Exhibit 10.16
REGISTRATION RIGHTS AGREEMENT
          This Registration Rights Agreement (this “Agreement”) is made and
entered into as of June 7, 2007, by and among Cardica, Inc., a Delaware
corporation (the “Company”), and the several purchasers signatory hereto (each a
“Purchaser” and collectively, the “Purchasers”).
          This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of June 7, 2007 between the Company and each Purchaser (the “Purchase
Agreement”).
          NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and each of the
Purchasers agree as follows:
     1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
          “Advice” shall have the meaning set forth in Section 6(f).
          “Affiliate” means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person.
          “Business Day” means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.
          “Closing” has the meaning set forth in the Purchase Agreement.
          “Closing Date” has the meaning set forth in the Purchase Agreement.
          “Commission” means the Securities and Exchange Commission.
          “common stock” means the common stock of the Company, par value $0.001
per share, and any securities into which such common stock may hereinafter be
reclassified.
          “Effective Date” means the date that the Registration Statement filed
pursuant to Section 2(a) is first declared effective by the Commission.
          “Effectiveness Deadline” means, with respect to the Initial
Registration Statement or the New Registration Statement, the earlier of:
(i) the 90th calendar day following the Closing Date; provided, that, if the
Commission reviews and has written comments to a filed Registration Statement,
then the Effectiveness Deadline under this clause (i) shall be the 120th
calendar day following the Closing Date, and (ii) the tenth (10th) Trading Day
following the date on which the Company is notified by the Commission that the
Registration Statement will not be reviewed or is no longer subject to further
review and comments and the effectiveness of the Registration Statement may be
accelerated; provided, however, that if the Effectiveness Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Effectiveness Deadline shall be extended to the next Business Day on which the
Commission is open for business.
          “Effectiveness Period” shall have the meaning set forth in
Section 2(b).

 

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          “Event” shall have the meaning set forth in Section 2(c).
          “Event Date” shall have the meaning set forth in Section 2(c).
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
          “Filing Deadline” means, with respect to the Registration Statement
required to be filed pursuant to Section 2(a), the 30th calendar day following
the Closing Date, provided, however, that if the Filing Deadline falls on a
Saturday, Sunday or other day that the Commission is closed for business, the
Filing Deadline shall be extended to the next business day on which the
Commission is open for business.
          “Holder” or “Holders” means the holder or holders, as the case may be,
from time to time of Registrable Securities.
          “Indemnified Party” shall have the meaning set forth in Section 5(c).
          “Indemnifying Party” shall have the meaning set forth in Section 5(c).
          “Losses” shall have the meaning set forth in Section 5(a).
          “New York Courts” means the state and federal courts sitting in the
City of New York, Borough of Manhattan.
          “Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
          “Placement Agents” means A.G. Edwards & Sons, Inc. as lead placement
agent, Allen & Company LLC as co-placement agent, and any permitted assigns.
          “Principal Market” means the Trading Market on which the common stock
is primarily listed on and quoted for trading, which, as of the Closing Date,
shall be the Nasdaq Global Market.
          “Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
          “Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
          “Register,” “registered” and “registration” refer to a registration
made by preparing and filing a Registration Statement or similar document in
compliance with the Securities Act and pursuant to Rule 415, and the declaration
or ordering of effectiveness of such Registration Statement or document.

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          “Registrable Securities” means all of (i) the Shares, (ii) the Warrant
Shares and (iii) any securities issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the foregoing, provided, that the Holder has completed and delivered to the
Company a Selling Stockholder Questionnaire; and provided, further, that Shares
and Warrant Shares shall cease to be Registrable Securities upon the earliest to
occur of the following: (A) sale pursuant to a Registration Statement or
Rule 144 under the Securities Act (in which case, only such security sold shall
cease to be a Registrable Security); or (B) becoming eligible for sale by the
Holder pursuant to Rule 144(k).
          “Registration Statements” means any one or more registration
statements of the Company filed under the Securities Act that covers the resale
of any of the Registrable Securities pursuant to the provisions of this
Agreement (including without limitation the Initial Registration Statement, the
New Registration Statement and any Remainder Registration Statements),
amendments and supplements to such Registration Statements, including
post-effective amendments, all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such Registration
Statements.
          “Rule 144” means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “Rule 415” means Rule 415 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          “Rule 424” means Rule 424 promulgated by the Commission pursuant to
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
          "SEC Guidance” means (i) any publicly-available written or oral
guidance, comments, requirements or requests of the Commission staff and
(ii) the Securities Act.
          “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
          “Selling Stockholder Questionnaire” means a questionnaire in the form
attached as Annex B hereto, or such other form of questionnaire as may
reasonably be adopted by the Company from time to time.
          “Shares” means the shares of common stock issued or issuable to the
Purchasers pursuant to the Purchase Agreement.
          “Special Registration Statement” shall mean a registration statement
relating to any employee benefit plan under Form S-8 or similar form or with
respect to any corporate reorganization or other transaction under Rule 145 of
the Securities Act.
          “Trading Day” means (i) a day on which the common stock is listed or
quoted and traded on its Principal Market (other than the OTC Bulletin Board),
or (ii) if the common stock is not listed on a Trading Market (other than the
OTC Bulletin Board), a day on which the common stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
common stock is not quoted on any Trading Market, a day on which the common
stock is quoted in the over-the-counter market as reported in the “pink sheets”
by Pink Sheets LLC (or any similar organization or agency

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succeeding to its functions of reporting prices); provided, that in the event
that the common stock is not listed or quoted as set forth in (i), (ii) and
(iii) hereof, then Trading Day shall mean a Business Day.
          “Trading Market” means whichever of the New York Stock Exchange, the
American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global
Market, the NASDAQ Capital Market or OTC Bulletin Board on which the common
stock is listed or quoted for trading on the date in question.
          “Warrants” means the Warrants issued pursuant to the Purchase
Agreement.
          “Warrant Shares” means the shares of common stock issued or issuable
upon exercise of the Warrants.
     2. Registration.
          (a) On or prior to the Filing Deadline, the Company shall prepare and
file with the Commission a “Shelf” Registration Statement covering the resale of
all of the Registrable Securities not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales
of the Registrable Securities, by such other means of distribution of
Registrable Securities as the Holders may reasonably specify (the “Initial
Registration Statement”). The Initial Registration Statement shall be on Form
S-3 (except if the Company is then ineligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
Form S-1) subject to the provisions of Section 2(f) and shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such Registration Statement) the “Plan of Distribution” section
attached hereto as Annex A. Notwithstanding the registration obligations set
forth in this subsection (a) and subsections (b) and (c) of this Section 2, in
the event the Commission informs the Company that all of the Registrable
Securities cannot, as a result of the application of Rule 415, be registered for
resale as a secondary offering on a single registration statement, the Company
agrees to promptly (i) inform each of the holders thereof and use its
commercially reasonable efforts to file amendments to the Initial Registration
Statement as required by the Commission and/or (ii) withdraw the Initial
Registration Statement and file a new registration statement (a “New
Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the Commission, on Form S-3
or such other form available to register for resale the Registrable Securities
as a secondary offering; provided, however, that prior to filing such amendment
or New Registration Statement, the Company shall be obligated to use its
commercially reasonable efforts to advocate with the Commission for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including without limitation, the Manual of Publicly Available
Telephone Interpretations D.29. Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages in Section 2(c), if
any SEC Guidance sets forth a limitation of the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Company used diligent efforts to advocate
with the Commission for the registration of all or a greater number of
Registrable Securities), unless otherwise directed in writing by a Holder as to
its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will first be reduced by Registrable
Securities not acquired pursuant to the Purchase Agreement (whether pursuant to
registration rights or otherwise), second by Registrable Securities represented
by holders of Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Holders on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Holders) and third by Registrable
Securities represented by Shares (applied, in the case that some Shares may be
registered, to the Holders on a pro rata basis based on the total number of
unregistered Shares held by such Holders, subject to a determination by the
Commission that certain Holders must be reduced first based on the number of

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Shares held by such Holders). In the event the Company amends the Initial
Registration Statement or files a New Registration Statement, as the case may
be, under clauses (i) or (ii) above, the Company will use its commercially
reasonable efforts to file with the Commission, as promptly as allowed by
Commission or staff guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Registrable Securities that
were not registered for resale on the Initial Registration Statement, as
amended, or the New Registration Statement (the “Remainder Registration
Statements”).
          (b) The Company shall use its commercially reasonable efforts to cause
each Registration Statement to be declared effective by the Commission as soon
as practicable and, with respect to the Initial Registration Statement or the
New Registration Statement, as applicable, no later than the Effectiveness
Deadline (including filing with the Commission a request for acceleration of
effectiveness in accordance with Rule 461 promulgated under the Securities Act
within five (5) Business Days after the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such
Registration Statement will not be “reviewed,” or not be subject to further
review and the effectiveness of such Registration Statement may be accelerated)
and shall use its commercially reasonable efforts to keep each Registration
Statement continuously effective under the Securities Act until the earlier of
(i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Holders or (ii) the date that all
Registrable Securities covered by such Registration Statement may be sold by
non-affiliates without volume restrictions pursuant to Rule 144(k) as determined
by counsel to the Company pursuant to a written opinion letter to such effect,
addressed and reasonably acceptable to the Company’s transfer agent (the
“Effectiveness Period”). The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading. Each Registration
Statement shall also cover, to the extent allowable under the Securities Act and
the rules promulgated thereunder (including Rule 416), such indeterminate number
of additional shares of common stock resulting from stock splits, stock
dividends or similar transactions with respect to the Registrable Securities.
The Company shall telephonically request effectiveness of a Registration
Statement as of 5:00 pm Eastern Time on the Effective Date. The Company shall
promptly notify the Holders via facsimile or e-mail of the effectiveness of a
Registration Statement within one (1) Business Day of the date on which the
Company telephonically confirms effectiveness with the Commission, which
confirmation shall initially be the date requested for effectiveness of a
Registration Statement. The Company shall, by 9:30 am Eastern Time on the first
Trading Day after the Effective Date, file a Rule 424(b) prospectus with the
Commission. Failure to so notify the Holders on or before the second Trading Day
after such notification or effectiveness or failure to file a final Prospectus
as aforesaid shall be deemed an Event under Section 2(c).
          (c) If: (i) the Initial Registration Statement is not filed with the
Commission on or prior to the Filing Deadline, (ii) the Initial Registration
Statement or the New Registration Statement, as applicable, is not declared
effective by the Commission (or otherwise does not become effective) for any
reason on or prior to the Effectiveness Deadline or (iii) after its Effective
Date, (A) such Registration Statement ceases for any reason (including without
limitation by reason of a stop order, or the Company’s failure to update the
Registration Statement), but excluding the inability of any Holder to sell the
Registrable Securities covered thereby due to market conditions, to remain
continuously effective as to all Registrable Securities for which it is required
to be effective or (B) the Holders are not permitted to utilize the Prospectus
therein to resell such Registrable Securities, in the case of (A) and (B), for
an aggregate of more than 20 consecutive Trading Days or for more than an
aggregate of 40 Trading Days in any 12-month period (which need not be
consecutive), other than as a result of a breach of this Agreement by a Holder
or a Holder’s failure to return a Selling Stockholder Questionnaire within the
time period provided

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by Section 2(e) hereof (any such failure or breach in clauses (i) through
(iii) above being referred to as an “Event,” and, for purposes of clauses (i) or
(ii), the date on which such Event occurs, or for purposes of clause (iii), the
date on which such 20 consecutive or 40 Trading Day period (as applicable) is
exceeded, being referred to as “Event Date”), then in lieu of any other rights
available to the Holders hereunder or under applicable law: (x) within five
(5) Business Days after each such Event Date, the Company shall pay to each
Holder an amount in cash, as liquidated damages and not as a penalty, equal to
1.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any Registrable Securities held by such Holder on the
Event Date (which remedy shall be exclusive of any other remedies available
under this Agreement or under applicable law); and (y) on each monthly
anniversary of each such Event Date (if the applicable Event shall not have been
cured by such date) until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as liquidated damages and not as a penalty,
equal to 1.0% of the aggregate purchase price paid by such Holder pursuant to
the Purchase Agreement for any Registrable Securities then held by such Holder
(which remedy shall be exclusive of any other remedies available under this
Agreement or under applicable law). The parties agree that the Company will not
be liable for liquidated damages under this Section 2(c) with respect to any
Warrants or Warrant Shares. If the Company fails to pay any liquidated damages
pursuant to this Section in full within five (5) Business Days after the date
payable, the Company will pay interest thereon at a rate of 1.5% per month (or
such lesser maximum amount that is permitted to be paid by applicable law) to
the Holder, accruing daily from the date such liquidated damages are due until
such amounts, plus all such interest thereon, are paid in full. The liquidated
damages pursuant to the terms hereof shall apply on a daily pro-rata basis for
any portion of a month prior to the cure of an Event, except in the case of the
first Event Date. In the event that the Company registers some but not all of
the Registrable Securities, the 1.0% of liquidated damages referred to above for
any monthly period shall be reduced to equal the percentage determined by
multiplying 1.0% by a fraction, the numerator of which shall be the number of
Registrable Securities for which there is not an effective Registration
Statement at such time and the denominator of which shall be the number of
Registrable Securities at such time. The Effectiveness Deadline for a
Registration Statement shall be extended without default or liquidated damages
hereunder in the event that the Company’s failure to obtain the effectiveness of
the Registration Statement on a timely basis results from (i) the failure of a
Purchaser to timely provide the Company with information requested by the
Company and necessary to complete the Registration Statement in accordance with
the requirements of the Securities Act (in which the Effectiveness Deadline
would be extended with respect to Registrable Securities held by such Purchaser)
or (ii) events or circumstances that are not in any way attributable to the
Company.
          (d) The Company shall not, from the date hereof until the date that is
60 days after the Effective Date of the Registration Statement, prepare and file
with the Commission a registration statement relating to an offering for its own
account under the Securities Act of any of its equity securities other than a
registration statement on Form S-8 or, in connection with an acquisition, on
Form S-4 unless the Closing Bid Price for the Common Stock on the Trading Day
prior to the date of filing any registration statement was greater than the
Purchase Price. For the avoidance of doubt, the Company shall not be prohibited
from preparing and filing with the Commission a registration statement relating
to an offering of Common Stock by existing stockholders of the Company under the
Securities Act pursuant to the terms of registration rights held by such
stockholders.
          (e) Each Holder agrees to furnish to the Company a completed
Questionnaire in the form attached to this Agreement as Annex B (a “Selling
Stockholder Questionnaire”) not more than ten (10) Trading Days following the
date of this Agreement. Each Holder further agrees that it shall not be entitled
to be named as a selling securityholder in a Registration Statement or use the
Prospectus for offers and resales of Registrable Securities at any time, unless
such Holder has returned to the Company a completed and signed Questionnaire. If
a Holder of Registrable Securities returns a

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Questionnaire after the deadline specified in the previous sentence, the Company
shall use its commercially reasonable efforts to take such actions as are
required to name such Holder as a selling security holder in the Registration
Statement or any pre-effective or post-effective amendment thereto and to
include (to the extent not theretofore included) in the Registration Statement
the Registrable Securities identified in such late Questionnaire. Each Holder
acknowledges and agrees that the information in the Selling Stockholder
Questionnaire will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information in the
Registration Statement.
          (f) In the event that Form S-3 is not available for the registration
of the resale of Registrable Securities hereunder, the Company shall
(i) register the resale of the Registrable Securities on another appropriate
form reasonably acceptable to the Holders and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the Commission.
     3. Registration Procedures
          In connection with the Company’s registration obligations hereunder,
the Company shall:
          (a) Not less than five Trading Days prior to the filing of a
Registration Statement and not less than one Trading Day prior to the filing of
any related Prospectus or any amendment or supplement thereto (except for Annual
Reports on Form 10-K, and Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K and any similar or successor reports), the Company shall furnish to the
Holder copies of such Registration Statement, Prospectus or amendment or
supplement thereto, as proposed to be filed, which documents will be subject to
the review of such Holder (it being acknowledged and agreed that if a Holder
does not object to or comment on the aforementioned documents within such five
(5) Trading Day or one (1) Trading Day period, as the case may be, then the
Holder shall be deemed to have consented to and approved the use of such
documents). The Company shall not file any Registration Statement or amendment
or supplement thereto in a form to which a Holder reasonably objects in good
faith, provided that, the Company is notified of such objection in writing
within the five (5) Trading Day or one (1) Trading Day period described above,
as applicable.
          (b) (i) Prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to each Registration
Statement and the Prospectus used in connection therewith as may be necessary to
keep such Registration Statement continuously effective as to the applicable
Registrable Securities for its Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented or
amended, to be filed pursuant to Rule 424; (iii) respond as promptly as
reasonably practicable to any comments received from the Commission with respect
to each Registration Statement or any amendment thereto and, as promptly as
reasonably possible, provide the Holders true and complete copies of all
correspondence from and to the Commission relating to such Registration
Statement that pertains to the Holders as “Selling Stockholders” but not any
comments that would result in the disclosure to the Holders of material and
non-public information concerning the Company; and (iv) comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of (subject to the terms of this Agreement) in accordance with the intended
methods of disposition by the Holders thereof as set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented; provided,
however, that each Purchaser shall be responsible for the

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delivery of the Prospectus to the Persons to whom such Purchaser sells any of
the Shares or the Warrant Shares (including in accordance with Rule 172 under
the Securities Act), and each Purchaser agrees to dispose of Registrable
Securities in compliance with the plan of distribution described in the
Registration Statement and otherwise in compliance with applicable federal and
state securities laws. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company filing a
report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the
Exchange Act, the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the Commission on the same day on which the Exchange Act report
which created the requirement for the Company to amend or supplement such
Registration Statement was filed.
          (c) Notify the Holders (which notice shall, pursuant to clauses
(iii) through (vi) hereof, be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made) as promptly as
reasonably possible (and, in the case of (i)(A) below, not less than three
Trading Days prior to such filing, in the case of (iii) and (iv) below, not more
than one Trading Day after such issuance or receipt, in the case of (v) below,
not less than one Trading Day after a determination by the Company that the
financial statements in any Registration Statement have become ineligible for
inclusion therein and, in the case of (vi) below, not more than one Trading Day
after the occurrence or existence of such development) and (if requested by any
such Person) confirm such notice in writing no later than one Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
any Registration Statement (in which case the Company shall provide to each of
the Holders true and complete copies of all comments that pertain to the Holders
as a “Selling Stockholder” or to the “Plan of Distribution” and all written
responses thereto, but not information that the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information that pertains to the Holders as
“Selling Stockholders” or the “Plan of Distribution”; (iii) of the issuance by
the Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or the Prospectus,
as the case may be, it 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 the case of any Prospectus, form of prospectus
or supplement thereto, in light of the circumstances under which they were
made), not misleading; and (vi) the occurrence or existence of any pending
development with respect to the Company that the Company believes may be
material and that, in the determination of the Company, makes it not in the best
interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, the Holders make no acknowledgement that any such information is
material, non-public information.

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          (d) Use commercially reasonable efforts to avoid the issuance of, or,
if issued, obtain the withdrawal of (i) any order suspending the effectiveness
of a Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, as soon as practicable.
          (e) If requested by a Holder, furnish to such Holder, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on
the Commission’s EDGAR system.
          (f) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify, unless an exemption from
registration and qualification applies, the Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Holder reasonably requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statements; provided, that the Company
shall not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action that would subject the
Company to general service of process in any jurisdiction where it is not then
so subject or subject the Company to any material tax in any such jurisdiction
where it is not then so subject.
          (g) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.
          (h) If requested by the Holders, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to the
Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement and under law, of all restrictive legends,
and to enable such Registrable Securities to be in such denominations and
registered in such names as any such Holders may reasonably request. In
connection therewith, if required by the Company’s transfer agent, the Company
shall promptly after the effectiveness of the Registration Statement cause an
opinion of counsel as to the effectiveness of the Registration Statement to be
delivered to and maintained with its transfer agent, together with any other
authorizations, certificates and directions required by the transfer agent,
which authorize and direct the transfer agent to issue such Registrable
Securities without legend upon sale by the holder of such shares of Registrable
Securities under the Registration Statement.
          (i) Following the occurrence of any event contemplated by
Section 3(c)(iii) through (vi), as promptly as reasonably practicable, prepare a
supplement or amendment, including a post-effective amendment, to the affected
Registration Statements or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any

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other required document so that, as thereafter delivered, no Registration
Statement nor any Prospectus will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of any Prospectus, form of prospectus
or supplement thereto, in light of the circumstances under which they were
made), not misleading.
          (j) (i) In the time and manner required by the Principal Market,
prepare and file with such Trading Market an additional shares listing
application covering all of the Registrable Securities, (ii) use commercially
reasonable efforts to take all steps necessary to cause such Registrable
Securities to be approved for listing on the Principal Market as soon as
possible thereafter, (iii) if requested by any Holder, provide such Holder
evidence of such listing, and (iv) during the Effectiveness Period, use
commercially reasonable efforts to maintain the listing of such Registrable
Securities on the Principal Market.
          (k) In order to enable the Holders to sell Shares or Warrant Shares
under Rule 144, for a period of two years from the Closing, the Company
covenants to use commercially reasonable efforts to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act. During such two year period, if the
Company is not required to file reports pursuant to Section 13(a) or 15(d) of
the Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act. The Company further
covenants that it will use commercially reasonable efforts to take such further
action as any Holder may reasonably request, all to the extent required from
time to time to enable such Person to sell Shares and Warrant Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act, including compliance
with the provisions of the Purchase Agreement relating to the transfer of the
Shares and Warrant Shares.
          (l) The Company may require each selling Holder to furnish to the
Company a certified statement as to (i) the number of shares of common stock
beneficially owned by such Holder and any Affiliate thereof, (ii) any NASD
affiliations, (iii) any natural persons who have the power to vote or dispose of
the common stock and (iv) any other information as may be requested by the
Commission, the NASD or any state securities commission. During any periods that
the Company is unable to meet its obligations hereunder with respect to the
registration of Registrable Securities because any Holder fails to furnish such
information within three Trading Days of the Company’s request, any liquidated
damages that are accruing at such time as to such Holder only shall be tolled
and any Event that may otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is delivered to the
Company.
     4. Registration Expenses. All fees and expenses incident to the Company’s
performance of or compliance with its obligations under this Agreement
(excluding any underwriting discounts and selling commissions and all legal fees
and expenses of legal counsel for any Holder) shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with any Trading Market on which the common stock is then listed for
trading, (B) with respect to compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of

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the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
requested by the Holders) and (C) with respect to any filing that may be
required to be made by any broker through which a Holder intends to make sales
of Registrable Securities with NASD Regulation, Inc. pursuant to the NASD
Rule 2710, so long as the broker is receiving no more than a customary brokerage
commission in connection with such sale, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
and of printing prospectuses if the printing of prospectuses is reasonably
requested by the Holders of a majority of the Registrable Securities included in
the Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any underwriting,
broker or similar fees or commissions of any Holder or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the
Holders.
     5. Indemnification.
          (a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify, defend and hold harmless each
Holder, the officers, directors, agents, partners, members, managers,
stockholders, Affiliates and employees of each of them, each Person who controls
any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, partners, members,
managers, stockholders, agents and employees of each such controlling Person, to
the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation,
reasonable costs of preparation and investigation and reasonable attorneys’
fees) and expenses (collectively, “Losses”), as incurred, that arise out of or
are based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus, or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (A) such
untrue statements, alleged untrue statements, omissions or alleged omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in the Registration Statement, such Prospectus or such
form of Prospectus or in any amendment or supplement thereto (it being
understood that each Holder has approved Annex A hereto for this purpose),
(B) in the case of an occurrence of an event of the type specified in
Section 3(c)(iii)-(vi), related to the use by a Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated and defined in Section 6(f) below, but only if and to
the extent that following the receipt of the Advice the misstatement or omission
giving rise to such Loss would have been corrected or (C) any such Losses arise
out of the Purchaser’s (or any other indemnified Person’s) failure to send or
give a copy of the Prospectus or supplement (as then amended or supplemented) to
the Persons asserting an untrue statement or alleged untrue statement or alleged
untrue statement or omission or alleged omission at or

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prior to the written confirmation of the sale of Registrable Securities to such
Person if such statement or omission was corrected in such Prospectus or
supplement. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding arising from or in connection with the
transactions contemplated by this Agreement of which the Company is aware. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified Party (as defined in Section 5(c)) and
shall survive the transfer of the Registrable Securities by the Holders.
          (b) Indemnification by Holders. Each Holder shall, notwithstanding any
termination of this Agreement, severally and not jointly, indemnify and hold
harmless the Company, its directors, officers, agents and employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising out of or are
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus, or any form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent that, such untrue statements or omissions are
based solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, (ii) to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and approved by such
Holder expressly for use in the Registration Statement (it being understood that
the Holder has approved Annex A hereto for this purpose), such Prospectus or
such form of Prospectus or in any amendment or supplement thereto or (iii) in
the case of an occurrence of an event of the type specified in
Section 3(c)(iii)-(vi), to the extent related to the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 6(f). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all reasonable fees and expenses incurred in connection with
defense thereof; provided, that the failure of any Indemnified Party to give
such notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that it
shall be finally determined by a court of competent jurisdiction (which
determination is not subject to appeal or further review) that such failure
shall have proximately and materially adversely prejudiced the Indemnifying
Party.
          An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest exists if the
same counsel were to represent such

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Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Party); provided, that the
Indemnifying Party shall not be liable for the fees and expenses of more than
one separate firm of attorneys at any time for all Indemnified Parties. The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
          Subject to the terms of this Agreement, all fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within twenty Trading Days of written notice thereof to the
Indemnifying Party; provided, that the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is finally
judicially determined to not be entitled to indemnification hereunder). The
failure to deliver written notice to the Indemnifying Party within a reasonable
time of the commencement of any such action shall not relieve such Indemnifying
Party of any liability to the Indemnified Party under this Section 5, except to
the extent that the Indemnifying Party is prejudiced in its ability to defend
such action..
          (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), (A) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the net proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission and (B) no
contribution will be made under circumstances where the maker of such
contribution would not have been required to indemnify the Indemnified Party
under the fault standards set forth in this Section 5. No person guilty of
fraudulent misrepresentation

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(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
          The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Purchase Agreement.
     6. Miscellaneous.
          (a) Remedies. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
          (b) No Piggyback on Registrations. Except and to the extent specified
in Schedule 3.1(y) to the Purchase Agreement, neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in a Registration Statement other than the
Registrable Securities, and the Company shall not prior to the Effective Date
enter into any agreement providing any such right to any of its security
holders.
          (c) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter, except for, and as provided in the Transaction Documents.
          (d) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it (unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall sell the
Registrable Securities only in accordance with a method of distribution
described in the Registration Statement.
          (e) Suspension of Trading. At any time after the Registrable
Securities are covered by an effective Registration Statement, the Company may
deliver to the Holders of such Registrable Securities a certificate (the
“Suspension Certificate”) approved by the Chief Executive Officer or Chief
Financial Officer of the Company and signed by an officer of the Company stating
that the effectiveness of and sales of Registrable Securities under the
Registration Statement would:
               (i) materially interfere with any transaction that would require
the Company to prepare financial statements under the Securities Act that the
Company would otherwise not be required to prepare in order to comply with its
obligations under the Exchange Act, or
               (ii) require public disclosure of a material transaction or event
prior to the time such disclosure might otherwise be required.
Upon receipt of a Suspension Certificate by Holders of Registrable Securities,
such Holders of Registrable Securities shall refrain from selling or otherwise
transferring or disposing of any Registrable

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Securities then held by such Holders for a specified period of time (a
“Suspension Period”) that is customary under the circumstances (not to exceed
twenty (20) days). Notwithstanding the foregoing sentence, the Company shall be
permitted to cause Holders of Registrable Securities to so refrain from selling
or otherwise transferring or disposing of any Registrable Securities on only two
(2) occasions during each twelve (12) consecutive month period that the
Registration Statement remains effective with no less than twenty (20) calendar
days in between Suspension Periods. The Company may impose stop transfer
instructions to enforce any required agreement of the Holders under this
Section 6(e).
          (f) Discontinued Disposition. Each Holder further agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in
Section 3(c)(iii)-(vi), such Holder will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until it is advised
in writing (the “Advice”) by the Company that the use of the applicable
Prospectus (as it may have been supplemented or amended) may be resumed. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. The Company agrees and acknowledges that any periods during which the
Holder is required to discontinue the disposition of the Registrable Securities
hereunder shall be subject to the provisions of Section 2(c) as qualified by
Section 3(a).
          (g) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified,
supplemented or waived unless the same shall be in writing and signed by the
Company and Holders holding a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence.
          (h) Term. The registration rights provided to the Holders of
Registrable Securities hereunder, and the Company’s obligation to keep the
Registration Statements effective, shall terminate at such time as there are no
Registrable Securities. Notwithstanding the foregoing, Section 2(c), Section 4,
Section 5, Section 6(i), Section 6(l), Section 6(m), Section 6(n), Section 6(o),
Section 6(p) and Section 6(q) shall survive the termination of this Agreement.
          (i) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be delivered as set forth
in the Purchase Agreement.
          (j) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Company may not assign its
rights or obligations hereunder without the prior written consent of all the
Holders of the then outstanding Registrable Securities (other than by merger or
consolidation or to an entity which acquires the Company including by way of
acquiring all or substantially all of the Company’s assets). The rights of the
Holders hereunder, including the right to have the Company register Registrable
Securities pursuant to this Agreement, may be assigned by each Holder to
transferees or assignees of all or any portion of the Registrable Securities,
but only if (i) the Holder agrees in writing with the transferee or assignee to
assign such rights and related obligations under this Agreement, and for the
transferee or assignee to assume such obligations, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment,
(ii) the Company is, within a reasonable time

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after such transfer or assignment, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect to which
such registration rights are being transferred or assigned, (iii) at or before
the time the Company received the written notice contemplated by clause (ii) of
this sentence, the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein and (iv) the transferee is an
“accredited investor,” as that term is defined in Rule 501 of Regulation D.
          (k) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party, it being understood that both parties
need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile or “.pdf” signature were the original thereof.
          (l) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.
          (m) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
          (n) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
          (o) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
          (p) Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. The decision of each Purchaser to purchase the Shares and
Warrants pursuant to the Transaction Documents has been made independently of
any other Purchaser. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser acknowledges that no other Purchaser has acted as agent for such
Purchaser in connection with making its investment hereunder and that no
Purchaser will be acting as agent of such Purchaser in connection with
monitoring its investment in the Shares and Warrants or enforcing its rights
under the Transaction Documents. Each Purchaser shall be entitled to protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any Proceeding for such purpose. The

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Company acknowledges that each of the Purchasers has been provided with the same
Registration Rights Agreement for the purpose of closing a transaction with
multiple Purchasers and not because it was required or requested to do so by any
Purchaser.
          (q) Currency. Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars. All amounts owing under this
Agreement are in United States Dollars. All amounts denominated in other
currencies shall be converted in the United States Dollar equivalent amount in
accordance with the applicable exchange rate in effect on the date of
calculation.
          (r) Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.
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          IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                  CARDICA, INC.    
 
           
 
  By:  /s/ Robert Y. Newell    
 
         
 
    Name:  Robert Y. Newell    
 
    Title:  CFO    

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGES OF HOLDERS TO FOLLOW]

 

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

                  NAME OF INVESTING ENTITY    
 
                Allen & Company Incorporated    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ Kim Wieland    
 
           
 
      Name: Kim Wieland    
 
      Title: CFO    
 
                ADDRESS FOR NOTICE    
 
           
 
  c/o        
 
           
 
                Street: 711 Fifth Avenue    
 
                City/State/Zip: New York, NY 10022    
 
                Attention: Kim M. Wieland    
 
                Tel: (212) 339-2370    
 
                Fax: (212) 508-5820    
 
                Email: kwieland@allenco.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                John Simon    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ John Simon    
 
           
 
      Name: John Simon    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Allen & Company LLC    
 
                Street: 711 Fifth Avenue    
 
                City/State/Zip: New York, NY 10022    
 
                Attention: John Simon    
 
                Tel: (212) 339-2295    
 
                Fax: (212) 339-2454    
 
                Email: jsimon@allenco.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Bruce Allen    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ Bruce Allen    
 
           
 
      Name: Bruce Allen    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Allen & Company    
 
                Street: 711 Fifth Avenue    
 
                City/State/Zip: New York, NY 10022    
 
                Attention: Mary Cullen    
 
                Tel: (212) 339-2341    
 
                Fax: (212) 832-8434    
 
                Email: mcullen@allenco.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Susan K. Allen    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ Susan K. Allen    
 
           
 
      Name: Susan K. Allen    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Allen & Company Incorporated    
 
                Street: 711 Fifth Avenue    
 
                City/State/Zip: New York, NY 10022    
 
                Attention: Kim M. Wieland    
 
                Tel: (212) 832-8000    
 
                Fax: (212) 832-8023    
 
                Email: kwieland@allenco.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Mary Cullen    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ Mary Cullen    
 
           
 
      Name: Mary Cullen    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Allen & Company    
 
                Street: 711 Fifth Avenue    
 
                City/State/Zip: New York, NY 10022    
 
           
 
  Attention:    
 
     
 
   
 
                Tel: (212) 339-2341    
 
                Fax: (212) 832-8434    
 
                Email: mcullen@allenco.com    

 

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

                      NAME OF INVESTING ENTITY    
 
                    Keough Partners, L.P.    
 
                    AUTHORIZED SIGNATORY    
 
                    By:    /s/ Michael L. Keough                         Name:
Michael L. Keough           Title: Managing Member    
 
                    ADDRESS FOR NOTICE    
 
               
 
  c/o                          
 
                    Street: 200 Galleria Parkway, Suite 970    
 
                    City/State/Zip: Atlanta, GA 30339    
 
               

  Attention:                        
 
                    Tel: (770) 852-5005    
 
               
 
  Fax:                        
 
               
 
  Email:                          

 

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

                  NAME OF INVESTING ENTITY    
 
                Sutter Hill Ventures, a California Limited Partnership    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ David E. Sweet    
 
           
 
      Name: David E. Sweet    
 
      Title: Managing Director of the General Partner    
 
                ADDRESS FOR NOTICE    
 
           
 
  c/o        
 
           
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Sutter Hill Entrepreneurs Fund (AI) L.P.    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ David E. Sweet    
 
           
 
      Name: David E. Sweet    
 
      Title: Managing Director of the General Partner    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Sutter Hill Entrepreneurs Fund (QP) L.P.    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ David E. Sweet    
 
           
 
      Name: David E. Sweet    
 
      Title: Managing Director of the General Partner    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                The Younger Living Trust, U/A/D 1/20/95    
 
           
 
  By:      /s/ Robert Yin    
 
           
 
      By: Robert Yin, under Power of Attorney    
 
      Name: William H. Younger, Jr., Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                The Anderson Living Trust, U/A/D 1/22/98    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ Robert Yin    
 
           
 
      By: Robert Yin, under Power of Attorney    
 
      Name: David L. Anderson, Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Anvest, L.P.    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:      /s/ David L. Anderson    
 
           
 
      Name: David L. Anderson    
 
      Title: General Partner    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                The Baker Revocable Trust, U/A/D 2/3/03    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: G. Leonard Baker, Jr., Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Jeffrey W. Bird and Christina R. Bird Trust         Agreement
dated 10/31/2000    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: Jeffrey W. Bird, Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING INDIVIDUAL    
 
                James C. Gaither    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: James C. Gaither    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Gregory P. and Sarah J.D. Sands Trustees         The Gregory P.
and Sarah J.D. Sands Trust         Agreement dated 2/24/99    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: Gregory P. Sands, Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Saunders Holdings, L.P.    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: G. Leonard Baker, Jr., General Partner    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                David E. Sweet and Robin T. Sweet as Trustees of
The David and Robin Sweet Living Trust dated 7/6/04    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ David E. Sweet
 
Name: David E. Sweet    
 
      Title: Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING INDIVIDUAL    
 
                Patricia Tom    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Patricia Tom
 
Name: Patricia Tom    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan
FBO Sherryl W. Casella    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Vicki M. Bandel
 
Name: Vicki M. Bandel
Title: Asst. V.P. & Trust Officer    
 
                ADDRESS FOR NOTICE    
 
                c/o Wells Fargo Bank, Institutional Trust Services    
 
                Street: 600 California Street, 12th Floor        
            MAC A0193-120    
 
                City/State/Zip: San Francisco, CA 94108    
 
                Attention: Vicki M. Bandel    
 
                Tel: (415) 396-3739    
 
                Fax: (415) 975-5739    
 
                Email: bandel@wellsfargo.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan
FBO Lynne B. Graw Rollover    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Vicki M. Bandel
 
Name: Vicki M. Bandel
Title: Asst. V.P. & Trust Officer    
 
                ADDRESS FOR NOTICE    
 
                c/o Wells Fargo Bank, Institutional Trust Services    
 
                Street: 600 California Street, 12th Floor        
            MAC A0193-120    
 
                City/State/Zip: San Francisco, CA 94108    
 
                Attention: Vicki M. Bandel    
 
                Tel: (415) 396-3739    
 
                Fax: (415) 975-5739    
 
                Email: bandel@wellsfargo.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan
FBO Tench Coxe    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Vicki M. Bandel
 
Name: Vicki M. Bandel
Title: Asst. V.P. & Trust Officer    
 
                ADDRESS FOR NOTICE    
 
                c/o Wells Fargo Bank, Institutional Trust Services    
 
                Street: 600 California Street, 12th Floor        
            MAC A0193-120    
 
                City/State/Zip: San Francisco, CA 94108    
 
                Attention: Vicki M. Bandel    
 
                Tel: (415) 396-3739    
 
                Fax: (415) 975-5739    
 
                Email: bandel@wellsfargo.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                James N. White and Patricia A. O’Brien, Trustees of the
White Family Trust dated 4/3/97    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
By: Robert Yin, under Power of Attorney    
 
      Name: James N. White, Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Robert Yin and Lily Yin, as Trustees of Yin Family Trust
dated March 1, 1997    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Robert Yin
 
Name: Robert Yin    
 
      Title: Trustee    
 
                ADDRESS FOR NOTICE    
 
                c/o Sutter Hill Ventures    
 
                Street: 755 Page Mill Rd., Suite A-200    
 
                City/State/Zip: Palo Alto, CA 94304-1005    
 
                Attention: Robert Yin    
 
                Tel: (650) 493-5600    
 
                Fax: 650) 858-1854    
 
                Email: robert@shv.com    

 

--------------------------------------------------------------------------------

 

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

                  CROSS CREEK CAPITAL, L.P.    
 
           
 
  By:   Cross Creek Capital GP, L.P.    
 
      Its Sole General Partner    
 
           
 
  By:   Cross Creek Capital, L.L.C.    
 
      Its Sole General Partner    
 
           
 
  By:   Wasatch Advisors, Inc.    
 
      Its Sole Member    
 
           
 
  By:   /s/ Daniel Thurber
 
Name: Daniel Thurber
Title: Vice President    
 
                ADDRESS FOR NOTICE    
 
                c/o Wasatch Advisors, Inc.    
 
                Street: 150 Social Hall Ave., 4th Floor    
 
                City/State/Zip: Salt Lake City, UT 84111    
 
                Attention: Allison Christensen/John Malooly    
 
                Tel: (801) 533-0777    
 
                Fax: (801) 533-9828    
 
           
 
  Email:   achristensen@wasatchadvisors.com    
 
      jmalooly@wasatchadvisors.com    

 

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

             
 
                CROSS CREEK CAPITAL EMPLOYEE’S FUND, L.P.    
 
           
 
  By:   Cross Creek Capital GP, L.P.
Its Sole General Partner    
 
           
 
  By:   Cross Creek Capital, L.L.C.    
 
      Its Sole General Partner    
 
           
 
  By:   Wasatch Advisors, Inc.    
 
      Its Sole Member    
 
           
 
  By:   /s/ Daniel Thurber
 
Name: Daniel Thurber
Title: Vice President    
 
                ADDRESS FOR NOTICE    
 
                c/o Wasatch Advisors, Inc.    
 
                Street: 150 Social Hall Ave., 4th Floor    
 
                City/State/Zip: Salt Lake City, UT 84111    
 
                Attention: Allison Christensen/John Malooly    
 
                Tel: (801) 533-0777    
 
                Fax: (801) 533-9828    
 
           
 
  Email:   achristensen@wasatchadvisors.com    
 
      jmalooly@wasatchadvisors.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Wasatch Advisors, Inc. as Investment Advisors for Wasatch
Funds, Inc. on behalf of Wasatch Micro Cap Fund    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Daniel Thurber
 
Name: Daniel Thurber    
 
      Title: VP    
 
                ADDRESS FOR NOTICE    
 
                c/o Wasatch Advisors, Inc.    
 
                Street: 150 Social Hall Ave., 4th Floor    
 
                City/State/Zip: Salt Lake City, UT 84111    
 
                Attention: Allison Christensen/John Malooly    
 
                Tel: (801) 533-0777    
 
                Fax: (801) 533-9828    
 
           
 
  Email:   achristensen@wasatchadvisors.com    
 
      jmalooly@wasatchadvisors.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Wasatch Advisors, Inc. as Investment Advisors for Wasatch
Funds, Inc. on behalf of Wasatch Micro Cap Value Fund    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Daniel Thurber
 
Name: Daniel Thurber    
 
      Title: VP    
 
                ADDRESS FOR NOTICE    
 
                c/o Wasatch Advisors, Inc.    
 
                Street: 150 Social Hall Ave., 4th Floor    
 
                City/State/Zip: Salt Lake City, UT 84111    
 
                Attention: Allison Christensen/John Malooly    
 
                Tel: (801) 533-0777    
 
                Fax: (801) 533-9828    
 
           
 
  Email:   achristensen@wasatchadvisors.com    
 
      jmalooly@wasatchadvisors.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                John Michael Egan    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ John Michael Egan
 
Name:    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
           
 
  c/o    
 
   
 
                Street: 1417 Vail Valley Drive    
 
                City/State/Zip: Vail, CO 81657    
 
                Attention: Mike Egan    
 
                Tel: (650) 245-1218    
 
                Fax: (970) 479-9753    
 
                Email: mike9egan@msn.com    

 

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

                  NAME OF INVESTING ENTITY    
 
                Irwin Lieber    
 
                AUTHORIZED SIGNATORY    
 
           
 
  By:        /s/ Irwin Lieber
 
Name:    
 
      Title:    
 
                ADDRESS FOR NOTICE    
 
                c/o Irwin Lieber    
 
                Street: 8 Applegreen Drive    
 
                City/State/Zip: Old Westbury, N.Y. 11568    
 
                Attention: Irwin Lieber    
 
                Tel: (212) 918-0548    
 
                Fax: (212) 486-4469    
 
                Email: irwin@geocap.com    

 

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Annex A
PLAN OF DISTRIBUTION
     We are registering the shares of common stock issued to the selling
stockholders and issuable upon exercise of the warrants issued to the selling
stockholders to permit the resale of these shares of common stock by the holders
of the shares of common stock and warrants from time to time after the date of
this prospectus. We will not receive any of the proceeds from the sale by the
selling stockholders of the shares of common stock. We will bear all fees and
expenses incident to our obligation to register the shares of common stock.
     The selling stockholders may sell all or a portion of the shares of common
stock beneficially owned by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of
common stock are sold through underwriters or broker-dealers, the selling
stockholders will be responsible for underwriting discounts or commissions or
agent’s commissions. The shares of common stock may be sold on any national
securities exchange or quotation service on which the securities may be listed
or quoted at the time of sale, in the over-the-counter market or in transactions
otherwise than on these exchanges or systems or in the over-the-counter market
and in one or more transactions at fixed prices, at prevailing market prices at
the time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions. The selling stockholders may use any one
or more of the following methods when selling shares:

•   ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

•   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

•   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

•   an exchange distribution in accordance with the rules of the applicable
exchange;

•   privately negotiated transactions;

•   settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

•   broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

•   through the writing or settlement of options or other hedging transactions,
whether such options are listed on an options exchange or otherwise;

•   a combination of any such methods of sale; and

•   any other method permitted pursuant to applicable law.

     The selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act, as
permitted by that rule, or Section 4(1) under the Securities Act, if available,
rather than under this prospectus, provided that they meet the criteria and
conform to the requirements of those provisions.

 

--------------------------------------------------------------------------------

 

     Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. If the selling stockholders effect such
transactions by selling shares of common stock to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal. Such
commissions will be in amounts to be negotiated, but, except as set forth in a
supplement to this Prospectus, in the case of an agency transaction will not be
in excess of a customary brokerage commission in compliance with NASD Rule 2440;
and in the case of a principal transaction a markup or markdown in compliance
with NASD IM-2440.
     In connection with sales of the shares of common stock or otherwise, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
shares of common stock in the course of hedging in positions they assume. The
selling stockholders may also sell shares of common stock short and if such
short sale shall take place after the date that this Registration Statement is
declared effective by the Commission, the selling stockholders may deliver
shares of common stock covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling
stockholders may also loan or pledge shares of common stock to broker-dealers
that in turn may sell such shares, to the extent permitted by applicable law.
The selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
Notwithstanding the foregoing, the selling stockholders have been advised that
they may not use shares registered on this registration statement to cover short
sales of our common stock made prior to the date the registration statement, of
which this prospectus forms a part, has been declared effective by the SEC.
     The selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the warrants or shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling stockholders to
include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer
and donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.
     The selling stockholders and any broker-dealer or agents participating in
the distribution of the shares of common stock may be deemed to be
“underwriters” within the meaning of Section 2(11) of the Securities Act in
connection with such sales. In such event, any commissions paid, or any
discounts or concessions allowed to, any such broker-dealer or agent and any
profit on the resale of the shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. Selling
Stockholders who are “underwriters” within the meaning of Section 2(11) of the
Securities Act will be subject to the prospectus delivery requirements of the
Securities Act and may be subject to certain statutory liabilities of, including
but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5
under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
     Each selling stockholder has informed the Company that it is not a
registered broker-dealer and does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the common
stock. Upon the Company being notified in writing by a selling stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of common stock through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplement to
this prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act,

 

--------------------------------------------------------------------------------

 

disclosing (i) the name of each such selling stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such the shares of common stock were sold, (iv) the commissions
paid or discounts or concessions allowed to such broker-dealer(s), where
applicable, (v) that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in this prospectus,
and (vi) other facts material to the transaction. In no event shall any
broker-dealer receive fees, commissions and markups, which, in the aggregate,
would exceed eight percent (8%).
     Under the securities laws of some states, the shares of common stock may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
     There can be no assurance that any selling stockholder will sell any or all
of the shares of common stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.
     Each selling stockholder and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of common stock by the selling
stockholder and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
     We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that each selling
stockholder will pay all underwriting discounts and selling commissions, if any,
and any legal expenses incurred by it. We will indemnify the selling
stockholders against certain liabilities, including some liabilities under the
Securities Act, in accordance with a registration rights agreement, or the
selling stockholders will be entitled to contribution. We may be indemnified by
the selling stockholders against civil liabilities, including liabilities under
the Securities Act, that may arise from any written information furnished to us
by the selling stockholders specifically for use in this prospectus, in
accordance with the related registration rights agreements, or we may be
entitled to contribution.

 

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Annex B
CARDICA, INC.
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
     The undersigned holder of shares of the common stock, par value $0.001 per
share, of Cardica, Inc., a Delaware corporation (the “Company”), issued pursuant
to a certain Securities Purchase Agreement by and among the Company and the
Purchasers named therein, dated as of ___, 2007 (the “Agreement”), understands
that the Company intends to file with the Securities and Exchange Commission a
registration statement on Form S-3 (the “Resale Registration Statement”) for the
registration and the resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities in accordance with
the terms of the Agreement. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Agreement.
     In order to sell or otherwise dispose of any Registrable Securities
pursuant to the Resale Registration Statement, a holder of Registrable
Securities generally will be required to be named as a selling stockholder in
the related prospectus or a supplement thereto (as so supplemented, the
“Prospectus”), deliver the Prospectus to purchasers of Registrable Securities
(including pursuant to Rule 172 under the Securities Act) and be bound by the
provisions of the Agreement (including certain indemnification provisions, as
described below). Holders must complete and deliver this Notice and
Questionnaire in order to be named as selling stockholders in the Prospectus.
Holders of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire within ten (10) Trading Days following the date of the
Agreement (1) will not be named as selling stockholders in the Resale
Registration Statement or the Prospectus and (2) may not use the Prospectus for
resales of Registrable Securities.
     Certain legal consequences arise from being named as a selling stockholder
in the Resale Registration Statement and the Prospectus. Holders of Registrable
Securities are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the Resale
Registration Statement and the Prospectus.
NOTICE
     The undersigned holder (the “Selling Stockholder”) of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities owned by it and listed below in Item
(3), unless otherwise specified in Item (3), pursuant to the Resale Registration
Statement. The undersigned, by signing and returning this Notice and
Questionnaire, understands and agrees that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Agreement.
     The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
1. Name.

     
(a)
  Full Legal Name of Selling Stockholder:
 
   
 
   
 
   

 

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(b)
  Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
 
   
 
   
 
   
(c)
  Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
 
   
 
   

2. Address for Notices to Selling Stockholder:

       
 
     
 
     
 
   
Telephone:
   
 
   
 
   
Fax:
   
 
   
 
   
Contact Person:
   
 
   
 
   
E-mail address of Contact Person:
   
 
   

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the
Purchase Agreement:

     
(a)
  Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:
 
   
 
   
 
   
 
   
 
   
 
   
 
   
(b)
  Number of shares of common stock to be registered pursuant to this Notice for
resale:
 
   
 
   
 
   
 
   
 
   
 
   

4. Broker-Dealer Status:

  (a)   Are you a broker-dealer?

Yes                     No

  (b)   If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

Yes                      No

 

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Note:
  If no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

  (c)   Are you an affiliate of a broker-dealer?

Yes                     No

     
Note:
  If yes, provide a narrative explanation below:
 
   
 
   
 
   
 
   

  (c)   If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

Yes                     No

     
Note:
  If no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
(a) Type and amount of other securities beneficially owned:

     
 
   
 
   
 
   

6. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
State any exceptions here:

     
 
   
 
   
 
   

 

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7. Plan of Distribution:
The undersigned has reviewed the form of Plan of Distribution attached as Annex
A to the Registration Rights Agreement, and hereby confirms that, except as set
forth below, the information contained therein regarding the undersigned and its
plan of distribution is correct and complete.

     
 
  State any exceptions here:
 
   
 
   
 
   
 
   

***********
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of any applicable Resale Registration
Statement. All notices hereunder and pursuant to the Agreement shall be made in
writing, by hand delivery, confirmed or facsimile transmission, first-class mail
or air courier guaranteeing overnight delivery at the address set forth below.
In the absence of any such notification, the Company shall be entitled to
continue to rely on the accuracy of the information in this Notice and
Questionnaire.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Resale Registration Statement and the Prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration
Statement and the Prospectus.
By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder, particularly Regulation M
in connection with any offering of Registrable Securities pursuant to the Resale
Registration Statement. The undersigned also acknowledges that it understands
that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and
any amendments or supplements thereto filed with the Commission pursuant to the
Securities Act.
The undersigned hereby acknowledges and is advised of the following
Interpretation A.65 of the July 1997 SEC Manual of Publicly Available Telephone
Interpretations regarding short selling:
“An Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective. One of the selling stockholders wanted
to do a short sale of common stock “against the box” and cover the short sale
with registered shares after the effective date. The issuer was advised that the
short sale could not be made before the registration statement become effective,
because the shares underlying the short sale are deemed to be sold at the time
such sale is made. There would, therefore, be a violation of Section 5 if the
shares were effectively sold prior to the effective date.”
By returning this Questionnaire, the undersigned will be deemed to be aware of
the foregoing interpretation.
I confirm that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are correct.

 

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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

                      Dated:       Beneficial Owner:        
 
 
 
         
 
   
 
                   
 
      By:                              
 
          Name:        
 
          Title:        

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
Nicholas J. Wunderlich
A.G. Edwards & Sons, Inc.
One North Jefferson
St. Louis, Missouri 63103
Tel: (314) 955-6719
Fax: (314) 955-6996
Email: nicholas.wunderlich@agedwards.com