exv10w16



 





Exhibit 10.16




EXECUTION VERSION




CONSENT TO GRANT OF REGISTRATION RIGHTS AND

AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT




     This Consent to Grant of Registration Rights and Amendment to Amended and
Restated Investor Rights Agreement (this “Consent and Amendment”) is entered into this
7th day of November, 2006, by and among Cardica, Inc., a Delaware corporation
(the “Company”), and the stockholders set forth on Exhibit A hereto (the “Stockholders”).



     Whereas, the Stockholders and certain other holders of common stock of the Company
have certain registration rights (the “Existing Rights”) pursuant to Section 2 of that certain
Amended and Restated Investor Rights Agreement entered into as of August 19, 2003, by and among the
Company, the Stockholders and the other holders of the Company’s capital stock named therein (as
amended to date, the “Rights Agreement”). Capitalized terms used but not defined herein shall have
the meanings ascribed to them in the Rights Agreement;



     Whereas, Section 2.11 of the Rights Agreement provides that any provision of Section
2 of the Rights Agreement may be amended and the observance thereof may be waived (either generally
or in a particular instance and either retroactively or prospectively) with the written consent of
the Company and the Holders of at least a majority of the Registrable Securities then outstanding;



     Whereas, Section 2.12 of the Rights Agreement provides that, except in limited
circumstances, the Company shall not, without the prior written consent of the Holders of at least
a majority of the Registrable Securities then outstanding, enter into any agreement with any holder
or prospective holder of any securities of the Company that would grant such holder registration
rights pari passu or senior to those granted to the Holders under the Rights Agreement;



     Whereas, the Stockholders are the Holders of at least a majority of the Registrable
Securities currently outstanding;



     Whereas, the Company intends to grant registration rights to Guidant Investment
Corporation, a California corporation (including its successor in interest and affiliates,
“Guidant”), that would require an amendment to Section 2 the Rights Agreement and the consent
required by Section 2.12 of the Rights Agreement; and



     Whereas, to enable the Company to consummate the transactions contemplated with
Guidant, the Stockholders desire to consent to the granting of registration rights to Guidant, and
the Company and the Stockholders desire to amend the Rights Agreement as provided herein.



     Now, Therefore, in consideration of the foregoing premises and the mutual covenants
and conditions set forth below, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties to this Consent and Amendment, intending to be legally bound,
agree as follows:



 









 





     1. Consent to Grant of Registration Rights. The Stockholders, on behalf of all
Holders of Registrable Securities, hereby consent, pursuant to Sections 2.11 and 2.12 of the Rights
Agreement, to the granting of the registration rights to Guidant as set forth in the Registration
Rights Agreement in substantially the form attached hereto as Exhibit B.



     2. Amendments to Rights Agreement. 




     (a) Amendments to Section 2.2(b). Section 2.2(b) of the Rights Agreement is hereby
amended to read in its entirely as follows:




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




     (b) Amendments to Section 2.3. Section 2.3(a) of the Rights Agreement is hereby
amended and restated to read in its entirety as follows:



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



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of not less than a majority of the Registrable Securities proposed to be sold in the
offering. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective date
of the registration statement. Any Registrable Securities excluded or withdrawn
from such underwriting shall be excluded and withdrawn from the registration. For
any Holder which is a partnership or corporation, the partners, retired partners and
shareholders of such Holder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the foregoing person
shall be deemed to be a single “Holder,” and any pro rata reduction with respect to
such “Holder” shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such “Holder,”
as defined in this sentence.”



     3. No Other Amendment. Except as modified by this Consent and Amendment, the Rights
Agreement shall remain in full force and effect in all respects without any modification. By
executing this Consent and Amendment below, the Company and the Stockholders certify that this
Consent and Amendment has been executed and delivered in compliance with the terms of Sections 2.11
and 2.12 of the Rights Agreement. This Consent and Amendment shall become effective when executed
and delivered by the Stockholders and the Company as provided under Sections 2.11 and 2.12 of the
Agreement.



     4. Counterparts. This Consent and Amendment may be executed in counterparts
(including by facsimile or portable document format (.PDF)), each of which shall constitute an
original and all of which, when taken together, shall constitute one agreement.



[Remainder of Page Intentionally Left Blank]




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



	 	 	 	 	 
	 	COMPANY:



Cardica, Inc.

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




 









 





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



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






 









 





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



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






 









 






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



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






 









 





Exhibit A




STOCKHOLDERS




Guidant Investment Corporation

Allen & Company Incorporated

Sutter Hill Ventures, a California Limited Partnership

Sutter Hill Entrepreneurs’ Fund (AI), L.P.

Sutter Hill Entrepreneurs’ Fund (QP), L.P.




 









 





Exhibit B




REGISTRATION RIGHTS AGREEMENT