded in accordance with all applicable Laws and national collective bargaining agreements.  Neither Sorin nor any Sorin Subsidiary has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act and the regulations promulgated thereunder or any similar state or local Law that remains unsatisfied.

(d)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (i) all commercial agency agreements entered into by Sorin and/or its Subsidiaries have been executed in compliance with all applicable Laws, economic collective agreements and individual agreements, (ii) Sorin and/or the Subsidiaries have fulfilled all their obligations related to the payments of commissions and social security contributions for agents, (iii) the agents are not entitled to be treated as, or recognized as having the status of, an employee of Sorin and/or the Subsidiaries, (iv) all contracts for the supply of works or services entered into by Sorin and its Subsidiaries have been executed and performed in compliance with applicable Laws and do not entitle any individual performing services or works in favor of Sorin and/or its Subsidiaries to be treated as, or recognized as having the status of, an employee thereof and (v) all of Sorin’s and its Subsidiaries’ contractors (and sub-contractors) have regularly paid wages, taxes and social security contributions in favor of their personnel and complied with their health and safety obligations.

(e)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, Sorin and its Subsidiaries have fully complied with applicable Laws and Sorin Labor Agreements when transferring employees to third parties in connection with transfers of going concerns, mergers or any other corporate transactions.

SECTION 4.13                                   Tax Matters.

(a)                                 Sorin and each Sorin Subsidiary properly maintains the mandatory tax books and accounts and has timely filed (taking into account any valid extension of time within which to file) all Tax Returns required to be filed by it and all such filed Tax Returns are correct, complete and accurate, and has paid all Taxes due (whether or not shown as due on such filed Tax Returns), subject in each case to such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  All Taxes which Sorin or any Sorin Subsidiary has been required by law to withhold or to collect for payment on or prior to the date hereof have been duly withheld and collected and have been paid to the appropriate Governmental Entity, subject to such exceptions as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  There are no material

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Liens related to Taxes upon any property or assets of Sorin or any Sorin Subsidiary, except for Sorin Permitted Liens.

(b)                                 Neither Sorin nor any Sorin Subsidiary has in effect any waiver of any statute of limitations with respect to any material amount of Taxes.  Neither Sorin nor any Sorin Subsidiary has agreed to any extension of time with respect to an assessment or deficiency for Taxes.  As of the date hereof, there is no action, suit, investigation, audit, claim, assessment or other proceeding pending with respect to Taxes for which Sorin or any Sorin Subsidiary may be liable that would, if determined adversely, reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  No material deficiency with respect to Taxes has been asserted or assessed in writing against Sorin or any Sorin Subsidiary which has not been fully paid or adequately reserved in Sorin Financial Statements in accordance with IFRS.

(c)                                  Neither Sorin nor any Sorin Subsidiary has been a member of an affiliated group of corporations filing a consolidated federal income Tax Return (other than a group the common parent of which is Sorin) or has any liability for Taxes of another person (other than Sorin or a Sorin Subsidiary) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law).

(d)                                 Neither Sorin nor any Sorin Subsidiary has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the Closing Date that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or foreign Law).

(e)                                  Neither Sorin nor any Sorin Subsidiary has, within the past six (6) years, (i) been engaged in, or been party to, any of the transactions set out in Chapter 5 of Part 23 of the UK Corporation Tax Act 2010, or (ii) made or received a chargeable payment as defined in section 1086 of that Act.

(f)                                   Neither Sorin nor any Sorin Subsidiary is a party to, or bound by, or has any obligation under, any Tax sharing, indemnification or similar Contract other than (i) Contracts solely among Sorin and the Sorin Subsidiaries and (ii) customary Tax indemnification provisions in Contracts entered into in the ordinary course of business and the primary purpose of which does not relate to Taxes.

(g)                                  Neither Sorin nor any Sorin Subsidiary has participated in any “listed transaction” required to be disclosed by any of them on any Tax Return in accordance with Treasury Regulation Section 1.6011-4(a) or any arrangements which have been or are required to be disclosed pursuant to Part 7 of the UK Finance Act 2004 (or any similar provision of state, local or foreign law).

(h)                                 Sorin has not been a “United States real property holding corporation” within the meaning of Section 897 of the Code during the five-year period ending on the Closing Date.

(i)                                     Neither Sorin nor any Sorin Subsidiary has knowledge of any facts or of any reason that would reasonably be expected to cause Holdco to be treated under current

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Law, as a result of the transactions contemplated by this Agreement, as a “domestic corporation” within the meaning of the Code.

SECTION 4.14                                   Real Property.

(a)                                 Section 4.14(a) of the Sorin Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of all material real property owned in fee by Sorin or any Sorin Subsidiary (the “Sorin Owned Real Property”).  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (i) Sorin or a Sorin Subsidiary has good and marketable title to the Sorin Owned Real Property, in each case free and clear of all Liens except for Sorin Permitted Liens and (ii) no Sorin Owned Real Property is subject to any option, obligation or right of first refusal or contractual right to purchase, lease or acquire any interest in any Sorin Owned Real Property.

(b)                                 Section 4.14(b) of the Sorin Disclosure Letter sets forth, as of the date of this Agreement, a true and complete list of all material real property that is leased, subleased or licensed by Sorin or any Sorin Subsidiary (the “Sorin Leased Real Property”), and together with the Sorin Owned Real Property, collectively, the “Sorin Real Property”).  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, Sorin or a Sorin Subsidiary has a valid leasehold estate in each Sorin Leased Real Property, in each case free and clear of all Liens except for Sorin Permitted Liens.  Each Contract of Sorin or the Sorin Subsidiaries for any Sorin Leased Real Property is legal, valid, enforceable and binding on Sorin and each Sorin Subsidiary that is a party thereto and, to the knowledge of Sorin, each other party thereto and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought, and except for such failures to be valid and binding or to be in full force and effect that would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, and neither Sorin nor any of the Sorin Subsidiaries is in breach of or default under, or has received written notice of any breach of or default under, and no condition exists which (with notice or lapse of time or both) would constitute a default under, any lease of Sorin Leased Real Property where such breach or default would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  Sorin has made available to Sorin a true and complete copy of all Contracts for Sorin Leased Real Property.  There are no outstanding options or rights of any third party to acquire any of Sorin’s or Sorin Subsidiary’s interests in such Sorin Leased Real Property.  Neither Sorin nor any Sorin Subsidiary has subleased or otherwise granted any person the right to use or occupy any Sorin Leased Real Property.  Neither Sorin nor any Sorin Subsidiary has collaterally assigned or granted any other security interest in any Sorin Leased Real Property or any interest therein.

SECTION 4.15                                   Environmental Matters.  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect:

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(a)                                 Sorin and each Sorin Subsidiary is, and has at all times been, in compliance with those Environmental Laws applicable to their respective assets, properties and operations (including possessing and complying with any required Environmental Permits), and there are no administrative or judicial proceedings, actions or investigations pending against Sorin or any Sorin Subsidiary and none of Sorin or any Sorin Subsidiary has received any written notice, demand, letter or claim, in either case, alleging that Sorin or such Sorin Subsidiary is in violation of, or has liability under, any Environmental Law.

(b)                                 To the knowledge of Sorin, there are no Hazardous Substances present in, at, on, or under any Sorin Owned Real Property, Sorin Leased Real Property or any other location that requires remediation or has resulted in a liability under Environmental Laws on the part of Sorin or any Sorin Subsidiary.

(c)                                  Sorin has provided any and all material information in its possession relating to (i) SNIA S.p.A. legacy environmental liability, including all environmental reports, studies, assessments, legal memoranda, sampling data and other environmental documentation relating to the lagoons of Marano Lagunare and Grado and the litigation relating thereto and (ii) the possession or storage of radiological materials or wastes.

SECTION 4.16                                   Intellectual Property.

(a)                                 Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, Sorin and the Sorin Subsidiaries (i) own all right, title and interest in or (ii) have the valid right or license to use all Intellectual Property Rights that are used in the conduct of the business of Sorin and the Sorin Subsidiaries as currently conducted (the “Sorin Intellectual Property Rights”).  Sorin has made available to Cyberonics a list of all Sorin Registered Intellectual Property Rights, which list is, to the knowledge of Sorin, true and complete in all material respects as of the date hereof.  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, Sorin and the Sorin Subsidiaries are the sole and exclusive owners of all applications and registrations included in the Sorin Registered Intellectual Property Rights, free and clear of all Liens, except for Sorin Permitted Liens.  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, all Sorin Registered Intellectual Property Rights are subsisting and, to Sorin’s knowledge, valid and enforceable.

(b)                                 As of the date of this Agreement, there is no pending, or to the knowledge of Sorin, threatened Proceeding against Sorin or any of the Sorin Subsidiaries concerning the validity, enforceability or ownership of any Sorin Intellectual Property Rights or the right of Sorin to use or otherwise exploit any Sorin Intellectual Property Rights, except for such Proceedings that would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect if determined adversely to Sorin or any of the Sorin Subsidiaries.  To the knowledge of Sorin, none of Sorin nor any of the Sorin Subsidiaries are subject to any order pertaining to the Sorin Intellectual Property Rights restricting in any material manner the use, transfer, licensing or other exploitation by Sorin or any of the Sorin Subsidiaries of any Sorin Intellectual Property Rights or Sorin’s

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(or the applicable Sorin Subsidiary’s) ownership thereof.  Neither Sorin nor any of the Sorin Subsidiaries has received, during the period beginning on the date that is two (2) years prior to the date of this Agreement, any written charge, complaint, claim, demand or notice challenging the validity of any of the Sorin Intellectual Property Rights, except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect if determined adversely to Sorin or any of the Sorin Subsidiaries.

(c)                                  Neither the execution, delivery and performance of this Agreement nor the consummation of the Mergers and other transactions contemplated by this Agreement will impair the right of Sorin to use, develop, make, have made, offer for sale, sell, import, copy, modify, create derivative works of, perform, display, distribute, license, or dispose of any Sorin Intellectual Property Rights or any portion thereof as currently used or exploited by Sorin and the Sorin Subsidiaries, except as would not reasonably be expected, individually or in the aggregate, to be material to Sorin and the Sorin Subsidiaries, taken as a whole.

(d)                                 To Sorin’s knowledge, as of the date hereof, the conduct of the business of Sorin and the Sorin Subsidiaries as currently conducted does not infringe upon any Intellectual Property Rights of any other person, except for any such infringement that would not reasonably be expected to be material to Sorin and the Sorin Subsidiaries, taken as a whole.  None of Sorin or any of the Sorin Subsidiaries has received, during the period beginning on the date that is two (2) years prior to the date of this Agreement, any written charge, complaint, claim, demand or notice alleging any such infringement by Sorin or any of the Sorin Subsidiaries that has not been settled or otherwise fully resolved, except for any such infringement that would not reasonably be expected to be material to Sorin and the Sorin Subsidiaries, taken as a whole.  To Sorin’s knowledge, no other person is infringing, or has infringed during the period beginning on the date that is two (2) years prior to the date of this Agreement, any Sorin Intellectual Property Rights owned by Sorin, except for any such infringement as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.

(e)                                  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, each of Sorin and the Sorin Subsidiaries has taken commercially reasonable steps to protect, preserve and maintain the secrecy and confidentiality of all Trade Secrets included in the Sorin Intellectual Property Rights that are both owned by Sorin or the Sorin Subsidiaries and material to the business of Sorin or the Sorin Subsidiaries as currently conducted.  To Sorin’s knowledge, there have been no breaches of security that resulted in the disclosure of any such material Trade Secrets, except for any such disclosure that would not reasonably be expected to be material to Sorin and the Sorin Subsidiaries, taken as a whole.

SECTION 4.17                                   Contracts.

(a)                                 Section 4.17(a) of the Sorin Disclosure Letter sets forth a true and complete list of all Sorin Material Contracts in effect as of the date hereof.  For the purposes of this Agreement, “Sorin Material Contract” means each Contract to which

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Sorin or any of the Sorin Subsidiaries is a party or by which it is bound (other than any of the foregoing solely between Sorin and any of the Sorin Subsidiaries or between any wholly owned Sorin Subsidiaries or any Sorin Benefit Plan) that:

(i)                                     relates to a partnership, collaboration agreement, joint venture or similar agreement or arrangement of Sorin or any of the Sorin Subsidiaries;

(ii)                                  relates to outstanding Indebtedness of Sorin or any Sorin Subsidiary in an amount in excess of $5 million;

(iii)                               by its terms calls for aggregate payments by Sorin or any of its Subsidiaries of more than $2 million in any fiscal year period, except for any such Contract that may be canceled by Sorin, without any material penalty or other liability to Sorin or any of its Subsidiaries, upon notice of 90 days or less;

(iv)                              by its terms calls for aggregate payments to Sorin or any of its Subsidiaries of more than $2 million in any fiscal year period;

(v)                                 is a definitive agreement providing for the acquisition from another person or disposition to another person, directly or indirectly (by merger, purchase or similar transaction), of assets or capital stock or other equity interests of another person (A) that involves aggregate consideration (alone or as a series of related Contracts) in excess of $3 million (other than acquisitions or dispositions of inventory in the ordinary course of business) and which has not been consummated or (B) under which Sorin or any Sorin Subsidiary has outstanding “earn-out” or other similar contingent payment obligations;

(vi)                              prohibits Sorin or any of its affiliates (including the Sorin Merger Surviving Company and its affiliates from and after the Effective Times) from (A) engaging or competing in any line of business in any geographical location or with any person or (B) selling any products or services (including Sorin products or services) of or to any other person or in any geographic region;

(vii)                           involves any material exchange traded, over-the-counter or other swap, cap, floor, collar, futures contract, forward contract, option or any other derivative financial instrument or contract, based on any commodity, security, instrument, asset, rate or index of any kind or nature whatsoever, whether tangible or intangible, including commodities, emissions allowances, renewable energy credits, currencies, interest rates, foreign currency and other indices;

(viii)                        obligates Sorin or any of the Sorin Subsidiaries to make any capital expenditures (including pursuant to any development project, partnership or joint venture) in excess of $2 million in any fiscal year;

(ix)                              obligates Sorin or any of the Sorin Subsidiaries to provide indemnification or a guarantee (other than in the ordinary course of business in connection with sales of products or services to customers) that, to the knowledge

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of Sorin, would reasonably be expected to result in payments in excess of $5 million as of the date hereof;

(x)                                 constitutes a Contract for Sorin Intellectual Property Rights (other than with respect to licenses for commercially available software or hardware) that would reasonably be expected to result in payments by Sorin in excess of $2 million per fiscal year;

(xi)                              is a Contract that grants “most favored nation” status or similar preferential pricing rights to any third party;

(xii)                           is a material Contract with a Governmental Entity;

(xiii)                        (A) obligates Sorin to purchase or otherwise obtain any product or service exclusively from a single party or sell any product or service exclusively to a single party or (B) under which any person has been granted the right to manufacture, sell, market or distribute any product of Sorin on an exclusive basis to any person or group of persons or in any geographical area; and

(xiv)                       any lease with respect to Sorin Leased Real Property.

(b)                                 Neither Sorin nor any Sorin Subsidiary is in breach of or default under the terms of any Sorin Material Contract (nor, to the knowledge of Sorin, is there any condition or event which, with notice or lapse of time or both, would constitute such a breach or default) where such breach or default would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  To the knowledge of Sorin, no other party to any Sorin Material Contract is in breach of or default (nor, to the knowledge of Sorin, is there any condition or event which, with notice or lapse of time or both, would constitute such a breach or default) under the terms of any Sorin Material Contract where such breach or default would reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect.  Each Sorin Material Contract is a valid and binding obligation of, and enforceable in accordance with its terms against, Sorin or the relevant Sorin Subsidiary party thereto, as applicable, and, to the knowledge of Sorin, each other party thereto and is in full force and effect, except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect; provided, however, that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c)                                  Prior to the date hereof, Sorin has heretofore delivered or made available to Cyberonics correct and complete copies of each Sorin Material Contract, together with any and all amendments and supplements thereto.

SECTION 4.18                                   Insurance.  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, (a) all insurance policies

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maintained by Sorin and the Sorin Subsidiaries are in full force and effect and provide insurance in such amounts and against such risks as the management of Sorin reasonably has determined to be prudent in accordance with industry practices or as is required by Law or regulation, and all premiums due and payable thereon have been paid; and (b) neither Sorin nor any Sorin Subsidiary is in breach or default of any of the insurance policies, and neither Sorin nor any Sorin Subsidiary has taken any action or failed to take any action which, with notice or the lapse of time, would constitute such a breach or default or permit termination or material modification of any of the insurance policies.  Except as would not reasonably be expected to have, individually or in the aggregate, a Sorin Material Adverse Effect, Sorin has not received any notice of termination or cancellation or denial of coverage with respect to any insurance policy.

SECTION 4.19                                   Anti-Money Laundering and Economic Sanctions Laws.

(a)                                 None of Sorin, the Sorin Subsidiaries, any of their respective officers, directors, employees or, to the knowledge of Sorin, agents designated by Sorin to act on behalf of Sorin and solely when acting in such capacity (collectively, the “Sorin Group,” it being acknowledged and agreed that any representation or warranty in this Agreement with respect to the Sorin Group shall, to the extent it applies to such agents, be deemed made to the knowledge of Sorin and solely when acting in such capacity), (i) is, or in the five (5) years prior to the date of this Agreement has been, in violation of any applicable anti-money laundering law or (ii) engages in, or in the five (5) years prior to the date of this Agreement has engaged in, any transaction, investment, undertaking or activity that conceals the identity, source or destination of the proceeds from any category of offenses designated in any applicable law, regulation or other binding measure implementing the “Forty Recommendations” and “Nine Special Recommendations” published by the Organization for Economic Co-operation and Development’s Financial Action Task Force on Money Laundering.

(b)                                 Except as otherwise authorized by OFAC, no member of the Sorin Group (i) conducts, or in the five (5) years prior to the date of this Agreement has conducted, any business or engages in, or in the five (5) years prior to the date of this Agreement has engaged in, making or receiving any contribution of funds, goods or services to or for the benefit of any Embargoed Person, (ii) deals in, or otherwise engages in, or in the five (5) years prior to the date of this Agreement has dealt in or otherwise engaged in, any transaction related to any property or interests in property blocked pursuant to any applicable Economic Sanctions Laws or (iii) engages in or conspires to engage in, or in the five (5) years prior to the date of this Agreement has engaged in or conspired to engage in, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the applicable prohibitions set forth in any Economic Sanctions Laws.

SECTION 4.20                                   FCPA and Anti-Corruption.

(a)                                 No member of the Sorin Group has in the five (5) years prior to the date of this Agreement, in connection with the business of Sorin or any Sorin Subsidiary, itself or, to the knowledge of Sorin, any other third party, in each case, acting on behalf of Sorin or

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any Sorin Subsidiary, taken any action in violation of the FCPA, Legislative Decree no. 231 under Italian Law or any Bribery Legislation.

(b)                                 No member of the Sorin Group is, or in the five (5) years prior to the date of this Agreement has been, subject to any actual, pending, or threatened civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings, demand letters, settlements, or enforcement actions, or made any voluntary disclosures to any Governmental Entity, involving Sorin or any Sorin Subsidiary in any way relating to applicable Bribery Legislation, including the FCPA.

(c)                                  Sorin and the Sorin Subsidiaries are in material compliance with the provisions of Italian Law contained in Legislative Decree no. 231, dated June 8, 2001, and have adopted all the actions provided for in such legislation to be exempted from fines, disqualifications or other sanctions (including the adoption and implementation of a model aimed at preventing crimes committed in their interest or to their advantage by their directors, managers, executives or by their agents or employees).

SECTION 4.21                                   Customers.  To the knowledge of Sorin, as of the date of this Agreement neither Sorin nor any of the Sorin Subsidiaries (a) has been notified in writing of any breach of any Contract with any of Sorin’s top twenty (20) customers (the “Sorin Material Customers”), measured by revenue generated in fiscal year 2014, that would be material and adverse to Sorin and the Sorin Subsidiaries, taken as a whole or (b) has been notified in writing by any such Sorin Material Customers that it intends to terminate or otherwise materially and adversely alter the terms of its business with Sorin or any of the Sorin Subsidiaries, in each case, in a manner that would be material and adverse to Sorin and the Sorin Subsidiaries, taken as a whole.  As of the date of this Agreement, neither Sorin nor any of the Sorin Subsidiaries has notified any such Sorin Material Customers in writing of any material breach of any material Contract by such Sorin Material Customers.

SECTION 4.22                                   Opinion of Financial Advisor.  Sorin’s board of directors has received the opinion of Rothschild on or prior to the date of this Agreement, to the effect that, as of the date of such opinion and subject to the assumptions, qualifications and limitations set forth therein, the Sorin Exchange Ratio is fair, from a financial point of view, to the shareholders of Sorin.  Sorin will make a true and complete copy of such opinion available to Cyberonics, for informational purposes only, after receipt of such opinion by Sorin’s board of directors.

SECTION 4.23                                   Anti-Takeover Provisions.  Assuming the accuracy of the representation contained in Section 3.02(h), Sorin, Holdco and Merger Sub have taken all actions necessary to render inapplicable to this Agreement and the Sorin Merger, and inapplicable to Holdco, Merger Sub and Sorin’s share capital in connection with this Agreement and the Sorin Merger, any and all Takeover Statutes, and no such Takeover Statute applies or will apply to Sorin, Holdco, Merger Sub, or any of their respective Subsidiaries, with respect to the Sorin Merger.

SECTION 4.24                                   Vote Required.  (i) The attendance of the holders of more than one-fifth of Sorin Shares able to vote and the affirmative vote of the holders of two-thirds of Sorin Shares in attendance and able to vote on the sole call at the Sorin Shareholder Meeting for the

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approval of the Sorin Merger and the Sorin Merger Terms (“Sorin Shareholder Approval”) and (ii) the approval of (A) Sorin, as the sole shareholder of Holdco, of this Agreement, the Sorin Merger Terms and the transactions contemplated hereby (including the Mergers) (the “Holdco Shareholder Approval”) and (B) Holdco, as the sole shareholder of Merger Sub, of this Agreement, the Sorin Merger Terms and the transactions contemplated hereby (including the Mergers) (the “Merger Sub Shareholder Approval”), are the only votes required (under applicable Law, the Sorin Charter, the Sorin Bylaws or otherwise) of the holders of any class or series of capital stock or other equity securities of Sorin, Holdco and Merger Sub to approve, as the case may be, this Agreement, the Sorin Merger Terms and the transactions contemplated hereby (including the Mergers).  The Principal Sorin Shareholders will be entitled to vote all Sorin Shares held by them at the Sorin Shareholder Meeting, and such Sorin Shares will be counted in determining whether the Sorin Shareholder Approval is obtained.

SECTION 4.25                                   Brokers.  No broker, finder or investment banker other than Rothschild is entitled to any brokerage, finder’s or other fee or commission from Sorin or any Sorin Subsidiary in connection with the transactions contemplated by this Agreement.

SECTION 4.26                                   Sufficient Funds.  At the Effective Times, Holdco will have available, and Holdco will provide Merger Sub with sufficient cash or lines of credit available to pay (i) any cash required to be paid to any holder of Excluded Sorin Rescission Shares and (ii) any and all other amounts required to be paid in connection with the consummation of the transactions contemplated by this Agreement, including the Mergers, and any related fees and expenses.

SECTION 4.27                                   Absence of Certain Arrangements.  Other than this Agreement and the Cyberonics Support Agreements and the Management Retention Agreements, there are no Contracts or any commitments to enter into any Contract between Sorin, Holdco, Merger Sub or any of their respective affiliates, on the one hand, and any director, officer, employee or stockholder of Cyberonics, on the other hand, relating to the transactions contemplated by this Agreement or the operations of the Sorin Merger Surviving Company or the Cyberonics Merger Surviving Corporation after the Effective Times.

SECTION 4.28                                   Acknowledgement of No Other Representations or Warranties.  Except for the representations and warranties contained in Article III, each of Sorin, Holdco and Merger Sub acknowledges and agrees that none of Cyberonics, the Cyberonics Subsidiaries or any of their respective affiliates or the Cyberonics Representatives makes or has made any representation or warranty, either express or implied, concerning Cyberonics or the Cyberonics Subsidiaries or any of their respective assets or properties or the transactions contemplated by this Agreement.  Sorin, Holdco and Merger Sub and their respective Representatives have received from Cyberonics or its Representatives certain estimates, projections and other forecasts for Cyberonics and its Subsidiaries and certain estimates, plans and budget information.  Each of Sorin, Holdco and Merger Sub acknowledges and agrees that there are uncertainties inherent in attempting to make such projections, forecasts, estimates, plans and budgets; that Cyberonics makes no representations or warranties with respect thereto except to the extent of any representations and warranties made by Cyberonics in Article III relating thereto; that Sorin, Holdco and Merger Sub are familiar with such uncertainties; and that, except to the extent the representations and warranties in Article III speak to such estimates, projections, forecasts, plans

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and budgets, Sorin, Holdco and Merger Sub are each taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates, projections, forecasts, plans and budgets so furnished to them or their Representatives.

ARTICLE V
COVENANTS

SECTION 5.01                                   Conduct of Business Pending the Mergers.

(a)                                 Conduct of Business by Cyberonics.  Cyberonics agrees that between the date of this Agreement and the Cyberonics Merger Effective Time, except as set forth in Section 5.01(a) of the Cyberonics Disclosure Letter, as expressly provided for, permitted, or as required by any provision of this Agreement or as required by applicable Law, by a Governmental Entity of competent jurisdiction or by the rules or requirements of the NASDAQ, unless Sorin shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), Cyberonics will, and will cause each Cyberonics Subsidiary to, (x) conduct its business and operations in all material respects in the ordinary course of business consistent with past practice and (y), to the extent consistent therewith, use commercially reasonable efforts to preserve substantially intact its business organization, keep available the services of its current officers and employees and preserve its relationships with significant Governmental Entities, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with it.  Without limiting the foregoing, except as set forth in Section 5.01(a) of the Cyberonics Disclosure Letter, as expressly provided for, permitted, or as required by any provision of this Agreement or as required by applicable Law, by a Governmental Entity of competent jurisdiction or by the rules or requirements of the NASDAQ, Cyberonics shall not, and shall not permit any Cyberonics Subsidiary to, between the date of this Agreement and the Cyberonics Merger Effective Time, do any of the following without the prior written consent of Sorin (which consent shall not be unreasonably withheld, delayed or conditioned):

(i)                                     amend its certificate of incorporation, bylaws or equivalent organizational documents;

(ii)                                  issue, deliver, sell, pledge, dispose, encumber, subject to any Lien or grant any shares of capital stock or other equity interests in, or voting securities of, Cyberonics or any Cyberonics Subsidiary, or options, warrants or other securities convertible into, or exchangeable or exercisable for, any such shares of capital stock, equity interests or voting securities, any rights of any kind to acquire any such shares of capital stock, equity interests, voting securities or such options, warrants or other convertible or exchangeable securities, or any rights relating to or based on the value of such capital stock, equity interests or voting securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than the issuance of Cyberonics Shares upon the exercise, vesting and/or settlement, as applicable, of Cyberonics Equity Awards outstanding as of the date hereof in accordance with the terms of the applicable award agreement and Cyberonics Stock Plan;

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(iii)                               sell, pledge, dispose of, transfer, abandon, allow to lapse, lease, license or encumber or otherwise subject to a Lien (other than a Cyberonics Permitted Lien) any property, rights or assets (including capital stock of any Cyberonics Subsidiary) (other than pledges, disposals, transfers, abandonments, lapses, leases, licenses or encumbrances of inventory, supplies, materials and products in the ordinary course of business consistent with past practice) of Cyberonics and the Cyberonics Subsidiaries, taken as a whole, other than pursuant to Contracts in effect on the date hereof that have been provided to Sorin prior to the date hereof;

(iv)                              (x) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any Cyberonics Securities (other than dividends paid by a wholly owned Cyberonics Subsidiary to Cyberonics or another wholly owned Cyberonics Subsidiary); (y) split, combine, reclassify or amend the terms of any shares of capital stock or other Cyberonics Securities; or (z) redeem, purchase or otherwise acquire any shares of capital stock or other securities or any rights, warrants, or options to acquire any such shares or other securities, except for any repurchases in connection with the exercise of or Tax withholdings on the vesting or payment, as applicable, of Cyberonics Equity Awards outstanding as of the date hereof in accordance with the terms of the applicable award agreement and Cyberonics Stock Plan;

(v)                                 adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Cyberonics or any Cyberonics Subsidiary;

(vi)                              acquire (including by merger, consolidation or acquisition of stock or assets) any business or any interest in any person or any division or amount of assets thereof, except with respect to such acquisitions for consideration that is for an individual transaction, not in excess of $30 million for all such transactions in the aggregate;

(vii)                           incur, prepay, defease, cancel or materially modify any Indebtedness or issue any debt securities or warrants or any rights to acquire debt securities, or assume, guarantee or endorse the obligations of any person (other than a wholly owned Cyberonics Subsidiary), except (A) for borrowings in the ordinary course of business under Cyberonics’s existing credit facilities or (B) Indebtedness for borrowed money that is prepayable at any time without penalty or premium in an amount not to exceed $30 million in the aggregate;

(viii)                        make any loans, advances or capital contributions to, or investments in, (i) any person in which Cyberonics or any Cyberonics Subsidiary does not own an equity interest as of the date hereof which loans, advances, capital contributions or investments are in an amount in excess of $5 million in the aggregate or (ii) any other person (other than any Cyberonics Subsidiary) in

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which Cyberonics or any Cyberonics Subsidiary owns an equity interest as of the date hereof which loans, advances, capital contributions or investments are in an amount in excess of $30 million in the aggregate;

(ix)                              modify, or amend, or renew, cancel or terminate, or waive, release or assign any material rights or claims with respect to, any Cyberonics Material Contract, or enter into any Contract which, if entered into prior to the date hereof, would be a Cyberonics Material Contract, other than renewals in the ordinary course of business consistent with past practice or automatic renewals contemplated by the terms of such Contract or, for the avoidance of doubt, as expressly permitted by any other clause of this Section 5.01(a); provided, however, that such renewals shall not be permitted with respect to any Contract that would materially restrict, after the Effective Times, Holdco and its Subsidiaries (including the Cyberonics Merger Surviving Corporation, the Sorin Merger Surviving Company and their respective Subsidiaries) with respect to engaging or competing in any line of business or in any geographic area;

(x)                                 enter into any Contract that would materially restrict, after the Effective Times, Holdco and its Subsidiaries (including the Cyberonics Merger Surviving Corporation, the Sorin Merger Surviving Company and their respective Subsidiaries) with respect to engaging or competing in any line of business or in any geographic area;

(xi)                              except to the extent required by Law or the terms of any Cyberonics Benefit Plan as in effect as of the date of this Agreement or as specifically contemplated by this Agreement: (A) other than in the ordinary course of business consistent with past practice, increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) other than in the ordinary course of business consistent with past practice, establish, adopt, enter into, amend or terminate any Cyberonics Benefit Plan; (C) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Cyberonics Benefit Plan; (D) pay or award, or commit to pay or award, any bonuses or incentive compensation, other than at times and in amounts in the ordinary course of business consistent with past practice; or (E) notwithstanding clause (A) or (B), for employees who are officers, grant any rights to severance or termination pay or enter into any employment or severance agreement;

(xii)                           establish, adopt, enter into, materially amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;

(xiii)                        except to the extent otherwise required by Law or in the ordinary and usual course of business consistent with past practice, make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return, make a request for a Tax ruling or enter into a closing agreement or advance pricing agreement in respect of a material

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amount of Taxes or settle or compromise any material audit, assessment, Tax claim or proceeding relating to Taxes, surrender any right to claim a material refund or offset of any Taxes, or change the classification of Cyberonics or any Cyberonics Subsidiary for U.S. federal Tax purposes;

(xiv)                       make any material change in accounting policies or procedures in effect as of April 25, 2014, other than as required by GAAP (or any interpretation or enforcement thereof), Regulation S-X of the Exchange Act or a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization) or applicable Law;

(xv)                          make any capital expenditures after the date hereof that exceed $15 million in the aggregate; provided, however, that Cyberonics and any Cyberonics Subsidiary shall be permitted to make emergency capital expenditures in any amount that Cyberonics determines is necessary in its reasonable judgment to maintain its ability to operate its business in the ordinary course;

(xvi)                       waive, release, assign, settle or compromise any Proceeding affecting Cyberonics or any Cyberonics Subsidiary (other than any Proceeding brought by Cyberonics against Sorin or brought by Sorin against Cyberonics arising out of or relating to this Agreement), other than any such waiver, release, assignment, settlement or compromise of a Proceeding (a) where the amounts paid or to be paid (A) do not exceed established reserves for such Proceedings as of the date hereof by more than $10 million in the aggregate or (B) are funded, subject to payment of a deductible, by insurance coverage maintained by Cyberonics or its Subsidiaries and (b) that does not include any equitable relief that would be material and adverse to the conduct of the business of Cyberonics and the Cyberonics Subsidiaries, taken as a whole, or the business of Holdco and the Subsidiaries of Holdco following the Effective Times (together, the “Holdco Group”), taken as a whole following the Effective Times;

(xvii)                    fail to maintain insurance consistent with past practice and of a size and scope that is reasonable for the business of Cyberonics and the Cyberonics Subsidiaries, taken as a whole;

(xviii)                 take any action or omit to take any action that is reasonably likely to cause any of the conditions to the Mergers set forth in Article VI not being satisfied; or

(xix)                       authorize, commit to or enter into any Contract to do any of the foregoing.

Nothing contained in this Agreement shall give Sorin, Holdco or Merger Sub, directly or indirectly, the right to control or direct the operations of Cyberonics prior to the Cyberonics Merger Effective Time.  Prior to the Cyberonics Merger Effective Time, Cyberonics shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations.

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(b)                                 Conduct of Business by Sorin, Holdco and Merger Sub.  Sorin, Holdco and Merger Sub agree that between the date of this Agreement and the Cyberonics Merger Effective Time, except as set forth in Section 5.01(b) of the Sorin Disclosure Letter, as expressly provided for, permitted or as required by any provision of this Agreement or as required by applicable Law, by a Governmental Entity of competent jurisdiction or by the rules or requirements of the MSE, unless Cyberonics shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), Sorin, Holdco and Merger Sub will, and will cause each of their respective Subsidiaries to, (x) conduct its business and operations in all material respects in the ordinary course of business consistent with past practice and (y) to the extent consistent therewith, use commercially reasonable efforts to preserve substantially intact its business organization, keep available the services of its current officers and employees and preserve its relationships with significant Governmental Entities, customers, suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with it.  Without limiting the foregoing, except as set forth in Section 5.01(b) of the Sorin Disclosure Letter, as expressly provided for, permitted or as required by any provision of this Agreement or as required by applicable Law, by a Governmental Entity of competent jurisdiction or by the rules or requirements of the MSE, Sorin, Holdco and Merger Sub shall not, and shall cause each of their respective Subsidiaries not to, between the date of this Agreement and the Cyberonics Merger Effective Time, do any of the following without the prior written consent of Cyberonics (which consent shall not be unreasonably withheld, delayed or conditioned):

(i)                                     amend its articles of incorporation, bylaws or equivalent organizational documents;

(ii)                                  issue, deliver, sell, pledge, dispose, encumber, subject to any Lien or grant any shares of capital stock or other equity interests in, or voting securities of, Sorin or any Sorin Subsidiary, or options, warrants or other securities convertible into, or exchangeable or exercisable for, any such shares of capital stock, equity interests or voting securities, any rights of any kind to acquire any such shares of capital stock, equity interests, voting securities or such options, warrants or other convertible or exchangeable securities, or any rights relating to or based on the value of such capital stock, equity interests or voting securities, or any “phantom” stock, “phantom” stock rights, stock appreciation rights or stock based performance units, other than the issuance of Sorin Shares upon the exercise, vesting and/or settlement, as applicable, of Sorin Equity Awards outstanding as of the date hereof in accordance with the terms of the applicable award agreement and Sorin Stock Plan;

(iii)                               sell, pledge, dispose of, transfer, abandon, allow to lapse, lease, license or encumber or otherwise subject to a Lien (other than a Sorin Permitted Lien) any property, rights or assets (including capital stock of any Sorin Subsidiary) (other than pledges, disposals, transfers, abandonments, lapses, leases, licenses or encumbrances of inventory, supplies, materials and products in the ordinary course of business consistent with past practice) of Sorin and the Sorin

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Subsidiaries, taken as a whole, other than pursuant to Contracts in effect on the date hereof that have been provided to Cyberonics prior to the date hereof;

(iv)                              (x) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any Sorin Securities (other than dividends paid by a wholly owned Sorin Subsidiary to Sorin or another wholly owned Sorin Subsidiary); (y) split, combine, reclassify or amend the terms of any shares of capital stock or other Sorin Securities; or (z) redeem, purchase or otherwise acquire any shares of capital stock or other securities or any rights, warrants, or options to acquire any such shares or other securities, except for any repurchases in connection with the exercise of or Tax withholdings on the vesting or payment, as applicable, of Sorin Equity Awards outstanding as of the date hereof in accordance with the terms of the applicable award agreement and Sorin Stock Plan;

(v)                                 adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of Sorin or any Sorin Subsidiary (other than a merger of one or more Sorin Subsidiaries with or into, or the transfer of one or more Sorin Subsidiaries to, one or more other Sorin Subsidiaries and other than in furtherance of the consummation of the transactions contemplated by this Agreement);

(vi)                              acquire (including by merger, consolidation or acquisition of stock or assets) any business or any interest in any person or any division or amount of assets thereof, except with respect to such acquisitions for consideration that is for an individual transaction, not in excess of $30 million for all such transactions in the aggregate;

(vii)                           incur, prepay, defease, cancel or materially modify any Indebtedness or issue any debt securities or warrants or any rights to acquire debt securities, or assume, guarantee or endorse the obligations of any person (other than a wholly owned Sorin Subsidiary), except (A) for borrowings in the ordinary course of business under Sorin’s existing credit facilities or (B) Indebtedness for borrowed money that is prepayable at any time without penalty or premium in an amount not to exceed $30 million in the aggregate;

(viii)                        make any loans, advances or capital contributions to, or investments in, (i) any person in which Sorin or any Sorin Subsidiary does not own an equity interest as of the date hereof which loans, advances, capital contributions or investments are in an amount in excess of $5 million in the aggregate or (ii) any other person (other than any Sorin Subsidiary) in which Sorin or any Sorin Subsidiary owns an equity interest as of the date hereof which loans, advances, capital contributions or investments are in an amount in excess of $30 million in the aggregate;

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(ix)                              modify, or amend, or renew, cancel or terminate, or waive, release or assign any material rights or claims with respect to, any Sorin Material Contract, or enter into any Contract which, if entered into prior to the date hereof, would be a Sorin Material Contract, other than renewals in the ordinary course of business consistent with past practice or automatic renewals contemplated by the terms of such Contract or, for the avoidance of doubt, as expressly permitted by any other clause of this Section 5.01(b); provided, however, that such renewals shall not be permitted with respect to any Contract that would materially restrict, after the Effective Times, Holdco and its Subsidiaries (including the Cyberonics Merger Surviving Corporation, the Sorin Merger Surviving Company and their respective Subsidiaries) with respect to engaging or competing in any line of business or in any geographic area;

(x)                                 enter into any Contract that would materially restrict, after the Effective Times, Holdco and its Subsidiaries (including the Cyberonics Merger Surviving Corporation, the Sorin Merger Surviving Company and their respective Subsidiaries) with respect to engaging or competing in any line of business or in any geographic area;

(xi)                              except to the extent required by Law or the terms of any Sorin Benefit Plan as in effect as of the date of this Agreement or as specifically contemplated by this Agreement: (A) other than in the ordinary course of business consistent with past practice, increase the compensation or benefits payable or to become payable to its directors, officers or employees; (B) other than in the ordinary course of business consistent with past practice, establish, adopt, enter into, amend or terminate any Sorin Benefit Plan; (C) take any action to amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any Sorin Benefit Plan; (D) pay or award, or commit to pay or award, any bonuses or incentive compensation, other than at times and in amounts in the ordinary course of business consistent with past practice; or (E) notwithstanding clause (A) or (B), for employees who are officers, grant any rights to severance or termination pay or enter into any employment or severance agreement;

(xii)                           establish, adopt, enter into, materially amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;

(xiii)                        except to the extent otherwise required by Law or in the ordinary and usual course of business consistent with past practice, make or change any material Tax election, adopt or change any material method of Tax accounting, file any material amended Tax Return, make a request for a Tax ruling or enter into a closing agreement or advance pricing agreement in respect of a material amount of Taxes or settle or compromise any material audit, assessment, Tax claim or proceeding relating to Taxes, surrender any right to claim a material refund or offset of any Taxes, or change the classification of Sorin or any Sorin Subsidiary for U.S. federal Tax purposes;

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(xiv)                       make any material change in accounting policies or procedures in effect as of December 31, 2013, other than as required by IFRS (or any interpretation or enforcement thereof) or a Governmental Entity or quasi-Governmental Entity (including the International Accounting Standards Board or any similar organization) or applicable Law;

(xv)                          make any capital expenditures after the date hereof that exceed the amounts contemplated by Sorin’s capital expenditure budget made available to Cyberonics in writing prior to the date hereof by more than five percent (5%) in the aggregate; provided, however, that Sorin and any Sorin Subsidiary shall be permitted to make emergency capital expenditures in any amount that Sorin determines is necessary in its reasonable judgment to maintain its ability to operate its business in the ordinary course;

(xvi)                       waive, release, assign, settle or compromise any Proceeding affecting Sorin or any Sorin Subsidiary (other than any Proceeding brought by Cyberonics against Sorin or brought by Sorin against Cyberonics arising out of or relating to this Agreement), other than any such waiver, release, assignment, settlement or compromise of a Proceeding (a) where the amounts paid or to be paid (A) do not exceed established reserves for such Proceedings as of the date hereof by more than $10 million in the aggregate or (B) are funded, subject to payment of a deductible, by insurance coverage maintained by Sorin or its Subsidiaries and (b) that does not include any equitable relief that would be material and adverse to the conduct of the business of Sorin and the Sorin Subsidiaries, taken as a whole or the business of Holdco Group, taken as a whole, following the Effective Times;

(xvii)                    fail to maintain insurance consistent with past practice and of a size and scope that is reasonable for the business of Sorin and the Sorin Subsidiaries, taken as a whole;

(xviii)                 take any action or omit to take any action that is reasonably likely to cause any of the conditions to the Mergers set forth in Article VI not being satisfied; or

(xix)                       authorize, commit to or enter into any Contract to do any of the foregoing.

Nothing contained in this Agreement shall give Cyberonics, directly or indirectly, the right to control or direct the operations of Sorin prior to the Cyberonics Merger Effective Time.  Prior to the Cyberonics Merger Effective Time, Sorin shall exercise, consistent with the terms and conditions of this Agreement, complete unilateral control and supervision over its business operations.

SECTION 5.02                                   Agreements Concerning Holdco and Merger Sub.

(a)                                 Holdco shall, immediately following execution of this Agreement, execute and deliver, in accordance with Section 228 of the DGCL and in its capacity as the sole

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stockholder of Merger Sub, a written consent adopting this Agreement.  Prior to the Closing Date, Sorin shall take all necessary actions to ensure that the shareholders of Holdco provide promptly all necessary consents and approvals with respect to this Agreement and the consummation of the Mergers and the other transactions contemplated hereby.

(b)                                 From the date of this Agreement until the Effective Times, Sorin shall cause Holdco and Merger Sub to comply with all of their respective obligations under this Agreement and Merger Sub shall not engage in any activities of any nature except as provided in or contemplated by this Agreement.  From and after the Effective Times, Holdco shall cause the Cyberonics Merger Surviving Corporation to comply with all of its obligations under this Agreement.

SECTION 5.03                                   No Solicitation by Cyberonics; Cyberonics Change of Recommendation.

(a)                                 Except as permitted by this Section 5.03, Cyberonics shall, and shall cause the Cyberonics Subsidiaries and its and their respective Representatives to, (i) immediately upon the execution of this Agreement cease any discussions or negotiations with any persons that are ongoing with respect to any Cyberonics Competing Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to a Cyberonics Competing Proposal, and (ii) from the execution of this Agreement until the Cyberonics Merger Effective Time, not (A) initiate, solicit or knowingly facilitate or encourage the submission of any inquiry, proposal or offer regarding a Cyberonics Competing Proposal, (B) furnish any information regarding Cyberonics or any Cyberonics Subsidiary to any person in connection with, for the purpose of encouraging or facilitating, or in response to, a Cyberonics Competing Proposal, (C) participate in any discussions or negotiations with respect to any Cyberonics Competing Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to a Cyberonics Competing Proposal, or (D) execute or enter into, or agree to enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement relating to any Cyberonics Competing Proposal (other than an Acceptable Cyberonics Confidentiality Agreement) (a “Cyberonics Acquisition Agreement”).  Promptly following the execution of this Agreement (and in any event no later than two (2) Business Days following the date of this Agreement), Cyberonics shall request the prompt return or destruction of all confidential information previously furnished in connection with a potential Cyberonics Competing Proposal to any person with whom Cyberonics or a Cyberonics Representative has had discussions or negotiations with respect to a Cyberonics Competing Proposal in the last twelve (12) months and shall terminate all physical and electronic dataroom access previously granted to any such person or its Representatives.

(b)                                 Notwithstanding anything to the contrary contained in Section 5.03(a), if at any time following the execution of this Agreement and prior to Cyberonics obtaining the Cyberonics Stockholder Approval, (i) Cyberonics has received a bona fide written Cyberonics Competing Proposal that has not resulted from a material breach of Section 5.03(a), (ii) the board of directors of Cyberonics determines in good faith, after

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consultation with its financial advisor and outside counsel, that such Cyberonics Competing Proposal constitutes or would reasonably be expected to lead to a Cyberonics Superior Proposal and (iii) the board of directors of Cyberonics determines, after consultation with its outside counsel, that failure to take such action would be inconsistent with its fiduciary duties to the stockholders of Cyberonics under applicable Law, then Cyberonics may, subject to compliance with this Section 5.03, (A) furnish information with respect to Cyberonics and the Cyberonics Subsidiaries to the person making such Cyberonics Competing Proposal and its Representatives and (B) participate in discussions or negotiations with the person making such Cyberonics Competing Proposal and its Representatives regarding such Cyberonics Competing Proposal; provided, however, that Cyberonics (1) will not, and will not permit or authorize the Cyberonics Subsidiaries or any Representative of Cyberonics or the Cyberonics Subsidiaries to, disclose any information to such person without first entering into an Acceptable Cyberonics Confidentiality Agreement with such person and (2) will as promptly as practicable (and in any event within 24 hours thereafter) provide or make available to Sorin any material information concerning Cyberonics or the Cyberonics Subsidiaries provided or made available to such other person (or its Representatives) that was not previously provided or made available to Sorin.  Subject to the undertakings of the Confidentiality Agreement, Cyberonics will promptly (and in any event, within 24 hours) notify Sorin in the event (x) any Cyberonics Competing Proposal is received by, (y) any information is requested in connection with any Cyberonics Competing Proposal from, or (z) any discussions or negotiations with respect to a Cyberonics Competing Proposal are sought to be initiated with, Cyberonics, any Cyberonics Subsidiary or any Cyberonics Representative, and shall (I) indicate, in connection with such notice, the identity of the person making such Cyberonics Competing Proposal, requesting such information or seeking to initiate such discussions or negotiations, together with a summary of the material terms and conditions of such Cyberonics Competing Proposal (including, if applicable, copies of any written Cyberonics Competing Proposal) or the nature of the request for information, as applicable, and (II) thereafter keep Sorin reasonably informed, on a reasonably current basis, of the status and terms of any such discussions or negotiations.  Cyberonics shall not, and shall cause the Cyberonics Subsidiaries not to, enter into any agreement with any person that prohibits Cyberonics from providing to Sorin any of the information required to be provided to Sorin under this Section 5.03(b) within the time periods contemplated hereby.  Notwithstanding anything to the contrary in this Section 5.03, the board of directors of Cyberonics may correspond in writing with any person making a Cyberonics Competing Proposal solely to request clarification of the terms and conditions thereof so as to determine whether such Cyberonics Competing Proposal constitutes or would reasonably be expected to lead to a Cyberonics Superior Proposal, provided that such written correspondence is delivered concurrently to Sorin.  Cyberonics shall not terminate, waive, amend or modify any provision of, or grant permission under, any “standstill” or confidentiality agreement to which Cyberonics is a party, and Cyberonics shall enforce the provisions of each such agreement.  Notwithstanding anything to the contrary contained in this Agreement, Cyberonics shall be permitted to fail to enforce any provision of any “standstill”, confidentiality or similar obligation of any person if the board of directors of Cyberonics determines in good faith, after consultation with its outside legal counsel, that the failure

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to take such action would be inconsistent with its fiduciary duties to Cyberonics’s stockholders under applicable Law; provided, that Cyberonics promptly advises Sorin that it is taking such action and the identity of the party or parties with respect to which it is taking such action; provided, further, that the foregoing shall not restrict Cyberonics from permitting a person to orally request the waiver of a “standstill” or similar obligation to the extent necessary to avoid violating fiduciary duties under applicable Law.

(c)                                  Except as set forth in Sections 5.03(d) and 5.03(e), neither the board of directors of Cyberonics nor any committee thereof shall (i) authorize, approve or recommend, or publicly propose to authorize, approve or recommend, any Cyberonics Competing Proposal, (ii) withhold or withdraw (or modify or qualify in a manner adverse to Sorin), or publicly propose to withhold or withdraw (or modify or qualify in a manner adverse to Sorin), the Cyberonics Board Recommendation (any action set forth in the foregoing clause (i) or (ii), a “Cyberonics Change of Recommendation”) or (iii) approve or recommend, or publicly propose to approve or recommend, or cause or permit Cyberonics or any Cyberonics Subsidiary to execute or enter into, any Cyberonics Acquisition Agreement.

(d)                                 Notwithstanding anything to the contrary contained in this Agreement, at any time prior to (but not after) obtaining the Cyberonics Stockholder Approval and subject to compliance with Section 7.02(b)(i) and this Section 5.03(d), the board of directors of Cyberonics may:

(i)                                     (A) make a Cyberonics Change of Recommendation in connection with a Cyberonics Superior Proposal or (B) cause Cyberonics to enter into a Cyberonics Acquisition Agreement with respect to a Cyberonics Superior Proposal and terminate this Agreement pursuant to Section 7.01(h), if (v) there has been no material breach of this Section 5.03, (w) a bona fide, written Cyberonics Competing Proposal is made to Cyberonics by a third person and the board of directors of Cyberonics determines in good faith, after consultation with its outside financial advisors and outside counsel, that such Cyberonics Competing Proposal constitutes a Cyberonics Superior Proposal, (x) Cyberonics provides Sorin 96 hours’ prior written notice of its intention to take such action (a “Notice of Cyberonics Superior Proposal Action”), which notice shall include the identity of the person making such Cyberonics Superior Proposal and the material terms and conditions of such Cyberonics Superior Proposal and, if applicable, shall attach the proposed Cyberonics Acquisition Agreement providing for such Cyberonics Superior Proposal (it being agreed that, in each case, neither the delivery of such notice by Cyberonics nor any public announcement thereof that the board of directors of Cyberonics determines in good faith, after consultation with outside counsel, is required to be made under applicable Law shall constitute a Cyberonics Change of Recommendation), (y) to the extent requested by Sorin, Cyberonics negotiates in good faith with Sorin with respect to any changes to the terms of this Agreement proposed by Sorin for at least 96 hours following delivery by Cyberonics of such Notice of Cyberonics Superior Proposal Action (it being understood and agreed that any amendment to any material term of any

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Cyberonics Competing Proposal will be deemed a new Cyberonics Competing Proposal for purposes of this Section 5.03(d), including with respect to the notice period referenced in this Section 5.03(d)(i), except that the 96 hours’ period shall be reduced to 72 hours for such purposes) and (z) taking into account any binding changes to the terms of this Agreement definitively and irrevocably agreed to by Sorin in writing, the board of directors of Cyberonics determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Cyberonics Competing Proposal would continue to constitute a Cyberonics Superior Proposal if such changes irrevocably agreed to by Sorin in writing were to be given effect; or

(ii)                                  make a Cyberonics Change of Recommendation other than in connection with a Cyberonics Competing Proposal if (A) Cyberonics provides Sorin 96 hours’ prior written notice of its intention to take such action (a “Notice of Cyberonics Change of Recommendation”), which notice shall specify, in reasonable detail, the reasons therefor (it being agreed that neither the delivery of such Notice of Cyberonics Change of Recommendation by Cyberonics nor any public announcement thereof that the board of directors of Cyberonics determines in good faith, after consultation with outside counsel, is required to be made under applicable Law shall constitute a Cyberonics Change of Recommendation), (B) Cyberonics has negotiated in good faith with Sorin with respect to any changes to the terms of this Agreement proposed by Sorin for at least 96 hours following delivery by Cyberonics of such Notice of Cyberonics Change of Recommendation and (C) taking into account any binding changes to the terms of this Agreement definitively and irrevocably agreed to by Sorin in writing, the board of directors of Cyberonics determines in good faith after consultation with outside legal counsel that the failure to take such action would be inconsistent with the fiduciary duties of the members of the board of directors of Cyberonics under applicable Law.

(e)                                  Nothing contained in this Section 5.03 or elsewhere in this Agreement shall prohibit Cyberonics or the board of directors of Cyberonics from (i) complying with its disclosure obligations under applicable United States federal or state Law with respect to a Cyberonics Competing Proposal, including taking and disclosing to the stockholders of Cyberonics a position contemplated by Rule 14d-9, Rule 14e-2(a) or Item 1012(a) of Regulation M-A promulgated under the Exchange Act (or any similar communication to stockholders) or (ii) making any disclosure to the stockholders of Cyberonics if the board of directors of Cyberonics determines in good faith, after consultation with outside counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties to the stockholders of Cyberonics under applicable Law; provided, however, that clause (ii) of this Section 5.03(e) shall not be deemed to permit the board of directors of Cyberonics to make a Cyberonics Change of Recommendation or take any of the actions referred to in Section 5.03(c)(iii), except, in each case, to the extent permitted by Section 5.03(d) (for the avoidance of doubt, it being agreed that the issuance by Cyberonics or the board of directors of Cyberonics of a “stop, look and listen” statement pending disclosure of its position, as contemplated by Rule 14e-2(a) or Rule 14d-9

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promulgated under the Exchange Act (or any similar communication to stockholders), shall not constitute a Cyberonics Change of Recommendation).

(f)                                   Neither Cyberonics nor the board of directors of Cyberonics shall take any action to exempt any person or entity (other than Holdco, Sorin, Merger Sub and their respective affiliates) from the restrictions on “business combinations” contained in Section 203 of the DGCL or any other Takeover Statute or otherwise cause such restrictions not to apply.

(g)                                  Cyberonics agrees that any violation of the restrictions set forth in this Section 5.03 by any Cyberonics Representative shall be deemed to be a breach of this Agreement (including this Section 5.03) by Cyberonics.

SECTION 5.04                                   No Solicitation by Sorin; Sorin Change of Recommendation.

(a)                                 Except as permitted by this Section 5.04, Sorin shall, and shall cause the Sorin Subsidiaries and its and their respective Representatives to, (i) immediately upon the execution of this Agreement cease any discussions or negotiations with any persons that are ongoing with respect to any Sorin Competing Proposal, or any inquiry, proposal or offer that would reasonably be expected to lead to a Sorin Competing Proposal and (ii) from the execution of this Agreement until the Sorin Merger Effective Time, not (A) initiate, solicit or knowingly facilitate or encourage the submission of any inquiry, proposal or offer regarding a Sorin Competing Proposal, (B) furnish any information regarding Sorin or any Sorin Subsidiary to any person in connection with, for the purpose of encouraging or facilitating, or in response to, a Sorin Competing Proposal, (C) participate in any discussions or negotiations with respect to any Sorin Competing Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to a Sorin Competing Proposal, or (D)  execute or enter into, or agree to enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement relating to any Sorin Competing Proposal (other than an Acceptable Sorin Confidentiality Agreement) (a “Sorin Acquisition Agreement”).  Promptly following the execution of this Agreement (and in any event no later than two Business Days following the date of this Agreement), Sorin shall request the prompt return or destruction of all confidential information previously furnished in connection with a potential Sorin Competing Proposal to any person with whom Sorin or a Sorin Representative has had discussions or negotiations with respect to a Sorin Competing Proposal in the last twelve (12) months and shall terminate all physical and electronic dataroom access previously granted to any such person or its Representatives.

(b)                                 Notwithstanding anything to the contrary contained in Section 5.04(a), if, at any time following the execution of this Agreement and prior to Sorin obtaining the Sorin Shareholder Approval, (i) Sorin has received a bona fide written Sorin Competing Proposal that has not resulted from a material breach of Section 5.04(a), (ii) the board of directors of Sorin determines in good faith, after consultation with its financial advisor and outside counsel, that such Sorin Competing Proposal constitutes or would reasonably be expected to lead to a Sorin Superior Proposal and (iii) the board of directors of Sorin

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determines, after consultation with its outside counsel, that failure to take such action would be inconsistent with its fiduciary duties to the stockholders of Sorin under applicable law, then Sorin may, subject to compliance with this Section 5.04, (A) furnish information with respect to Sorin and the Sorin Subsidiaries to the person making such Sorin Competing Proposal and its Representatives and (B) participate in discussions or negotiations with the person making such Sorin Competing Proposal and its Representatives regarding such Sorin Competing Proposal; provided, however, that Sorin (1) will not, will not permit or authorize the Sorin Subsidiaries or any Representative of Sorin or the Sorin Subsidiaries to, disclose any information to such person without first entering into an Acceptable Sorin Confidentiality Agreement with such person and (2) will as promptly as practicable (and in any event within 24 hours thereafter) provide to Cyberonics any material information concerning Sorin or the Sorin Subsidiaries provided or made available to such other person (or its Representatives) that was not previously provided or made available to Cyberonics.  Subject to the undertakings of the Confidentiality Agreement, Sorin will promptly (and in any event, within 24 hours) notify Cyberonics in the event (x) any Sorin Competing Proposal is received by, (y) any information is requested in connection with any Sorin Competing Proposal from, or (z) any discussions or negotiations with respect to a Sorin Competing Proposal are sought to be initiated with, Sorin, any Sorin Subsidiary or any Sorin Representative, and shall (I) indicate, in connection with such notice, the identity of the person making such Sorin Competing Proposal, requesting such information or seeking to initiate such discussions or negotiations, together with a summary of the material terms and conditions of such Sorin Competing Proposal (including, if applicable, copies of any written Sorin Competing Proposal) or the nature of the request for information, as applicable, and (II) thereafter keep Cyberonics reasonably informed, on a reasonably current basis, of the status and terms of any such discussions or negotiations.  Sorin shall not, and shall cause the Sorin Subsidiaries not to, enter into any agreement with any person that prohibits Sorin from providing to Cyberonics any of the information required to be provided to Cyberonics under this Section 5.04 within the time periods contemplated hereby.  Notwithstanding anything to the contrary in this Section 5.04, the board of directors of Sorin may correspond in writing with any person making a Sorin Competing Proposal solely to request clarification of the terms and conditions thereof so as to determine whether such Sorin Competing Proposal constitutes or would reasonably be expected to lead to a Sorin Superior Proposal, provided that such written correspondence is delivered concurrently to Cyberonics.  Sorin shall not terminate, waive, amend or modify any provision of, or grant permission under, any “standstill” or confidentiality agreement to which Sorin is a party, and Sorin shall enforce the provisions of each such agreement.  Notwithstanding anything to the contrary contained in this Agreement, Sorin shall be permitted to fail to enforce any provision of any “standstill”, confidentiality or similar obligation of any person if the board of directors of Sorin determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be inconsistent with its fiduciary duties to Sorin’s stockholders under applicable Law; provided, that Sorin promptly advises Cyberonics that it is taking such action and the identity of the party or parties with respect to which it is taking such action; provided, further, that the foregoing shall not restrict Sorin from permitting a person to orally

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request the waiver of a “standstill” or similar obligation to the extent necessary to avoid violating fiduciary duties under applicable Law.

(c)                                  Except as set forth in Sections 5.04(d) or 5.04(e), neither the board of directors of Sorin nor any committee thereof shall (i) authorize, approve or recommend, or publicly propose to authorize, approve or recommend, any Sorin Competing Proposal, (ii) withhold or withdraw (or modify or qualify in a manner adverse to Cyberonics), or publicly propose to withhold or withdraw (or modify or qualify in a manner adverse to Cyberonics), the Sorin Board Recommendation (any action set forth in the foregoing clause (i) or (ii), a “Sorin Change of Recommendation”) or (iii) approve or recommend, or publicly propose to approve or recommend, or cause or permit Sorin or any Sorin Subsidiary to execute or enter into, any Sorin Acquisition Agreement.

(d)                                 Notwithstanding anything to the contrary contained in this Agreement, at any time prior to (but not after) obtaining the Sorin Shareholder Approval and subject to compliance with Section 7.02(b)(ii) and this Section 5.04(d), the board of directors of Sorin may:

(i)                                     (A) make a Sorin Change of Recommendation in connection with a Cyberonics Superior Proposal or (B) cause Sorin to enter into a Sorin Acquisition Agreement with respect to a Sorin Superior Proposal and terminate this Agreement pursuant to Section 7.01(i), if (v) there has been no material breach of this Section 5.04, (w) a bona fide, written Sorin Competing Proposal is made to Sorin by a third person and the board of directors of Sorin determines in good faith, after consultation with its outside financial advisors and outside counsel, that such Sorin Competing Proposal constitutes a Sorin Superior Proposal, (x) Sorin provides Cyberonics 96 hours’ prior written notice of its intention to take such action (a “Notice of Sorin Superior Proposal Action”), which notice shall include the identity of the person making such Sorin Superior Proposal and the material terms and conditions of such Sorin Superior Proposal and, if applicable, shall attach the proposed Sorin Acquisition Agreement providing for such Sorin Superior Proposal (it being agreed that, in each case, neither the delivery of such notice by Sorin nor any public announcement thereof that the board of directors of Sorin determines in good faith, after consultation with outside counsel, is required to be made under applicable Law shall constitute a Sorin Change of Recommendation), (y) to the extent requested by Cyberonics, Sorin negotiates in good faith with Cyberonics with respect to any changes to the terms of this Agreement proposed by Cyberonics for at least 96 hours following delivery by Sorin of such Notice of Sorin Superior Proposal Action (it being understood and agreed that any amendment to any material term of any Sorin Competing Proposal will be deemed a new Sorin Competing Proposal for purposes of this Section 5.04(d), including with respect to the notice period referenced in this Section  5.04(d)(i), except that the 96 hours’ period shall be reduced to 72 hours for such purposes) and (z) taking into account any binding changes to the terms of this Agreement definitively and irrevocably agreed to by Cyberonics in writing, the board of directors of Sorin determines in good faith, after consultation with its financial advisor and outside legal counsel, that such

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Sorin Competing Proposal would continue to constitute a Sorin Superior Proposal if such changes irrevocably agreed to by Sorin in writing were to be given effect; or

(ii)                                  make a Sorin Change of Recommendation other than in connection with a Sorin Competing Proposal if (A) Sorin provides Cyberonics 96 hours’ prior written notice of its intention to take such action (a “Notice of Sorin Change of Recommendation”), which notice shall specify, in reasonable detail, the reasons therefor (it being agreed that neither the delivery of such Notice of Sorin Change of Recommendation by Sorin nor any public announcement thereof that the board of directors of Sorin determines in good faith, after consultation with outside counsel, is required to be made under applicable Law shall constitute a Sorin Change of Recommendation), (B) Sorin has negotiated in good faith with Cyberonics with respect to any changes to the terms of this Agreement proposed by Cyberonics for at least 96 hours following delivery by Sorin of such Notice of Sorin Change of Recommendation and (C) taking into account any binding changes to the terms of this Agreement definitively and irrevocably agreed to by Cyberonics in writing, the board of directors of Sorin has determined in good faith after consultation with outside legal counsel that the failure to take such action would be inconsistent with the fiduciary duties of the members of the board of directors of Sorin under applicable Law.

(e)                                  Nothing contained in this Section 5.04 or elsewhere in this Agreement shall prohibit Sorin or the board of directors of Sorin from complying with its disclosure obligations under applicable Italian Laws with respect to a Sorin Competing Proposal, including making any disclosure to the shareholders of Sorin if the board of directors of Sorin determines in good faith, after consultation with outside counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties to the shareholders of Sorin under applicable Law; provided, however, that this Section 5.04(e) shall not be deemed to permit the board of directors of Sorin to make a Sorin Change of Recommendation or take any of the actions referred to in Section 5.04(c)(iii), except, in each case, to the extent permitted by Section 5.04(d).

(f)                                   Neither Sorin nor the board of directors of Sorin shall take any action to exempt any person or entity (other than Holdco, Sorin, Merger Sub and their respective affiliates) from the provisions of “control share acquisitions” contained in any Takeover Statute or otherwise cause such restrictions not to apply.

(g)                                  Sorin agrees that any violation of the restrictions set forth in this Section  5.04 by any Sorin Representative shall be deemed to be a breach of this Agreement (including this Section 5.04) by Sorin.

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SECTION 5.05                                   Registration Statements; Sorin Information Document; Proxy Statement; NASDAQ Listing Application; LSE Listing Application; Holdco Prospectus; Holdco Filings; Sorin Filings; Meetings.

(a)                                 As promptly as practicable following the execution of this Agreement, (i) Cyberonics shall prepare the Proxy Statement (with Sorin’s reasonable cooperation), (ii) Holdco (with Cyberonics’s reasonable cooperation) shall prepare and file with the SEC a registration statement on Form S-4 (together with all amendments thereto, the “Registration Statement”), in connection with the registration under the Securities Act of the Holdco Shares to be issued to the holders of Sorin Shares and Cyberonics Shares, as applicable, in connection with the Mergers, and in which the Proxy Statement will be included as a prospectus, (iii) Sorin shall prepare, file and publish in accordance with applicable Law an information document relating to the Sorin Shareholder Meeting (together with any amendments thereof or supplements thereto, the “Sorin Information Document”, it being understood and agreed that such Sorin Information Document shall comply with Italian Law and the parties hereto shall cooperate in good faith to ensure that the intent of the parties hereto, as set forth in this Agreement, is reflected as nearly as possible in such other documents), (iv) Holdco shall prepare and file with (x) the NASDAQ a listing application (the “NASDAQ Listing Application”) for the dual-listing of the Holdco Shares on the NASDAQ, (y) with the FCA and the LSE applications for the admission of the Holdco Shares (including, for the avoidance of doubt, the Sorin Merger Consideration and the Cyberonics Merger Consideration) to the standard listing segment of the Official List and the admission of such shares to trading on the LSE’s Main Market for listed securities on or as close as practicable following the Sorin Merger Effective Time and the Cyberonics Merger Effective Time respectively (the “LSE Listing Application”), and (z) prepare and submit to the FCA for approval the Holdco Prospectus, (v) Holdco shall prepare and file with the Registrar of Companies in England and Wales (the “Registrar”) the Sorin Merger Terms, with any other customary terms approved with the prior written consent of Cyberonics (which shall not be unreasonably withheld, conditioned or delayed) in compliance with Regulation 7 of the UK Merger Regulations and a report from the directors of Holdco compliant with Regulation 8 of the UK Merger Regulations, which shall have been approved by the Holdco board of directors in accordance with the Laws of England and Wales, and which filing shall be made in sufficient time for a notice of receipt of the documents to be published in the London Gazette by the Registrar not later than thirty (30) days prior to the date of the Sorin Shareholder Meeting and (vi) Sorin shall prepare and file with Sorin’s Companies Register: (x) the Sorin Merger Terms, with any other customary terms approved with the prior written consent of Cyberonics (which shall not be unreasonably withheld, conditioned or delayed) in compliance with the Laws of Italy, (y) a report of the Sorin board of directors, compliant with the Laws of Italy, which shall have been approved by the Sorin board of directors as provided by the Laws of Italy, and (z) the Sorin Expert Report.  Sorin and Holdco shall ensure that the Sorin Merger Terms and all other documents required to effect the transactions contemplated hereby, including to obtain the Sorin Shareholder Approval and complete the Sorin Merger, reflect and are consistent with the terms of this Agreement in all respects, except as otherwise required by applicable Laws or consented to in writing by Cyberonics in advance (such consent not to be unreasonably withheld, conditioned or delayed).  Sorin, Holdco and Cyberonics shall

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provide each other with a reasonable opportunity to review and comment on the documents referred to in the preceding sentence and any amendment or supplement thereto (which comments shall be reasonably considered) prior to their filing.  No filing of, or amendment or supplement to, such documents shall be made by Sorin, Holdco or Cyberonics, as applicable, without the prior consent of Sorin and Cyberonics, as applicable (which shall not be unreasonably withheld, delayed or conditioned).  Subject to Section 5.03, the Proxy Statement shall include the Cyberonics Board Recommendation and subject to Section 5.04, the Sorin Information Document shall include the Sorin Board Recommendation.  Each of Sorin, Holdco, Merger Sub and Cyberonics shall cooperate in the preparation of the Registration Statement, the Proxy Statement, the Holdco Prospectus, the Sorin Information Document, the NASDAQ Listing Application, the LSE Listing Application and, in each case, any amendments or supplements thereto, and shall furnish all information concerning Sorin, Holdco, Merger Sub and Cyberonics, as applicable, and their respective affiliates and holders of shares and provide such other assistance as is reasonably requested or necessary or appropriate in connection with the preparation, filing and distribution of such documents including the resolution of any comments in respect of the Registration Statement from the SEC or the Holdco Prospectus from the FCA.  Each of Sorin and Cyberonics shall use commercially reasonable efforts to cause to be delivered to Holdco and each other a “comfort letter” of its independent auditors, dated the date that is two (2) Business Days prior to the date on which the Registration Statement becomes effective.  The parties shall use their respective reasonable best efforts to (i) cause the Registration Statement to become effective as promptly as practicable following the filing thereof (including by responding to comments of the SEC) and to keep the Registration Statement effective as long as is necessary to consummate the Mergers and the other transactions contemplated hereby, (ii) satisfy prior to the effective date of the Registration Statement any applicable foreign or state securities laws in connection with the issuance of Holdco Shares pursuant to the Mergers, (iii) cause the Proxy Statement to be cleared by the SEC as promptly as reasonably practicable, (iv) prepare, file and obtain any necessary approvals of the Sorin Information Document, in each case as promptly as reasonably practicable, and (v) cause the Holdco Prospectus to be approved by the FCA as promptly as reasonably practicable and for the FCA to provide to CONSOB and, to the extent required under applicable Law, any other relevant competent authorities, a certificate of approval and other documentation required under the EU Prospectus Directive (Directive 2003/71/EC), as amended, for the Holdco Prospectus to be, to the extent required under applicable Law, “passported” into Italy and any other relevant member state.  Sorin, Holdco and Cyberonics shall notify each other promptly of the receipt of any comments from the SEC or its staff, the FCA or its employees, or any comments from any other Governmental Entity and of any request by the SEC or its staff, the FCA or its employees or any request by any other Governmental Entity for amendments or supplements to the Registration Statement, the Holdco Prospectus, the Proxy Statement or the Sorin Information Document, or for additional information, and will supply each other with copies of all correspondence between Sorin, Holdco or Cyberonics, as applicable, or any of their respective Representatives, and the SEC or its staff, the FCA or its employees, or any other Governmental Entity with respect to the Registration Statement, the Proxy Statement, the Holdco Prospectus or the Sorin Information Document.

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(b)                                 If at any time prior to the Cyberonics Merger Effective Time any information relating to Sorin, Holdco, Merger Sub or Cyberonics, or any of their respective affiliates, officers or directors, should be discovered by Sorin, Holdco, Merger Sub or Cyberonics which should be set forth in an amendment or supplement to any of the Registration Statement, the Proxy Statement, the Holdco Prospectus or the Sorin Information Document, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or in the case of the Holdco Prospectus there arises or is noted a significant new factor, material mistake or inaccuracy relating to the information included in the Holdco Prospectus after its approval by the FCA and prior to the Cyberonics Merger Effective Time or, if later, the Holdco Shares being admitted to trading on the LSE, the party which discovers such information shall promptly notify the other parties and the parties shall cooperate as appropriate to prepare and promptly file an appropriate amendment or supplement describing such information and, to the extent required by applicable Law, disseminate such amendment or supplement to the stockholders of Sorin or Cyberonics, as applicable.  Nothing in this Section 5.05(b) shall limit the obligations of any party under Section 5.05(a).  Sorin, Holdco and Cyberonics will cause (i) the Registration Statement to comply as to form in all material respects with the applicable provisions of the Securities Act and the rules and regulations thereunder and (ii) the Holdco Prospectus to comply in all material respects with applicable Laws and the rules and regulations applicable thereto, including the Prospectus Rules and the Listing Rules.

(c)                                  Holdco shall promptly advise Sorin and Cyberonics when the Registration Statement has become effective and of any supplements or amendments thereto.  Subject to Section 5.05(e), applicable Law, the Cyberonics Charter, the Cyberonics Bylaws and the rules of NASDAQ, Cyberonics shall, as promptly as reasonably practicable after (i) the Registration Statement is declared effective in accordance with Section 5.05(a) and (ii) the SEC (or the staff of the SEC) confirms that it has no further comments to the Proxy Statement, distribute the Proxy Statement to its stockholders and duly call, give notice of and mail the Proxy Statement to the holders of Cyberonics Common Stock as of the record date established for, convene and hold, a meeting of its stockholders for the purpose of submitting to such stockholders this Agreement for adoption in order to obtain the Cyberonics Stockholder Approval (the “Cyberonics Stockholder Meeting”).  Subject to Section 5.03, Cyberonics’s board of directors shall recommend that Cyberonics’s stockholders adopt this Agreement (the “Cyberonics Board Recommendation”), and Cyberonics shall, unless there has been a Cyberonics Change of Recommendation as permitted by this Agreement, use all lawful efforts to solicit from its stockholders proxies in favor of the adoption of this Agreement and to take all other action reasonably necessary or advisable to secure the Cyberonics Stockholder Approval.

(d)                                 Sorin shall, in accordance with all applicable rules and regulations of the MSE and Italian Law, call and hold an extraordinary general meeting of its shareholders (the “Sorin Shareholder Meeting”), for the purpose of obtaining the Sorin Shareholder Approval as promptly as practicable, and shall submit the Sorin Merger Terms and the transactions contemplated hereby and thereby to the shareholders of Sorin at the Sorin Shareholder Meeting for the purpose of obtaining the Sorin Shareholder Approval. 

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Subject to Section 5.04, Sorin’s board of directors shall recommend that Sorin’s shareholders approve this Agreement (the “Sorin Board Recommendation”), and Sorin shall, unless there has been a Sorin Change of Recommendation as permitted by this Agreement, use all lawful efforts to take all actions reasonably necessary or advisable to secure the Sorin Shareholder Approval.  Sorin shall file the Sorin Shareholder Approval with Sorin’s relevant Companies Register promptly following the approval of the Sorin Merger Terms by its shareholders.

(e)                                  Notwithstanding anything contained herein to the contrary, Cyberonics shall not be obligated to fix the record date for the Cyberonics Stockholder Meeting until the expiration of the withdrawal period for rescission rights held by Sorin shareholders in accordance with Italian Law (and shall be entitled to mail the Proxy Statement a customary amount of time prior to the Cyberonics Stockholder Meeting).

(f)                                   Sorin shall use reasonable best efforts to obtain the early termination of the right of creditors of Sorin to exercise creditor opposition rights under the Laws of Italy, and shall take any other actions necessary or advisable to resolve any exercise of such rights as promptly as practicable.

(g)                                  Holdco and Sorin will use commercially reasonable efforts to ensure that the issuance and subsequent trading of Holdco Shares on the NASDAQ do not attract a charge to stamp duty or stamp duty reserve tax in the United Kingdom, provided, however, that Holdco and Sorin shall be treated as having so used commercially reasonable efforts for purposes of this Section 5.05(g) so long as the Holdco Shares to be traded on the NASDAQ are put into a clearance system or depositary receipts system, including the Depository Trust Company.

SECTION 5.06                                   Access to Information.  From the date of this Agreement to the Cyberonics Merger Effective Time, Sorin and Cyberonics shall, and shall cause each of their respective Subsidiaries, and shall direct and use reasonable best efforts to cause their respective Representatives to: (i) provide to each other and their respective Representative, upon prior written notice, reasonable access, during normal business hours in such a manner as not to unreasonably interfere with the operation of any business conducted by it, to its officers, employees, properties, offices, other facilities and books and records; and (ii) furnish promptly such information concerning its business, properties, contracts, assets and liabilities as Sorin or Cyberonics or their respective Representatives may reasonably request; provided, however, that Sorin and Cyberonics shall not be required to (or to cause any of their respective Subsidiaries or Representatives to) afford such access or furnish such information (x) to the extent that it reasonably believes in good faith that doing so would: (A) result in the loss of attorney-client privilege; (B) violate any of its obligations with respect to confidentiality to any third party or otherwise breach, contravene or violate any then effective Contract to which it is party; or (C) breach, contravene, violate or result in liability under any applicable Law (including the HSR Act or any other antitrust or competition Law) (it being agreed that Cyberonics and Sorin shall use their respective reasonable best efforts to reduce the scope of or eliminate the applicable restriction) or (y) if Cyberonics or any of its affiliates, on the one hand, and Sorin or any of its affiliates, on the other hand, are adverse parties in any Proceeding, to the extent that is reasonably pertinent to such Proceeding.  Sorin and Cyberonics shall, and shall cause each of

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their respective Subsidiaries and shall direct and use reasonable best efforts to cause their respective Representatives to, hold all information provided or furnished pursuant to this Section 5.06 confidential in accordance with the terms of the Confidentiality Agreement.

SECTION 5.07                                   Appropriate Action; Consents; Filings.

(a)                                 On the terms and subject to the conditions set forth in this Agreement, each of Sorin, Holdco and Cyberonics shall (and shall cause each of their respective affiliates to) use its reasonable best efforts (unless, with respect to any action, another standard of performance is expressly provided for herein) to consummate and make effective the transactions contemplated hereby and to cause the conditions set forth in Article VI to be satisfied, in each case as promptly as practicable.  Without limiting the generality of the foregoing, but subject to the other terms and conditions set forth in this Agreement, each of Sorin, Holdco and Cyberonics shall (and shall cause each of their respective affiliates to) use its reasonable best efforts to (i) promptly obtain all actions or nonactions, consents, licenses, permits (including Environmental Permits), waivers, approvals, authorizations and orders from Governmental Entities or other persons necessary in connection with the consummation of the transactions contemplated hereby, including any certifications or orders from the Court, Italian notary public and competent Italian court, (ii) as promptly as practicable (and, in the case of the HSR Act, in any event within ten (10) Business Days after the date hereof), make all registrations and filings, and thereafter make any other required submissions with, and pay any fees due in connection therewith to, any Governmental Entity or other persons necessary in connection with the consummation of the transactions contemplated by this Agreement, including the filings required of them or their “ultimate parent entities” under the HSR Act, (iii) file all notifications required under any other Antitrust Law, in each case with respect to this Agreement and the transactions contemplated hereby, including the Mergers, as promptly as reasonably practicable, (iv) defend all lawsuits or other legal, regulatory or other proceedings to which it is a party challenging or affecting this Agreement or the consummation of the transactions contemplated by this Agreement, in each case until the issuance of a final, non-appealable order with respect to each such lawsuit or other proceeding, (v) seek to have lifted or rescinded any injunction or restraining order which may adversely affect the ability of the parties to consummate the transactions contemplated hereby, in each case until the issuance of a final, non-appealable order with respect thereto and (vi) execute and deliver any additional instruments necessary to consummate the transactions contemplated hereby.

(b)                                 Notwithstanding anything to the contrary in Section 5.07(a), Cyberonics, Sorin, Holdco and Merger Sub agree to use their respective reasonable best efforts (and to cause their affiliates to use their respective reasonable best efforts) to avoid or eliminate each and every impediment and obtain all consents under any Antitrust Laws that may be required by any foreign or U.S. federal, state or local Governmental Entity with competent jurisdiction, so as to enable the parties to close the transactions contemplated by this Agreement as promptly as practicable, including accepting operational restrictions or limitations and committing to or effecting, by consent decree, hold separate orders, trust, or otherwise, the sale, license, disposition or holding separate of such assets or businesses as are required (and the entry into agreements with, and

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submission to orders of, the relevant Governmental Entity) in order to avoid the entry of, or to effect the dissolution of or vacate or lift, any order, that would otherwise have the effect of preventing or materially delaying the consummation of the transactions contemplated by this Agreement.  Further, and for the avoidance of doubt, each of Cyberonics, Sorin, Holdco and Merger Sub shall take (and shall cause each of its affiliates to take) any and all actions necessary or advisable in order to ensure that (x) no requirement for any non-action by or consent or approval of the Antitrust Division, the FTC or other foreign or U.S. Governmental Entity with respect to any Antitrust Laws, (y) no decree, judgment, injunction, temporary restraining order or any other order in any suit or proceeding with respect to any Antitrust Laws, and (z) no other matter relating to any Antitrust Laws, would in any case prevent or materially delay the consummation of the transactions contemplated by this Agreement.

(c)                                  Without limiting the generality of anything contained in this Section 5.07, each party hereto shall: (i) give the other parties prompt notice of the making or commencement of any request, inquiry, investigation, action or legal proceeding by or before any Governmental Entity with respect to the transactions contemplated by this Agreement; (ii) keep the other parties informed as to the status of any such request, inquiry, investigation, action or legal proceeding; and (iii) promptly inform the other parties, and if in writing, promptly furnish the outside legal counsel for the other parties with copies of (or, in the case of oral communications, advise as to the contents of) any communication to or from the FTC, the Antitrust Division, or any other Governmental Entity regarding the transactions contemplated by this Agreement.  Each party hereto will consult and cooperate with the other parties and will consider in good faith and in advance the views of the other parties in connection with any filing, analysis, appearance, presentation, memorandum, brief, argument, opinion or proposal made or submitted to any Governmental Entity in connection with the transactions contemplated by this Agreement.  In addition, except as may be prohibited by any Governmental Entity or by any Law, in connection with any such request, inquiry, investigation, action or legal proceeding, each party hereto will, upon reasonable request, permit authorized Representatives of the other parties to be present at each telephonic or in-person meeting or conference relating to such request, inquiry, investigation, action or legal proceeding and to have access to and be consulted in advance (and consider in good faith any comments made by others) in connection with any document, opinion or proposal made or submitted to any Governmental Entity in connection with such request, inquiry, investigation, action or legal proceeding.  Each party hereto may, as each deems advisable and necessary, reasonably designate any competitively sensitive information provided to the other under this Section 5.07(c) as “outside counsel only.” Such materials and information contained therein shall be given only to the outside legal counsel for the other parties and will not be disclosed by such outside legal counsel to employees, officers, or directors of the receiving parties unless express permission is obtained in advance from the disclosing party; provided, however, that materials provided pursuant to this Section 5.07(c) may be redacted (i) as necessary to comply with contractual arrangements and (ii) as necessary to address reasonable privilege concerns.  Notwithstanding anything in this Agreement to the contrary, nothing in this Section 5.07 shall require either party to provide to the other party or its Representatives a copy of its HSR Act Filing.

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SECTION 5.08                                   Certain Notices.  Subject to applicable Laws and the instructions of any Governmental Entity as well as the limitations set forth in Section 5.06 with respect to information sharing, each of Cyberonics, Holdco and Sorin shall keep the other apprised of the status of matters relating to completion of the transactions contemplated hereby, including promptly furnishing the other with copies of material notices or other communications received by Sorin, Holdco, Merger Sub or Cyberonics, as the case may be, or any of their respective Subsidiaries, from any third person and/or any Governmental Entity with respect to the Mergers and the other transactions contemplated by this Agreement.

SECTION 5.09                                   Public Announcements.  The initial press release issued by Sorin and Cyberonics concerning this Agreement and the transactions contemplated hereby shall be a joint press release.  Thereafter through the Cyberonics Merger Effective Time, and so long as this Agreement is in effect, none of Holdco, Sorin or Cyberonics shall issue or cause the publication of any press release or other public announcement concerning this Agreement, the Mergers or the other transactions contemplated hereby without the prior consultation and consent of the other parties hereto (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by applicable Law or by obligations pursuant to any listing agreement with the NASDAQ, LSE or the MSE, as applicable, or by any Governmental Entity with jurisdiction over such party.  For the avoidance of doubt, the provisions of this Section 5.09 do not apply to (i) any announcement, document or publication in connection with a Cyberonics Competing Proposal, Cyberonics Superior Proposal or Cyberonics Change of Recommendation, (ii) any announcement, document or publication in connection with a Sorin Competing Proposal, Sorin Superior Proposal or Sorin Change of Recommendation or (iii) any disclosure by Cyberonics or Sorin of any information concerning this Agreement or the transactions contemplated hereby in connection with any dispute between the parties regarding this Agreement, the Mergers or the other transactions contemplated by this Agreement.

SECTION 5.10                                   Directors & Officers Indemnification and Insurance.

(a)                                 From and after the Cyberonics Merger Effective Time, each of the Sorin Merger Surviving Company and the Cyberonics Merger Surviving Corporation agrees that it will indemnify and hold harmless, to the fullest extent permitted under applicable Law (and the Sorin Merger Surviving Company or the Cyberonics Merger Surviving Corporation shall also advance expenses as incurred to the fullest extent permitted under applicable Law, provided that the person to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such person is not entitled to indemnification), each present and former director, officer, employee and agents of Cyberonics or any Cyberonics Subsidiary against any costs or expenses (including reasonable attorneys’ fees), judgments, settlement amounts, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or related to such person’s service as a director, officer, employee or agent of Cyberonics or any Cyberonics Subsidiary or services performed by such persons at the request of Cyberonics or any Cyberonics Subsidiary at or prior to the Cyberonics Merger Effective Time, whether asserted or claimed prior to, at or after the Cyberonics Merger Effective Time, including the transactions contemplated by this Agreement, and including any expenses incurred in enforcing such person’s rights under this Section 5.10.

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(b)                                 For not fewer than six (6) years from and after the Cyberonics Merger Effective Time, the certificate of incorporation and bylaws of the Cyberonics Merger Surviving Corporation and each Cyberonics Subsidiary shall contain provisions no less favorable with respect to exculpation, indemnification and advancement of expenses of directors, officers, employees and agent of Cyberonics and the Cyberonics Subsidiaries for periods at or prior to the Cyberonics Merger Effective Time than are set forth in the Cyberonics Charter, the Cyberonics Bylaws or the equivalent organizational documents of any Cyberonics Subsidiary as of the date hereof, except as may be required by applicable Law.  The contractual indemnification rights, if any, in existence on the date of this Agreement with any of the directors, officers, employees or agents of Cyberonics or any Cyberonics Subsidiary shall be assumed by the Cyberonics Merger Surviving Corporation, without any further action, and shall continue in full force and effect in accordance with their terms following the Cyberonics Merger Effective Time.

(c)                                  For the benefit of Cyberonics’s present and former directors and officers, Cyberonics shall be permitted, prior to the Cyberonics Merger Effective Time, and if Cyberonics fails to do so, the Sorin Merger Surviving Company shall cause the Cyberonics Merger Surviving Corporation to obtain and fully pay the premium for a directors’ and officers’ liability insurance and indemnification policy that provides coverage for a period of six (6) years from and after the Cyberonics Merger Effective Time for events occurring prior to the Cyberonics Merger Effective Time (the “Cyberonics D&O Insurance”) that is no less favorable in the aggregate than Cyberonics’s existing policy, and that has a cost not in excess of 300% of the last annual premium paid by Cyberonics prior to the date of this Agreement for the Cyberonics D&O Insurance in place in effect as of the date hereof.  If Cyberonics and the Cyberonics Merger Surviving Corporation for any reason fail to obtain such “tail” insurance policy as of the Cyberonics Merger Effective Time, the Cyberonics Merger Surviving Corporation shall, and the Sorin Merger Surviving Company shall cause the Cyberonics Merger Surviving Corporation to, continue to maintain in effect for a period of at least six (6) years from and after the Cyberonics Merger Effective Time the Cyberonics D&O Insurance in place as of the date hereof with terms, conditions, retentions and limits of liability that are at least as favorable as provided in Cyberonics’s existing policies as of the date hereof, or the Cyberonics Merger Surviving Corporation shall, and the Sorin Merger Surviving Company shall cause the Cyberonics Merger Surviving Corporation to, purchase comparable Cyberonics D&O Insurance for such six-year period with terms, conditions, retentions and limits of liability that are at least as favorable as provided in Cyberonics’s existing policies as of the date hereof; provided, however, in no event shall the Sorin Merger Surviving Company or the Cyberonics Merger Surviving Corporation be required to pay an annual premium for the Cyberonics D&O Insurance that is in excess of 300% of the annual premium paid as of the date hereof by Cyberonics for such insurance; and provided, further, that if the annual premiums of such insurance coverage exceed such amount, the Cyberonics Merger Surviving Corporation shall obtain a policy with the greatest coverage available for a cost not exceeding such amount.

(d)                                 For six (6) years from and after the Sorin Merger Effective Time, each of the Sorin Merger Surviving Company or one of its Subsidiaries, to the extent required by applicable Law, will indemnify and hold harmless, to the fullest extent permitted under

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