Exhibit 10.16
EXECUTION VERSION
CONSENT TO GRANT OF REGISTRATION RIGHTS AND
AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
     This Consent to Grant of Registration Rights and Amendment to Amended and
Restated Investor Rights Agreement (this “Consent and Amendment”) is entered
into this 7th day of November, 2006, by and among Cardica, Inc., a Delaware
corporation (the “Company”), and the stockholders set forth on Exhibit A hereto
(the “Stockholders”).
     Whereas, the Stockholders and certain other holders of common stock of the
Company have certain registration rights (the “Existing Rights”) pursuant to
Section 2 of that certain Amended and Restated Investor Rights Agreement entered
into as of August 19, 2003, by and among the Company, the Stockholders and the
other holders of the Company’s capital stock named therein (as amended to date,
the “Rights Agreement”). Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Rights Agreement;
     Whereas, Section 2.11 of the Rights Agreement provides that any provision
of Section 2 of the Rights Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively) with the written consent of the Company and the
Holders of at least a majority of the Registrable Securities then outstanding;
     Whereas, Section 2.12 of the Rights Agreement provides that, except in
limited circumstances, the Company shall not, without the prior written consent
of the Holders of at least a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder registration rights
pari passu or senior to those granted to the Holders under the Rights Agreement;
     Whereas, the Stockholders are the Holders of at least a majority of the
Registrable Securities currently outstanding;
     Whereas, the Company intends to grant registration rights to Guidant
Investment Corporation, a California corporation (including its successor in
interest and affiliates, “Guidant”), that would require an amendment to
Section 2 the Rights Agreement and the consent required by Section 2.12 of the
Rights Agreement; and
     Whereas, to enable the Company to consummate the transactions contemplated
with Guidant, the Stockholders desire to consent to the granting of registration
rights to Guidant, and the Company and the Stockholders desire to amend the
Rights Agreement as provided herein.
     Now, Therefore, in consideration of the foregoing premises and the mutual
covenants and conditions set forth below, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties to this
Consent and Amendment, intending to be legally bound, agree as follows:

 

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     1. Consent to Grant of Registration Rights. The Stockholders, on behalf of
all Holders of Registrable Securities, hereby consent, pursuant to Sections 2.11
and 2.12 of the Rights Agreement, to the granting of the registration rights to
Guidant as set forth in the Registration Rights Agreement in substantially the
form attached hereto as Exhibit B.
     2. Amendments to Rights Agreement.
     (a) Amendments to Section 2.2(b). Section 2.2(b) of the Rights Agreement is
hereby amended to read in its entirely as follows:
“If the Initiating Holders intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to this Section 2.2 or any
request pursuant to Section 2.4 and the Company shall include such information
in the written notice referred to in Section 2.2(a) or Section 2.4(a), as
applicable. In such event, the right of any Holder to include its Registrable
Securities in such registration shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). Notwithstanding any other provision of this
Section 2.2 or Section 2.4, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders and the Registration Rights
Agreement Holders (as defined below), who are entitled to include shares in such
registration pursuant to Section 2.3 of the Registration Rights Agreement (as
defined below) on a pro rata basis based on the number of Piggyback Registrable
Securities (as defined below) held by all such Holders (including the Initiating
Holders) and Registration Rights Agreement Holders. Any Piggyback Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
the registration. For purposes of this Agreement, “Registration Rights
Agreement” shall mean that certain Registration Rights Agreement by and between
the Company and Guidant Investment Corporation dated as of November 7, 2006,
“Registration Rights Agreement Holders” shall mean all “Holders” as defined
Registration Rights Agreement, and “Piggyback Registrable Securities” shall mean
Registrable Securities under this Agreement and all Registrable Securities as
defined in the Registration Rights Agreement.”
     (b) Amendments to Section 2.3. Section 2.3(a) of the Rights Agreement is
hereby amended and restated to read in its entirety as follows:

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“Underwriting. If the registration statement under which the Company gives
notice under this Section 2.3 is for an underwritten offering, the Company shall
so advise the Holders of Registrable Securities. In such event, the right of any
such Holder to be included in a registration pursuant to this Section 2.3 shall
be conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company (or, in the case of a registration statement
initiated by shareholders of the Company, the underwriter selected by such
shareholders that is reasonably acceptable to the Company). Notwithstanding any
other provision of the Agreement, if the underwriter determines in good faith
that marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated (a) in the case of a registration statement initiated by the
Company for any offering of shares by the Company, first, to the Company;
second, to the Holders and Registration Rights Agreement Holders on a pro rata
basis based on the total number of Piggyback Registrable Securities (as defined
below) held by the Holders and Registration Rights Agreement Holders; and third,
to any other shareholder of the Company (other than a Holder or a Registration
Rights Agreement Holder) on a pro rata basis and (b) in the case of a
registration statement initiated by the Registration Rights Agreement Holders,
first, to the Registration Rights Agreement Holders on a pro rata basis based on
the total number of Registrable Securities (as defined in the Registration
rights Agreement) held by the Registration Rights Agreement Holders; second, to
the Holders on a pro rata basis based on the total number of Registrable
Securities held by the Holders; and third, to any other shareholder of the
Company (other than a Holder or Registration Rights Agreement Holder) on a pro
rata basis. In the case of a registration initiated by the Company for the sale
of shares by the Company, no such reduction shall (i) reduce the securities
being offered by the Company for its own account to be included in the
registration and underwriting, or (ii) reduce the amount of securities of the
selling Holders and the selling Registration Rights Agreement Holders included
in the registration below twenty percent (20%) of the total amount of securities
included in such registration. Notwithstanding the foregoing or anything herein
to the contrary, in no event will shares of any Holder be included in such
registration if such registration is a registration pursuant to Section 2.2 of
the Registration Rights Agreement and such inclusion would reduce the number of
shares which may be included by Registration Rights Agreement Holders without
the written consent of Registration Rights Agreement Holders of not less than a
majority of the Registrable Securities (as defined in the Registration Rights
Agreement) proposed to be sold in the offering. Additionally, in no event will
shares of any other selling shareholder, other than the Registration Rights
Agreement Holders as set forth above, be included in such registration which
would reduce the number of shares which may be included by Holders without the
written consent of Holders

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of not less than a majority of the Registrable Securities proposed to be sold in
the offering. If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to the Company and
the underwriter, delivered at least ten (10) business days prior to the
effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration. For any Holder which is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing person shall be deemed to be a single “Holder,”
and any pro rata reduction with respect to such “Holder” shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such “Holder,” as defined in this sentence.”
     3. No Other Amendment. Except as modified by this Consent and Amendment,
the Rights Agreement shall remain in full force and effect in all respects
without any modification. By executing this Consent and Amendment below, the
Company and the Stockholders certify that this Consent and Amendment has been
executed and delivered in compliance with the terms of Sections 2.11 and 2.12 of
the Rights Agreement. This Consent and Amendment shall become effective when
executed and delivered by the Stockholders and the Company as provided under
Sections 2.11 and 2.12 of the Agreement.
     4. Counterparts. This Consent and Amendment may be executed in counterparts
(including by facsimile or portable document format (.PDF)), each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
[Remainder of Page Intentionally Left Blank]

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     In Witness Whereof, the undersigned have executed this Consent to Grant of
Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement as of the date first written above.

            COMPANY:

Cardica, Inc.
      By:   /s/ Bernard Hausen         Bernard Hausen, M.D., Ph.D.             

 

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     In Witness Whereof, the undersigned have executed this Consent to Grant of
Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement as of the date first written above.

                      STOCKHOLDERS:    
 
                    Guidant Investment Corporation    
 
                    By:   /s/ Lawrence J. Knopf                       Print
Name:   Lawrence J. Knopf         Print Title:   Vice President – Legal and
Secretary    

 

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     In Witness Whereof, the undersigned have executed this Consent to Grant of
Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement as of the date first written above.

                      STOCKHOLDERS:    
 
                    Allen & Company Incorporated    
 
                    By:   /s/ Kim M. Wieland                       Print Name:  
Kim M. Wieland         Print Title:   Chief Financial Officer    

 

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     In Witness Whereof, the undersigned have executed this Consent to Grant of
Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement as of the date first written above.

                      STOCKHOLDERS:    
 
                    Sutter Hill Ventures, a California Limited Partnership    
 
                    By:   /s/ William H. Younger, Jr.                      
Print Name:   William H. Younger, Jr.         Print Title:   Managing Director
of the General Partner    
 
                    Sutter Hill Entrepreneurs’ Fund (AI), L.P.    
 
                    By:   /s/ William H. Younger, Jr.                      
Print Name:   William H. Younger, Jr.         Print Title:   Managing Director
of the General Partner    
 
                    Sutter Hill Entrepreneurs’ Fund (QP), L.P.    
 
                    By:   /s/ William H. Younger, Jr.                      
Print Name:   William H. Younger, Jr.         Print Title:   Managing Director
of the General Partner    

 

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Exhibit A
STOCKHOLDERS
Guidant Investment Corporation
Allen & Company Incorporated
Sutter Hill Ventures, a California Limited Partnership
Sutter Hill Entrepreneurs’ Fund (AI), L.P.
Sutter Hill Entrepreneurs’ Fund (QP), L.P.

 

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Exhibit B
REGISTRATION RIGHTS AGREEMENT