exv10w15



 





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:



 









 





          “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

10









 








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

11









 








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

12









 








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.




13









 








          (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.




14









 








          (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.




15









 








          (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

16









 








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

17









 








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



18









 







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

19









 








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.



20









 





     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



21









 







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




22









 






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



23









 








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

24









 







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).






25









 








          (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









 




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









 







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









 





     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









 





     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]




 









 







	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 	 	 
	 

	 	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









 
















	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 	 	 
	 	 	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










 





	 	 	 	 	 
	 	 	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









 





	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	 

	 	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









 





	 	 	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	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









 






	 	 	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 
	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	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









 






	 	 	 	 	 
	 

	 	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









 






	 	 	 	 	 
	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









 






	 	 	 	 	 	 	 
	 	 	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









 






	 	 	 	 	 	 	 	 	 
	 	 	 	 	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









 





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




 









 








ANNEX A-2




Second Closing Purchasers




Cross Creek Capital, L.P

Cross Creek Capital Employees’ Fund, L.P.




 









 





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









 





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









 





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









 





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









 





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









 




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









 






	 	 	 
	___(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









 






	 	 	 
	___

	 	(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









 





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









 





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









 




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









 




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









 






	 	 	 	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




14









 





SCHEDULE A




 









 





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.





 









 





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.



 









 





     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




 









 





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)




 









 





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









 





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









 





     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









 





EXHIBIT A




Resolutions




5









 





EXHIBIT B




Certificate of Incorporation




6









 





EXHIBIT C




Bylaws




7









 







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









 





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