Exhibit 10.15
SECURITIES PURCHASE AGREEMENT
     This Securities Purchase Agreement (this “Agreement”) is dated as of
June 7, 2007, by and among Cardica, Inc., a Delaware corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
RECITALS
          A. The Company and each Purchaser is executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the
United States Securities and Exchange Commission (the “Commission”) under the
Securities Act.
          B. Each Purchaser, severally and not jointly, wishes to purchase, and
the Company wishes to sell, upon the terms and conditions stated in this
Agreement, (i) that aggregate number of shares of the common stock, par value
$0.001 per share (the “Common Stock”), of the Company, set forth below such
Purchaser’s name on the signature page of this Agreement (which aggregate amount
for all Purchasers together shall be 2,301,337 shares of Common Stock and shall
be collectively referred to herein as the “Shares”) and (ii) warrants, in
substantially the form attached hereto as Exhibit A (the “Warrants”), to acquire
up to that number of additional shares of Common Stock equal to 25% of the
number of Shares purchased by such Purchaser (rounded up to the nearest whole
share) (the shares of Common Stock issuable upon exercise of or otherwise
pursuant to the Warrants collectively are referred to herein as the “Warrant
Shares”).
          C. The Shares, the Warrants and the Warrant Shares collectively are
referred to herein as the “Securities”.
          D. The Company has engaged A.G. Edwards & Sons, Inc. as lead placement
agent (the “Lead Placement Agent”) and Allen & Company LLC as co-placement agent
(the “Co-Placement Agent” and together with the Lead Placement Agent, the
“Placement Agents”) for the offering of the Shares and Warrants on a “best
efforts” basis.
          E. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, substantially in the form attached hereto as Exhibit B (the
“Registration Rights Agreement”), pursuant to which, among other things, the
Company will agree to provide certain registration rights with respect to the
Shares and the Warrant Shares under the Securities Act and the rules and
regulations promulgated thereunder and applicable state securities laws.
     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 the Purchasers hereby
agree as follows:
ARTICLE I.
DEFINITIONS
     1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms shall have
the meanings indicated in this Section 1.1:

 

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          “Action” means any action, suit, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation pending or, to the Company’s Knowledge, threatened in writing (or
otherwise) against the Company or any of their respective properties or any
officer, director or employee of the Company acting in his or her capacity as an
officer, director or employee before or by any federal, state, county, local or
foreign court, arbitrator, governmental or administrative agency, regulatory
authority, stock market, stock exchange or trading facility.
          “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, Controls, is
controlled by or is under common control with such Person, as such terms are
used in and construed under Rule 144. With respect to a Purchaser, any
investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.
          “Agreement” shall have the meaning ascribed to such term in the
Preamble.
          “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.
          “Buy-In” has the meaning set forth in Section 4.1(f).
          “Buy-In Price” has the meaning set forth in Section 4.1(f).
          “Closing” means the closing of the purchase by the Purchasers listed
on Annex A-1 hereto and sale by the Company of Shares and Warrants to such
Purchasers pursuant to this Agreement on the Closing Date as provided in
Section 2.1(a) hereof.
          “Closing Bid Price” means, for any security as of any date, the last
closing price for such security on the Principal Trading Market, as reported by
Bloomberg, or, if the Principal Trading Market begins to operate on an extended
hours basis and does not designate the closing bid price then the last bid price
of such security prior to 4:00 p.m., New York City Time, as reported by
Bloomberg, or, if the Principal Trading Market is not the principal securities
exchange or trading market for such security, the last closing price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the last closing price of such security in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for such security by
Bloomberg, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price of such security on such date shall be the fair market value as mutually
determined by the Company and the holder. If the Company and the holder are
unable to agree upon the fair market value of such security, then such dispute
shall be resolved pursuant to Section 10 of the Warrants. All such
determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.
          “Closing Date” means the second (2nd) Trading Day after the date on
which this Agreement has been executed and delivered by all parties hereto,
unless on such date the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2
(other than those to be satisfied at the Closing or Second Closing) shall not
have been satisfied or waived, in which case the Closing Date shall be on the
second (2nd) Trading Day after the date on which the last to be satisfied or
waived of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 (other than
those to be satisfied at the Closing or Second Closing) shall have been
satisfied or waived.
          “Commission” has the meaning set forth in the Recitals.

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          “Common Stock” has the meaning set forth in the Recitals, and also
includes any securities into which the Common Stock may hereafter be
reclassified or changed.
          “Common Stock Equivalents” means any securities of the Company which
would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common
Stock.
          “Company Counsel” means Cooley Godward Kronish LLP.
          “Company Deliverables” has the meaning set forth in Section 2.2(a).
          “Company’s Knowledge” means with respect to any statement made to the
knowledge of the Company, that the statement is based upon the actual knowledge
of the officers of the Company having responsibility for the matter or matters
that are the subject of the statement.
          “Control” (including the terms “controlling”, “controlled by” or
“under common control with”) means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
          “Disclosure Materials” has the meaning set forth in Section 3.1(h).
          “Effective Date” means the date on which the initial Registration
Statement required by Section 2(a) of the Registration Rights Agreement is first
declared effective by the Commission.
          “Effectiveness Deadline” means the date on which the initial
Registration Statement is required to be declared effective by the Commission
under the terms of the Registration Rights Agreement.
          “Environmental Laws” has the meaning set forth in Section 3.1(l).
          “Exchange Act” means the Securities Exchange Act of 1934, as amended,
or any successor statute, and the rules and regulations promulgated thereunder.
          “GAAP” means U.S. generally accepted accounting principles, as applied
by the Company.
          “Intellectual Property” has the meaning set forth in Section 3.1(r).
          “Irrevocable Transfer Agent Instructions” means, with respect to the
Company, the Irrevocable Transfer Agent Instructions, in the form of Exhibit E,
executed by the Company and delivered to and acknowledged in writing by the
Transfer Agent.
          “Lien” means any lien, charge, claim, encumbrance, security interest,
right of first refusal, preemptive right or other restrictions of any kind.
          “Material Adverse Effect” means a material adverse effect on the
results of operations, assets, business or financial condition of the Company,
except that any of the following, either alone or in combination, shall not be
deemed a Material Adverse Effect: (i) effects caused by changes or circumstances
affecting general market conditions in the U.S. economy or which are generally
applicable to the industry in which the Company operates, (ii) effects resulting
from or relating to the announcement or disclosure of the sale of the Securities
or other transactions contemplated by this Agreement, or (iii) effects caused by
any

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event, occurrence or condition resulting from or relating to the taking of any
action in accordance with this Agreement.
          “Material Contract” means any contract of the Company that has been
filed or was required to have been filed as an exhibit to the SEC Reports
pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.
          “Material Permits” has the meaning set forth in Section 3.1(p).
          “New York Courts” means the state and federal courts sitting in the
City of New York, Borough of Manhattan.
          “Outside Date” means June 30, 2007.
          “Person” means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
          “Placement Agent Fee” means the cash fee to be paid to the Placement
Agents for services rendered to the Company in connection with the offering of
the Shares and Warrants.
          “Principal Trading Market” means the Trading Market on which the
Common Stock is primarily listed on and quoted for trading, which, as of the
date of this Agreement and 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.
          “Purchase Price” means $5.16 per unit.
          “Purchaser Deliverables” has the meaning set forth in Section 2.2(b).
          “Registration Rights Agreement” has the meaning set forth in the
Recitals.
          “Registration Statement” means a registration statement meeting the
requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Registrable Securities (as defined in the
Registration Rights Agreement).
          “Required Approvals” has the meaning set forth in Section 3.1(e).
          “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.
          “SEC Reports” has the meaning set forth in Section 3.1(h).
          “Second Closing” means the closing of the purchase by the Purchasers
listed on Annex A-2 hereto and sale by the Company of Shares and Warrants to
such Purchasers pursuant to this Agreement on the Second Closing Date as
provided in Section 2.1(a) hereof.
          “Second Closing Date” means June 21, 2007, unless on such date the
conditions set forth in 2.1, 2.2, 5.3 and 5.4 (other than those to be satisfied
at the Second Closing) shall not have been satisfied or

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waived, in which case the Second Closing Date shall be on the second (2nd)
Trading Day after the date on which the last to be satisfied or waived of the
conditions set forth in Sections 2.1, 2.2, 5.3 and 5.4 (other than those to be
satisfied at the Second Closing) shall have been satisfied or waived.
          “Secretary’s Certificate” has the meaning set forth in
Section 2.2(a)(vii).
          “Securities Act” means the Securities Act of 1933, as amended.
          “Short Sales” include, without limitation, (i) all “short sales” as
defined in Rule 200 promulgated under Regulation SHO under the Exchange Act,
whether or not against the box, and all types of direct and indirect stock
pledges, forward sale contracts, options, puts, calls, short sales, swaps, “put
equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act) and
similar arrangements (including on a total return basis), and (ii) sales and
other transactions through non-U.S. broker dealers or foreign regulated brokers.
          “Subscription Amount” means with respect to each Purchaser, the
aggregate amount to be paid for the Shares and the related Warrants purchased
hereunder as indicated on such Purchaser’s signature page to this Agreement next
to the heading “Aggregate Purchase Price (Subscription Amount)”.
          “Subsidiary” means any entity in which the Company, directly or
indirectly, owns capital stock or holds an equity or similar interest.
          “Trading Affiliate” has the meaning set forth in Section 3.2(h).
          “Trading Day” means (i) a day on which the Common Stock is listed or
quoted and traded on its Principal Trading 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 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 the OTC Bulletin Board on which the Common
Stock is listed or quoted for trading on the date in question.
          “Transaction Documents” means this Agreement, the schedules and
exhibits attached hereto, the Warrants, the Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions and any other documents or agreements
executed in connection with the transactions contemplated hereunder.
          “Transfer Agent” means Computershare Trust Company, N.A., or any
successor transfer agent for the Company.
          “Warrants” has the meaning set forth in the Recitals to this
Agreement.
ARTICLE II.
PURCHASE AND SALE
     2.1 Closing.

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          (a) Amount. Subject to the terms and conditions set forth in this
Agreement, at the Closing, the Company shall issue and sell to each Purchaser
listed on Annex A-1 hereto, and each Purchaser listed on Annex A-1 hereto shall,
severally and not jointly, purchase from the Company, such number of Shares of
Common Stock equal to the quotient resulting from dividing (i) the aggregate
purchase price for such Purchaser, as indicated below such Purchaser’s name on
the signature page of this Agreement (the “Subscription Amount”) by (ii) the
Purchase Price, rounded down to the nearest whole Share. In addition, each
Purchaser listed on Annex A-1 hereto shall receive a Warrant to purchase a
number of Warrant Shares equal to 25% of the number of Shares purchased by such
Purchaser, as indicated below such Purchaser’s name on the signature page to
this Agreement. The Warrants shall have an exercise price equal to $5.65 per
Warrant Share. Subject to the terms and conditions set forth in this Agreement,
at the Second Closing, the Company shall issue and sell to each Purchaser listed
on Annex A-2 hereto, and each Purchaser listed on Annex A-2 hereto shall,
severally and not jointly, purchase from the Company, such number of Shares of
Common Stock equal to the quotient resulting from dividing (i) its Subscription
Amount by (ii) the Purchase Price, rounded down to the nearest whole Share. In
addition, each Purchaser listed on Annex A-2 hereto shall receive a Warrant to
purchase a number of Warrant Shares equal to 25% of the number of Shares
purchased by such Purchaser, as indicated below such Purchaser’s name on the
signature page to this Agreement.
          (b) Closing. The Closing and Second Closing of the purchase and sale
of the Shares and Warrants shall take place at the offices of Cooley Godward
Kronish LLP, 3175 Hanover Street, Palo Alto, California on the Closing Date and
Second Closing Date, respectively, or at such other locations or remotely by
facsimile transmission or other electronic means as the parties may mutually
agree.
          (c) Form of Payment. On the Closing Date, (i) each Purchaser listed on
Annex A-1 hereto shall wire its Subscription Amount, in United States dollars
and in immediately available funds, in the amount set forth as the “Aggregate
Purchase Price (Subscription Amount)” indicated below such Purchaser’s name on
the applicable signature page hereto by wire transfer to the Company’s account,
as set forth in instructions previously provided to the Purchasers, (ii) the
Company shall irrevocably instruct the Transfer Agent to deliver to each
Purchaser listed on Annex A-1 hereto one or more stock certificates, free and
clear of all restrictive and other legends except as expressly provided in
Section 4.1(b) hereof, evidencing the number of Shares such Purchaser is
purchasing as is set forth on such Purchaser’s signature page to this Agreement
next to the heading “Number of Shares to be Acquired”, within three (3) Business
Days after the Closing and (iii) the Company shall issue to each Purchaser
listed on Annex A-1 hereto a Warrant pursuant to which such Purchaser shall have
the right to acquire such number of Warrant Shares as is set forth on such
Purchaser’s signature page to this Agreement next to the heading “Underlying
Shares Subject to Warrant”, in the case of clauses (ii) and (iii), duly executed
on behalf of the Company and registered in the name of such Purchaser. On the
Second Closing Date, (i) each Purchaser listed on Annex A-2 hereto shall wire
its Subscription Amount, in United States dollars and in immediately available
funds, in the amount set forth as the “Aggregate Purchase Price (Subscription
Amount)” indicated below such Purchaser’s name on the applicable signature page
hereto by wire transfer to the Company’s account, as set forth in instructions
previously provided to the Purchasers, (ii) the Company shall irrevocably
instruct the Transfer Agent to deliver to each Purchaser listed on Annex A-2
hereto one or more stock certificates, free and clear of all restrictive and
other legends except as expressly provided in Section 4.1(b) hereof, evidencing
the number of Shares such Purchaser is purchasing as is set forth on such
Purchaser’s signature page to this Agreement next to the heading “Number of
Shares to be Acquired”, within three (3) Business Days after the Second Closing
and (iii) the Company shall issue to each Purchaser listed on Annex A-2 hereto a
Warrant pursuant to which such Purchaser shall have the right to acquire such
number of Warrant Shares as is set forth on such Purchaser’s signature page to
this Agreement next to the heading “Underlying Shares Subject to Warrant”, in
the case of clauses (ii) and (iii), duly executed on behalf of the Company and
registered in the name of such Purchaser.

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     2.2 Closing Deliveries. (a) On or prior to the Closing with respect to the
Purchasers listed on Annex A-1 hereto or on or prior to the Second Closing with
respect to the Purchasers listed on Annex A-2 hereto, the Company shall issue,
deliver or cause to be delivered to such Purchaser the following (the “Company
Deliverables”):
               (i) this Agreement, duly executed by the Company;
               (ii) facsimile copies of one or more stock certificates, free and
clear of all restrictive and other legends except as provided in Section 4.1(b)
hereof, evidencing the Shares subscribed for by such Purchaser hereunder,
registered in the name of such Purchaser as set forth on the Stock Certificate
Questionnaire included as Exhibit C-2 hereto (the “Stock Certificates”), with
the original Stock Certificates delivered within three (3) Business Days of
Closing;
               (iii) a Warrant, executed by the Company and registered in the
name of such Purchaser as set forth on the Stock Certificate Questionnaire
included as Exhibit C-2 hereto, pursuant to which such Purchaser shall have the
right to acquire such number of Warrant Shares equal to 25% of the number of
Shares issuable to such Purchaser pursuant to Section 2.2(a)(ii), rounded up to
the nearest whole share, on the terms set forth therein;
               (iv) a legal opinion of Company Counsel, dated as of the Closing
Date and in the form attached hereto as Exhibit D, executed by such counsel and
addressed to such Purchasers;
               (v) the Registration Rights Agreement, duly executed by the
Company;
               (vi) duly executed Irrevocable Transfer Agent Instructions
acknowledged in writing by the Transfer Agent;
               (vii) a certificate of the Secretary of the Company (the
“Secretary’s Certificate”), dated as of the Closing Date, (a) certifying the
resolutions adopted by the Board of Directors of the Company or a duly
authorized committee thereof approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the
Securities, (b) certifying the current versions of the certificate of
incorporation, as amended, and by-laws of the Company and (c) certifying as to
the signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company, in the form attached hereto as
Exhibit F;
               (viii) the Compliance Certificate referred to in Section 5.1(g)
or Section 5.3(g), as applicable;
               (ix) a certificate evidencing the formation and good standing of
the Company issued by the Secretary of State of the State of Delaware, as of a
date within five (5) days of the Closing Date;
               (x) a certificate evidencing the Company’s qualification as a
foreign corporation and good standing issued by the Secretary of State of the
State of California, as of a date within ten (10) days of the Closing Date;
               (xi) a certified copy of the Certificate of Incorporation, as
certified by the Secretary of State of the State of the State of Delaware, as of
a date within ten (10) days of the Closing Date; and

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               (xii) a consent to grant of registration rights executed by the
Company and each of the Persons set forth in Schedule 3.1(y) hereto.
          (b) On or prior to the Closing with respect to the Purchasers listed
on Annex A-1 hereto or on or prior to the Second Closing with respect to the
Purchasers listed on Annex A-2 hereto, such Purchaser shall deliver or cause to
be delivered to the Company the following (the "Purchaser Deliverables”):
               (i) this Agreement, duly executed by such Purchaser;
               (ii) its Subscription Amount, in United States dollars and in
immediately available funds, in the amount set forth as the “Aggregate Purchase
Price (Subscription Amount)” indicated below such Purchaser’s name on the
applicable signature page hereto by wire transfer to the Company’s account as
previously provided to the Purchasers;
               (iii) the Registration Rights Agreement, duly executed by such
Purchaser;
               (iv) a fully completed and duly executed Selling Stockholder
Questionnaire in the form attached as Annex B to the Registration Rights
Agreement; and
               (v) a fully completed and duly executed Accredited Investor
Questionnaire and Stock Certificate Questionnaire in the forms attached hereto
as Exhibits C-1 and C-2, respectively.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
     3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants as of the date hereof and the Closing Date (except for
the representations and warranties that speak as of a specific date, which shall
be made as of such date), to each of the Purchasers and to the Placement Agents
that, except as set forth in the Schedules delivered herewith or disclosed in
the SEC Reports:
          (a) Subsidiaries. The Company has no direct or indirect Subsidiaries.
          (b) Organization and Qualification. The Company is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the State of Delaware, with the requisite corporate power and
authority to own or lease and use its properties and assets and to carry on its
business as currently conducted. The Company is not in violation of any of the
provisions of its certificate of incorporation or bylaws. The Company is duly
qualified to conduct business and is in good standing as a foreign corporation
or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be,
would not have a Material Adverse Effect.
          (c) Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents to which it is a
party and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents to which it is a
party by the Company and the consummation by it of the transactions contemplated
hereby and thereby (including, but not limited to, the sale and delivery of the
Shares and the Warrants and the reservation for issuance and the subsequent
issuance of the Warrant Shares upon exercise of the Warrants) have been duly
authorized by all necessary corporate action on the part of the Company, and no
further corporate action is required by the Company, its Board of Directors or
its stockholders in connection therewith other than in connection with the

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Required Approvals. Each of the Transaction Documents to which it is a party has
been (or upon delivery will have been) duly executed by the Company and is, or
when delivered in accordance with the terms hereof, will constitute the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies or by other equitable principles of general application.
Except as set forth on Schedule 3.1(c) hereto, there are no shareholder
agreements, voting agreements, or other similar arrangements with respect to the
Company’s capital stock to which the Company is a party or, to the Company’s
Knowledge, between or among any of the Company’s stockholders.
          (d) No Conflicts. The execution, delivery and performance by the
Company of the Transaction Documents to which it is a party and the consummation
by the Company of the transactions contemplated hereby or thereby (including,
without limitation, the issuance of the Shares and Warrants and the reservation
for issuance and issuance of the Warrant Shares) do not and will not
(i) conflict with or violate any provisions of the Company’s certificate of
incorporation or bylaws or otherwise result in a violation of the organizational
documents of the Company, (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
result in the creation of any Lien upon any of the properties or assets of the
Company or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any Material
Contract or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company is subject or decree (including federal and state
securities laws and regulations and the rules and regulations, assuming the
correctness of the representations and warranties made by the Purchasers herein,
of any self regulatory organization to which the Company or its securities are
subject , including all applicable Trading Markets), or by which any property or
asset of the Company is bound or affected), except in the case of clause
(iii) such as would not, individually or in the aggregate, have a Material
Adverse Effect.
          (e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the Transaction Documents
(including the issuance of the Securities), other than (i) the filing with the
Commission of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, (ii) filings required by
applicable state securities laws, (iii) the filing of a Notice of Sale of
Securities on Form D with the Commission under Regulation D of the Securities
Act, (iv) the filing of any requisite notices and/or application(s) to the
Principal Trading Market for the issuance and sale of the Common Stock and the
Warrants and the listing of the Common Stock for trading or quotation, as the
case may be, thereon in the time and manner required thereby, (v) the filings
required in accordance with Section 4.11 of this Agreement and (vi) those that
have been made or obtained prior to the date of this Agreement (collectively,
the “Required Approvals”).
          (f) Issuance of the Securities. The Shares have been duly authorized
and, when issued and paid for in accordance with the terms of the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable and
free and clear of all Liens, other than restrictions on transfer provided for in
the Transaction Documents or imposed by applicable securities laws, and shall
not be subject to preemptive or similar rights. The Warrants have been duly
authorized and, when issued and paid for in accordance with the terms of the
Transaction Documents, will be duly and validly issued, free and clear of all
Liens, other than restrictions on transfer provided for in the Transaction
Documents or imposed by applicable securities laws, and shall not be subject to
preemptive or similar rights of shareholders. The Warrant Shares issuable upon
exercise of the Warrants have been duly authorized and, when issued and paid for
in accordance with the terms of the Transaction Documents and the Warrants will
be duly and validly issued, fully paid and

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nonassessable, free and clear of all Liens, other than restrictions on transfer
provided for in the Transaction Documents or imposed by applicable securities
laws, and shall not be subject to preemptive or similar rights of shareholders.
Assuming the accuracy of the representations and warranties of the Purchasers in
this Agreement, the Shares and the Warrant Shares will be issued in compliance
with all applicable federal and state securities laws. As of the Closing Date,
the Company shall have reserved from its duly authorized capital stock not less
than the maximum number of shares of Common Stock issuable upon exercise of the
Warrants (without taking into account any limitations on the exercise of the
Warrants set forth in the Warrants). The Company shall, so long as any of the
Warrants are outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued capital stock, solely for the
purpose of effecting the exercise of the Warrants, the number of shares of
Common Stock issuable upon exercise of the Warrants (without taking into account
any limitations on the exercise of the Warrants set forth in the Warrants).
          (g) Capitalization. The number of shares and type of all authorized,
issued and outstanding capital stock, options and other securities of the
Company (whether or not presently convertible into or exercisable or
exchangeable for shares of capital stock of the Company) has been set forth in
the SEC Reports and has changed since the date of such SEC Reports only to
reflect stock option and warrant exercises that do not, individually or in the
aggregate, have a material affect on the issued and outstanding capital stock,
options and other securities. All of the outstanding shares of capital stock of
the Company are duly authorized, validly issued, fully paid and non-assessable,
have been issued in compliance in all material respects with all applicable
federal and state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase any capital stock of the Company. (i) No shares of the Company’s
capital stock are subject to preemptive rights or any other similar rights or
any liens or encumbrances suffered or permitted by the Company; (ii) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares of capital
stock of the Company, or contracts, commitments, understandings or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company; (iii) there are no outstanding debt securities,
notes, credit agreements, credit facilities or other agreements, documents or
instruments evidencing indebtedness of the Company or by which the Company is or
may become bound; (iv) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in connection
with the Company; (v) there are no agreements or arrangements under which the
Company is obligated to register the sale of any of their securities under the
Securities Act (except the Registration Rights Agreement); (vi) there are no
outstanding securities or instruments of the Company or which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
redeem a security of the Company; (vii) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Securities; (viii) the Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement; and (ix) the Company has no liabilities or obligations required to
be disclosed in the SEC Reports (as defined herein) but not so disclosed in the
SEC Reports, other than those incurred in the ordinary course of the Company’s
businesses and which, individually or in the aggregate, do not or would not have
a Material Adverse Effect.
          (h) SEC Reports. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it under the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for twelve
(12) months preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports” and together with
this Agreement and the Schedules to this Agreement (if any), the “Disclosure
Materials”), on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports

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prior to the expiration of any such extension. As of the date hereof, the
Company is not aware of any event occurring on or prior to the Closing Date
(other than the transactions contemplated by the Transaction Documents) that
requires the filing of a Form 8-K after the Closing. As of their respective
filing dates, or to the extent corrected by a subsequent restatement, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
          (i) Financial Statements. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing (or to the extent corrected
by a subsequent restatement). Such financial statements have been prepared in
accordance with GAAP applied on a consistent basis during the periods involved,
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries taken as a
whole as of and for the dates thereof and the results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, year-end audit adjustments. Each of the Material Contracts to which
the Company is a party or to which the property or assets of the Company is
subject has been filed as an exhibit to the SEC Reports.
          (j) Tax Matters. The Company (i) has prepared and filed all foreign,
federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith, with respect to which adequate reserves have been
set aside on the books of the Company and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply,
except, in the case of clauses (i) and (ii) above, where the failure to so pay
or file any such tax, assessment, charge or return would not have a Material
Adverse Effect.
          (k) Material Changes. Since the date of the latest financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there have been no events, occurrences or developments that
have had or would reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, (ii) the Company has not incurred any
material liabilities (contingent or otherwise) other than (A) trade payables,
accrued expenses and other liabilities incurred in the ordinary course of
business consistent with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to GAAP or required to
be disclosed in filings made with the Commission, (iii) the Company has not
materially altered its method of accounting or the manner in which it keeps its
accounting books and records, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock (other than in connection with repurchases of unvested stock
issued to employees of the Company), (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except Common Stock issued in
the ordinary course as dividends on outstanding preferred stock or pursuant to
existing Company stock option or stock purchase plans or executive and director
corporate arrangements disclosed in the SEC Reports and (vi) there has not been
any material change or amendment to, or any waiver of any material right under,
any Material Contract under which the Company or any of its assets is bound or
subject. Except for the issuance of the Securities contemplated by this
Agreement, no event, liability or development has occurred or exists with
respect to the Company or its business, properties, operations or financial
condition that would be required to be disclosed by the Company

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under applicable securities laws at the time this representation is made that
has not been publicly disclosed at least one Trading Day prior to the date that
this representation is made.
          (l) Environmental Matters. To the Company’s Knowledge, the Company
(i) is not in violation of any statute, rule, regulation, decision or order of
any governmental agency or body or any court, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), (ii) does not own or
operate any real property contaminated with any substance that is in violation
of any Environmental Laws, (iii) is not liable for any off-site disposal or
contamination pursuant to any Environmental Laws, or (iv) is not subject to any
claim relating to any Environmental Laws; which violation, contamination,
liability or claim has had or would have, individually or in the aggregate, a
Material Adverse Effect; and there is no pending or, to the Company’s Knowledge,
threatened investigation that might lead to such a claim.
          (m) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities, (ii) involves a claim of violation of or liability
under any federal, state, local or foreign laws governing the Company’s
operations, including without limiting the generality of the foregoing, laws
regulating the protection of human health, including without limiting the
generality of the foregoing, laws relating to the manufacture, processing,
packaging, labeling, marketing, distribution, use, inspection, treatment,
storage, disposal, transport or handling of the Company’s products, and
regulated or hazardous substances, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or
notice letters, orders, permits, plans or regulations issued, entered,
promulgated or approved thereunder, all as may be in effect from time to time
and all successors, replacements and expansions thereof, (iii) involves injury
to or death of any person arising from or relating to any of the Company’s
product, or (iv) could, if there were an unfavorable decision, individually or
in the aggregate, have a Material Adverse Effect. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration
statement filed by the Company under the Exchange Act or the Securities Act.
          (n) Employment Matters. No material labor dispute exists or, to the
Company’s Knowledge, is imminent with respect to any of the employees of the
Company which would have a Material Adverse Effect. None of the Company’s
employees is a member of a union that relates to such employee’s relationship
with the Company, and the Company is not a party to a collective bargaining
agreement, and the Company believes that its relationship with its employees is
good.
          (o) Compliance. The Company (i) is not in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Company), nor
has the Company received written notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any
other Material Contract (whether or not such default or violation has been
waived), (ii) is not in violation of any order of any court, arbitrator or
governmental body having jurisdiction over the Company or its properties or
assets, or (iii) is not or has not been in violation of, or in receipt of notice
that it is in violation of, any statute, rule or regulation of any governmental
authority applicable to the Company, including without limitation, all
applicable rules and regulations of the Food and Drug Administration (the
“FDA”), and all applicable laws, statutes, ordinances, rules or regulations
(including, without limitation, the Federal Food, Drug and Cosmetic Act of 1938,
as amended and similar foreign laws and regulations) enforced by the FDA or
equivalent foreign authorities, except in each case as would not, individually
or in the aggregate, have a Material Adverse Effect.
          (p) Regulatory Permits. The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct its business as described in
the SEC Reports, including without limitation the FDA, except where the failure

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to possess such permits, individually or in the aggregate, has not and would not
have, individually or in the aggregate, a Material Adverse Effect (“Material
Permits”), and (i) the Company has not received any notice of proceedings
relating to the revocation or modification of any such Material Permits and
(ii) the Company is unaware of any facts or circumstances that the Company would
reasonably expect to give rise to the revocation or modification of any Material
Permits.
          (q) Title to Assets. The Company has good and marketable title in fee
simple to all real property. The Company has good and marketable title to all
tangible personal property owned by it which is material to the business of the
Company, in each case free and clear of all liens, encumbrances and defects
except such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company. Any real property and facilities held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company.
          (r) Patents and Trademarks. To the Company’s Knowledge, the Company
owns, possesses, licenses or has other rights to use all foreign and domestic
patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology and other proprietary rights and processes (collectively, the
“Intellectual Property”) necessary for the conduct of its businesses as now
conducted. Except where such violations or infringements would not have, either
individually or in the aggregate, a Material Adverse Effect, to the Company’s
Knowledge (a) there are no rights of third parties to any such Intellectual
Property; (b) there is no infringement by third parties of any such Intellectual
Property; (c) there is no pending or threatened action, suit, proceeding or
claim by others challenging the Company’s rights in or to any such Intellectual
Property; (d) there is no pending or threatened action, suit, proceeding or
claim by others challenging the validity or scope of any such Intellectual
Property; and (e) there is no pending or threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others.
          (s) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
the Company believes to be prudent in the businesses and locations in which the
Company is engaged. The Company has not received any notice of cancellation of
any such insurance, nor does the Company have any Knowledge that it will be
unable to renew its existing insurance coverage for the Company as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business without a significant increase in cost.
          (t) Transactions With Affiliates and Employees. None of the officers
or directors of the Company and, to the Company’s Knowledge, none of the
employees of the Company, is presently a party to any transaction with the
Company or to a presently contemplated transaction (other than for services as
employees, officers and directors) that would be required to be disclosed
pursuant to Item 404 of Regulation S-K promulgated under the Securities Act.
          (u) Internal Accounting Controls. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any differences.

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          (v) Sarbanes-Oxley; Disclosure Controls. To the Company’s Knowledge,
the Company is in compliance in all material respects with all of the provisions
of the Sarbanes-Oxley Act of 2002 which are applicable to it, except where such
noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect. The Company maintains disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act).
          (w) Certain Fees. No person or entity will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or a Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company, other than the Placement Agents with
respect to the offer and sale of the Securities (which placement agents fees are
being paid by the Company). The Company shall indemnify, pay, and hold each
Purchaser harmless against, any liability, loss or expense (including, without
limitation, attorneys’ fees and out-of-pocket expenses) arising in connection
with any such right, interest or claim.
          (x) Private Placement. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2 of this Agreement and
the accuracy of the information disclosed in the Accredited Investor
Questionnaires, no registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the Purchasers under the
Transaction Documents.
          (y) Registration Rights. Other than each of the Purchasers or as set
forth in Schedule 3.1(y) hereto, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company other than those securities which are currently registered on an
effective registration statement on file with the Commission.
          (z) No Directed Selling Efforts or General Solicitation. Neither the
Company nor any Person acting on its or its behalf has conducted any “general
solicitation” or “general advertising” (as those terms are used in Regulation D)
in connection with the offer or sale of any of the Securities.
          (aa) No Integrated Offering. Assuming the accuracy of the Purchasers’
representations and warranties set forth in Section 3.2, neither the Company nor
any Person acting on its behalf has, directly or indirectly, at any time within
the past six months, made any offers or sales of any Company security or
solicited any offers to buy any security under circumstances that would
(i) eliminate the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale by
the Company of the Securities as contemplated hereby or (ii) cause the offering
of the Securities pursuant to the Transaction Documents to be integrated with
prior offerings by the Company for purposes of any applicable law, regulation or
shareholder approval provisions, including, without limitation, under the rules
and regulations of any Trading Market on which any of the securities of the
Company are listed or designated.
          (bb) Listing and Maintenance Requirements. The Company’s Common Stock
is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to terminate the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that
the Commission is contemplating terminating such registration. The Company has
not, in the 12 months preceding the date hereof, received written notice from
any Trading Market on which the Common Stock is or has been listed or quoted to
the effect that the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is in compliance in all
material respects with the listing and maintenance requirements for continued
trading of the Common Stock on the Principal Trading Market.

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          (cc) Investment Company. The Company is not required to be registered
as, and is not an Affiliate of, and immediately following the Closing will not
be required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
          (dd) Application of Takeover Protections; Rights Agreements. The
Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s charter documents
or the laws of the State of Delaware that is or could reasonably be expected to
become applicable to any of the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the
Transaction Documents, including, without limitation, the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities. The Company has
not adopted a stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of Common Stock or a change in control of
the Company.
          (ee) Off Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company and an unconsolidated or
other off balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings and is not so disclosed or that otherwise would have
a Material Adverse Effect.
          (ff) Acknowledgment Regarding Purchasers’ Purchase of Securities. The
Company acknowledges and agrees that each of the Purchasers is acting solely in
the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any advice
given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchasers’ purchase of the Securities.
          (gg) No Additional Agreements. The Company does not have any agreement
or understanding with any Purchaser with respect to the transactions
contemplated by the Transaction Documents other than as specified in the
Transaction Documents.
     3.2 Representations and Warranties of the Purchasers. Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date in the case of the Purchasers listed on
Annex A-1 hereto and as of the Second Closing Date in the case of the Purchasers
listed on Annex A-2 hereto to the Company as follows:
          (a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution, delivery and
performance by such Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or, if such Purchaser is
not a corporation, such partnership, limited liability company or other
applicable like action, on the part of such Purchaser. Each of this Agreement
and the Registration Rights Agreement has been duly executed by such Purchaser,
and when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

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          (b) No Conflicts. The execution, delivery and performance by such
Purchaser of this Agreement and the Registration Rights Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby will not (i) result in a violation of the organizational documents of
such Purchaser, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which such Purchaser is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws) applicable to such
Purchaser, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Purchaser to perform its obligations hereunder.
          (c) Investment Intent. Such Purchaser understands that the Securities
are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Securities and,
upon exercise of the Warrants, will acquire the Warrant Shares issuable upon
exercise thereof as principal for its own account and not with a view to, or for
distributing or reselling such Securities or any part thereof in violation of
the Securities Act or any applicable state securities laws, provided, however,
that by making the representations herein, such Purchaser does not agree to hold
any of the Securities for any minimum period of time and reserves the right,
subject to the provisions of this Agreement and the Registration Rights
Agreement, at all times to sell or otherwise dispose of all or any part of such
Securities or Warrant Shares pursuant to an effective registration statement
under the Securities Act or under an exemption from such registration and in
compliance with applicable federal and state securities laws. Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business. Such
Purchaser does not presently have any agreement, plan or understanding, directly
or indirectly, with any Person to distribute or effect any distribution of any
of the Securities (or any securities which are derivatives thereof) to or
through any person or entity; such Purchaser is not a registered broker-dealer
under Section 15 of the Exchange Act or an entity engaged in a business that
would require it to be so registered as a broker-dealer.
          (d) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on which it
exercises the Warrants it will be, an “accredited investor” as defined in Rule
501(a) under the Securities Act.
          (e) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general advertisement.
          (f) Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.
          (g) Access to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Disclosure Materials and has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and its respective
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without

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unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Neither such inquiries nor any other
investigation conducted by or on behalf of such Purchaser or its representatives
or counsel shall modify, amend or affect such Purchaser’s right to rely on the
truth, accuracy and completeness of the Disclosure Materials and the Company’s
representations and warranties contained in the Transaction Documents. Such
Purchaser has sought such accounting, legal and tax advice as it has considered
necessary to make an informed decision with respect to its acquisition of the
Securities.
          (h) Certain Trading Activities. Other than with respect to the
transactions contemplated herein, since the time that such Purchaser was first
contacted by the Company, the Placement Agents or any other Person regarding the
transactions contemplated hereby, neither the Purchaser nor any Affiliate of
such Purchaser which (x) had knowledge of the transactions contemplated hereby,
(y) has or shares discretion relating to such Purchaser’s investments or trading
or information concerning such Purchaser’s investments, including in respect of
the Securities, and (z) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading (collectively, “Trading
Affiliates”) has directly or indirectly, nor has any Person acting on behalf of
or pursuant to any understanding with such Purchaser or Trading Affiliate,
effected or agreed to effect any transactions in the securities of the Company
(including, without limitation, any Short Sales involving the Company’s
securities). Notwithstanding the foregoing, in the case of a Purchaser and/or
Trading Affiliate that is, individually or collectively, a multi-managed
investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s or Trading Affiliate’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s or Trading Affiliate’s
assets, the representation set forth above shall apply only with respect to the
portion of assets managed by the portfolio manager that have knowledge about the
financing transaction contemplated by this Agreement. Other than to other
Persons party to this Agreement, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, and except as otherwise provided in Section 4.13,
no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in Short Sales in the securities of the Company after the
effectiveness of the Registration Statement as described in Section 4.13.
          (i) Brokers and Finders. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Purchaser.
          (j) Independent Investment Decision. Such Purchaser has independently
evaluated the merits of its decision to purchase Securities pursuant to the
Transaction Documents, and such Purchaser confirms that it has not relied on the
advice of any other Purchaser’s business and/or legal counsel in making such
decision. Such Purchaser understands that nothing in this Agreement or any other
materials presented by or on behalf of the Company to the Purchaser in
connection with the purchase of the Securities constitutes legal, tax or
investment advice. Such Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Securities. Such Purchaser understands that
each of the Placement Agents has acted solely as the agent of the Company in
this placement of the Securities and such Purchaser has not relied on the
business or legal advice of each of the Placement Agents or any of its agents,
counsel or Affiliates in making its investment decision hereunder, and confirms
that none of such Persons has made any representations or warranties to such
Purchaser in connection with the transactions contemplated by the Transaction
Documents.
          (k) Reliance on Exemptions. Such Purchaser understands that the
Securities being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and

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understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities.
          (l) No Governmental Review. Such Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
          (m) Regulation M. Such Purchaser is aware that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of Common Stock
and other activities with respect to the Common Stock by the Purchasers.
          (n) Residency. Such Purchaser’s principal executive offices are in the
jurisdiction set forth immediately below Purchaser’s name on the applicable
signature page attached hereto.
The Company and each of the Purchasers acknowledge and agree that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
     4.1 Transfer Restrictions.
          (a) Compliance with Laws. Notwithstanding any other provision of this
Article IV, each Purchaser covenants that the Securities may be disposed of only
pursuant to an effective registration statement under, and in compliance with
the requirements of, the Securities Act, or pursuant to an available exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, and in compliance with any applicable state and federal
securities laws. In connection with any transfer of the Securities other than
(i) pursuant to an effective registration statement, (ii) to the Company,
(iii) to an Affiliate of a Purchaser, (iv) pursuant to Rule 144 (provided that
the Purchaser provides the Company with reasonable assurances (in the form of
seller and broker representation letters) that the securities may be sold
pursuant to such rule) or Rule 144A, (v) pursuant to Rule 144(k) following the
applicable holding period or (vi) in connection with a bona fide pledge, the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company,
the form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. As a condition of transfer, any
such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights of a Purchaser under this Agreement and the
Registration Rights Agreement.
          (b) Legends. Certificates evidencing the Securities shall bear any
legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form until such time as they are not required
under Section 4.1(c): (and a stock transfer order may be placed against transfer
of the certificates for the Securities):
[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED]
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED EXCEPT

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AS PROVIDED BY SECTION 4 OF THAT CERTAIN SECURITIES PURCHASE AGREEMENT, DATED AS
OF JUNE 7, 2007, BY AND AMONG CARDICA, INC. AND EACH PURCHASER IDENTIFIED ON THE
SIGNATURE PAGES THERETO.
     In addition, if any Purchaser is an Affiliate of the Company, certificates
evidencing the Securities issued to such Purchaser shall bear a customary
“affiliates” legend.
          (c) Removal of Legends. The legend set forth in Section 4.1(b) above
shall be removed and the Company shall issue a certificate without such legend
or any other legend to the holder of the applicable Shares or Warrant Shares
upon which it is stamped or issue to such holder by electronic delivery at the
applicable balance account at DTC, if (i) such Securities are sold pursuant to
an effective Registration Statement and the Purchaser has delivered a signed and
completed Purchaser’s Certificate of Subsequent Sale in substantially the form
of Exhibit H attached hereto (the “Certificate of Sale”) with respect to such
Securities, (ii) such Securities are sold or transferred pursuant to Rule 144
(if the transferor is not an Affiliate of the Company), or (iii) such Securities
are eligible for sale under Rule 144(k). Any fees (with respect to the Transfer
Agent, Company Counsel or otherwise) associated with the removal of such legend
shall be borne by the Company. Following such time as a legend is no longer
required for certain Securities, the Company will no later than three
(3) Trading Days following the delivery by a Purchaser to the Company or the
Transfer Agent (with notice to the Company) of a legended certificate
representing such Shares or Warrant Shares (endorsed or with stock powers
attached, signatures guaranteed, and otherwise in form necessary to affect the
reissuance and/or transfer, deliver or cause to be delivered to the transferee
of such Purchaser or such Purchaser, as applicable, a certificate representing
such Securities that is free from all restrictive and other legends. The Company
may not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section 4.1.
Certificates for Shares or Warrant Shares subject to legend removal hereunder
may be transmitted by the Transfer Agent to the Purchasers, as applicable, by
crediting the account of the transferee’s Purchaser’s prime broker with DTC.
          (d) Irrevocable Transfer Agent Instructions. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, in the form of Exhibit E attached hereto (the “Irrevocable Transfer Agent
Instructions”). The Company represents and warrants that no instruction other
than the Irrevocable Transfer Agent Instructions or instructions consistent
therewith referred to in this Section 4.1(d) will be given by the Company to its
transfer agent in connection with this Agreement, and that the Securities shall
otherwise be freely transferable on the books and records of the Company as and
to the extent provided in this Agreement, the other Transaction Documents and
applicable law. The Company acknowledges that a breach by it of its obligations
under this Section 4.1(d) will cause irreparable harm to a Purchaser.
Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section 4.1(d) will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Section 4.1(d), that a Purchaser shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.
          (e) Acknowledgement. Each Purchaser hereunder acknowledges its primary
responsibilities under the Securities Act and accordingly will not sell or
otherwise transfer the Warrants, Shares, the Warrant Shares or any interest
therein without complying with the requirements of the Securities Act. While the
Registration Statement remains effective, each Purchaser hereunder may sell the
Shares and Warrant Shares in accordance with the plan of distribution contained
in the Registration Statement and, if it does so, it will comply therewith and
with the related prospectus delivery requirements unless an exemption therefrom
is available. Each Purchaser, severally and not jointly with the other
Purchasers, agrees that if it is

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notified by the Company in writing at any time that the Registration Statement
registering the resale of the Shares or the Warrant Shares is not effective or
that the prospectus included in such Registration Statement no longer complies
with the requirements of Section 10 of the Securities Act, the Purchaser will
refrain from selling such Shares and Warrant Shares until such time as the
Purchaser is notified by the Company that such Registration Statement is
effective or such prospectus is compliant with Section 10 of the Exchange Act,
unless such Purchaser is able to, and does, sell such Shares or Warrant Shares
pursuant to an available exemption from the registration requirements of
Section 5 of the Securities Act. Both the Company and its Transfer Agent, and
their respective directors, officers, employees and agents, may rely on this
subsection (e), and each Purchaser hereunder will indemnify and hold harmless
each of such persons from any breaches or violations of this paragraph.
          (f) Buy-In. If the Company shall fail for any reason or for no reason
to issue to a Purchaser unlegended certificates within three (3) Business Days
of receipt of all documents necessary for the removal of the legend set forth
above, including, but not limited to the signed and completed Certificate of
Sale (the “Deadline Date”), then, in addition to all other remedies available to
such Purchaser, if on or after the Business Day immediately following such three
(3) Business Day period, such Purchaser purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of shares of Common Stock that such Purchaser anticipated receiving from
the Company without any restrictive legend (a “Buy-In”), then the Company shall,
within three (3) Business Days after such Purchaser’s request and in such
Purchaser’s sole discretion, either (i) pay cash to the Purchaser in an amount
equal to such Purchaser’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at
which point the Company’s obligation to deliver such certificate (and to issue
such shares of Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to such Purchaser a certificate or certificates
representing such shares of Common Stock and pay cash to the Purchaser in an
amount equal to the excess (if any) of the Buy-In Price over the product of
(a) such number of shares of Common Stock, times (b) the Closing Bid Price on
the Deadline Date.
     4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance
of the Securities may result in dilution of the outstanding shares of Common
Stock. The Company further acknowledges that its obligations under the
Transaction Documents, including without limitation its obligation to issue the
Shares and the Warrant Shares pursuant to the Transaction Documents, are
unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the
dilutive effect that such issuance may have on the ownership of the other
stockholders of the Company.
     4.3 Reservation of Common Stock. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance from and after the Closing Date, no less than the maximum number of
shares of Common Stock issuable upon exercise of the Warrants issued at the
Closing and the Second Closing.
     4.4 Furnishing of Information. In order to enable the Purchasers to sell
the Securities under Rule 144 of the Securities Act, for a period of two years
from the Second Closing, the Company shall use its 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 the Exchange Act. During such two year period,
if the Company is not required to file reports pursuant to such laws, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the
Shares and Warrant Shares under Rule 144.

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     4.5 Form D and Blue Sky. The Company agrees to timely file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Purchaser who requests a copy in writing promptly after such
filing. The Company, on or before the Closing Date, shall take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for or to qualify the Securities for sale to the Purchasers at the
Closing pursuant to this Agreement under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to the
Purchasers who request in writing such evidence on or prior to the Closing Date.
The Company shall make all filings and reports relating to the offer and sale of
the Securities required under applicable securities or “Blue Sky” laws of the
states of the United States following the Closing Date and the Second Closing
Date.
     4.6 No Integration. The Company shall not, and shall use its commercially
reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that will be integrated
with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the
Purchasers, or that will be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it
would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such
subsequent transaction.
     4.7 Subsequent Registrations. 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.
     4.8 Securities Laws Disclosure; Publicity. By 9:00 a.m., New York City
time, on the Trading Day immediately following the execution of this Agreement,
the Company shall issue a press release (the “Press Release”) reasonably
acceptable to the Lead Placement Agent disclosing all material terms of the
transactions contemplated hereby. On or before 9:00 a.m., New York City time, on
the fourth Trading Day following the execution of this Agreement (or such
earlier time as required by law), the Company will file a Current Report on Form
8-K with the Commission describing the terms of the Transaction Documents (and
including as exhibits to such Current Report on Form 8-K the material
Transaction Documents (including, without limitation, this Agreement, the form
of Warrant and the Registration Rights Agreement)). Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser or
an Affiliate of any Purchaser, or include the name of any Purchaser or an
Affiliate of any Purchaser in any press release or filing with the Commission
(other than the Registration Statement) or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) any registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final Transaction Documents (including signature pages thereto) with the
Commission and (ii) to the extent such disclosure is required by law, request of
the Staff of the Commission or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior written notice of such
disclosure permitted under this subclause (ii). From and after the issuance of
the Press Release, no Purchaser shall be in possession of any material,
non-public information received from the Company or any of its respective
officers, directors, employees or agents, that is not disclosed in the Press
Release unless a Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. Each Purchaser, severally and not
jointly with the other Purchasers, covenants that until

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such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in this Section 4.8, such Purchaser will
maintain the confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this transaction).
     4.9 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company shall not and shall cause each of its officers, directors, employees and
agents, not to, provide any Purchaser with any material, non-public information
regarding the Company from and after the filing of the Press Release without the
express written consent of such Purchaser, unless prior thereto such Purchaser
shall have executed a written agreement regarding the confidentiality and use of
such information.
     4.10 Indemnification.
          (a) Indemnification of Purchasers. In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and
hold each Purchaser and its directors, officers, shareholders, members,
partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title) of
such controlling person (each, a “Purchaser Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur, as a result of or relating to third party claims
against such Purchaser relating to any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents, provided that that such a claim for
indemnification relating to any breach of any of the representations or
warranties made by the Company in this Agreement is made within one year from
the Closing. The Company will not be liable to any Purchaser Party under this
Agreement to the extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents.
          (b) Conduct of Indemnification Proceedings. Promptly after receipt by
any Person (the “Indemnified Person”) of notice of any demand, claim or
circumstances which would or might give rise to a claim or the commencement of
any action, proceeding or investigation in respect of which indemnity may be
sought pursuant to Section 4.10(a), such Indemnified Person shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the failure of any Indemnified Person so to notify the Company
shall not relieve the Company of its obligations hereunder except to the extent
that the Company is actually and materially prejudiced by such failure to
notify. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless: (i) the Company and the
Indemnified Person shall have mutually agreed to the retention of such counsel;
(ii) the Company shall have failed promptly to assume the defense of such
proceeding and to employ counsel reasonably satisfactory to such Indemnified
Person in such proceeding; or (iii) in the reasonable judgment of counsel to
such Indemnified Person, representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. The Company shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, delayed or conditioned. Without the prior written consent of the
Indemnified Person, which consent shall not be unreasonably withheld, delayed or
conditioned, the Company shall not effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could

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have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release of
such Indemnified Person from all liability arising out of such proceeding.
     4.11 Listing of Securities. In the time and manner required by the
Principal Trading Market, the Company shall prepare and file with such Trading
Market an additional shares listing application covering all of the Shares and
Warrant Shares and shall use its commercially reasonable efforts to take all
steps necessary to maintain, so long as any other shares of Common Stock shall
be so listed, such listing.
     4.12 Use of Proceeds. The Company intends to use the net proceeds from the
sale of the Securities hereunder for working capital and general corporate
purposes.
     4.13 Dispositions and Confidentiality After The Date Hereof. Each Purchaser
shall not, and shall cause its Trading Affiliates not to, prior to the
effectiveness of the Registration Statement: (a) sell, offer to sell, solicit
offers to buy, dispose of, loan, pledge or grant any right with respect to
(collectively, a “Disposition") the Securities; or (b) engage in any hedging or
other transaction which is designed or could reasonably be expected to lead to
or result in a Disposition of the Securities by such Purchaser or an Affiliate.
In addition, Purchaser agrees that for so long as it owns any Common Stock, it
will not enter into any short sale of Shares executed at a time when the
Purchaser has no equivalent offsetting long position in the Common Stock. For
purposes of determining whether the Purchaser has an equivalent offsetting long
position in the Common Stock, shares that the Purchaser is entitled to receive
within sixty (60) days (whether pursuant to contract or upon conversion or
exercise of convertible securities) will be included as if held long by the
Purchaser. Such Purchaser covenants that neither it nor any Person acting on its
behalf or pursuant to any understanding with it will engage in any transactions
in the Company’s securities (including, without limitation, any Short Sales
involving the Company’s securities) during the period from the date hereof until
the earlier of such time as (i) the transactions contemplated by this Agreement
are first publicly announced as described in Section 4.8 or (ii) this Agreement
is terminated in full pursuant to Section 6.17 . Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall apply only with respect to the
portion of assets managed by the portfolio manager that have knowledge about the
financing transaction contemplated by this Agreement. Each Purchaser understands
and acknowledges, severally and not jointly with any other Purchaser, that the
Commission currently takes the position that covering a short position
established prior to effectiveness of a resale registration statement with
shares included in such registration statement would be a violation of Section 5
of the Securities Act, as set forth in Item 65, Section 5 under Section A, of
the Manual of Publicly Available Telephone Interpretations, dated July 1997,
compiled by the Office of Chief Counsel, Division of Corporation Finance.
ARTICLE V.
CONDITIONS PRECEDENT TO CLOSING
     5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase
Securities at the Closing. The obligation of each Purchaser listed on Annex A-1
hereto to acquire Securities at the Closing is subject to the fulfillment to
such Purchaser’s satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by such Purchaser (as to itself
only):
          (a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as
to materiality, in which case such representations and warranties shall

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be true and correct in all respects) as of the date when made and as of the
Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date.
          (b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Securities at the Closing
(including all Required Approvals), all of which shall be and remain so long as
necessary in full force and effect.
          (e) No Suspensions of Trading in Common Stock; Listing. The Common
Stock (i) shall be designated for quotation or listed on the Principal Trading
Market and (ii) shall not have been suspended, as of the Closing Date, by the
Commission or the Principal Trading Market from trading on the Principal Trading
Market nor shall suspension by the Commission or the Principal Trading Market
have been threatened, as of the Closing Date, either (A) in writing by the
Commission or the Principal Trading Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Trading Market.
          (f) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).
          (g) Compliance Certificate. The Company shall have delivered to each
Purchaser a certificate, dated as of the Closing Date and signed by its Chief
Executive Officer or its Chief Financial Officer, dated as of the Closing Date,
certifying to the fulfillment of the conditions specified in Sections 5.1(a) and
(b) in the form attached hereto as Exhibit G.
          (h) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.17 herein.
     5.2 Conditions Precedent to the Obligations of the Company to sell
Securities at the Closing. The Company’s obligation to sell and issue the
Securities to each Purchaser listed on Annex A-1 hereto at the Closing is
subject to the fulfillment to the satisfaction of the Company on or prior to the
Closing Date of the following conditions, any of which may be waived by the
Company:
          (a) Representations and Warranties. The representations and warranties
made by such Purchaser in Section 3.2 hereof shall be true and correct in all
material respects as of the date when made, and as of the Closing Date as though
made on and as of such date, except for representations and warranties that
speak as of a specific date.
          (b) Performance. Such Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Purchaser at or prior to the Closing Date.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority

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of competent jurisdiction that prohibits the consummation of any of the
transactions contemplated by the Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Securities, all of which shall be
and remain so long as necessary in full force and effect.
          (e) Purchasers Deliverables. Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b).
          (f) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.17 herein.
          5.3 Conditions Precedent to the Obligations of the Purchasers to
Purchase Securities at the Second Closing. The obligation of each Purchaser
listed on Annex A-2 to acquire the Securities at the Second Closing is subject
to the fulfillment to such Purchaser’s satisfaction, on or prior to the Second
Closing Date, of each of the following conditions, any of which may be waived by
such Purchaser (as to itself only):
          (a) Representations and Warranties. The representations and warranties
of the Company contained herein shall be true and correct in all material
respects (except for those representations and warranties which are qualified as
to materiality, in which case such representations and warranties shall be true
and correct in all respects) as of the date when made and as of the Second
Closing Date, as though made on and as of such date, except for such
representations and warranties that speak as of a specific date.
          (b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Second Closing.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Securities at the Second Closing
(including all Required Approvals), all of which shall be and remain so long as
necessary in full force and effect.
          (e) No Suspensions of Trading in Common Stock; Listing. The Common
Stock (i) shall be designated for quotation or listed on the Principal Trading
Market and (ii) shall not have been suspended, as of the Second Closing Date, by
the Commission or the Principal Trading Market from trading on the Principal
Trading Market nor shall suspension by the Commission or the Principal Trading
Market have been threatened, as of the Second Closing Date, either (A) in
writing by the Commission or the Principal Trading Market or (B) by falling
below the minimum listing maintenance requirements of the Principal Trading
Market.
          (f) Company Deliverables. The Company shall have delivered the Company
Deliverables in accordance with Section 2.2(a).

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          (g) Compliance Certificate. The Company shall have delivered to such
Purchaser a certificate, dated as of the Second Closing Date and signed by its
Chief Executive Officer or its Chief Financial Officer, dated as of the Second
Closing Date, certifying to the fulfillment of the conditions specified in
Sections 5.3(a) and (b) in the form attached hereto as Exhibit G.
          (h) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.17 herein.
     5.4 Conditions Precedent to the Obligations of the Company to sell
Securities at the Second Closing. The Company’s obligation to sell and issue the
Securities at the Second Closing to each Purchaser listed on Annex A-2 hereto is
subject to the fulfillment to the satisfaction of the Company on or prior to the
Second Closing Date of the following conditions, any of which may be waived by
the Company:
          (a) Representations and Warranties. The representations and warranties
made by such Purchaser in Section 3.2 hereof shall be true and correct in all
material respects as of the date when made, and as of the Second Closing Date as
though made on and as of such date, except for representations and warranties
that speak as of a specific date.
          (b) Performance. Such Purchaser shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by such Purchaser at or prior to the Second Closing Date.
          (c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction that
prohibits the consummation of any of the transactions contemplated by the
Transaction Documents.
          (d) Consents. The Company shall have obtained in a timely fashion any
and all consents, permits, approvals, registrations and waivers necessary for
consummation of the purchase and sale of the Securities, all of which shall be
and remain so long as necessary in full force and effect.
          (e) Purchasers Deliverables. Such Purchaser shall have delivered its
Purchaser Deliverables in accordance with Section 2.2(b).
          (f) Termination. This Agreement shall not have been terminated as to
such Purchaser in accordance with Section 6.17 herein.
ARTICLE VI.
MISCELLANEOUS
     6.1 Fees and Expenses. At the Closing and the Second Closing, the Company
shall reimburse the Placement Agents for the reasonable fees and expenses in
connection with the transactions contemplated by this Agreement pursuant to its
obligations under its engagement letter with the Placement Agents dated as of
May 10, 2007 (the “Engagement Letter”), including, the expenses of counsel to
the Placement Agents (which fees shall include, without limitation, the fees and
expenses associated with the negotiation, preparation and execution and delivery
of this Agreement and the other Transaction Documents and any amendments,
modifications or waivers thereto), subject to the consent of the Company for
fees and expenses in excess of $75,000 in the aggregate. The Company and the
Purchasers shall each pay the fees and expenses of their respective advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees, stamp taxes and other taxes and duties levied in

26

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connection with the sale and issuance of the Securities to the Purchasers. Each
party acknowledges that Lowenstein Sandler PC has rendered legal advice to the
Placement Agents and not to such party in connection with the transactions
contemplated hereby, and that such party has relied for such matters on the
advice of its own respective counsel.
     6.2 Entire Agreement. The Transaction Documents, together with the Exhibits
and Schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements,
understandings, discussions and representations, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such
documents, exhibits and schedules. At or after the Closing, and without further
consideration, the Company and the Purchasers will execute and deliver to the
other such further documents as may be reasonably requested in order to give
practical effect to the intention of the parties under the Transaction
Documents.
     6.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section prior to 5:00 p.m., New York City
time, on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service with next day delivery specified, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as follows:

         
 
  If to the Company:   Cardica, Inc.
 
      900 Saginaw Drive
 
      Redwood City, California 94063
 
      Telephone No.: (650) 364-9975
 
      Facsimile No.: (650) 364-3134
 
      Attention: Robert Y. Newell
 
       
 
  With a copy to:   Cooley Godward Kronish LLP
 
      Five Palo Alto Square
 
      3000 El Camino Real
 
      Palo Alto, California 94306-2155
 
      Telephone No.: (650) 843-5180
 
      Facsimile No.: (650) 849-7400
 
      Attention: Suzanne Sawochka Hooper, Esq.
 
       
 
  If to a Purchaser:   To the address set forth under such Purchaser’s name on
the signature page hereof;

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
     6.4 Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding or having the
right to acquire a majority of the Shares and the Warrant Shares on a
fully-diluted basis at the time of such amendment or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any

27

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subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise any right
hereunder in any manner impair the exercise of any such right. No consideration
shall be offered or paid to any Purchaser to amend or consent to a waiver or
modification of any provision of any Transaction Document unless the same
consideration is also offered to all Purchasers who then hold Securities.
     6.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party. This Agreement
shall be construed as if drafted jointly by the parties, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement or any of the Transaction
Documents.
     6.6 Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties and their successors and
permitted assigns. This Agreement, or any rights or obligations hereunder, may
not be assigned by the Company without the prior written consent of the
Purchasers. Any Purchaser may assign its rights hereunder in whole or in part to
any Person to whom such Purchaser assigns or transfers any Securities in
compliance with the Transaction Documents and applicable law, provided such
transferee shall agree in writing to be bound, with respect to the transferred
Securities, by the terms and conditions of this Agreement that apply to the
“Purchasers”.
     6.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except each of the Placement Agents is an intended third
party beneficiary of Article III hereof and the Placement Agents may enforce the
provisions of such Article directly against the parties with obligations
thereunder.
     6.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such New York Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
     6.9 Survival. The representations and warranties contained herein shall
survive the Closing and the Second Closing and the delivery of the Securities
for a period of one (1) year from the Closing Date. The agreements and covenants
contained herein shall survive for the applicable statute of limitations.

28

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     6.10 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered 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 signature page were an original thereof.
     6.11 Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
     6.12 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company and the Transfer Agent of such loss, theft or destruction and the
execution by the holder thereof of a customary lost certificate affidavit of
that fact and an agreement to indemnify and hold harmless the Company and the
Transfer Agent for any losses in connection therewith or, if required by the
Transfer Agent, a bond in such form and amount as is required by the Transfer
Agent. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with
the issuance of such replacement Securities. If a replacement certificate or
instrument evidencing any Securities is requested due to a mutilation thereof,
the Company may require delivery of such mutilated certificate or instrument as
a condition precedent to any issuance of a replacement.
     6.13 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
action for specific performance of any such obligation (other than in connection
with any action for a temporary restraining order) the defense that a remedy at
law would be adequate.
     6.14 Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.
     6.15 Adjustments in Share Numbers and Prices. In the event of any stock
split, subdivision, dividend or distribution payable in shares of Common Stock
(or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly shares of Common Stock), combination or other
similar recapitalization or event occurring after the date hereof, each
reference in any Transaction Document to a number of shares or a price per share
shall be deemed to be amended to appropriately account for such event.

29

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     6.16 Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document. The decision of each Purchaser to
purchase Securities pursuant to the Transaction Documents has been made by such
Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser,
and no Purchaser and any of its agents or employees shall have any liability to
any other Purchaser (or any other Person) relating to or arising from any such
information, materials, statement or opinions. Nothing contained herein or in
any Transaction Document, and no action taken by any Purchaser pursuant 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 or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. 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 Securities or enforcing its rights under the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the
Purchasers has been provided with the same Transaction Documents for the purpose
of closing a transaction with multiple Purchasers and not because it was
required or requested to do so by any Purchaser. The Company’s obligations to
each Purchaser under this Agreement are identical to its obligations to each
other Purchaser other than such differences resulting solely from the number of
Securities purchased by such Purchaser, but regardless of whether such
obligations are memorialized herein or in another agreement between the Company
and a Purchaser.
     6.17 Termination. This Agreement may be terminated and the sale and
purchase of the Shares and the Warrants abandoned at any time prior to the
Closing or the Second Closing, as applicable, by either the Company or any
Purchaser listed on Annex A-1 hereto (with respect to itself only), or at any
time prior to the Second Closing by either the Company or any Purchaser listed
on Annex A-2 hereto (with respect to itself only), upon written notice to the
other, if the Closing or the Second Closing, as applicable, has not been
consummated on or prior to 5:00 p.m., New York City time, on the Outside Date;
provided, however, that the right to terminate this Agreement under this
Section 6.17 shall not be available to any Person whose failure to comply with
its obligations under this Agreement has been the cause of or resulted in the
failure of the Closing or the Second Closing, as applicable, to occur on or
before such time. Nothing in this Section 6.17 shall be deemed to release any
party from any liability for any breach by such party of the terms and
provisions of this Agreement or the other Transaction Documents or to impair the
right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents. In the
event of a termination pursuant to this Section, the Company shall promptly
notify all non-terminating Purchasers. Upon a termination in accordance with
this Section, the Company and the terminating Purchaser(s) shall not have any
further obligation or liability (including arising from such termination) to the
other, and no Purchaser will have any liability to any other Purchaser under the
Transaction Documents as a result therefrom.

30

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

 

     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES FOR PURCHASERS FOLLOW]

 

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                  NAME OF PURCHASER: Allen & Company Incorporated
 
           
 
  By:   /s/ Kim Wieland    
 
                Name: Kim Wieland         Title: CFO    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $999,992.52
 
   
 
  Number of Shares to be Acquired: 193,797
 
   
 
  Underlying Shares Subject to Warrant: 48,450
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  711 Fifth Avenue
 
  New York, NY 10022
 
   
 
  Telephone No.: (212) 339-2370
 
   
 
  Facsimile No.: (212) 508-5820
 
   
 
  Attention: kwieland@allenco.com

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

2

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                  NAME OF PURCHASER: John Simon    
 
           
 
  By:   /s/ John Simon    
 
                Name: John Simon         Title:    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $499,993.68
 
   
 
  Number of Shares to be Acquired: 96,898
 
   
 
  Underlying Shares Subject to Warrant: 24,225
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Allen & Company LLC
 
  711 Fifth Avenue
 
  New York, NY 10022
 
   
 
  Telephone No.: (212) 339-2295
 
   
 
  Facsimile No.: (212) 339-2454
 
   
 
  Attention: John Simon

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

3

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                  NAME OF PURCHASER: Mary Cullen    
 
           
 
  By:   /s/ Mary Cullen    
 
                Name: Mary Cullen         Title:    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $299,999.04
 
   
 
  Number of Shares to be Acquired: 58,139
 
   
 
  Underlying Shares Subject to Warrant: 14,535
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Allen & Company LLC
 
  711 Fifth Avenue
 
  New York, NY 10022
 
   
 
  Telephone No.: (212) 339-2341
 
   
 
  Facsimile No.: (212) 339-8434
 
   
 
  Attention: Mary Cullen

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

4

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                  NAME OF PURCHASER: Bruce Allen    
 
           
 
  By:   /s/ Bruce Allen    
 
                Name: Bruce Allen         Title:    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $799,996.08
 
   
 
  Number of Shares to be Acquired: 155,038
 
   
 
  Underlying Shares Subject to Warrant: 38,760
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Allen & Company LLC
 
  711 Fifth Avenue
 
  New York, NY 10022
 
   
 
  Telephone No.: (212) 339-2341
 
   
 
  Facsimile No.: (212) 832-8434
 
   
 
  Attention: Mary Cullen

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

5

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                  NAME OF PURCHASER: Susan K. Allen    
 
           
 
  By:   /s/ Susan K. Allen    
 
                Name: Susan K. Allen         Title:    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $499,993.68
 
   
 
  Number of Shares to be Acquired: 96,898
 
   
 
  Underlying Shares Subject to Warrant: 24,225
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Allen & Company LLC
 
  711 Fifth Avenue
 
  New York, NY 10022
 
   
 
  Telephone No.: (212) 832-8000
 
   
 
  Facsimile No.: (212) 832-8023
 
   
 
  Attention: Kim M. Wieland

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

6

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                  NAME OF PURCHASER: Keough Partners, L.P.    
 
           
 
  By:   /s/ Michael L. Keough    
 
                Name: Michael L. Keough         Title: Managing Member    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $275,000.00
 
   
 
  Number of Shares to be Acquired: 53,294
 
   
 
  Underlying Shares Subject to Warrant: 13,324
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  200 Galleria Parkway
 
  Suite 970
 
  Atlanta, Georgia 30339
 
   
 
  Telephone No.: (770) 852-5005
 
   
 
  Facsimile No.: (770) 852-5023
 
   
 
  Attention:                                                             

Delivery Instructions:
(if different than above)
c/o Allen & Company LLC
Street: 711 Fifth Avenue
City/State/Zip: New York, NY 10022
Attention: Terry McCarthy
Telephone No.: (212) 339-2540

7

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  NAME OF PURCHASER:   Sutter Hill Ventures, a California    
 
      Limited Partnership    

             
 
  By:   /s/ David E. Sweet    
 
                Name: David E. Sweet         Title: Managing Director of the
General Partner    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $1,689,047.00
 
   
 
  Number of Shares to be Acquired: 327,334
 
   
 
  Underlying Shares Subject to Warrant: 81,834
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  755 Page Mill Rd.
 
  Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

8

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  NAME OF PURCHASER:   Sutter Hill Entrepreneurs Fund (AI) L.P.

             
 
  By:   /s/ David E. Sweet    
 
                Name: David E. Sweet         Title: Managing Director of the
General Partner    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $16,453.00
 
   
 
  Number of Shares to be Acquired: 3,188
 
   
 
  Underlying Shares Subject to Warrant: 797
 
  (25% of the number of Shares to be acquired)
 
   
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  755 Page Mill Rd.
 
  Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

9

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  NAME OF PURCHASER:   Sutter Hill Entrepreneurs Fund (QP) L.P.

             
 
  By:   /s/ David E. Sweet    
 
                Name: David E. Sweet         Title: Managing Director of the
General Partner    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $41,661.00
 
   
 
  Number of Shares to be Acquired: 8,073
 
   
 
  Underlying Shares Subject to Warrant: 2,019
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Sutter Hill Ventures
 
  755 Page Mill Rd, Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

10

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  NAME OF PURCHASER:   The Younger Living Trust,    
 
      U/A/D 1/20/95    

             
 
  By:   /s/ Robert Yin    
 
           
 
      Robert Yin, under Power of Attorney         Name: William H. Younger, Jr.
        Title: Trustee    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $233,338.00
 
   
 
  Number of Shares to be Acquired: 45,220
 
   
 
  Underlying Shares Subject to Warrant: 11,305
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Sutter Hill Ventures
 
  755 Page Mill Rd, Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

11

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  NAME OF PURCHASER:   The Anderson Living Trust,    
 
      U/A/D 1/22/98    

             
 
  By:   /s/ Robert Yin    
 
           
 
      Robert Yin, under Power of Attorney    
 
  Name:   David L. Anderson    
 
  Title:   Trustee    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $62,743.00
 
   
 
  Number of Shares to be Acquired: 12,159
 
   
 
  Underlying Shares Subject to Warrant: 3,040
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Sutter Hill Ventures
 
  755 Page Mill Rd, Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

12

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                  NAME OF PURCHASER: Anvest, L.P.    
 
           
 
  By:   /s/ David L. Anderson    
 
                Name: David L. Anderson         Title: General Partner    

     
 
  Aggregate Purchase Price (Subscription Amount):
 
  $62,743.00
 
   
 
  Number of Shares to be Acquired: 12,159
 
   
 
  Underlying Shares Subject to Warrant: 3,040
 
  (25% of the number of Shares to be acquired)
 
   
 
  Tax ID No.:                                         
 
   
 
  Address for Notice:
 
   
 
  c/o Sutter Hill Ventures
 
  755 Page Mill Rd, Suite A-200
 
  Palo Alto, CA 94304-1005
 
   
 
  Telephone No.: (650) 493-5600
 
   
 
  Facsimile No.: (650) 858-1854
 
   
 
  Attention: Robert Yin

Delivery Instructions:
(if different than above)

         
c/o
       
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

13

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              NAME OF PURCHASER: The Baker Revocable Trust, U/A/D 2/3/03
 
       
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   G. Leonard Baker, Jr.,
 
  Title:   Trustee
 
            Aggregate Purchase Price (Subscription Amount):
$34,071.00
 
            Number of Shares to be Acquired: 6,602
 
            Underlying Shares Subject to Warrant: 1,651     (25% of the number
of Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

14

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  NAME OF PURCHASER:   Jeffrey W. Bird and
 
      Christina R. Bird Trust
 
      Agreement dated 10/31/2000

         
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   Jeffrey W. Bird
 
  Title:   Trustee
 
            Aggregate Purchase Price (Subscription Amount):
$5,531.00
 
            Number of Shares to be Acquired: 1,071
 
            Underlying Shares Subject to Warrant: 268     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

15

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              NAME OF PURCHASER: James C. Gaither
 
       
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   James C. Gaither
 
  Title:    
 
            Aggregate Purchase Price (Subscription Amount):
$53,894.00
 
            Number of Shares to be Acquired: 10,444
 
            Underlying Shares Subject to Warrant: 2,611     (25% of the number
of Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

16

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  NAME OF PURCHASER:   Gregory P. and Sarah J.D.
 
      Sands Trustees
 
      The Gregory P. and Sarah J.D.
 
      Sands Trust Agreement dated
 
      2/24/99

         
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   Gregory P. Sands
 
  Title:   Trustee
 
            Aggregate Purchase Price (Subscription Amount):
$25,636.00
 
            Number of Shares to be Acquired: 4,968
 
            Underlying Shares Subject to Warrant: 1,242
 
            (25% of the number of Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

17

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              NAME OF PURCHASER: Saunders Holdings, L.P.
 
       
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   G. Leonard Baker, Jr.
 
  Title:   General Partner
 
            Aggregate Purchase Price (Subscription Amount):
$77,575.00
 
            Number of Shares to be Acquired: 15,033
 
            Underlying Shares Subject to Warrant: 3,759     (25% of the number
of Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

18

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  NAME OF PURCHASER:   David E. Sweet and Robin T. Sweet as Trustees of The
David and Robin Sweet Living Trust dated 7/6/04

         
 
  By:   /s/ David E. Sweet
 
       
 
  Name:   David E. Sweet
 
  Title:    
 
            Aggregate Purchase Price (Subscription Amount):
$8,445.00
 
            Number of Shares to be Acquired: 1,636
 
            Underlying Shares Subject to Warrant: 409     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

19

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              NAME OF PURCHASER: Patricia Tom
 
       
 
  By:   /s/ Patricia Tom
 
            Name: Patricia Tom
 
  Title:    
 
            Aggregate Purchase Price (Subscription Amount):
$1,062.00
 
            Number of Shares to be Acquired: 205
 
            Underlying Shares Subject to Warrant: 52     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

20

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  NAME OF PURCHASER:   Wells Fargo Bank, N.A. FBO
 
      SHV Profit Sharing Plan
 
      FBO Lynne B. Graw Rollover

         
 
  By:   /s/ Vicki M. Bandel
 
       
 
  Name:   Vicki M. Bandel
 
  Title:   Asst. V.P. & Trust Officer
 
            Aggregate Purchase Price (Subscription Amount):
$2,934.00
 
            Number of Shares to be Acquired: 568
 
            Underlying Shares Subject to Warrant: 142     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            Wells Fargo Bank     Institutional Trust Services     600 California
Street, 12th Floor     MAC A0193-120     San Francisco, CA 94108
 
            Telephone No.: (415) 396-3739
 
            Facsimile No.: (415) 975-5739
 
            Attention: Vicki M. Bandel

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

21

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  NAME OF PURCHASER:   Wells Fargo Bank, N.A. FBO
 
      SHV Profit Sharing Plan
 
      FBO Sherryl W. Casella

         
 
  By:   /s/ Vicki M. Bandel
 
       
 
  Name:   Vicki M. Bandel
 
  Title:   Asst. V.P. & Trust Officer
 
            Aggregate Purchase Price (Subscription Amount):
$5,874.00
 
            Number of Shares to be Acquired: 1,138
 
            Underlying Shares Subject to Warrant: 285     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            Wells Fargo Bank     Institutional Trust Services     600 California
Street, 12th Floor     MAC A0193-120     San Francisco, CA 94108
 
            Telephone No.: (415) 396-3739
 
            Facsimile No.: (415) 975-5739
 
            Attention: Vicki M. Bandel

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

22

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  NAME OF PURCHASER:   Wells Fargo Bank, N.A. FBO
 
      SHV Profit Sharing Plan
 
      FBO Tench Coxe

         
 
  By:   /s/ Vicki M. Bandel
 
       
 
  Name:   Vicki M. Bandel
 
  Title:   Asst. V.P. & Trust Officer
 
            Aggregate Purchase Price (Subscription Amount):
$167,644.00
 
            Number of Shares to be Acquired: 32,489
 
            Underlying Shares Subject to Warrant: 8,123     (25% of the number
of Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            Wells Fargo Bank     Institutional Trust Services     600 California
Street, 12th Floor     MAC A0193-120     San Francisco, CA 94108
 
            Telephone No.: (415) 396-3739
 
            Facsimile No.: (415) 975-5739
 
            Attention: Vicki M. Bandel

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

23

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  NAME OF PURCHASER:   James N. White and Patricia A. O’Brien, Trustees of the
White Family Trust dated 4/3/97

         
 
  By:   /s/ Robert Yin
 
       
 
      Robert Yin, under Power of Attorney
 
  Name:   James N. White
 
  Title:   Trustee
 
            Aggregate Purchase Price (Subscription Amount):
$10,658.00
 
            Number of Shares to be Acquired: 2,065
 
            Underlying Shares Subject to Warrant: 517     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

24

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  NAME OF PURCHASER:   Robert Yin and Lily Yin, as Trustees of Yin Family Trust
dated March 1, 1997

         
 
  By:   /s/ Robert Yin
 
       
 
  Name:   Robert Yin
 
  Title:   Trustee
 
            Aggregate Purchase Price (Subscription Amount):
$690.00
 
            Number of Shares to be Acquired: 133
 
            Underlying Shares Subject to Warrant: 34     (25% of the number of
Shares to be acquired)
 
            Tax ID No.:                                         
 
            Address for Notice:
 
            c/o Sutter Hill Ventures     755 Page Mill Rd, Suite A-200     Palo
Alto, CA 94304-1005
 
            Telephone No.: (650) 493-5600
 
            Facsimile No.: (650) 858-1854
 
            Attention: Robert Yin

          Delivery Instructions:     (if different than above)    
 
       
c/o
 
 
   
 
       
 
       
Street:
       
 
       
 
       
City/State/Zip:
       
 
       
 
       
Attention:
       
 
       
 
       
Telephone No.:
       
 
       

25

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                  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:
Name:   /s/ Daniel Thurber
 
Daniel Thurber    
 
  Title:   Vice President    
 
                Aggregate Purchase Price (Subscription Amount):
$1,821,036.53
 
                Number of Shares to be Acquired: 352,914
 
                Underlying Shares Subject to Warrant: 88,229
 
                (25% of the number of Shares to be acquired)
 
                Tax ID No.:                                         
 
                Address for Notice:
 
                150 Social Hall Ave., 4th Floor     Salt Lake City, UT 84111
 
                Telephone No.: (801) 533-0777
 
                Facsimile No.: (801) 533-9828
 
                Attention:   Allison Christensen
                    Phoebe Hailey

26

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          Delivery Instructions:
(if different than above)    
 
       
c/o
  Bank of America   Register Certificates in the name of:
 
       
Street:
  Investment Services Group   PACO c/o 80-16-200-1037662
 
  MailCode MA5-100-17-06    
 
  100 Federal St., 17th Floor    
 
        City/State/Zip: Boston, MA 02110    
 
        Attention: Christine McCullough    
 
        Telephone No.: (617) 434-7627    

27

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                  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:
Name:   /s/ Daniel Thurber
 
Daniel Thurber    
 
  Title:   Vice President    
 
                Aggregate Purchase Price (Subscription Amount):
$178,963.47
 
                Number of Shares to be Acquired: 34,682
 
                Underlying Shares Subject to Warrant: 8,671     (25% of the
number of Shares to be acquired)
 
                Tax ID No.:                                         
 
                Address for Notice:
 
                150 Social Hall Ave., 4th Floor     Salt Lake City, UT 84111
 
                Telephone No.: (801) 533-0777
 
                Facsimile No.: (801) 533-9828
 
                Attention:   Allison Christensen
                    Phoebe Hailey

28

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          Delivery Instructions:
(if different than above)    
 
       
c/o
  Bank of America   Register Share Certificates in the name of:
 
       
Street:
  Investment Services Group   PACO c/o 80-16-200-1037670
 
  MailCode MA5-100-17-06    
 
  100 Federal St., 17th Floor    
 
        City/State/Zip: Boston, MA 02110    
 
        Attention: Christine McCullough    
 
        Telephone No.: (617) 434-7627    

29

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  NAME OF PURCHASER:   Wasatch Advisors, Inc. as Investment Advisors for Wasatch
Funds, Inc. on behalf of Wasatch Micro Cap Fund

             
 
  By:
Name:   /s/ Daniel Thurber
 
Daniel Thurber    
 
  Title:   VP    
 
                Aggregate Purchase Price (Subscription Amount):
$2,500,000.00
 
                Number of Shares to be Acquired: 484,496
 
                Underlying Shares Subject to Warrant: 121,124     (25% of the
number of Shares to be acquired)
 
                Tax ID No.:                                         
 
                Address for Notice:
 
                150 Social Hall Ave., 4th Floor     Salt Lake City, UT 84111
 
                Telephone No.: (801) 533-0777
 
                Facsimile No.: (801) 533-9828
 
                Attention:   Allison Christensen
                    John Malooly
                    Daniel Thurber

30

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          Delivery Instructions:
(if different than above)    
 
       
c/o
  DTC/New York Window   Register Shares in the name of:
 
  FAI: State Street Bank   Casing & Co.
 
       
Street:
  55 Water St. 1st Floor    
 
        City/State/Zip: New York, NY 10041    
 
        Attention: NY Window Dept.    
 
        Telephone No.: (816) 871-1632     REF: WYA4/Wasatch Micro Cap Fund    

31

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  NAME OF PURCHASER:   Wasatch Advisors, Inc. as Investment Advisors for Wasatch
Funds, Inc. on behalf of Wasatch Micro Cap Value Fund

             
 
  By:   /s/ Daniel Thurber
 
   
 
  Name:   Daniel Thurber    
 
  Title:   VP    
 
                Aggregate Purchase Price (Subscription Amount):
$1,200,000.00
 
                Number of Shares to be Acquired: 232,558
 
                Underlying Shares Subject to Warrant: 58,140     (25% of the
number of Shares to be acquired)
 
                Tax ID No.:                                         
 
                Address for Notice:
 
                150 Social Hall Ave., 4th Floor     Salt Lake City, UT 84111
 
                Telephone No.: (801) 533-0777
 
                Facsimile No.: (801) 533-9828
 
                Attention:   Allison Christensen
                    John Malooly
                    Daniel Thurber

32

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          Delivery Instructions:
(if different than above)    
 
       
c/o
  DTC/New York Window   Register Shares in the name of:
 
  FAI: State Street Bank   Carrhae & Co.
 
       
Street:
  55 Water St. 1st Floor    
 
        City/State/Zip: New York, NY 10041    
 
        Attention: NY Window Dept.    
 
        Telephone No.: (816) 871-1632     REF: W4A9/Wasatch Micro Cap Value Fund
   

33

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                  NAME OF PURCHASER: John Michael Egan
 
           
 
  By:
Name:   /s/ John Michael Egan
 
   
 
  Title:        
 
                Aggregate Purchase Price (Subscription Amount):
$50,000.00
 
                Number of Shares to be Acquired: 9,689
 
                Underlying Shares Subject to Warrant: 2,423     (25% of the
number of Shares to be acquired)
 
                Tax ID No.:                                         
 
                Address for Notice:
 
                1474 Commodore Way     Hollywood, Fl 33019
 
                Telephone No.: (650) 245-1218
 
                Facsimile No.: (970) 479-9753
 
                Attention: Mike Egan
 
           
Delivery Instructions:
(if different than above)
           
 
           
c/o Mike Egan
           
 
           
Street: 1417 Vail Valley Drive
           
 
           
City/State/Zip: Vail, CO 81657
           
 
           
Attention: Mike Egan
           
 
           
Telephone No.: (650) 245-1218
           

34

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                          NAME OF PURCHASER: Irwin Lieber
 
               
 
      By:
Name:   /s/ Irwin Lieber
 
   
 
      Title:        
 
                        Aggregate Purchase Price (Subscription Amount):
$250,000.00
 
                        Number of Shares to be Acquired: 48,449
 
                        Underlying Shares Subject to Warrant: 12,113        
(25% of the number of Shares to be acquired)
 
                        Tax ID No.:                                         
 
                        Address for Notice:
 
                        8 Applegreen Drive         Old Westbury, N.Y. 11568
 
                        Telephone No.: (212) 918-0548
 
                        Facsimile No.: (212) 486-4469
 
                        Attention: Irwin Lieber
 
                Delivery Instructions:
(if different than above)            
 
               
c/o
   
 
           
 
               
Street:
   
 
           
 
               
City/State/Zip:
   
 
           
 
               
Attention:
   
 
           
 
               
Telephone No.:
   
 
           

35

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ANNEX A-1
First Closing Purchasers
Irwin Lieber
Carrhae & Co.
Casing & Co.
John Michael Egan
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Sherryl W. Casella
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Lynne B. Graw Rollover
Wells Fargo Bank, N.A. FBO SHV Profit Sharing Plan FBO Tench Coxe
The Younger Living Trust U/A/D 1/20/95
Gregory P. and Sarah J.D. Sands, Trustees
The Gregory P. and Sarrah J.D. Sands Trust Agreement dated 2/24/99
James C. Gaither
Robert Yin and Lily Yin
As Trustees of Yin Family Trust Dated March 1, 1997
James N. White and Patricia A. O’Brien,
Trustees of the White Family Trust Dated 4/3/97
The Baker Revocable Trust U/A/D 2/3/03
Sutter Hill Ventures
A California Limited Partnership
Sutter Hill Entrepreneurs Fund (AI) L.P.
Sutter Hill Entrepreneurs Fund (QP) L.P.
Saunders Holdings, L.P.
The Anderson Living Trust U/A/D 1/22/98
Jeffrey W. Bird and Christina R. Bird Trust Agreement Dated 10/31/2000
Anvest, L.P.
David E. Sweet and Robin T. Sweet as Trustees of The David and Robin Sweet
Living Trust Dated
7/6/04
Patrica Tom
Susan K. Allen
Allen & Company Incorporated
Keough Partners, L.P.
John Simon
Mary Cullen
Bruce Allen

 

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ANNEX A-2
Second Closing Purchasers
Cross Creek Capital, L.P
Cross Creek Capital Employees’ Fund, L.P.

 

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EXHIBITS:

     
A:
  Form of Warrant
B:
  Form of Registration Rights Agreement
C-1:
  Accredited Investor Questionnaire
C-2:
  Stock Certificate Questionnaire
D:
  Form of Opinion of Company Counsel
E:
  Irrevocable Transfer Agent Instructions
F:
  Form of Secretary’s Certificate
G:
  Form of Officer’s Certificate
H:
  Purchaser’s Certificate of Subsequent Sale

2

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EXHIBIT A
Form of Warrant
[The Form of Warrant is attached as Exhibit 4.6 to the Current Report on Form
8-K filed by Cardica, Inc. on June 13, 2007]

3

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EXHIBIT B
Form of Registration Rights Agreement
[The Registrations Right Agreement is attached as Exhibit 10.16 to the Current
Report on Form 8-K filed by Cardica, Inc. on June 13, 2007]

4

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Instruction Sheet
(to be read in conjunction with the entire Securities Purchase Agreement and
Registration Rights
Agreement)
A. Complete the following items in the Securities Purchase Agreement and/or
Registration Rights Agreement:

  1.   Provide the information regarding the Purchaser requested on the
signature pages. The Securities Purchase Agreement and the Registration Rights
Agreement must be executed by an individual authorized to bind the Purchaser.  
  2.   Exhibit C-1 – Accredited Investor Questionnaire:         Provide the
information requested by the Accredited Investor Questionnaire     3.  
Exhibit C-2 Stock Certificate Questionnaire:         Provide the information
requested by the Stock Certificate Questionnaire     4.   Annex B to the
Registration Rights Agreement — Selling Securityholder Notice and Questionnaire
        Provide the information requested by the Selling Securityholder Notice
and Questionnaire     5.   Return the signed Securities Purchase Agreement and
Registration Rights Agreement 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

B.   Instructions regarding the transfer of funds for the purchase of Securities
have been provided to the Purchasers.

5

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EXHIBIT C-1
ACCREDITED INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: Cardica, Inc.
This Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $0.001 per share, and shares of common stock that may be
issued upon exercise of certain warrants (collectively, the “Securities”), of
Cardica, Inc., a Delaware corporation (the “Corporation”). The Securities are
being offered and sold by the Corporation without registration under the
Securities Act of 1933, as amended (the “Act”), and the securities laws of
certain states, in reliance on the exemptions contained in Section 4(2) of the
Act and on Regulation D promulgated thereunder and in reliance on similar
exemptions under applicable state laws. The Corporation must determine that a
potential investor meets certain suitability requirements before offering or
selling Securities to such investor. The purpose of this Questionnaire is to
assure the Corporation that each investor will meet the applicable suitability
requirements. The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering
exemptions from registration is based in part on the information herein
supplied.
This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security. Your answers will be kept strictly confidential.
However, by signing this Questionnaire, you will be authorizing the Corporation
to provide a completed copy of this Questionnaire to such parties as the
Corporation deems appropriate in order to ensure that the offer and sale of the
Securities will not result in a violation of the Act or the securities laws of
any state and that you otherwise satisfy the suitability standards applicable to
purchasers of the Securities. All potential investors must answer all applicable
questions and complete, date and sign this Questionnaire. Please print or type
your responses and attach additional sheets of paper if necessary to complete
your answers to any item.
PART A.      BACKGROUND INFORMATION

          Name of Beneficial Owner of the Securities:
 
 
 
        Business Address: 
 
 
 
  (Number and Street)    
 
           
(City)
  (State)   (Zip Code)
 
        Telephone Number: (___) 
 
 

If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: 
 
State of
formation:                                                                  
                                                                              
                
Approximate Date of
formation:                                                                
                                                                            

6

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Set forth in the space provided below the (i) state(s), if any, in the United
States in which you maintained your principal office during the past two years
and the dates during which you maintained your office in each state, and
(ii) state(s), if any, in which you pay income taxes:
                                                            
                                                            
                                                            
Were you formed for the purpose of investing in the securities being offered?
          Yes ___               No ___
If an individual:

          Residence
Address:                                                                   
                                                                              
               
 
  (Number and Street)    
 
           
(City)
  (State)   (Zip Code)
 
        Telephone Number: (___)  
 
 
 
        Age:                                    Citizenship:
                                    Where registered to vote:
                    

Set forth in the space provided below the state(s), if any, in the United States
in which you maintained your residence during the past two years and the dates
during which you resided in each state:
Are you a director or executive officer of the Corporation?
          Yes ___           No ___
Social Security or Taxpayer Identification
No.                                                                                                    
PART B. ACCREDITED INVESTOR QUESTIONNAIRE
     In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category applicable
to you as a Purchaser of Securities of the Company.

     
___
  (1) A bank as defined in Section 3(a)(2) of the Securities Act, or any savings
and loan association or other institution as defined in Section 3(a)(5)(A) of
the Securities Act whether acting in its individual or fiduciary capacity;
 
   
___
  (2)A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934;

7

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___(3)
  An insurance company as defined in Section 2(13) of the Securities Act;
 
   
___(4)
  An investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act;
 
   
___(5)
  A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;
 
   
___(6)
  A plan established and maintained by a state, its political subdivisions, or
any agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
 
   
___(7)
  An employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made solely by persons that are
accredited investors;
 
   
___(8)
  A private business development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940;
 
   
___(9)
  An organization described in Section 501(c)(3) of the Internal Revenue Code, a
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Securities, with total assets in
excess of $5,000,000;
 
   
___(10)
  A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;
 
   
___(11)
  A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his purchase exceeds $1,000,000;
 
   
___(12)
  A natural person who had an individual income in excess of $200,000 in each of
the two most recent years, or joint income with that person’s spouse in excess
of $300,000, in each of those years, and has a reasonable expectation of
reaching the same income level in the current year;
 
   
___(13)
  An executive officer or director of the Company;

8

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___
  (14) An entity in which all of the equity owners qualify under any of the
above subparagraphs. If the undersigned belongs to this investor category only,
list the equity owners of the undersigned, and the investor category which each
such equity owner satisfies:
 
   

(Continue on a separate piece of paper, if necessary.)

              A.   FOR EXECUTION BY AN INDIVIDUAL:  
 
           
 
                                             By               
                                                                
 
  Date        
 
      Print Name:                                                              
 
 
            B.   FOR EXECUTION BY AN ENTITY:
 
           
 
      Entity Name:                                                             
   
 
           
 
                                             By               
                                                                
 
  Date        
 
      Print Name:                                                              
 
 
     
Title:                                                                         
 
 
            C.   ADDITIONAL SIGNATURES (if required by partnership, corporation
or trust document):
 
           
 
      Entity Name:                                                             
   
 
           
 
                                             By               
                                                                
 
  Date        
 
      Print Name:                                                              
 
 
     
Title:                                                                         
 
 
           
 
      Entity Name:                                                             
   
 
           
 
                                             By               
                                                                
 
  Date        
 
      Print Name:                                                              
 
 
     
Title:                                                                         
 

9

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EXHIBIT C-2
Stock Certificate Questionnaire
     Pursuant to Section 2.2(b) of the Agreement, please provide us with the
following information:

         
1.
  The exact name that the Securities are to be registered in (this is the name
that will appear on the stock certificate(s)). You may use a nominee name if
appropriate:    
 
       
 
       
2.
  The relationship between the Purchaser of the Securities and the Registered
Holder listed in response to Item 1 above:    
 
       
 
       
3.
  The mailing address, telephone and telecopy number of the Registered Holder
listed in response to Item 1 above:    
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
 
       
4.
  The Tax Identification Number (or, if an individual, the Social Security
Number) of the Registered Holder listed in response to Item 1 above:    
 
       

10

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EXHIBIT D
Form of Opinion of Company Counsel
We have acted as counsel for Cardica, Inc., a Delaware corporation (the
“Company”), in connection with the issuance and sale of up
to                                shares (the “Shares”) of the Company’s common
stock, $0.001 par value per share (the “Common Stock”), and warrants (the
“Warrants”) to purchase up to                                 shares of the
Common Stock (the “Warrant Shares,” and, collectively with the Shares and
Warrants, the “Securities”), to the Purchasers under the Securities Purchase
Agreement dated as of June 7, 2007 (the “Purchase Agreement”). We are rendering
this opinion pursuant to Section 2.2(iv) of the Purchase Agreement. Except as
otherwise defined herein, capitalized terms used but not defined herein have the
respective meanings given to them in the Purchase Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by the various parties and originals or
copies certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
As to certain factual matters, we have relied upon certificates of officers of
the Company and have not sought to independently verify such matters. Where we
render an opinion “to our knowledge” or concerning an item “known to us” or “of
which we are aware” or our opinion otherwise refers to our knowledge, it is
based solely upon (i) an inquiry of attorneys within this firm who have
represented the Company in this transaction, (ii) receipt of a certificate
executed by an officer of the Company covering such matters and (iii) such other
investigation, if any, that we specifically set forth herein.
In rendering this opinion, we have assumed: the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; the due authorization, execution and delivery
of all documents (except the due authorization, execution and delivery by the
Company of the Purchase Agreement, the Registration Rights Agreement and the
Warrants (together, the “Transaction Documents”)), where authorization,
execution and delivery are prerequisites to the effectiveness of such documents;
and the genuineness and authenticity of all signatures on original documents
(except the signatures on behalf of the Company on the Transaction Documents).
We have also assumed: that all individuals executing and delivering documents
had the legal capacity to so execute and deliver; that the Transaction Documents
are obligations binding upon the parties thereto other than the Company; that
the parties to the Transaction Documents other than the Company have filed any
required California franchise or income tax returns and have paid any required
California franchise or income taxes; and that there are no extrinsic agreements
or understandings among the parties to the Transaction Documents of the Material
Agreements (as defined below) that would modify or interpret the terms of any of
the Transaction Documents or the Material Agreements or the respective rights or
obligations of the parties thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America and the laws of the States of California and New York and the
General Corporation Law of the State of Delaware.

11

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We express no opinion as to whether the laws of any particular jurisdiction
apply, no opinion to the extent that the laws of any jurisdiction other than
those identified above are applicable to the subject matter hereof and no
opinion as to the enforceability of the waiver of jury trial set forth in
section 6.8 of the Purchase Agreement or any liquidated damages provisions in
the Transaction Documents.
We are not rendering any opinion as to any statute, rule, regulation, ordinance,
decree or decisional law relating to antitrust, banking, land use,
environmental, pension, employee benefits, tax, fraudulent conveyance or usury,
laws governing the legality of investments for regulated entities, Regulations
T, U or X of the Board of Governors of the Federal Reserve System, local laws,
any law, rules or regulations relating to the clinical development, manufacture,
distribution or sale of medical device products or the bylaws, rules or
regulations of the National Association of Securities Dealers, Inc. (“NASD”).
Furthermore, we express no opinion with respect to compliance with antifraud
laws, rules or regulations relating to securities or the offer and sale thereof;
compliance with fiduciary duties by the Company’s Board of Directors or
stockholders; compliance with safe harbors for disinterested Board of Director
or stockholder approvals; compliance with state securities or blue sky laws
except as specifically set forth below; compliance with the Investment Company
Act of 1940; or compliance with laws that place limitations on corporate
distributions.
With regard to our opinion in paragraphs 1 and 3 below with respect to the good
standing and due qualification as the case may be, of the Company, we have
relied solely upon certificates of the Secretaries of State of the indicated
jurisdictions as of a recent date.
With regard to our opinion in paragraph 6 below with respect to securities of
the Company to be issued after the date hereof, we express no opinion to the
extent that, notwithstanding its current reservation of shares of Common Stock,
future issuance of securities of the Company and/or antidilution adjustments to
outstanding securities of the Company cause the Warrants to be exercisable for
more shares of Common Stock than the number that then remain authorized but
unissued.
With regard to our opinion in paragraph 7 below concerning defaults under and
any material breaches of any Material Agreement, we have relied solely upon
(i) inquiries of officers of the Company and (ii) an examination of the
contracts filed by the Company in its SEC Reports, a list of which is attached
hereto as Schedule B (the “Material Agreements”), in the form provided to us by
the Company. We have made no further investigation. Further, with regard to our
opinions in paragraphs 6 and 7 below concerning Material Agreements, we express
no opinion as to (i) financial covenants or similar provisions therein requiring
financial calculations or determinations to ascertain compliance,
(ii) provisions therein relating to the occurrence of a “material adverse event”
or words of similar import or (iii) any statement or writing that may constitute
parol evidence bearing on interpretation or construction. To the extent that
laws other than those of California and Delaware govern any of the Material
Agreements, we assume that the Material Agreements would be interpreted in
accordance with their plain meaning.
With regard to our opinion in paragraph 8 below with respect to pending or
overtly threatened litigation, we have made an inquiry of the attorneys within
this firm who have represented the Company in this transaction, examined and
relied upon a certificate executed by an officer of the Company covering such
matters and checked the records of this firm to ascertain that we are not acting
as counsel of record for the Company in any such matter. We have made no further
investigation.

12

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With regard to our opinion in paragraph 10 below, we have assumed the following:
(a) that the representations made by each Purchaser in the Purchase Agreement
are true and correct; (b) that neither the Company, the Placement Agents nor any
person acting on behalf of either the Company or the Placement Agents has
offered or sold the Securities by any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D promulgated under
the Securities Act; and (c) that there will be no offerings or sales of
securities of the Company after the date hereof in a transaction that can be
“integrated” with any sales of the Securities.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:

  1.   The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.     2.  
The Company has the requisite corporate power to own, lease and operate its
property and assets, and to conduct its business as described in the SEC
Reports, to execute and deliver the Transaction Documents and to perform its
obligations thereunder, including, without limitation, to issue, sell and
deliver the Shares and the Warrants under the agreement and to issue the Warrant
Shares issuable upon exercise of the Warrants.     3.   The Company is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of the State of California.     4.   The Company has the requisite
corporate power to execute, deliver and perform its obligations under the
Transaction Documents.     5.   All corporate action on the part of the Company
necessary for the authorization, execution and delivery of the Transaction
Documents by the Company, the authorization, sale, issuance and delivery of the
Securities and the performance by the Company of its obligations under the
Transaction Documents has been taken. Each of the Transaction Documents has been
duly and validly authorized, executed and delivered by the Company and each such
agreement constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its respective terms, except that we
express no opinion as to the validity of rights to indemnity and contribution
under section 4.10 of the Purchase Agreement and section 5 of the Registration
Rights Agreement and except as such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, arrangement,
moratorium or other similar laws affecting creditors’ rights generally, and
subject to general equity principles and to limitations on availability of
equitable relief, including specific performance.     6.   The Company’s
authorized capital stock consists of (a) forty-five million (45,000,000) shares
of Common Stock, par value $0.001 and (b) five million (5,000,000) shares of
Preferred Stock, par value $0.001. The Shares and Warrant Shares have been duly
authorized and the Warrant Shares have been reserved for issuance upon exercise
of the Warrants. The Shares and Warrants, when issued, sold and delivered
against payment therefor in accordance with the terms of the Purchase Agreement
and the Warrant Shares, if issued on the date hereof upon exercise of the
Warrants and payment therefor in accordance with the terms of the Warrants, will
be validly issued, outstanding, fully paid and nonassessable and free of any
pre-emptive right or similar rights

13

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      contained in the Company’s Certificate of Incorporation or Bylaws or any
Material Agreement. The Warrant Shares have been duly and validly reserved for
issuance.     7.   The execution and delivery of the Transaction Documents, the
issuance of the Shares and the Warrants pursuant thereto do not violate any
provision of the Company’s Certificate of Incorporation or Bylaws, do not
constitute a default under or a material breach of any Material Agreement and do
not violate (a) any governmental statute, rule or regulation which in our
experience is typically applicable to transactions of the nature contemplated by
the Transaction Documents or (b) any order, writ, judgment, injunction, decree,
determination or award which has been entered against the Company and of which
we are aware, in each case to the extent the violation of which would materially
and adversely affect the Company.     8.   To our knowledge, there is no action,
proceeding or investigation pending or overtly threatened against the Company
before any court or administrative agency that questions the validity of the
Transaction Documents or that could reasonably be expected to result, either
individually or in the aggregate, in a material adverse effect on the Company.  
  9.   All consents, approvals, authorizations, or orders of, and filings,
registrations and qualifications with any U.S. Federal or California or New York
regulatory authority or governmental body required for the issuance of the
Shares have been made or obtained, except (a) for the filing of a Form D
pursuant to Securities and Exchange Commission Regulation D and (b) for the
filing of the notice to be filed under California Corporations Code
Section 25102.1(d).     10.   The offer and sale of the Shares and the Warrants
are exempt from the registration requirements of the Securities Act of 1933, as
amended, subject to the timely filing of a Form D pursuant to Securities and
Exchange Commission Regulation D.     11.   To our knowledge, there are no
written contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been waived
in writing or otherwise satisfied) to require the Company to include any
securities of the Company in any registration statement contemplated by
Section 2 of the Registration Rights Agreement.

This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
Cooley Godward Kronish llp
By:                                                                       
         
                Suzanne Sawochka Hooper

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SCHEDULE A

 

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SCHEDULE B
Material Agreements

1.   2005 Equity Incentive Plan and forms of related agreements and documents.  
2.   Amended and Restated Investor Rights Agreement, dated August 19, 2003, by
and among the Registrant and certain stockholders.   3.   Benefit Agreement with
Bernard Hausen, M.D., Ph.D.   4.   Office Lease Agreement, dated April 25, 2003,
and First Amendment to Office Lease Agreement, dated January 21, 2004.   5.  
Distribution Agreement, dated June 16, 2003, by and between Cardica, Inc. and
Century Medical, Inc.   6.   Subordinated Convertible Note Agreement with
Century Medical, Inc., dated June 16, 2003, and Amendment No. 1 thereto, dated
August 6, 2003.   7.   Note issued pursuant to Subordinated Convertible Note
Agreement with Century Medical, Inc.   8.   Agreement, dated August 19, 2003, by
and between the Company and the Guidant Investment Corporation.   9.  
Intellectual Property Security Agreement, dated August 19, 2003, by the Company
in favor of Guidant.   10.   Notes issued pursuant to Omnibus Agreement.   11.  
Allen & Company LLC Letter of Intent, dated September 12, 2005.   12.   License,
Development and Commercialization Agreement, dated December 9, 2005, by and
between Cardica, Inc. and Cook Incorporated.   13.   1997 Equity Incentive Plan
and forms of related agreements and documents.   14.   Cardica, Inc. 2005 Equity
Incentive Plan, as amended.   15.   Note Conversion Agreement, dated November 7,
2006, by and between Cardica, Inc. and Guidant Investment Corporation.   16.  
Registration Rights Agreement, dated November 7, 2006, by and between Cardica,
Inc. and Guidant Investment Corporation.   17.   Consent to Grant of
Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement, dated November 7, 2006, by and between Cardica, Inc. and the
investors set forth there.   18.   Cardica, Inc. Non-Employee Director
Compensation.   19.   First Amendment to Distribution Agreement, dated March 30,
2007, by and between Cardica, Inc. and Century Medical, Inc.   20.   Amendment
No. 2 to Subordinated Convertible Note Agreement, dated March 30, 2007, by and
between Cardica, Inc. and Century Medical, Inc.   21.   Amended and Restated
Note issued pursuant to Amendment No. 2 to Subordinated Convertible Note
Agreement with Century Medical, Inc.   22.   Letter Agreement with Richard M.
Ruedy.

 

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EXHIBIT E
[Form of Irrevocable Transfer Agent Instructions
As of June __, 2007
Computershare Trust Company, N.A.
[Address]
[Address]
Attn:                                         
Ladies and Gentlemen:
     Reference is made to that certain Securities Purchase Agreement, dated as
of June 7, 2007 (the “Agreement”), by and among Cardica, Inc., a Delaware
corporation (the “Company”), and the purchasers named on the signature pages
thereto (collectively, and including permitted transferees, the “Holders”),
pursuant to which the Company is issuing to the Holders shares (the “Shares”) of
Common Stock of the Company, par value $0.001 per share (the “Common Stock”),
and warrants (the “Warrants”), which are exercisable into shares of Common
Stock.
     This letter shall serve as our irrevocable authorization and direction to
you (provided that you are the transfer agent of the Company at such time and
the conditions set forth in this letter are satisfied), subject to any stop
transfer instructions that we may issue to you from time to time, if any:
          (i) to issue certificates representing shares of Common Stock upon
transfer or resale of the Shares; and
          (ii) to issue shares of Common Stock upon the exercise of the Warrants
(the “Warrant Shares”) to or upon the order of a Holder from time to time upon
delivery to you of a properly completed and duly executed Exercise Notice, in
the form attached hereto as Annex I, which has been acknowledged by the Company
as indicated by the signature of a duly authorized officer of the Company
thereon together with indication of receipt of the exercise price therefor.
     You acknowledge and agree that so long as you have received (a) written
confirmation from the Company’s legal counsel that a registration statement
covering resales of the Shares and the Warrant Shares has been declared
effective by the Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “Securities Act”), a copy of such
registration statement and a completed and signed Purchaser’s Certificate of
Subsequent Sale with respect to a sale pursuant to such effective registration
statement, (b) written confirmation from the Company’s legal counsel that the
Shares and the Warrant Shares are eligible for sale in conformity with Rule 144
under the Securities Act (“Rule 144”) and customary documentation from a
Holder’s broker with respect to a sale pursuant to Rule 144 or (c) written
confirmation from the Company’s legal counsel that the Shares and the Warrant
Shares are eligible for sale in conformity with Rule 144(k) under the Securities
Act, then, unless otherwise required by law, within five (5) business days of
your receipt of a notice of sale and documentation required pursuant to clause
(a) or (b) above, as applicable, or a request from a Holder for the issuance of
an unlegended certificate in the event that the Shares and the Warrant Shares
are eligible for sale in conformity with Rule 144(k) under the Securities Act,
you shall issue the certificates representing the Shares and/or the Warrant
Shares, as the case may be, registered in the names of the purchaser of such
Shares or Warrant Shares or the Holder, as the case may be, and such
certificates shall not bear any legend restricting transfer of the Shares or the
Warrant Shares thereby and should not be subject to any stop-transfer
restriction.

 

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     In the event that you have not received the documentation required pursuant
to clause (a) or (b) of the immediately preceding paragraph or such Shares and
Warrant Shares are not eligible for sale in conformity with Rule 144(k) under
the Securities Act, then the certificates for such Shares and/or Warrant Shares
shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED] UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED EXCEPT AS
PROVIDED BY SECTION 4 OF THAT CERTAIN SECURITIES PURCHASE
AGREEMENT, DATED AS OF JUNE 7, 2007, BY AND AMONG CARDICA,
INC. AND EACH PURCHASER IDENTIFIED ON THE SIGNATURE PAGES
THERETO.
     Please be advised that the Holders are relying upon this letter as an
inducement to enter into the Agreement and, accordingly, each Holder is a third
party beneficiary to these instructions.
     Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions.

                  Very truly yours,    
 
                CARDICA, INC.    
 
           
 
  By:        
 
                Name:    
 
                Title:    
 
           

Acknowledged and Agreed:
COMPUTERSHARE TRUST COMPANY, N.A.
By:
                                                                                
Name:                                                                                
Title:                                                                                
Date: June __, 2007

 

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Annex I
Form of Exercise Notice
(To be executed by the Holder to exercise the right to purchase shares
of Common Stock under the Warrants)
To: Cardica, Inc.
(1) The undersigned holder hereby exercises the right to purchase
                     of the shares of Common Stock (the “Warrant Shares”) of
Cardica, Inc., a Delaware corporation (the “Company”), pursuant to the Warrant
(the “Warrant”). Capitalized terms used herein and not otherwise defined herein
have the respective meanings set forth in the Warrant.
(2) The Holder intends that payment of the Exercise Price shall be made as
(check one):

     
o
  “Cash Exercise” with respect to                                         
Warrant Shares; and/or
 
   
o
  “Cashless Exercise” with respect to                                         
Warrant Shares.

(3) If the Holder has elected a Cash Exercise, the holder shall pay the sum of
$                     to the Company in accordance with the terms of the
Warrant.
(4) Pursuant to this Exercise Notice, the Company shall deliver to the Holder
                     Warrant Shares in accordance with the terms of the Warrant.
(5) By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby,
the Holder will not beneficially own in excess of the number of shares of Common
Stock (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.
Dated:                     ,           
Name of Holder:                                         
By:                                                                     
            
Name:                                                                     
            
Title:                                                                     
            

(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)

 

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ACKNOWLEDGEMENT
     The Company hereby acknowledges this Exercise Notice and receipt of the
appropriate exercise price and hereby directs Computershare Trust Company, N.A.
to issue the above indicated number of shares of Common Stock in accordance with
the Transfer Agent Instructions dated                      , 2007, from the
Company and acknowledged and agreed to by Computershare Trust Company, N.A..

                  CARDICA, INC.    
 
           
 
  By:        
 
                Name:    
 
                Title:    
 
           

2

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EXHIBIT F
Form of Secretary’s Certificate
The undersigned hereby certifies that he is the duly elected, qualified and
acting Secretary of Cardica, Inc., a Delaware corporation (the “Company”), and
that as such he is authorized to execute and deliver this certificate in the
name and on behalf of the Company and in connection with the Securities Purchase
Agreement, dated as of June 7, 2007, by and among the Company and the investors
party thereto (the “Securities Purchase Agreement”), and further certifies in
his official capacity, in the name and on behalf of the Company, the items set
forth below. Capitalized terms used but not otherwise defined herein shall have
the meaning set forth in the Securities Purchase Agreement.

1.   Attached hereto as Exhibit A is a true, correct and complete copy of the
resolutions duly adopted by the Board of Directors of the Company at a meeting
of the Board of Directors held on June 6, 2007. Such resolutions have not in any
way been amended, modified, revoked or rescinded, have been in full force and
effect since their adoption to and including the date hereof and are now in full
force and effect.   2.   Attached hereto as Exhibit B is a true, correct and
complete copy of the Certificate of Incorporation of the Company, together with
any and all amendments thereto currently in effect, and no action has been taken
to further amend, modify or repeal such Certificate of Incorporation, the same
being in full force and effect in the attached form as of the date hereof.   3.
  Attached hereto as Exhibit C is a true, correct and complete copy of the
Bylaws of the Company and any and all amendments thereto currently in effect,
and no action has been taken to further amend, modify or repeal such Bylaws, the
same being in full force and effect in the attached form as of the date hereof.
  4.   Each person listed below has been duly elected or appointed to the
position(s) indicated opposite his name and is duly authorized to sign the
Securities Purchase Agreement and each of the Transaction Documents on behalf of
the Company, and the signature appearing opposite such person’s name below is
such person’s genuine signature.

                  Name   Position   Signature
 
           
 
  Bernard A. Hausen, M.D., Ph.D.   Chief Executive Officer    
 
           
 
           
 
  Robert Y. Newell   Chief Financial Officer    
 
           

IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___day
of June, 2007.

         
 
       
 
  Robert Y. Newell    
 
  Secretary    

3

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     I, Bernard A. Hausen, M.D., Ph.D., Chief Executive Officer, hereby certify
that Robert Y. Newell is the duly elected, qualified and acting Secretary of the
Company and that the signature set forth above is his true signature.

         
 
       
 
  Bernard A. Hausen, M.D., Ph.D.    
 
  Chief Executive Officer    

4

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EXHIBIT A
Resolutions

5

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EXHIBIT B
Certificate of Incorporation

6

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EXHIBIT C
Bylaws

7

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EXHIBIT G
Form of Officer’s Certificate
The undersigned, the Chief Executive Officer of Cardica, Inc., a Delaware
corporation (the “Company”), pursuant to Section 5.1(g) of the Securities
Purchase Agreement, dated as of June 7, 2007, by and among the Company and the
investors signatory thereto (the “Securities Purchase Agreement”), hereby
represents, warrants and certifies to such investors as follows (capitalized
terms used but not otherwise defined herein shall have the meaning set forth in
the Securities Purchase Agreement):

1.   The representations and warranties of the Company contained herein are true
and correct in all material respects as of the date when made and as of the
[Closing Date][Second Closing Date], as though made on and as of such date,
except for such representations and warranties that speak as of a specific date.
  2.   The Company have been performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by it at or
prior to the [Closing][Second Closing].

                    IN WITNESS WHEREOF, the undersigned has executed this
certificate this ___day of June, 2007.

         
 
       
 
       
 
  Bernard A. Hausen, M.D., Ph.D.    
 
  Chief Executive Officer    

8

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EXHIBIT H
PURCHASER’S CERTIFICATE OF SUBSEQUENT SALE
To:Cooley Godward Kronish llp

     
Attention:
  Nikki Pope, Esq.
 
  Five Palo Alto Square
 
  3000 El Camino Real
 
  Palo Alto, CA 94306-2155
 
  Fax: 650-849-7400
 
  Email: npope@cooley.com

The undersigned, the selling securityholder or an officer of, or other duly
authorized person, hereby certifies that
                                                                                
represents that it has sold                                          shares of
the Common Stock of Cardica, Inc. and that such shares were sold on
                     either (i) in accordance with the registration statement on
Form S-3 with file number                     , in which case the selling
securityholder certifies that such selling securityholder has delivered a
current prospectus in connection with such sale, provided, however, that if
Rule 172 under the Securities Act of 1933, as amended, is then in effect, such
selling securityholder has confirmed that a current prospectus is deemed to be
delivered in connection with such sale, or (ii) in accordance with Rule 144
under the Securities Act of 1933 (“Rule 144”), in which case the selling
securityholder certifies that it has complied with the requirements of Rule 144.
Print or type:

                 
 
  Name of individual representing selling securityholder (if an institution):  
         
 
               
 
               
 
  Title of individual representing selling securityholder (if an institution):  
         
 
               
 
                Signature by:            
 
               
 
               
 
  Selling securityholder or individual representative:   By:        
 
               
 
      Name:        
 
               
 
               
 
      Title:        
 
               

9