INVESTOR'S RIGHTS AGREEMENT between THORATEC CORPORATION and HEARTWARE INTERNATIONAL, INC. Dated as of February 12, 2009

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HEARTWARE INTERNATIONAL, INC. | THORATEC CORPORATION

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Title: INVESTOR'S RIGHTS AGREEMENT between THORATEC CORPORATION and HEARTWARE INTERNATIONAL, INC. Dated as of February 12, 2009
Governing Law: New York Date: 2/13/2009
Law Firm: Latham Watkins;Shearman Sterling

Exhibit 10.3

INVESTOR’S RIGHTS AGREEMENT

between

THORATEC CORPORATION

and

HEARTWARE INTERNATIONAL, INC.

Dated as of February 12, 2009

TABLE OF CONTENTS


	Page
1 Definitions		1

2 Corporate Governance		3

3 Legends; Securities Law Compliance		4

4 Registration Rights		4

5 Indemnification		15

6 Miscellaneous		19

INVESTOR’S RIGHTS AGREEMENT

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

WITNESSETH:

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

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

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

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

Definitions

1.1

Definitions of Certain Terms

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

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

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

“ ASIC ” means the Australian Securities and Investments Commission.

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

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

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

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

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

“ Company Indemnified Parties ” is defined in Section 5.1.1 .

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

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

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

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

“ Indemnified Party ” is defined in Section 5.1.3 .

“ Indemnifying Party ” is defined in Section 5.1.3 .

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

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

“ Investor Indemnified Parties ” is defined in Section 5.1.2 .

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

“ Piggyback Registration Statement ” is defined in Section 4.2.1 .

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

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

“ Registration Expenses ” is defined in Section 4.4.1 .

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

“ Resale Effectiveness Period ” is defined in Section 4.1.1 .

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

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

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

“ Subsequent Shelf Registration ” is defined in Section 4.1.2 .

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

1.2

Headings; Table of Contents

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

1.3

Interpretation

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

2 Corporate Governance

2.1

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

2.2

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

Legends; Securities Law Compliance

	3.1		Each certificate representing Registrable Securities that is restricted stock as defined in Rule 144 under the Securities Act shall bear the following legend:

			“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS SUCH DISPOSITION IS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM.”

3.2

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

Registration Rights

4.1

Shelf Registration

4.1.1

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

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

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

	4.1.3		If for any reason the Company is unable to qualify as a registrant to register the Registrable Securities on Form S-3 or any equivalent form or forms or any similar registration in accordance with Section 4.1.1 or Section 4.1.2 , as applicable, the Company shall use commercially reasonable efforts to file a registration statement on Form S-1 or any equivalent form or forms within thirty (30) days of such failure to qualify in order to provide for the registration of such Registrable Securities for resale by the Investor in accordance with any reasonable method of distribution elected by the Investor.

	4.1.4		If the Investor intends that any Registrable Securities covered by any registration pursuant to Section 4.1 shall be distributed by means of an underwritten offering, the Investor will so advise the Company. In such event, the managing underwriter to administer the offering will be chosen by the Investor, subject to the prior written consent of the Company, such consent not to be unreasonably withheld, conditioned or delayed. Unless otherwise mutually agreed by the Company and the Investor, the Company and the Investor shall enter into an underwriting agreement in such reasonable and customary form as shall have been negotiated and agreed to by the Company with the underwriter or underwriters selected for such underwriting. If the Investor disapproves of the terms of the underwriting, the Investor may promptly elect to withdraw therefrom by written notice to the Company and the managing underwriter.

	4.1.5		If the managing underwriter in any underwritten offering pursuant to this Section 4.1 , advises the Company that in its reasonable opinion the number of securities requested by the Investor to be included in such distribution exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Investor will include in such distribution only such number of securities that in the reasonable opinion of such underwriter can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price).

	4.1.6		Notwithstanding the foregoing, if the Company shall furnish to the Investor a certificate signed by the Chief Executive Officer of the Company stating that in the good faith judgment of the Board it would be detrimental to the Company and its stockholders for such Resale Shelf Registration Statement to be filed, the Company shall have the right to defer such filing for a period of not more than sixty (60) days after receipt of the request by the Investor; provided , however , that the Company shall not register any securities for the account of itself or any other stockholder during such sixty (60) day period.

	4.1.7		In addition, the Company shall not be obligated to effect or to take any action to effect, any registration pursuant to this Section 4.1 after the Company has effected one (1) registration pursuant to this Section 4.1 ; provided , however , that such registration has been declared or ordered effective and has been available for sales of Registrable Securities for the entire Resale Effectiveness Period.

4.2

Piggyback Registrations

4.2.1

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

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

	4.2.2		The right of the Investor to registration pursuant to this Section 4.2 will be conditioned upon the Investor’s participation in the underwriting and the inclusion of the Investor’s Registrable Securities in the underwriting, and the Company and the Investor will (together with any other Persons distributing their securities through such underwriting) enter into an underwriting agreement (including all reasonable and customary questionnaires, powers of attorney, indemnities, lock-up letters and other documents required under the terms of such underwriting agreement) in such reasonable and customary form as shall have been negotiated and agreed to by the Company with the underwriter or underwriters selected for such underwriting by the Company. If the Investor disapproves of the terms of the underwriting, the Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.

	4.2.3		If the managing underwriter in any underwritten offering pursuant to a Piggyback Registration Statement advises the Company that in its sole and reasonable opinion the number of securities requested to be included in such registration exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration only such number of securities that in the reasonable opinion of such underwriter can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the securities the Company proposes to sell and (ii) second, the Registrable Securities of the Investor and any other securities of the Company that have been requested by other holders of Common Stock having registration rights to be so included, on a pro rata basis, up to the maximum number of securities the managing underwriter advises the

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

4.3

Registration Procedures

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

	4.3.1		Prepare and file, within thirty (30) days after receipt by the Company of a request by the Investor to file with the SEC a Registration Statement with respect to such Registrable Securities required to be filed pursuant to Section 4.1 , together with any notices or regulatory filings required to be made in connection therewith (including filing a copy of the Registration Statement and any amendments or supplements thereto, with ASX), and thereafter use its commercially reasonable efforts to cause such Registration Statement to become effective as soon as reasonably practicable after the filing thereof (with a copy of the Registration Statement once effective to be lodged with ASIC if required); provided that, before filing a Registration Statement or any amendments or supplements thereto, the Company will, at the Company’s expense, furnish or otherwise make available to the Investor and the Investor’s Counsel copies of all such documents proposed to be filed and such other documents reasonably requested by the Investor and the Investor’s Counsel, which documents will be subject to the review and/or reasonable comment, as applicable, of the Investor and the Investor’s Counsel, including any comment letter from the SEC with respect to such filing or the documents incorporated by reference therein and any response to such comment letter, and provide the Investor and the Investor’s Counsel reasonable opportunity to participate in the preparation of such Registration Statement and the opportunity to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s financial books and records, officers, accountants and other advisors, as the Investor or the Investor’s Counsel may reasonably request; provided, that, it shall be a condition to such review of such information that the inspecting person enter into a customary confidentiality agreement in form and substance reasonably satisfactory to the Company;

	4.3.2		Prepare and file with the SEC (with a copy to be lodged with ASIC if required) such amendments and supplements to such Registration Statement as may be necessary to keep such Registration Statement effective for a period of either (i) not less than, if such Registration Statement is a Piggyback Registration Statement relating to an underwritten offering, such period as, based upon the opinion of counsel

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

	4.3.3		Furnish to the Investor, and each managing underwriter, if any, such number of copies, without charge, of such Registration Statement, each amendment and supplement thereto, including each preliminary prospectus, final prospectus, any other prospectus (including any prospectus filed under Rule 424, Rule 430A or Rule 430B under the Securities Act and any “issuer free writing prospectus” as such term is defined under Rule 433 under the Securities Act), all exhibits and other documents filed therewith and such other documents as the Investor or such managing underwriter may reasonably request including in order to facilitate the disposition of the Registrable Securities owned by the Investor, and upon request a copy of any and all transmittal letters or other correspondence to or received from, the SEC or any other Governmental Authority relating to such offer;

	4.3.4		Use commercially reasonable efforts to register or qualify (or exempt from registration or qualification) such Registrable Securities, and keep such registration or qualification (or exemption therefrom) effective, under such other securities or blue sky laws of such United States jurisdictions as the Investor reasonably requests and do any and all other acts and things that may be reasonably necessary or reasonably advisable to enable the Investor to consummate the disposition in such jurisdictions of the Registrable Securities owned by the Investor ( provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this

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

4.3.5

Notify the Investor, the outside counsel to the Investor (the “ Investor’s Counsel ”) and the managing underwriter(s), if any, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, u

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