REGISTRATION RIGHTS AGREEMENT

RESMED INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (THE "AGREEMENT") IS MADE AS OF MAY 14,
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2002, BETWEEN RESMED INC., A DELAWARE CORPORATION (THE "PARENT") AND LESLIE
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HOFFMAN, AN INDIVIDUAL ("HOFFMAN").
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WHEREAS:
A. PURSUANT TO THE TERMS OF THE AGREEMENT AND PLAN OF MERGER DATED AS
OF EVEN DATE HEREWITH (THE "MERGER AGREEMENT"), BY AND AMONG PARENT, SERVO
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MAGNETICS INCORPORATED, A CALIFORNIA CORPORATION ("TARGET"), SERVO MAGNETICS
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ACQUISITION, INC., A DELAWARE CORPORATION AND WHOLLY OWNED SUBSIDIARY OF PARENT
("MERGER SUB"), AND HOFFMAN, TARGET IS BEING MERGED WITH AND INTO MERGER SUB
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(THE "MERGER").
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B. IN CONNECTION WITH THE MERGER, HOFFMAN SHALL RECEIVE FULLY PAID AND
NON-ASSESSABLE SHARES OF COMMON STOCK OF PARENT, PAR VALUE $.004 PER SHARE.
C. THE MERGER AGREEMENT PROVIDES FOR THE EXECUTION AND DELIVERY OF THIS
AGREEMENT AT THE CLOSING OF THE TRANSACTIONS CONTEMPLATED THEREBY WHICH GRANTS
HOFFMAN CERTAIN RIGHTS TO HAVE THE SHARES REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS
CONTAINED HEREIN AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HEREBY AGREE AS
FOLLOWS:
SECTION 1
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
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COMPLIANCE WITH SECURITIES ACT; REGISTRATION RIGHTS
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1.1 CERTAIN DEFINITIONS
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. UNLESS OTHERWISE INDICATED, THE TERMS IN THIS AGREEMENT SHALL HAVE THE
SAME MEANINGS AS THOSE TERMS IN THE MERGER AGREEMENT. AS USED IN THIS
AGREEMENT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING RESPECTIVE MEANINGS:
"COMMON STOCK" SHALL MEAN PARENT'S COMMON STOCK, PAR VALUE $.004 PER SHARE.
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"HOLDER" SHALL MEAN (I) HOFFMAN AND (II) ANY PERSON HOLDING REGISTRABLE
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SECURITIES TO WHOM THE RIGHTS UNDER THIS SECTION 1 HAVE BEEN TRANSFERRED IN
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ACCORDANCE WITH SECTION 1.8 HEREOF.
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"REGISTRABLE SECURITIES" MEANS THE SHARES UNTIL SUCH TIME THAT SUCH SECURITIES
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HAVE BEEN (I) EFFECTIVELY REGISTERED UNDER THE SECURITIES ACT AND DISPOSED OF
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (II) SOLD IN A SINGLE
TRANSACTION EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF
THE SECURITIES ACT SO THAT ALL TRANSFER RESTRICTIONS AND RESTRICTIVE LEGENDS
WITH RESPECT THERETO ARE REMOVED UPON THE CONSUMMATION OF SUCH SALE.
THE TERMS "REGISTER," "REGISTERED" AND "REGISTRATION" REFER TO A REGISTRATION
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EFFECTED BY PREPARING AND FILING A REGISTRATION STATEMENT IN COMPLIANCE WITH THE
SECURITIES ACT, AND THE DECLARATION OR ORDERING OF THE EFFECTIVENESS OF SUCH
REGISTRATION STATEMENT.
"REGISTRATION EXPENSES" SHALL MEAN ALL EXPENSES, EXCEPT AS OTHERWISE STATED
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BELOW, INCURRED BY PARENT IN COMPLYING WITH SECTION 1.2 HEREOF, INCLUDING,
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WITHOUT LIMITATION, ALL REGISTRATION, QUALIFICATION AND FILING FEES, INCLUDING
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NASD FILING FEES, PRINTING EXPENSES (INCLUDING EXPENSES OF PRINTING CERTIFICATES
FOR REGISTRABLE SECURITIES AND OF PRINTING PRELIMINARY AND FINAL PROSPECTUSES),
ESCROW FEES, FEES AND DISBURSEMENTS OF COUNSEL FOR PARENT, BLUE SKY FEES AND
EXPENSES, THE EXPENSE OF ANY SPECIAL AUDITS INCIDENT TO OR REQUIRED BY ANY SUCH
REGISTRATION.
"SEC" SHALL MEAN THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER FEDERAL
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AGENCY AT THE TIME ADMINISTERING THE SECURITIES ACT.
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"SECURITIES ACT" SHALL MEAN THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
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SIMILAR FEDERAL STATUTE AND THE RULES AND REGULATIONS OF THE SEC THEREUNDER, ALL
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AS THE SAME SHALL BE IN EFFECT AT THE TIME.
"SELLING EXPENSES" SHALL MEAN ALL UNDERWRITING DISCOUNTS, SELLING COMMISSIONS
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AND STOCK TRANSFER TAXES APPLICABLE TO THE SECURITIES REGISTERED BY HOLDER AND
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ALL REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR HOLDER.
"SHARES" SHALL MEAN THE SHARES OF COMMON STOCK OF PARENT, PAR VALUE $.004 PER
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SHARE, ISSUED TO HOFFMAN PURSUANT TO THE MERGER AGREEMENT AND ANY OTHER
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SECURITIES ISSUED IN RESPECT OF SUCH SECURITIES UPON ANY STOCK SPLIT, STOCK
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DIVIDEND, RECAPITALIZATION, MERGER, CONSOLIDATION OR SIMILAR EVENT.
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1.2 MANDATORY REGISTRATION
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. PARENT SHALL PREPARE AND FILE WITH THE SEC, WITHIN 180 CALENDAR DAYS
FOLLOWING THE CLOSING DATE (AS DEFINED IN THE MERGER AGREEMENT), EXCEPT AS A
RESULT OF DELAYS THAT ARE CAUSED BY THE ACTIONS OR INACTIONS OF HOLDER, A
REGISTRATION STATEMENT (THE "REGISTRATION STATEMENT") ON FORM S-3 (OR ANY
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SIMILAR OR SUCCESSOR SHORT FORM OF REGISTRATION STATEMENT AS IS THEN AVAILABLE
TO EFFECT A REGISTRATION FOR RESALE OF THE REGISTRABLE SECURITIES) COVERING THE
RESALE OF THE SHARES BY HOLDER. PARENT SHALL USE ITS COMMERCIALLY REASONABLE
EFFORTS TO CAUSE THE REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE AS PROMPTLY
AS IS REASONABLY PRACTICAL AFTER THE FILING THEREOF. IN NO EVENT SHALL PARENT
BE REQUIRED HEREUNDER TO PREPARE AND FILE WITH THE SEC A REGISTRATION STATEMENT
ON FORM S-1 (OR ANY SIMILAR OR SUCCESSOR LONG FORM OF REGISTRATION STATEMENT).
1.3 EXPENSES OF REGISTRATION
--------------------------
. ALL REGISTRATION EXPENSES INCURRED IN CONNECTION WITH ALL REGISTRATIONS
PURSUANT TO SECTION 1.2 SHALL BE BORNE BY PARENT. UNLESS OTHERWISE STATED,
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HOLDER SHALL BEAR ITS OWN SELLING EXPENSES.
1.4 REGISTRATION PROCEDURES
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. IN CONNECTION WITH THE MANDATORY REGISTRATION UNDER SECTION 1.2, PARENT
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WILL:
(A) PREPARE AND FILE WITH THE SEC THE REGISTRATION STATEMENT WITH RESPECT TO
THE SHARES AND USE REASONABLE EFFORTS TO CAUSE SUCH REGISTRATION STATEMENT
TO BECOME EFFECTIVE AS SOON AS IS REASONABLY PRACTICAL AFTER THE FILING THEREOF,
AND TO KEEP THE REGISTRATION STATEMENT EFFECTIVE UNTIL THE EARLIER OF: (I) THE
SALE OF ALL REGISTRABLE SECURITIES HAS BEEN COMPLETED; OR (II) THE EARLIEST TIME
AT WHICH ALL REGISTRABLE SECURITIES THEN HELD BY HOLDER MAY BE RESOLD OVER A
THREE MONTH PERIOD PURSUANT TO RULE 144 OR ANY SIMILAR OR SUCCESSOR RULE OR
EXEMPTION UNDER THE SECURITIES ACT;
(B) PREPARE AND FILE WITH THE SEC SUCH AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO SUCH REGISTRATION STATEMENT, AND SUCH SUPPLEMENTS TO THE RELATED
PROSPECTUS, AS MAY BE REQUIRED BY THE RULES, REGULATIONS OR INSTRUCTIONS
APPLICABLE TO THE SECURITIES ACT DURING THE APPLICABLE PERIOD IN ACCORDANCE WITH
THE INTENDED METHODS OF DISPOSITION SPECIFIED BY THE HOLDERS OF THE REGISTRABLE
SECURITIES COVERED BY SUCH REGISTRATION STATEMENT, AND CAUSE THE RELATED
PROSPECTUS AS SO SUPPLEMENTED TO BE FILED PURSUANT TO RULE 424 UNDER THE
SECURITIES ACT;
(C) NOTIFY HOLDER PROMPTLY AND (IF REQUESTED) CONFIRM SUCH NOTICE IN
WRITING, (I) WHEN A PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR POST-EFFECTIVE
AMENDMENT HAS BEEN FILED, AND, WITH RESPECT TO SUCH REGISTRATION STATEMENT OR
ANY POST-EFFECTIVE AMENDMENT, WHEN THE SAME HAS BECOME EFFECTIVE, (II) OF ANY
REQUEST BY THE SEC FOR AMENDMENTS OR SUPPLEMENTS TO SUCH REGISTRATION STATEMENT
OR THE RELATED PROSPECTUS OR FOR ADDITIONAL INFORMATION REGARDING HOLDER, (III)
OF THE ISSUANCE BY THE SEC OF ANY STOP ORDER SUSPENDING THE EFFECTIVENESS OF
SUCH REGISTRATION STATEMENT OR THE INITIATION OF ANY PROCEEDINGS FOR THAT
PURPOSE, (IV) OF THE RECEIPT BY PARENT OF ANY NOTIFICATION WITH RESPECT TO THE
SUSPENSION OF THE QUALIFICATION OR EXEMPTION FROM QUALIFICATION OF ANY OF THE
REGISTRABLE SECURITIES FOR SALE IN ANY JURISDICTION OR THE INITIATION OR
THREATENING OF ANY PROCEEDING FOR SUCH PURPOSE, AND (V) OF THE HAPPENING OF ANY
EVENT THAT REQUIRES THE MAKING OF ANY CHANGES IN SUCH REGISTRATION STATEMENT,
PROSPECTUS OR DOCUMENTS INCORPORATED OR DEEMED TO BE INCORPORATED THEREIN BY
REFERENCE SO THAT THEY WILL NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT
OR OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE
MADE, NOT MISLEADING;
(D) USE COMMERCIALLY REASONABLE EFFORTS TO OBTAIN THE WITHDRAWAL OF ANY
ORDER SUSPENDING THE EFFECTIVENESS OF SUCH REGISTRATION STATEMENT, OR THE
LIFTING OF ANY SUSPENSION OF THE QUALIFICATION OR EXEMPTION FROM QUALIFICATION
OF ANY REGISTRABLE SECURITIES FOR SALE IN ANY JURISDICTION IN THE UNITED STATES;
(E) FURNISH TO HOLDER, COUNSEL FOR HOLDER AND EACH MANAGING UNDERWRITER, IF
ANY, WITHOUT CHARGE, ONE CONFORMED COPY OF SUCH REGISTRATION STATEMENT, AS
DECLARED EFFECTIVE BY THE SEC, AND OF EACH POST-EFFECTIVE AMENDMENT THERETO, IN
EACH CASE INCLUDING FINANCIAL STATEMENTS AND SCHEDULES AND ALL EXHIBITS AND
REPORTS INCORPORATED OR DEEMED TO BE INCORPORATED THEREIN BY REFERENCE; AND
DELIVER, AT HOLDER'S EXPENSE, SUCH NUMBER OF COPIES OF THE PRELIMINARY
PROSPECTUS, ANY AMENDED PRELIMINARY PROSPECTUS, EACH FINAL PROSPECTUS AND ANY
POST-EFFECTIVE AMENDMENT OR SUPPLEMENT THERETO, AS HOLDER MAY REASONABLY REQUEST
IN ORDER TO FACILITATE THE DISPOSITION OF THE REGISTRABLE SECURITIES OF HOLDER
COVERED BY SUCH REGISTRATION STATEMENT IN CONFORMITY WITH THE REQUIREMENTS OF
THE SECURITIES ACT;
(F) PRIOR TO ANY PUBLIC OFFERING OF REGISTRABLE SECURITIES COVERED BY SUCH
REGISTRATION STATEMENT, USE COMMERCIALLY REASONABLE EFFORTS TO REGISTER OR
QUALIFY SUCH REGISTRABLE SECURITIES FOR OFFER AND SALE UNDER THE SECURITIES OR
BLUE SKY LAWS OF SUCH JURISDICTIONS AS HOLDER SHALL REASONABLY REQUEST IN
WRITING; PROVIDED, HOWEVER, THAT PARENT SHALL IN NO EVENT BE REQUIRED TO QUALIFY
GENERALLY TO DO BUSINESS AS A FOREIGN CORPORATION OR AS A DEALER IN ANY
JURISDICTION WHERE IT IS NOT AT THE TIME SO QUALIFIED OR TO EXECUTE OR FILE A
GENERAL CONSENT TO SERVICE OF PROCESS IN ANY SUCH JURISDICTION WHERE IT HAS NOT
THERETOFORE DONE SO OR TO TAKE ANY ACTION THAT WOULD SUBJECT IT TO GENERAL
SERVICE OF PROCESS OR TAXATION IN ANY SUCH JURISDICTION WHERE IT IS NOT THEN
SUBJECT; AND
(G) UPON THE OCCURRENCE OF ANY EVENT CONTEMPLATED BY PARAGRAPH 1.4(C)(V)
ABOVE, PREPARE A SUPPLEMENT OR POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION
STATEMENT OR THE RELATED PROSPECTUS OR ANY DOCUMENT INCORPORATED OR DEEMED TO BE
INCORPORATED THEREIN BY REFERENCE AND FILE ANY OTHER REQUIRED DOCUMENT SO THAT,
AS THEREAFTER DELIVERED TO THE PURCHASERS OF THE REGISTRABLE SECURITIES BEING
SOLD THEREUNDER, SUCH PROSPECTUS WILL NOT CONTAIN AN UNTRUE STATEMENT OF A
MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN
OR NECESSARY TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER
WHICH THEY WERE MADE, NOT MISLEADING.
1.5 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934
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. WITH A VIEW TO MAKING AVAILABLE TO HOLDER THE BENEFITS OF RULE 144
PROMULGATED UNDER THE SECURITIES ACT, PARENT AGREES USE COMMERCIALLY REASONABLE
EFFORTS TO:
(A) MAKE AND KEEP PUBLIC INFORMATION AVAILABLE, AS THOSE TERMS ARE
UNDERSTOOD AND DEFINED IN SEC RULE 144, FOR THE TWO YEAR PERIOD FOLLOWING THE
DATE OF THIS AGREEMENT, SO LONG AS PARENT REMAINS SUBJECT TO THE PERIODIC
REPORTING REQUIREMENTS UNDER SECTIONS 13 OR 15(D) OF THE EXCHANGE ACT;
(B) FILE WITH THE SEC IN A TIMELY MANNER ALL REPORTS AND OTHER DOCUMENTS
REQUIRED OF PARENT UNDER THE SECURITIES ACT AND THE EXCHANGE ACT; AND
(C) FURNISH TO HOLDER, SO LONG AS HOLDER OWNS ANY REGISTRABLE SECURITIES,
FORTHWITH UPON REQUEST A WRITTEN STATEMENT BY PARENT THAT IT HAS COMPLIED WITH
THE REPORTING REQUIREMENTS OF SEC RULE 144.
1.6 INDEMNIFICATION.
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(A) PARENT WILL INDEMNIFY AND HOLD HARMLESS, TO THE FULL EXTENT PERMITTED BY
LAW, HOLDER WITH RESPECT TO WHICH REGISTRATION, QUALIFICATION OR COMPLIANCE
HAS BEEN EFFECTED PURSUANT TO THIS SECTION 1, AND EACH UNDERWRITER, IF ANY, AND
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EACH PERSON WHO CONTROLS ANY UNDERWRITER WITHIN THE MEANING OF SECTION 15 OF THE
SECURITIES ACT OR THE EXCHANGE ACT, AGAINST ALL EXPENSES, CLAIMS, LOSSES,
DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THEREOF), INCLUDING ANY OF THE
FOREGOING INCURRED IN SETTLEMENT OF ANY LITIGATION, COMMENCED OR THREATENED,
ARISING OUT OF OR BASED ON ANY OF THE FOLLOWING STATEMENTS, OMISSIONS OR
VIOLATIONS, OR ALLEGATIONS THEREOF (ANY OF WHICH, A "VIOLATION"): (I) ANY UNTRUE
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STATEMENT (OR ALLEGED UNTRUE STATEMENT) OF A MATERIAL FACT CONTAINED IN ANY
REGISTRATION STATEMENT, PROSPECTUS, OFFERING CIRCULAR OR OTHER DOCUMENT, OR ANY
AMENDMENT OR SUPPLEMENT THERETO, INCIDENT TO ANY SUCH REGISTRATION,
QUALIFICATION OR COMPLIANCE, (II) ANY OMISSION (OR ALLEGED OMISSION) TO STATE
THEREIN A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO MAKE THE
STATEMENTS THEREIN, IN LIGHT OF THE CIRCUMSTANCES IN WHICH THEY WERE MADE, NOT
MISLEADING OR (III) ANY VIOLATION BY PARENT OF THE SECURITIES ACT, THE EXCHANGE
ACT, STATE SECURITIES LAW OR ANY RULE OR REGULATION PROMULGATED UNDER SUCH LAWS
APPLICABLE TO PARENT IN CONNECTION WITH ANY SUCH REGISTRATION, QUALIFICATION OR
COMPLIANCE, AND WITHIN A REASONABLE PERIOD PARENT WILL REIMBURSE HOLDER, EACH
SUCH UNDERWRITER AND EACH PERSON WHO CONTROLS ANY SUCH UNDERWRITER, FOR ANY
LEGAL AND ANY OTHER EXPENSES REASONABLY INCURRED IN CONNECTION WITH
INVESTIGATING, PREPARING OR DEFENDING ANY SUCH CLAIM, LOSS, DAMAGE, LIABILITY OR
ACTION; PROVIDED THAT PARENT WILL NOT BE LIABLE IN ANY SUCH CASE TO THE EXTENT
THAT ANY SUCH CLAIM, LOSS, DAMAGE, LIABILITY OR EXPENSE ARISES OUT OF OR IS
BASED ON (X) ANY UNTRUE STATEMENT OR OMISSION OR ALLEGED UNTRUE STATEMENT OR
OMISSION, MADE IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION
FURNISHED BY HOLDER TO PARENT FOR USE IN THE REGISTRATION STATEMENT OR (Y) A
MATERIAL MISSTATEMENT OR OMISSION OF FACT CONTAINED IN ANY PRELIMINARY
PROSPECTUS IF A FINAL, AMENDED OR SUPPLEMENTAL PROSPECTUS WHICH CORRECTS SUCH
OMISSION OR MISSTATEMENT IS DELIVERED BY PARENT TO SUCH PERSON AT OR PRIOR TO
THE WRITTEN CONFIRMATION OF THE SALE GIVING RISE TO THE VIOLATION OR ALLEGED
VIOLATION.
(B) HOLDER WILL INDEMNIFY PARENT, EACH OF ITS AFFILIATES, DIRECTORS,
OFFICERS, AGENTS AND REPRESENTATIVES, EACH UNDERWRITER, IF ANY, OF PARENT'S
SECURITIES COVERED BY A REGISTRATION STATEMENT COVERING THE RESALE OF THE
SHARES, AND EACH PERSON WHO CONTROLS PARENT OR SUCH UNDERWRITER WITHIN THE
MEANING OF SECTION 15 OF THE SECURITIES ACT, AGAINST ALL CLAIMS, LOSSES, DAMAGES
AND LIABILITIES (OR ACTIONS IN RESPECT THEREOF) ARISING OUT OF OR BASED ON A
VIOLATION, AND WITHIN A REASONABLE PERIOD WILL REIMBURSE PARENT, SUCH
AFFILIATES, DIRECTORS, OFFICERS, PERSONS, UNDERWRITERS OR CONTROL PERSONS FOR
ANY LEGAL OR ANY OTHER EXPENSES REASONABLY INCURRED IN CONNECTION WITH
INVESTIGATING OR DEFENDING ANY SUCH CLAIM, LOSS, DAMAGE, LIABILITY OR ACTION, IN
EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT SUCH UNTRUE STATEMENT (OR
ALLEGED UNTRUE STATEMENT) OR OMISSION (OR ALLEGED OMISSION) IS MADE IN SUCH
REGISTRATION STATEMENT, PROSPECTUS, OFFERING CIRCULAR OR OTHER DOCUMENT IN
RELIANCE UPON AND IN CONFORMITY WITH WRITTEN INFORMATION FURNISHED BY HOLDER TO
PARENT FOR USE IN THE REGISTRATION STATEMENT.
(C) EACH PARTY ENTITLED TO INDEMNIFICATION UNDER THIS SECTION 1.6 (THE
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"INDEMNIFIED PARTY") SHALL GIVE NOTICE TO THE PARTY REQUIRED TO PROVIDE
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INDEMNIFICATION (THE "INDEMNIFYING PARTY") PROMPTLY AFTER SUCH INDEMNIFIED PARTY
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HAS ACTUAL KNOWLEDGE OF ANY CLAIM AS TO WHICH INDEMNITY MAY BE SOUGHT, AND SHALL
PERMIT THE INDEMNIFYING PARTY TO ASSUME THE DEFENSE OF ANY SUCH CLAIM OR ANY
LITIGATION RESULTING THEREFROM, PROVIDED THAT COUNSEL FOR THE INDEMNIFYING
PARTY, WHO SHALL CONDUCT THE DEFENSE OF SUCH CLAIM OR LITIGATION, SHALL BE
APPROVED BY THE INDEMNIFIED PARTY (WHOSE APPROVAL SHALL NOT UNREASONABLY BE
WITHHELD), AND THE INDEMNIFIED PARTY MAY PARTICIPATE IN SUCH DEFENSE AT SUCH
PARTY'S EXPENSE, AND PROVIDED FURTHER THAT THE FAILURE OF ANY INDEMNIFIED PARTY
TO GIVE NOTICE AS PROVIDED HEREIN SHALL NOT RELIEVE THE INDEMNIFYING PARTY OF
ITS OBLIGATIONS UNDER THIS SECTION 1 UNLESS THE FAILURE TO GIVE SUCH NOTICE IS
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MATERIALLY PREJUDICIAL TO AN INDEMNIFYING PARTY'S ABILITY TO DEFEND SUCH ACTION
AND PROVIDED FURTHER, THAT THE INDEMNIFYING PARTY SHALL NOT ASSUME THE DEFENSE
FOR MATTERS AS TO WHICH THERE IS A CONFLICT OF INTEREST OR SEPARATE AND
DIFFERENT DEFENSES. NO INDEMNIFYING PARTY, IN THE DEFENSE OF ANY SUCH CLAIM OR
LITIGATION, SHALL, EXCEPT WITH THE CONSENT OF EACH INDEMNIFIED PARTY, CONSENT TO
ENTRY OF ANY JUDGMENT OR ENTER INTO ANY SETTLEMENT WHICH DOES NOT INCLUDE AS AN
UNCONDITIONAL TERM THEREOF THE GIVING BY THE CLAIMANT OR PLAINTIFF TO SUCH
INDEMNIFIED PARTY OF A RELEASE FROM ALL LIABILITY IN RESPECT TO SUCH CLAIM OR
LITIGATION.
1.7 INFORMATION BY HOLDER
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. IF REGISTRABLE SECURITIES HELD BY HOLDER ARE INCLUDED IN ANY
REGISTRATION, HOLDER SHALL FURNISH TO PARENT SUCH INFORMATION REGARDING HOLDER,
THE REGISTRABLE SECURITIES AND OTHER SECURITIES OF PARENT HELD BY HIM AND THE
DISTRIBUTION PROPOSED BY HOLDER AS PARENT MAY REQUEST IN WRITING AND AS SHALL BE
REQUIRED IN CONNECTION WITH ANY REGISTRATION, QUALIFICATION OR COMPLIANCE
REFERRED TO IN THIS SECTION 1.
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1.8 TRANSFER OF REGISTRATION RIGHTS
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. THE RIGHTS TO HAVE SECURITIES REGISTERED GRANTED HOLDERS UNDER SECTION
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1.2 MAY NOT BE ASSIGNED TO A TRANSFEREE OR ASSIGNEE WITHOUT THE PRIOR WRITTEN
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CONSENT OF PARENT EXCEPT THAT SUCH RIGHTS MAY BE TRANSFERRED OR ASSIGNED TO
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SPOUSES AND TO ANCESTORS, LINEAL DESCENDANTS AND SIBLINGS OF HOLDER WHO ACQUIRE
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SHARES BY GIFT, WILL OR INTESTATE SUCCESSION.
SECTION 2
MISCELLANEOUS
2.1 GOVERNING LAW
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. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE INTERNAL LAWS OF
THE STATE OF CALIFORNIA.
2.2 SURVIVAL
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. THE COVENANTS AND AGREEMENTS MADE HEREIN SHALL SURVIVE THE CLOSING OF
THE TRANSACTIONS CONTEMPLATED HEREBY.
2.3 SUCCESSORS AND ASSIGNS
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. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE PROVISIONS HEREOF SHALL INURE
TO THE BENEFIT OF, AND BE BINDING UPON, THE SUCCESSORS, ASSIGNS, HEIRS,
EXECUTORS AND ADMINISTRATORS OF THE PARTIES HERETO.
2.4 ENTIRE AGREEMENT; AMENDMENT
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. THIS AGREEMENT AND THE MERGER AGREEMENT CONSTITUTE THE FULL AND ENTIRE
UNDERSTANDING AND AGREEMENT BETWEEN THE PARTIES WITH REGARD TO THE SUBJECTS
HEREOF AND THEREOF, AND NO PARTY SHALL BE LIABLE OR BOUND TO ANY OTHER PARTY IN
ANY MANNER BY ANY WARRANTIES, REPRESENTATIONS OR COVENANTS EXCEPT AS
SPECIFICALLY SET FORTH HEREIN OR THEREIN. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER THIS AGREEMENT NOR ANY TERM HEREOF MAY BE AMENDED, WAIVED, DISCHARGED OR
TERMINATED OTHER THAN BY A WRITTEN INSTRUMENT SIGNED BY THE PARTY AGAINST WHOM
ENFORCEMENT OF ANY SUCH AMENDMENT, WAIVER, DISCHARGE OR TERMINATION IS SOUGHT;
PROVIDED, HOWEVER, THAT HOLDERS OF A MAJORITY OF THE REGISTRABLE SECURITIES MAY,
WITH PARENT'S PRIOR WRITTEN CONSENT, WAIVE, MODIFY OR AMEND ON BEHALF OF ALL
HOLDERS, ANY PROVISIONS HEREOF.
2.5 NOTICES, ETC
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.. ALL NOTICES, REQUESTS, DEMANDS, CLAIMS, AND OTHER COMMUNICATIONS HEREUNDER
WILL BE IN WRITING. ANY NOTICE, REQUEST, DEMAND, CLAIM, OR OTHER COMMUNICATION
HEREUNDER SHALL BE DEEMED DULY GIVEN IF (AND THEN TWO BUSINESS DAYS AFTER) IT IS
SENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID,
AND ADDRESSED TO THE INTENDED RECIPIENT AS SET FORTH BELOW:
IF TO HOFFMAN:
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LESLIE HOFFMAN
6660 VARIEL AVENUE
CANOGA PARK, CA 91203
TELECOPY: (818) 346-6294

WITH A COPY TO:
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FULBRIGHT & JAWORSKI L.L.P.
865. S. FIGUEROA STREET, 29TH FLOOR
LOS ANGELES, CALIFORNIA 90017
ATTN: DAVID A. EBERSHOFF, ESQ.
TELECOPY: (213) 680-4518
IF TO PARENT:
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RESMED INC.
14040 DANIELSON STREET
POWAY, CALIFORNIA 92064
ATTN: LEGAL DEPARTMENT
TELECOPY: (858) 746-2830
COPY TO:
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LATHAM & WATKINS
650 TOWN CENTER DRIVE,
20TH FLOOR,
COSTA MESA, CALIFORNIA 92626
ATTN: PATRICK T. SEAVER, ESQ.
TELECOPY: (714) 755-8290
ANY PARTY MAY SEND ANY NOTICE, REQUEST, DEMAND, CLAIM, OR OTHER COMMUNICATION
HEREUNDER TO THE INTENDED RECIPIENT AT THE ADDRESS SET FORTH ABOVE USING ANY
OTHER MEANS (INCLUDING PERSONAL DELIVERY, EXPEDITED COURIER, MESSENGER SERVICE,
TELECOPY, TELEX, ORDINARY MAIL, OR ELECTRONIC MAIL), BUT NO SUCH NOTICE,
REQUEST, DEMAND, CLAIM, OR OTHER COMMUNICATION SHALL BE DEEMED TO HAVE BEEN DULY
GIVEN UNLESS AND UNTIL IT ACTUALLY IS RECEIVED BY THE INTENDED RECIPIENT. ANY
PARTY MAY CHANGE THE ADDRESS TO WHICH NOTICES, REQUESTS, DEMANDS, CLAIMS, AND
OTHER COMMUNICATIONS HEREUNDER ARE TO BE DELIVERED BY GIVING THE OTHER PARTIES
NOTICE IN THE MANNER HEREIN SET FORTH.
2.6 DELAYS OR OMISSIONS
---------------------
. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NO DELAY OR OMISSION TO EXERCISE
ANY RIGHT, POWER OR REMEDY ACCRUING TO ANY PARTY TO THIS AGREEMENT UPON ANY
BREACH OR DEFAULT OF ANY OTHER PARTY UNDER THIS AGREEMENT, SHALL IMPAIR ANY SUCH
RIGHT, POWER OR REMEDY OF SUCH NONDEFAULTING PARTY NOR SHALL IT BE CONSTRUED TO
BE A WAIVER OF ANY SUCH BREACH OR DEFAULT, OR AN ACQUIESCENCE THEREIN, OR OF OR
IN ANY SIMILAR BREACH OR DEFAULT THEREAFTER OCCURRING; NOR SHALL ANY WAIVER OF
ANY SINGLE BREACH OR DEFAULT BE DEEMED A WAIVER OF ANY OTHER BREACH OR DEFAULT
THERETOFORE OR THEREAFTER OCCURRING. ANY WAIVER, PERMIT, CONSENT OR APPROVAL OF
ANY KIND OR CHARACTER ON THE PART OF ANY PARTY OF ANY BREACH OR DEFAULT UNDER
THIS AGREEMENT, OR ANY WAIVER ON THE PART OF ANY HOLDER OF ANY PROVISIONS OR
CONDITIONS OF THIS AGREEMENT, MUST BE IN WRITING AND SHALL BE EFFECTIVE ONLY TO
THE EXTENT SPECIFICALLY SET FORTH IN SUCH WRITING. ALL REMEDIES, EITHER UNDER
THIS AGREEMENT OR BY LAW OR OTHERWISE AFFORDED TO ANY PARTY TO THIS AGREEMENT,
SHALL BE CUMULATIVE AND NOT ALTERNATIVE.
2.7 COUNTERPARTS
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. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF
WHICH SHALL BE ENFORCEABLE AGAINST THE PARTIES ACTUALLY EXECUTING SUCH
COUNTERPARTS, AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE INSTRUMENT.
2.8 SEVERABILITY
------------
. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT BECOMES OR IS DECLARED
BY A COURT OF COMPETENT JURISDICTION TO BE ILLEGAL, UNENFORCEABLE OR VOID, THIS
AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT WITHOUT SAID PROVISION;
PROVIDED THAT NO SUCH SEVERABILITY SHALL BE EFFECTIVE IF IT MATERIALLY CHANGES
THE ECONOMIC BENEFIT OF THIS AGREEMENT TO ANY PARTY.
2.9 TITLES AND SUBTITLES
----------------------
. THE TITLES AND SUBTITLES USED IN THIS AGREEMENT ARE USED FOR CONVENIENCE
ONLY AND ARE NOT CONSIDERED IN CONSTRUING OR INTERPRETING THIS AGREEMENT.
(SIGNATURE PAGE FOLLOWS)




THE FOREGOING AGREEMENT IS HEREBY EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN.
"PARENT"

RESMED INC.,
A DELAWARE CORPORATION
BY:
/S/PETER C FARRELL
- --------------------
NAME: PETER C FARRELL
TITLE: CEO


"HOFFMAN"
LESLIE HOFFMAN,
AN INDIVIDUAL
/S/ LESLIE HOFFMAN
- --------------------

(SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)