Document:

exv10w9

 

[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

Exhibit 10.9

AGREEMENT

     This Agreement (this “Agreement”) is entered into as of the 19th day of
August, 2003 (the “Execution Date”), by and between Guidant Investment Corporation, a
California corporation (“Guidant”), and Cardica, Inc., a Delaware corporation (the
“Company”).

RECITALS

     A. Guidant desires to provide the Company a Ten Million Two Hundred Fifty Thousand Dollars
(US$10,250,000) line of credit and to make a Four Million Dollar (US$4,000,000) equity investment
in the Company in exchange for an agreement by the Company not to enter into any agreement
regarding a material transaction, as more expressly set forth herein.

     B. The Company, as borrower, desires to borrow from Guidant, as lender, up to an aggregate
principal amount of Ten Million Two Hundred Fifty Thousand Dollars (US$10,250,000), on the terms
and conditions set forth herein, and to sell to Guidant up to eight hundred fifty-one thousand
sixty-four (851,064) shares (the “Shares”) of the Company’s Series E Preferred Stock, $0.001 par
value, for an aggregate purchase price of Four Million Dollars and Eighty Cents (US$4,000,000.80).

AGREEMENT

     Now, Therefore, in consideration of the promises and of the mutual provisions,
agreements and covenants contained herein, the Company and Guidant hereby agree as follows:

ARTICLE I

LINE OF CREDIT

     1.1 Commitment. At any time from the date hereof and prior to the Commitment Termination
Date, Guidant shall make loans (the “Loans”) to the Company in an aggregate principal amount not to
exceed Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000) (the “Line of Credit”). The
collective outstanding amount of all Loans made to the Company shall hereinafter be referred to as
the “Loan.”

     1.2 Interest.

          (a) Interest. Each Loan shall bear interest from the relevant Disbursement Date on the unpaid
principal amount thereof until such Loan is repaid in full, at a rate per annum equal to eight and
three quarters percent (8.75%). Upon the occurrence and during the continuation of an Event of
Default, each Loan shall, to the extent permitted by law, bear interest at a rate equal to the rate
provided above plus two percent (2%) per annum.

          (b) Accrual and Computation of Interest. Interest shall be computed on the basis of a year of
365 days for the actual number of days elapsed for any Loan.

1.

 

          (c) Maximum Interest Rate. Nothing in this Agreement shall require the Company to pay
interest at a rate exceeding the maximum amount permitted by applicable law to be charged by
Guidant; provided, that in any event the Company shall pay the lesser of such maximum permissible
rate and the rate provided herein. If, however, interest is paid hereunder in excess of the
maximum rate of interest permitted by law, any interest so paid that exceeds such maximum rate
shall automatically be deemed to constitute a payment of principal and shall automatically be
applied in reduction of principal due on the applicable Note in the amount of such excess. In the
event and to the extent such excess amount of interest exceeds the outstanding unpaid principal
balance under such Note, any such excess shall be immediately returned to the Company by Guidant.

     1.3 Payments.

          (a) Interest Payments. The Company shall pay Guidant all interest then accrued with respect
to any Note on the Maturity Date, or, if earlier, upon full repayment of such Note.

          (b) Loan Payment. The Company shall repay the entire outstanding principal amount of the Loan
in full on the Maturity Date. Amounts repaid (whether repaid when due or prepaid) may not be
reborrowed.

          (c) Optional Prepayment. The Company may at any time prepay the entire outstanding principal
amount of the Loan or any portion thereof without penalty.

          (d) Material Transaction Prepayment. The Company shall repay the outstanding principal amount
of the Loan immediately upon the occurrence of a Material Transaction between the Company and any
Person other than Guidant, and in such event Guidant shall have no further obligation to make any
further disbursement under this Agreement.

          (e) Subordination. Notwithstanding the foregoing, the payment of principal of each Note will
be subordinated in right of payment to the prior payment in full of all Senior Indebtedness,
whether outstanding on the date hereof or hereafter incurred; provided, however, that, except as
limited under Article VI, the Company shall pay outstanding principal, plus any accumulated
interest amounts, on the Maturity Date of each Note.

          (f) Event of Default. Except as may be limited under Article VI, when an Event of Default
occurs and continues, Guidant may, without notice or demand, do any or all of the following (i)
declare all amounts immediately due and payable (but if an Event of Default described in clause (b)
of the defined term occurs all amounts are immediately due and payable without any action by
Guidant); (ii) stop advancing money or extending credit for the Company’s benefit under this
Agreement; and (iii) exercise any other remedies available to it under applicable statutes, at law,
or in equity.

     1.4 Note. Each Loan made shall be evidenced by a promissory note (substantially in the form
attached hereto as Exhibit A) executed by the Company and made payable to Guidant in the
stated principal amount of such Loan. Each such promissory note is herein referred to as a “Note,”
and collectively such promissory notes are herein referred to as “Notes.” The Company

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hereby authorizes Guidant to indicate upon a schedule attached to each Note all payments of
principal and interest thereon. Absent manifest error, such notations shall be presumptive as to
the aggregate unpaid principal amount of the Loan, and interest due thereon, but any failure by
Guidant to make such notations or the inaccuracy or incompleteness of any such notations shall not
affect the Obligations.

     1.5 Delivery of Note; Closing. The delivery of the first Note by the Company (the “Closing”)
shall occur on the first Disbursement Date or such later Business Day as shall be mutually agreed
upon by the Company and Guidant (the “Closing Date”). On the Closing Date, Guidant shall provide,
in immediately available funds, an amount equal to the principal amount of the first installment of
the Loan (as set forth in the applicable Borrowing Notice, as such term is defined in Section 1.7
hereof), by wire transfer for the account of the Company in accordance with the following:

	 	 	 	 	 
	 

	 	Chase Manhattan Bank	 	 
	 

	 	ABA# [*]	 	 
	 
	 	 	 	 
	 

	 	Fahnestock & Co. Inc.	 	 
	 

	 	Account # [*]	 	 
	 

	 	For Final Credit of:
	 	Cardica, Inc.
	 

	 	Final Credit Account #:
	 	[*]

     1.6 Home Office Payment. The Company shall pay all sums due on each Note by wire transfer of
immediately available funds for the account of Guidant in accordance with the following:

	 	 	 	 	 
	 

	 	Citibank—New York, NY	 	 
	 

	 	ABA# [*]	 	 
	 

	 	Account [*]	 	 
	 

	 	Account Name:
	 	Guidant Corporation

or by such other method or at such other location as Guidant shall specify from time to time in
writing to Company, without presentation or surrender of the Note or the making of any notation
thereon.

     1.7 Borrowing Procedures. The Company shall deliver to Guidant written notice of the
Company’s desire for a Loan no later than 11:00 a.m. San Francisco, California time five (5)
Business Days prior to the requested Disbursement Date. Such notice shall be irrevocable and shall
be substantially in the form attached hereto as Exhibit B attached hereto (“Borrowing
Notice”). In no event shall the amount requested for any one Loan be less than One Million Dollars
(US$1,000,000), or the remaining availability under the Line of Credit if such amount is less than
One Million Dollars (US$1,000,000), nor greater than Five Million Two Hundred Fifty Thousand
Dollars (US$5,250,000). In no event shall Guidant be obligated to make a second disbursement until
at least six (6) months after the first Disbursement Date and unless the Company has complied with
its obligations under Section 5.7 of this Agreement.

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     1.8 Obligation to Fund. Upon written notice by the Company pursuant to Section 1.7 hereof to
borrow, and so long as no Event of Default has occurred and is continuing, Guidant shall have the
absolute obligation to fund the Loan on the Disbursement Date in the amount requested in the
Borrowing Notice.

ARTICLE II

INTERPRETATION OF AGREEMENT; DEFINITIONS.

     2.1 Definitions. Unless the context otherwise requires, the terms hereinafter set forth when
used herein shall have the following meanings and the following definitions shall be equally
applicable to both the singular and plural forms of any of the terms herein defined:

     “Acquisition Proposal” shall mean any proposal made by a third party to acquire, directly or
indirectly, including pursuant to a merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration consisting of cash and/or
securities, more than 50% of the combined voting power of the shares of the Company then
outstanding or all or substantially all the assets of the Company.

     “Affiliate” shall mean any Person (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with, the Company, (ii)
which beneficially owns or holds fifty percent (50%) or more of any class of the Voting Stock of
the Company or (iii) fifty percent (50%) or more of the Voting Stock (or in the case of a Person
which is not a corporation, fifty percent (50%) or more of the equity interest) of which is
beneficially owned or held by the Company. The term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or otherwise. In addition, The
Guidant Foundation is an Affiliate of Guidant.

     “Business Day” shall mean any day other than a Saturday, Sunday, legal holiday or other day on
which commercial banks located in San Francisco, California are authorized or required by law to be
closed.

     “CMI” shall mean Century Medical, Inc., a Japan corporation.

     “Commitment Termination Date” shall be the date that is the second (2nd)
anniversary of the Execution Date.

     “Common Stock” shall mean the Common Stock, par value $0.001 per share, of the Company.

     “Disbursement Date” shall mean any date on which a Loan is made.

     “Disclosure Schedule” shall have the meaning specified in Article III hereof.

     “Event of Default” shall mean: (a) a default in the payment of the principal or unpaid accrued
interest on the Notes when due and payable if the Company does not cure such default within ten
(10) calendar days after Guidant has given the Company written notice of such

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default; (b) the institution by the Company of proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to institution of bankruptcy or insolvency proceedings against it
or the filing by it of a petition or answer or consent seeking reorganization or relief under the
United States Federal Bankruptcy Code, or any other applicable federal or state law, or the consent
by it to the filing of any such petition or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Company, or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors which proceedings are not dismissed
within thirty (30) days of the commencement of such proceedings; (c) the commencement of an action
against the Company (and service of process in connection therewith on the Company) seeking any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar relief under any
present or future statute, law or regulation which action shall not have been resolved in favor of
the Company within thirty (30) days of the commencement of such action, or the appointment without
the consent or acquiescence of the Company of any trustee, receiver or liquidator of the Company or
of all or any substantial part of the properties of the Company which appointment shall not have
been vacated within thirty (30) days of such appointment; (d) a default under the terms of the VLL
Loan Agreements; (e) an “Event of Default” as defined under Section 7.1 under the CMI Loan
Agreement, regardless of whether CMI treats such occurrence as a default; (f) a default in the
performance of any of its covenants and agreements set forth in Section 5.8 hereof and the
continuance of such default for thirty (30) days after Guidant has given the Company written notice
of such default, or (g) the Quiet Period and the Exclusive Negotiation Period shall have been
terminated due to the termination of the Agreement by the Company in accordance with Section 5.1
hereof because of the receipt by the Company of an Acquisition Proposal and the Board of Directors
of the Company determined in good faith, after consultation with outside counsel, that it was
necessary to do so to act in a manner consistent with its fiduciary duties to the Company’s
stockholders under applicable law.

     “Exclusive Negotiation Period” shall mean a period of thirty (30) days commencing on the
earlier of (x) November 1, 2004, or (y) the date following the expiration of the Quiet Period (as
hereinafter defined).

     “FDA” shall mean the U.S. Food and Drug Administration.

     “Financial Statements” shall have the meaning specified in Section 3.17 hereof.

     “GAAP” shall mean generally accepted accounting principles at the time in the United States.

     “Indebtedness” shall mean indebtedness for borrowed money evidenced by a promissory note that
provides for payment of interest based on a principal amount and includes the acceleration of
payment of such principal amount upon certain events of default.

     “Interest Payment Date” shall mean the date on which the payment of accrued interest on any
Note is due and payable.

     “IP Security Agreement” shall have the meaning specified in Section 6.7 hereof.

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     “Lien” shall mean any interest in property securing an obligation owed to, or a claim by, a
Person other than the owner of the property, whether such interest is based on the common law,
statute or contract, and including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other
title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting
trust agreements, buy-back agreements and all similar arrangements) affecting property. For
purposes of this Agreement, the Company shall be deemed to be the owner of any property which it
has acquired or holds subject to a conditional sale agreement, capitalized lease or other
arrangement pursuant to which title to the property has been retained by or vested in some other
Person for security purposes and such retention or vesting shall constitute a Lien.

     “Material Adverse Effect” shall mean any event, act or failure to act which would have a
material adverse effect on the Company’s assets, business (as presently conducted or as proposed to
be conducted), properties, financial condition or operating results, or on the Company’s ability to
enter into and perform its Obligations.

     “Material Transaction” shall mean any merger, sale or other transfer of all or substantially
all of the assets or capital stock of the Company, or any other material strategic transaction
involving the Company (including the licensing or other transfer of the Company’s intellectual
property, or a United States distribution agreement with a competitor of Guidant’s); provided,
however, in no event shall either (a) the sale of shares of the Company’s capital stock (x) in any
transaction or series of related transactions consummated principally for equity financing purposes
that is not directly related to a material strategic business transaction (such as a merger,
acquisition, license, distribution or development transaction), or (y) in connection with the
Company’s initial public offering of its securities registered under the Securities Act, or (b) any
transaction or series of related transactions with Guidant or its affiliates, constitute a
“Material Transaction.”

     “Maturity Date” shall mean the date that is five (5) years from the Execution Date, or any
other earlier date on which a Note becomes due and payable, whether as stated or by virtue of an
Event of Default or otherwise.

     “Obligations” shall mean all loans, advances, debts, liabilities, obligations, covenants and
duties owing, to Guidant by the Company of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under this Agreement, the Note or the
IP Security Agreement, whether or not for the payment of money, arising by reason of an extension
of credit, absolute or contingent, due or to become due, now existing or hereafter arising,
including all principal, interest, charges, expenses, fees, attorneys’ fees and disbursements and
any other sum chargeable to the Company under this Agreement or the IP Security Agreement.

     “PAS-Port Data” shall mean such data described on Exhibit D hereof which is
incorporated herein by this reference.

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     “Permitted Liens” shall mean (a) Liens held by VLL or CMI; (b) Liens for taxes, fees,
assessments or other government charges or levies, either not delinquent or being contested in good
faith and for which Borrower maintains adequate reserves on its books; (c) purchase money Liens (i)
on equipment acquired or held by the Company or its subsidiaries incurred for financing the
acquisition of the equipment, or (ii) existing on equipment when acquired, if the Lien is confined
to the property and improvements and the proceeds of the equipment; (d) leases or subleases granted
in the ordinary course of the Company’s business, including in connection with the Company’s leased
premises or leased property; (e) minor liens and encumbrances which do not materially detract from
the value of the property subject thereto or materially impair the operations of the Company; (f)
Liens that constitute rights of set-off of a customary nature or banker’s Liens with respect to
amounts on deposit, whether arising by operation of law or by contract, in connection with
arrangements entered into with banks in the ordinary course of business; and (g) Liens incurred in
the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through
(c), but any extension, renewal or replacement Lien must be limited to the property encumbered by
the existing Lien and the principal amount of the indebtedness may not increase.

     “Person” shall mean an individual, partnership, corporation, limited liability company, trust
or unincorporated organization, and a government or agency or political subdivision thereof.

     “Quiet Period” shall have the meaning specified in Section 5.1.

     “Registered Holder” shall mean Guidant Investment Corporation.

     “SEC” shall mean the Securities and Exchange Commission, or successor regulatory entity.

     “Securities Act” shall mean the Securities Act of 1933, as amended.

     “Senior Indebtedness” shall mean any and all Indebtedness, fees, costs, expenses, liabilities
or other amounts owed, owing or to be owed by the Company to (x) VLL pursuant to those certain Loan
and Security Agreements dated March 17, 2000 and July 5, 2001, and December 12, 2002, as they may
be amended or supplemented from time to time (collectively, the “VLL Loan Agreements”); and (y) CMI
pursuant to that certain Subordinated Convertible Note Agreement by and between the Company and CMI
dated June 16, 2003, as it may be amended or supplemented from time to time (the “CMI Loan
Agreement”), provided, however, that amounts owing to CMI pursuant to the CMI Loan Agreement shall
only constitute “Senior Indebtedness” to the extent amounts owing to Guidant and VLL collectively
exceed [*] Dollars (US$[*]), and further shall only be “Senior Indebtedness” to the extent provided
for in the CMI Loan Agreement.

     “VLL” shall mean Venture Lending & Leasing II, Inc., and Venture Lending & Leasing III, Inc.,
and their successors or assigns, collectively.

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     “Voting Stock” shall mean securities of any class or classes, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).

     2.2 Accounting Principles. Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.

     2.3 Directly or Indirectly. Where any provision in this Agreement refers to action to be
taken by any Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by such Person.

     2.4 Legal Holidays. In any case where any Interest Payment Date or the Maturity Date of the
Note shall not be a Business Day, then (notwithstanding any other provision of this Agreement or of
the Note) payment of interest or principal or conversion of the Note, as the case may be, shall be
made on the next succeeding Business Day with the same force and effect as if made on the Interest
Payment Date, or at the Maturity Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as otherwise specifically set forth in the Disclosure Schedule attached hereto as
Exhibit C (the “Disclosure Schedule”), the Company represents and warrants to Guidant as
of the date hereof as follows:

     3.1 Organization, Good Standing. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own and operate its properties and assets, to execute
and deliver this Agreement, to issue the Notes, to carry out the provisions of this Agreement, and
to carry on its business as presently conducted and as presently proposed to be conducted.

     3.2 Subsidiaries. The Company does not own or control any equity security or other interest
of any other corporation, limited partnership or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement.

     3.3 Capitalization; Voting Rights.

          (a) The authorized capital stock of the Company consists of (i) 23,860,000 shares of Common
Stock, par value $0.001 per share, 4,646,079 shares of which are issued and outstanding; and (ii)
15,243,000 shares of Preferred Stock, par value $0.001 per share, 683,000 shares of which are
designated Series A Preferred Stock, all of which are issued and outstanding, 1,700,000 shares of
which are designated Series B Preferred Stock, 1,585,838 shares of which are issued and
outstanding, 5,500,000 shares of which are designated Series C Preferred Stock,

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4,698,996 shares of which are issued and outstanding, 6,500,000 shares of which are designated
Series D Preferred Stock, 4,821,992 of which are issued and outstanding, and 1,006,000 shares of
which are designated Series E Preferred Stock, none of which are issued and outstanding. All issued
and outstanding shares of the Company’s Common Stock and Preferred Stock have been duly authorized
and validly issued and are fully paid and nonassessable. Each share of Preferred Stock is
convertible into Common Stock on a one-for-one basis as of the date hereof.

          (b) Under the Company’s 1997 Equity Incentive Plan as amended to date (the “Plan”), (i)
1,805,459 shares have been issued pursuant to restricted stock purchase agreements and/or the
exercise of outstanding options (such number is reflected in the number of shares of outstanding
Common Stock listed in Section 3.3(a)(i) above), (ii) options to purchase 2,079,829 shares have
been granted and are currently outstanding, and (iii) 554,092 shares of Common Stock remain
available for future issuance to officers, directors, employees and consultants of the Company.

          (c) Other than (i) the shares reserved for issuance under the Plan, (ii) warrants to purchase
96,439 shares of Common Stock, (iii) warrants to purchase 36,810 shares of Series B Preferred
Stock, (iv) warrants to purchase 156,250 shares of Series C Preferred Stock, (v) warrants to
purchase 180,052 shares of Series D Preferred Stock, and (vi) except as may be granted pursuant to
this Agreement, that certain Series E Preferred Stock Purchase Agreement between the Company and
Guidant of even date herewith (the “Purchase Agreement”) and that certain Amended and Restated
Investor Rights Agreement by and among the Company, Guidant, and certain other holders of the
Company’s Preferred Stock of even date herewith (the “Investor Rights Agreement”), there are no
outstanding options, warrants, rights (including conversion or preemptive rights and rights of
first refusal), proxy or stockholder agreements, or agreements of any kind for the purchase or
acquisition from the Company of any of its securities.

          (d) The rights, preferences, privileges and restrictions of the Preferred Stock and Common
Stock are as stated in the Company’s Amended and Restated Certificate of Incorporation (the
“Restated Charter”). Each series of Preferred Stock is convertible into Common Stock on a
one-for-one basis as of the date hereof.

          (e) No stock plan, stock purchase, stock option or other agreement or understanding between
the Company and any holder of any equity securities or rights to purchase equity securities
provides for acceleration or other changes in the vesting provisions or other terms of such
agreement or understanding as the result of any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company.

     3.4 Authorization; Binding Obligations. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization of this Agreement, the
performance of all obligations of the Company hereunder and the authorization, issuance and
delivery of the Notes pursuant hereto has been taken or will be taken prior to the Closing. This
Agreement, when executed and delivered, will be a valid and binding obligation of the Company
enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application affecting enforcement
of creditors’ rights, and (b) general principles of equity that restrict the

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availability of equitable remedies. The issuance of the Notes is not subject to any
preemptive rights or rights of first refusal that have not been properly waived or complied with.

     3.5 Liabilities. The Company has no material liabilities and, to the best of its knowledge,
knows of no material contingent liabilities, except current liabilities incurred in the ordinary
course of business which have not been, either in any individual case or in the aggregate,
materially adverse.

     3.6 Agreements; Action.

          (a) Except for agreements explicitly contemplated hereby and agreements between the Company
and its employees with respect to the sale of the Company’s Common Stock, there are no agreements,
understandings or proposed transactions between the Company and any of its officers, directors,
affiliates or any affiliate thereof.

          (b) There are no agreements, understandings, instruments, contracts, judgments, orders, writs
or decrees to which the Company is a party or to its knowledge by which it is bound which may
involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of
$50,000 (other than obligations of, or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business), or (ii) the transfer or license of any
patent, copyright, trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of “off the shelf” or other standard products), or (iii)
indemnification by the Company with respect to infringements of proprietary rights (other than
indemnification obligations arising from purchase or sale or license agreements entered into in the
ordinary course of business).

          (c) The Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or any other liabilities (other than with respect to dividend
obligations, distributions, indebtedness and other obligations incurred in the ordinary course of
business) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities
individually less than $50,000, in excess of $100,000 in the aggregate, (iii) made any loans or
advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged
or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the
ordinary course of business.

          (d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities,
agreements, understandings, instruments, contracts and proposed transactions involving the same
person or entity (including persons or entities the Company has reason to believe are affiliated
therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

     3.7 Obligations to Related Parties. There are no obligations of the Company to officers,
directors, stockholders, or employees of the Company other than (a) for payment of salary for
services rendered, (b) reimbursement for reasonable expenses incurred on behalf of the Company and
(c) for other standard employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the

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Board of Directors of the Company). None of the officers, directors or, to the best of the
Company’s knowledge, key employees or stockholders of the Company or any members of their immediate
families, are indebted to the Company or have any direct or indirect ownership interest in any firm
or corporation with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the Company, other than passive
investments in publicly traded companies (representing less than 1% of such company) which may
compete with the Company. No officer, director or stockholder, or any member of their immediate
families, is, directly or indirectly, interested in any material contract with the Company (other
than such contracts as relate to any such person’s ownership of capital stock or other securities
of the Company).

     3.8 Title to Properties and Assets; Liens, Etc. The Company has good and marketable title to
its properties and assets, including the properties and assets reflected in the most recent balance
sheet included in the Balance Sheet (as defined in Section 3.17), and good title to its leasehold
estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other
than Permitted Liens. All facilities, machinery, equipment, fixtures, vehicles and other
properties owned, leased or used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. The Company is in
compliance with all material terms of each lease to which it is a party or is otherwise bound.

     3.9 Intellectual Property.

          (a) To the best of its knowledge, the Company owns or possesses sufficient legal rights to all
patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information
and other proprietary rights and processes necessary for its business as now conducted and as
presently proposed to be conducted, without any known infringement of the rights of others. There
are no outstanding options, licenses or agreements of any kind relating to the foregoing
proprietary rights, nor is the Company bound by or a party to any options, licenses or agreements
of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information and other proprietary rights and processes of any other person or
entity other than such licenses or agreements arising from the purchase of “off the shelf” or
standard products or licenses incidental to consulting agreements or with independent contractors.

          (b) The Company has not received any communications alleging that the Company has violated or,
by conducting its business as presently proposed, would violate any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary rights of any other
person or entity.

          (c) The Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would interfere with their
duties to the Company or that would conflict with the Company’s business as presently proposed to
be conducted. No employee, officer or consultant of the Company has excluded works or inventions
made prior to his or her employment with the Company from his or her assignment of inventions
pursuant to such employee, officer or consultant’s proprietary

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information and inventions agreement. The Company does not believe it is or will be necessary
to utilize any inventions, trade secrets or proprietary information of any of its employees made
prior to their employment by the Company, except for inventions, trade secrets or proprietary
information that have been assigned to the Company.

          (d) Neither the execution nor delivery of this Agreement, nor the carrying on of the Company’s
business by the employees of the Company, nor the conduct of the Company’s business as presently
proposed, will, to the Company’s knowledge, conflict with or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any contract, covenant or instrument
under which any employee is now obligated.

     3.10 Compliance with Other Instruments. The Company is not in violation or default of any
term of its Restated Charter or Bylaws, or of any provision of any mortgage, indenture, contract,
agreement, instrument or contract to which it is party or by which it is bound or of any judgment,
decree, order, writ. The execution, delivery, and performance of and compliance with this
Agreement, and the issuance of the Notes pursuant hereto, will not, with or without the passage of
time or giving of notice, result in any such material violation, or be in conflict with or
constitute a default under any such term, or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets or properties.

     3.11 Litigation. There is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened in writing against the Company that questions the
validity of this Agreement or the right of the Company to enter into this Agreement, or to
consummate the transactions contemplated hereby, or which would reasonably be expected to result,
either individually or in the aggregate, in any material adverse change in the assets, condition,
affairs or prospects of the Company, financially or otherwise, or any change in the current equity
ownership of the Company, nor is the Company aware that there is any basis for any of the
foregoing. The foregoing includes, without limitation, actions pending or, to the Company’s
knowledge, threatened in writing involving the prior employment of any of the Company’s employees,
their use in connection with the Company’s business of any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the Company intends to
initiate.

     3.12 Tax Returns and Payments. The Company has filed all tax returns (federal, state and
local) required to be filed by it. All taxes shown to be due and payable on such returns, any
assessments imposed, and to the Company’s knowledge all other taxes due and payable by the Company,
have been paid or will be paid prior to the time they become delinquent. The Company has no
knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of
this Agreement that is not adequately provided for. The Company has paid all federal, state and
local income, profits, franchise, sales, use, property, excise, payroll and other taxes (including
interest and penalties) to the extent that such have become due.

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     3.13 Employees. The Company has no collective bargaining agreements with any of its
employees. There is no labor union organizing activity pending or, to the Company’s knowledge,
threatened with respect to the Company. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement, bonus plan, incentive plan,
profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the
Company’s knowledge, no employee of the Company, nor any consultant with whom the Company has
contracted, is in violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to be employed by, or
to contract with, the Company because of the nature of the business to be conducted by the Company;
and to the Company’s knowledge the continued employment by the Company of its present employees,
and the performance of the Company’s contracts with its independent contractors, will not result in
any such violation. The Company has not received any notice alleging that any such violation has
occurred. No employee of the Company has been granted the right to continued employment by the
Company or to any material compensation following termination of employment with the Company. The
Company is not aware that any officer, key employee or group of employees intends to terminate his,
her or their employment with the Company, nor does the Company have a present intention to
terminate the employment of any officer, key employee or group of employees.

     3.14 Registration Rights and Voting Rights. Except as required pursuant to the Investor
Rights Agreement, the Company is presently not under any obligation, and has not granted any
rights, to register (as defined in Section 1.1 of the Investor Rights Agreement) any of the
Company’s presently outstanding securities or any of its securities that may hereafter be issued.
To the Company’s knowledge, except as contemplated in that certain Voting Agreement dated August 9,
2000, by and among the Company and certain holders of the Company’s Common Stock and Preferred
Stock, as amended to date, no stockholder of the Company has entered into any agreement with
respect to the voting of equity securities of the Company.

     3.15 Compliance with Laws; Permits. To its knowledge, the Company is not in violation of any
applicable statute, rule, regulation, order or restriction of any domestic or foreign government or
any instrumentality or agency thereof in respect of the conduct of its business or the ownership of
its properties which violation would materially and adversely affect the business, assets,
liabilities, financial condition, operations or prospects of the Company. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained and no registrations
or declarations are required to be filed in connection with the execution and delivery of this
Agreement and the issuance of the Notes, except such as has been duly and validly obtained or
filed. The Company has all franchises, permits, licenses and any similar authority necessary for
the conduct of its business as now being conducted by it, the lack of which could materially and
adversely affect the business, properties or financial condition of the Company and believes it can
obtain, without undue burden or expense, any similar authority for the conduct of its business as
planned to be conducted.

     3.16 Offering Valid. Assuming the accuracy of the representations and warranties of Guidant
contained in Article IV hereof, the offer and issuance of the Notes will be exempt from the
registration requirements of the Securities Act, and will have been registered or qualified (or are
exempt from registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws. Neither the Company nor any agent on its

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behalf has solicited or will solicit any offers to issue or has offered to issue or will offer
to issue all or any part of the Notes to any person or persons so as to bring the issuance of such
Notes by the Company within the registration provisions of the Securities Act or any state
securities laws.

     3.17 Financial Statements. The Company has made available to Guidant (a) its audited balance
sheet as of June 30, 2002, and audited statement of operations for the fiscal year ended June 30,
2002, (b) its unaudited balance sheet (the “Balance Sheet”) as of May 31, 2003 (the “Balance Sheet
Date”) and unaudited statement of operations for the period ending on the Balance Sheet Date
(collectively, the “Financial Statements”), and (c) its unaudited balance sheets as of April 30,
2003, May 31, 2003 and June 30, 2003 and unaudited statements of operations for the monthly period
ended on each such date. The Financial Statements, together with the notes thereto, have been
prepared in accordance with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as disclosed therein, and present fairly in all material
respects the financial condition and position of the Company as of June 30, 2002, and the Balance
Sheet Date; provided, however, that the unaudited financial statements are subject to normal
year-end audit adjustments, and do not contain footnotes required under generally accepted
accounting principles.

     3.18 Changes. Since the Balance Sheet Date, there has not been to the Company’s knowledge:

          (a) Any change in the assets, liabilities, financial condition or operating results of the
Company from that reflected in the Financial Statements, except changes in the ordinary course of
business that have not been, either individually or in the aggregate, materially adverse;

          (b) Any damage, destruction or loss, whether covered by insurance or not, materially and
adversely affecting the business, properties or financial condition of the Company;

          (c) Any waiver or compromise by the Company of a valuable right or material debt owed to it;

          (d) Any satisfaction or discharge of any lien, claim or encumbrance, or payment of any
obligation by the Company, except those in the ordinary course of business that are not material to
the business, properties or financial condition of the Company;

          (e) Any change to a material contract or agreement by which the Company or any of its assets
is bound or to which the Company is subject which materially and adversely affects the business,
assets, liabilities, financial condition or operations of the Company;

          (f) Any material change in any compensation arrangement or agreement with any employee,
officer, director or stockholder;

          (g) Any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or
other intangible assets;

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          (h) Any resignation or termination of employment of any officer or key employee of the
Company;

          (i) Any mortgage, pledge, transfer or a security interest in, or lien, created by the Company,
with respect to any of the Company’s material properties or assets, except liens for taxes not yet
due or payable and those which arise in the ordinary course of business and do not materially
impair the Company’s ownership or use of its material property or assets;

          (j) Any loans or guarantees made by the Company to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other than travel and other
advances made in the ordinary course of business;

          (k) Any declaration, setting aside, payment or other distribution in respect of any of the
Company’s capital stock, or any direct or indirect redemption, purchase or other acquisition of any
of such stock by the Company other than a repurchase by the Company of shares of its Common Stock
pursuant to the right of first refusal set forth in the Company’s Bylaws;

          (l) Any material change, except in the ordinary course of business, in the contingent
obligations of the Company by way of guaranty, endorsement, indemnity, warranty or otherwise;

          (m) Any debt, obligation or liability incurred, assumed or guaranteed by the Company except
those for immaterial amounts and for current liabilities incurred in the ordinary course of
business; and

          (n) Any arrangement or commitment by the Company to do any of the acts described in
subsections (a) through (m) above.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF GUIDANT

     Except as contemplated by this Agreement, Guidant represents and warrants to the Company as of
the date hereof as follows:

     4.1 Corporate Organization. Guidant is a corporation duly incorporated, validly existing and
in good standing under the laws of California. Guidant has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver this Agreement, to
purchase the Notes, to carry out the provisions of this Agreement, and to carry on its business as
presently conducted and as presently proposed to be conducted.

     4.2 Authority. All corporate action on the part of Guidant, its officers, directors and
stockholders necessary for the authorization of this Agreement, the performance of all obligations
of Guidant has been taken or will be taken prior to the Closing. This Agreement, when executed and
delivered, will be a valid and binding obligation of Guidant enforceable in accordance with its
terms, except (a) as limited by applicable bankruptcy, insolvency,

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reorganization, moratorium or other laws of general application affecting enforcement of
creditors’ rights, and (b) general principles of equity that restrict the availability of equitable
remedies. The execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under (a) any provision of the Certificate of
Incorporation or Bylaws of Guidant, or (b) any material agreement or instrument, permit, license,
judgment, order, statute, law, ordinance, rule or regulation applicable to Guidant or its
properties or assets, other than any such conflicts, violations, defaults, terminations,
cancellations or accelerations which individually or in the aggregate would not have a material
adverse effect on Guidant.

     No consent, approval, order or authorization of, or registration, declaration or filing with,
any United States governmental authority is required by or with respect to Guidant in connection
with the execution and delivery of this Agreement by Guidant or the consummation by Guidant of the
transactions contemplated hereby or thereby.

     4.3 Restricted Note. Guidant represents and agrees that, upon the issuance of any Note, (a)
Guidant will acquire such Note for Guidant’s own account, and for the purpose of investment and not
with a view to the distribution thereof, and (b) the Note has not been registered under Section 5
of the Securities Act and may not be offered or sold by Guidant.

     4.4 Disclosure of Information. Guidant believes it has received all the information it
considers necessary or appropriate for deciding whether to enter into this Agreement and purchase
the Note. Guidant further represents that it has had an opportunity to ask questions and receive
answers from the Company regarding the terms and conditions of this Agreement and the issuance of
the Note.

     4.5 Investment Experience. Guidant is an investor in securities of companies in the
development stage and acknowledges that it is able to fend for itself, and bear the economic risk
of its investment and has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of this Agreement and the issuance of the Note. Guidant
represents that it has not been organized for the purpose of acquiring the Note.

     4.6 Accredited Investor. Guidant is an “accredited investor” as defined in Rule 501 of
Regulation D as promulgated by the SEC under the Securities Act and shall submit to the Company
such further assurances of such status as may be requested by the Company.

ARTICLE V

COVENANTS OF THE PARTIES

     5.1 Quiet Period. From and after the date hereof and until the later of (x) the date of
approval by the FDA of the Company’s PAS-Port, or (y) such time as the PAS-Port Data is collected,
the Company shall not enter into any agreement or negotiations for any transaction or series of
transactions resulting in a Material Transaction (collectively, the “Quiet Period”); provided,
however, that the Quiet Period shall not extend beyond November 30, 2004 so long as

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the Company has complied with its obligations in Section 5.2. Notwithstanding the foregoing,
in the event that the Company receives an Acquisition Proposal and the Board of Directors of the
Company determines in good faith, after consultation with outside counsel, that it is necessary to
do so to act in a manner consistent with its fiduciary duties to the Company’s stockholders under
applicable law, the Board of Directors of the Company may terminate this Agreement solely to enter
into an agreement with such third party, but only after the Company shall have complied with
Section 3.7 of the Amended and Restated Investor Rights Agreement of even date herewith by and
among the Company and the Investors identified on Exhibit A thereto. The Company shall be
permitted to sell additional shares of its capital stock during the Quiet Period provided that such
sales do not result in a Material Transaction.

     5.2 Company’s Efforts Regarding PAS-Port Data. The Company shall use its reasonable best
efforts to gather the PAS-Port Data and obtain FDA clearance for the PAS-Port on or before October
31, 2004.

     5.3 Exclusive Negotiation Period. During the Exclusive Negotiation Period, Guidant and its
Affiliates shall have an exclusive right to negotiate with the Company for the acquisition of the
Company by Guidant or its Affiliates by means of any transaction or series of transactions,
including but not limited to by way of merger, acquisition, or a stock or asset transfer. During
the Negotiation Period, the Company shall not enter into any agreement or negotiations for any
transaction or series of transactions resulting in a Material Transaction and shall negotiate in
good faith with Guidant and its Affiliates for the acquisition of the Company by Guidant or its
Affiliates by means of any transaction or series of transactions, including but not limited to by
way of merger, acquisition, or a stock or asset transfer.

     5.4 Equity Purchase. Guidant shall acquire the Shares on the date hereof.

     5.5 Information Rights. During such time as any Obligation remains outstanding, Guidant shall
have the rights of a Major Investor under Sections 3.1 and 3.2 of the Investor Rights Agreement and
Guidant shall be subject to the obligations of an Investor under Section 3.3 of the Investor Rights
Agreement.

     5.6 Non-Solicitation of Employees. The Company and Guidant agree that, until the expiration
of the Exclusive Negotiation Period, neither party will solicit, attempt to hire, hire or employ,
directly or indirectly, through any enterprise with which the party is associated, any person who
is currently or who, during any time prior to the expiration of the Exclusive Negotiation Period,
becomes an employee of the other party or in any way solicit or induce (or assist another person in
soliciting or inducing) any employee of the other party to terminate his or her employment with
such other party.

     5.7 Repayment of Debt to VLL. The Company shall repay, within thirty (30) business days of
the Closing Date, all amounts owing to VLL pursuant to the VLL Loan Agreements.

     5.8 Covenants of the Company. From and after the Execution Date and continuing so long as
any amount remains unpaid on the Notes, the Company covenants that:

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          (a) Corporate Existence. The Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the existence, rights and franchises of the Company
relating to its corporate existence.

          (b) Maintenance of Properties. The Company will use commercially reasonable efforts to
maintain, preserve and keep its material properties which are used or useful in the conduct of its
business (whether owned in fee or a leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements, renewals and additions so that at all
times the efficiency thereof shall be maintained in all material respects. Notwithstanding the
foregoing, the Company may dispose of obsolete and unneeded property.

          (c) Indebtedness. Except with five (5) days’ prior notice to Guidant, the Company shall not
incur any Indebtedness other than Senior Indebtedness or guarantee any such Indebtedness or issue
or sell any debt securities of the Company other than Senior Indebtedness or guarantee any debt
securities of others.

          (d) Notice of Claims and Litigation. The Company will give prompt notice to Guidant of any
claim or action at law or in equity, or before any governmental, administrative or regulatory body
or arbitration panel instituted against the Company, or disputes that have a high probability of
resulting in a suit of significance against the Company involving a claim against the Company, for
damages in excess of Five Hundred Thousand Dollars ($500,000) or which, if concluded adversely to
the Company, could be reasonably expected to have a Material Adverse Effect.

          (e) Notice of Default. The Company shall promptly give written notice to Guidant of any known
default or breach by the Company of any of its obligations or commitments set forth in this
Agreement, or otherwise of any default or other occurrence that, with lapse of time and/or giving
of notice, would constitute an Event of Default.

ARTICLE VI

SUBORDINATION AND SECURITY INTEREST OF GUIDANT

     6.1 Subordination. The Indebtedness evidenced by the Notes is hereby expressly subordinated
to the extent and in the manner hereinafter set forth, in right of payment to the prior payment in
full of the Senior Indebtedness.

     6.2 Default on Senior Indebtedness. If there should occur any receivership, insolvency,
assignment for the benefit of creditors, bankruptcy, reorganization or arrangements with creditors
(whether or not pursuant to bankruptcy or other insolvency laws), sale of all or substantially all
of the assets, dissolution, liquidation or any other marshalling of the assets and liabilities of
the Company, then no amount shall be paid by the Company in respect of the principal of or interest
on the Notes at the time outstanding, unless and until the principal of and interest on the Senior
Indebtedness then outstanding shall be paid in full. If there occurs an event of default that has
been declared with respect to any Senior Indebtedness, or in the instrument under which any Senior
Indebtedness is outstanding, permitting the holder of such Senior Indebtedness to accelerate the
maturity thereof, no payment shall be made in respect of the

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principal of or interest on the Notes, unless (i) such event of default shall have been cured
by the Company or waived by holders of the Senior Indebtedness or shall have ceased to exist, or
(ii) payment of all Senior Indebtedness shall have been accelerated and all Senior Indebtedness
shall have been paid in full, or (iii) within six (6) months after the happening of such event of
default (a “Payment Blockage Period”), the maturity of such Senior Indebtedness shall not have been
accelerated. Notwithstanding anything contained herein to the contrary, payments by the Company of
principal and interest on the Notes to the Registered Holder shall be halted under this Section
6.2(iii) for only one (1) Payment Blockage Period during any twelve (12) month consecutive period.

     6.3 Effect of Subordination. Subject to the rights, if any, of the holders of Senior
Indebtedness under this Article VI to receive cash, securities or other properties otherwise
payable or deliverable to the Registered Holder, nothing contained in this Article VI shall impair,
as between the Company and the Registered Holder, the obligation of the Company, subject to the
terms and conditions hereof, to pay to the Registered Holder the principal hereof and interest
hereon as and when the same become due and payable, or shall prevent the Registered Holder, upon
default hereunder, from exercising all rights, powers and remedies otherwise provided herein or by
applicable law, except as limited under Section 6.2 above.

     6.4 Undertaking. By its acceptance of a Note, the Registered Holder agrees to execute and
deliver such documents as may be reasonably requested from time to time by the Company or the
lender of any Senior Indebtedness to implement the foregoing provisions of this Article VI.

     6.5 Subordination of Future Debt. During the term of this Agreement and until the performance
of all obligations to Guidant, the Company shall not incur or permit to exist any Indebtedness,
excluding Senior Indebtedness, unless (a) approved by Guidant in its sole discretion in writing, or
(b) the holder’s right to repayment of such Indebtedness, the priority of any Lien securing the
same, and the rights of the holder thereof to enforce remedies against the Company following
default have been made subordinate to the Liens of Guidant and the prior payment of the obligations
to Guidant under this Agreement pursuant to a written subordination agreement satisfactory to
Guidant, which agreement may provide that regularly scheduled payments of accrued interest on such
subordinated Indebtedness may be paid by the Company and retained by the holder so long as no Event
of Default has occurred.

     6.6 Security Interest. Subject to Permitted Liens, to secure the prompt payment of each Loan,
the Company hereby grants a first priority security interest to Guidant in all personal property
and assets of the Company, including without limitation, all of the Company’s right, title and
interest in and to all equipment, general intangibles, intellectual property, inventory, investment
property, receivables, fixtures, deposit accounts and other goods and personal property, whether
tangible or intangible, whether now owned or hereafter acquired and wherever located, all proceeds
of each of the foregoing and all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing (“Collateral”).

     6.7 Financing Statements. With respect to Collateral, the Company covenants to execute and
deliver to Guidant all financing statements, notices and other documents from time to time
reasonably requested by Guidant, including the Intellectual Property Security Agreement

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in the form attached hereto as Exhibit E (the “IP Security Agreement”), to maintain a
perfected security interest in the Collateral in favor of Guidant; perform such other acts as
directed by Guidant, and execute and deliver to Guidant such additional conveyances, assignments,
agreements and instruments, as Guidant may at any time reasonably request in connection with the
administration and enforcement of this Agreement or Guidant’s rights, powers and remedies
hereunder.

     6.8 Release. At such time as the Company shall completely satisfy all of the Obligations
secured hereunder (other than contingent indemnification obligations not yet due), Guidant shall
execute and deliver to the Company all lien releases and other instruments as may be reasonably
necessary or proper to terminate Guidant’s security interest in the Collateral, subject to any
disposition of the Collateral which may have been made by Guidant pursuant to this Agreement. For
the purpose of this Agreement, the Obligations shall be deemed to continue if the Borrower enters
into any bankruptcy or similar proceeding at a time when any amount paid to Guidant could be
ordered to be repaid as a preference or pursuant to a similar theory, and shall continue until it
is finally determined that no such repayment can be ordered (provided that nothing herein shall
limit the obligation of Guidant under the immediately preceding sentence to execute lien releases
and other instruments during any preference period unless a bankruptcy or similar proceeding has
been entered into at the time such execution would otherwise be required).

     6.9 Remedies. Upon the occurrence and during the continuation of an Event of Default, Guidant
shall have the right to exercise all the remedies of a secured party under the California Uniform
Commercial Code, including, without limitation, the right to require the Company to assemble the
Collateral and any tangible property in which Secured Party has a security interest under this
Agreement and to make it available to Guidant at a place designated by Guidant. Guidant shall have
a nonexclusive, royalty free license to use the Collateral to the extent reasonably necessary to
permit Guidant to exercise its rights and remedies upon the occurrence and during the continuation
of an Event of Default. The Company will pay any reasonable expenses (including reasonable
attorneys’ fees) incurred by Guidant in connection with the exercise of any of Guidant’s rights
hereunder, including, without limitation, any reasonable expense incurred in disposing of the
Collateral.

ARTICLE VII

MISCELLANEOUS

     7.1 Governing Law. This Agreement and the Notes issued hereunder shall be governed in all
respects by the laws of the State of California as such laws are applied to agreements between
California residents entered into and performed entirely in California.

     7.2 Survival. The representations, warranties, covenants and agreements of the parties
hereunder shall survive the enforcement, amendment or waiver of this Agreement or the Notes.

     7.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,

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executors and administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of the Shares from time to time.

     7.4 Entire Agreement. This Agreement, together with the Notes, constitutes the entire and
final agreement between the parties hereto with respect to the subject matter hereof and supersedes
any and all prior oral or written agreements or discussions on the subject matter hereof.

     7.5 Severability. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     7.6 Amendment and Modification. Neither this Agreement nor any of the other documents or
instruments delivered herewith or executed pursuant hereto may be modified or amended in any
respect except in a writing signed by both parties expressly setting forth such modification or
amendment.

     7.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power
or remedy accruing to any party, upon any breach, default or noncompliance by another party under
this Agreement or the Notes shall impair any such right, power or remedy, nor shall it be construed
to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or
in any similar breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character either party’s part of any breach,
default or noncompliance under this Agreement, or Guidant’s under any Note, must be in writing and
shall be effective only to the extent specifically set forth in such writing. All remedies, either
under this Agreement and/or the Notes, as applicable, by law, or otherwise afforded to any party,
shall be cumulative and not alternative.

     7.8 Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt.
Such certificates, documents or notice may be personally delivered to an authorized representative
of the Company or Guidant (as the case may be) at any address where such authorized representative
is present, such other address as such party may designate by twenty (20) days advance written
notice to the other party, and otherwise shall be sent to the following address:

	 	 	 	 	 
	 

	 	     If to the Company:
	 	Cardica, Inc.
	 

	 	 	 	171 Jefferson Drive
	 

	 	 	 	Menlo Park, CA 94025
	 

	 	 	 	Attention: Bernard Hausen
	 

	 	 	 	Telecopy No.: (650) 326-5655

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21.

 

	 	 	 	 	 
	 

	 	With a copy to:
	 	Nancy H. Wojtas, Esq.
	 

	 	 	 	Cooley Godward LLP
	 

	 	 	 	Five Palo Alto Square
	 

	 	 	 	3000 El Camino Real
	 

	 	 	 	Palo Alto, CA 94306
	 

	 	 	 	Telecopy No.: (650) 849-7400
	 
	 	 	 	 
	 

	 	If to Guidant:
	 	Guidant Corporation
	 

	 	 	 	3200 Lakeside Drive
	 

	 	 	 	Santa Clara, CA 95054
	 

	 	 	 	Attention: Greg Garfield
	 

	 	 	 	Telecopy No.: (408) 845-1897
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Amy C. Seidel, Esq.
	 

	 	 	 	Faegre & Benson LLP
	 

	 	 	 	2300 Wells Fargo Center
	 

	 	 	 	90 South Seventh Street
	 

	 	 	 	Minneapolis, MN 55402
	 

	 	 	 	Telecopy No.: (612) 766-1600

     7.9 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any
provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from
the losing party all fees, costs and expenses of enforcing any right of such prevailing party under
or with respect to this Agreement, including without limitation, such reasonable fees and expenses
of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses
of appeals.

     7.10 Titles and Subtitles. The titles of the sections and subsections of the Agreement are
for convenience of reference only and are not to be considered in construing this Agreement.

     7.11 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument.

     7.12 Confidentiality. The Nondisclosure Agreement between the Company (f/k/a Vascular
Innovations, Inc.) and Guidant dated April 4, 2000, shall remain in full force and effect.

     7.13 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to
refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties
hereto may require.

     7.14 Term; Termination. This Agreement shall terminate in the following circumstances: (a) by
the Company if Guidant fails to make a Loan on a Disbursement Date as requested by the Company in
any Borrowing Notice and does not cure such failure within five (5) days’ written notice from the
Company; or (b) upon the expiration of the Exclusive Period provided that the full and final
payment of all amounts owed by the Company to Guidant under the Notes shall have been made.
Notwithstanding the foregoing, upon the expiration of the Exclusivity Period, Sections 5.1 and 5.2
shall have no further force or effect. Upon the payment

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22.

 

in full of all amounts due under this Agreement, Guidant shall promptly execute and deliver to
the Company all such documents and instruments that shall be necessary to evidence termination of
this Agreement and the security interest created hereunder, including any UCC3 financing statement
amendments terminating any UCC1 financing statements filed by Guidant.

[Remainder of Page Intentionally Left Blank]

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23.

 

     In Witness Whereof, the Company and Guidant by their duly authorized officers have
each caused this Agreement to be executed as of the date first written above.

	 	 	 	 	 	 	 
	 	 	GUIDANT:	 	 
	 
	 	 	 	 	 	 
	 	 	GUIDANT INVESTMENT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	/s/
	 	Ronald W. Dollens	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Ronald W. Dollens	 	 
	 

	 	 	 	 

	 	 
	 	 	Title: President	 	 
	 
	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CARDICA, INC.	 	 

	 	 	 	 	 	 	 	 	 
	 	 	/s/	 	Bernard Hausen	 	 
	 	 	 	 	 
	 

	 	By:
	 	 	 	Bernard Hausen	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Title:	 	President & CEO	 	 

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Signature Page to Agreement 

 

 

EXHIBIT A

FORM OF NOTE

CARDICA, INC.

8.75% Note        

			
	     No. N-1
	 	     Menlo Park, CA
	$                    
	 	                     ___, 200_

     Cardica, Inc., a corporation duly organized and existing under the laws of the State of
Delaware (the “Company”), for value received, hereby promises to pay to Guidant Investment
Corporation, a California corporation (“Guidant”), the principal sum of [                     ($___)]
on the Maturity Date (as defined in the Agreement referred to below), and to pay interest (computed
on the basis of the actual number of days elapsed and a year of 365 days) on the unpaid principal
balance thereof from the date of this Note at the rate of eight and three quarters percent (8.75%)
per annum from the date hereof, payable in arrears on the Maturity Date.

     The interest and principal payments payable with respect to this Note, on the Maturity Date,
regardless of whether by declaration, acceleration or otherwise, pursuant to the Agreement (as
defined herein), shall be paid to Guidant in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts. Such interest
and principal payments shall be made to Guidant in accordance with the provisions of the Note
Agreement.

     This Note is one of the Notes of the Company issued in an aggregate principal amount of up to
Ten Million Two Hundred Fifty Thousand Dollars ($10,250,000) pursuant to the Agreement, dated
[                     ___, 2003], by and between the Company and Guidant (the “Agreement”). Guidant is
entitled to the benefits of the Agreement, and may enforce the Agreement and exercise the remedies
provided for thereby or otherwise available in respect thereof.

     This Note may not be transferred or assigned by Guidant to any Person other than to its
Affiliates.

     In the case of an Event of Default (as defined in the Agreement), the principal of this Note
in certain circumstances may be declared or otherwise become due and payable in the manner and with
the effect provided in the Agreement, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived.

     The Indebtedness evidenced by this Note is, to the extent provided in the Agreement,
subordinate and subject in right of payment to the Senior Indebtedness (as defined in the
Agreement), and this Note is issued subject to the provisions of the Agreement with respect
thereto.

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     No reference herein to the Agreement and no provision of this Note or of the Agreement shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Note at the times, place and rate, and in
the coin or currency, herein prescribed.

     All terms used in this Note that are defined in the Agreement shall have the meanings assigned
to them in the Agreement.

     This Note has been delivered to Guidant in Santa Clara, California, and the Note and the
Credit Agreement are governed by and shall be construed and enforced in accordance with and the
rights of the parties shall be governed by the law of the State of California excluding
choice-of-law principles.

     In Witness Whereof, the Company has caused this Note to be duly executed as of the
___day of ___, 200_.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	CARDICA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 	 	 	 	 	 	 	 	Print Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Attest:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Print Name:	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 	 	 
	Print Title:	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 	 	 	 	 	 

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EXHIBIT B

FORM OF BORROWING NOTICE

Date:                                         

	 	 	 
	To:

	 	Guidant Investment Corporation
	 

	 	3200 Lakeside Drive
	 

	 	Santa Clara, CA 95054
	 

	 	Attention: Greg Garfield
	 
	 	 
	Re:

	 	The Agreement dated as of                      ___, 2003 (as the same
may from time to time be further amended, modified,
supplemented or restated, the (“Agreement”), by and among
Cardica, Inc., a Delaware corporation (the
“Company”) and Guidant Investment Corporation, a California
corporation (“Guidant”)

Ladies and Gentlemen:

The undersigned refers to the Agreement, capitalized terms used herein but not defined herein being
used herein as therein defined, and hereby gives Guidant irrevocable notice, pursuant to Section
1.8 of the Credit Agreement, of the request for a Loan (“Advance”) as specified herein:

     1. The Disbursement Date of the requested Advance (which is a Business Day) is
                    , 200___.

     2. The aggregate amount of the requested Advance is $                    .

The undersigned hereby certifies that the following statements are true on the date hereof, and
will be true on the Disbursement Date of the requested Advance, before and after giving effect
thereto and to the application of the proceeds therefrom:

     1. No Event of Default has occurred and is continuing, or would result from such requested
Advance;

     2. The requested Advance will not cause the aggregate principal amount of all Loans issued
under the Agreement to exceed, as of the designated Disbursement Date, Ten Million Two Hundred
Fifty Thousand Dollars ($10,250,000);

     3. If the requested Advance will constitute the second disbursement under the Agreement, the
Company has complied with Section 5.7 of the Agreement; and

     4. The account to which the requested Advance should be remitted is the account set forth in
Section 1.5 of the Agreement.

	 	 	 	 	 	 	 	 	 
	 	 	Cardica, Inc., a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 	 	Print Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

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EXHIBIT C

SCHEDULE OF EXCEPTIONS

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EXHIBIT D

PAS-PORT DATA

          Cardica will provide Guidant with additional clinical data on the patency of 78 additional
grafts using the PAS-PortTM device. The following data will be provided:

	 	1)	 	intraoperative performance data;
	 
	 	2)	 	graft patency assessment by angiography (the PAS-port trial indicates this to be the
primary method of obtaining primary endpoint data.) In the event that the patient is
unable to tolerate or refuses angiography, Cardiac CT or cardiac MRI will be obtained at 6
months postoperatively (180+/-30 days of day of surgery) (provided that the core lab is
able to assess graft patency on all methods of diagnostic imaging);
	 
	 	3)	 	core lab reports for each patient and a core lab summary report on all additional
PAS-Port patient data; and
	 
	 	4)	 	a six-month clinical report that summarizes the new clinical findings and statistical
endpoints of the additional data obtained.

     Cardica intends to deploy additional PAS-PortTM Proximal Anastomosis implants in patients
enrolled in the C-PortTM clinical trial using the C-Port study’s inclusion/exclusion criteria, which
is more broad than the original PAS-Port trial. The primary endpoint of the C-Port study is to
evaluate the graft patency of the distal anastomosis device. The primary differences between the
two trials are that C-Port will include older patients and may also include patients requiring
procedures with valve replacements plus CABG. The Company therefore anticipates higher morbidity
and mortality rates in this study compared to the original PAS-PortTM clinical trial. Cardica
intends to use the PAS-PortTM device in this trial only on graft vessels that do not have a C-PortTM
device on the distal anastomosis. If the patient demographics of the C-Port trial are deemed to be
significantly different from that of the PAS-Port trial, then Cardica will perform a retrospective
logistic regression analysis to determine if these demographic variables have a significant effect
on the results of the primary or secondary study endpoints.

     The PAS-PortTM data provided from these additional 78 grafts will be used with the original
PAS-Port clinical trial data from 47 grafts to determine an overall patency rate using a sample
size of 125 grafts as well as on a stand alone basis for the new study sample size of 78 PAS-PortTM
grafts.

     If the PAS-PortTM 510(k) is not cleared by the FDA and there is an unforeseen delay in
completing these 78 PAS-Port additional grafts during the C-PortTM clinical trial or if in 200
patients enrolled in the C-PortTM study Cardica cannot accumulate 6 month PAS-PortTM patency data
from 78 grafts in the C-Port clinical trial, then Cardica will supplement this data base with
pool-able data to the original 47 grafts in a new clinical trial in which the statistical
hypotheses and endpoints are clearly defined, such as to ensure that the trial will prove or
disprove a statistically comparative endpoint to a historical control. Prior to commencing this
study Cardica will conduct a pre-IDE meeting with FDA to ensure that the statistical hypotheses and
endpoints of this new trial will be appropriate and meet FDA’s guidelines for 510(k) clearance of
the PAS-port device.

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If the PAS-PortTM 510(k) is cleared by the FDA and there is an unforeseen delay in completing these
78 PAS-Port additional grafts during the C-PortTM clinical trial or if in 200 patients enrolled in
the C-PortTM study Cardica cannot accumulate 6 month PAS-PortTM patency data from 78 grafts in the
C-Port clinical trial, then Cardica will supplement this data base with pool-able data to the
original 47 grafts with 6 month patency data obtained from patients enrolled in the PAS-PortTM
registry. This 78-patient registry data will have pool-able data to the original 47 patient
PAS-Port registry such that statistically significant endpoints can be assessed.

     In all cases, if Cardica does not obtain FDA 510(k) clearance for the PAS-port device, Guidant
Corporation may, at Cardica’s request, provide assistance to Cardica to further develop Cardica’s
regulatory and clinical strategy. This assistance may take place in the form of pre-IDE meetings,
protocol development, trial management, and the preparation of regulatory filings.

[End of PAS-Port Data]

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Exhibit E

IP Security Agreement

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Exhibit 10.10

INTELLECTUAL PROPERTY SECURITY AGREEMENT

     This Intellectual Property Security Agreement (this “Agreement”) is entered into as
of this 19th day of August, 2003 by Cardica, Inc., a Delaware corporation (the
“Borrower”), in favor of Guidant Investment Corporation, a California corporation
(“Guidant”).

     In order to induce Guidant to extend the Loan (as defined in the Agreement by and between the
Borrower and Guidant dated as of the date hereof (the “Omnibus Agreement”)), the Borrower has
agreed to grant a security interest in the Borrower’s intellectual property, including the
Collateral described herein, to Guidant for purposes of securing certain obligations of the
Borrower to Guidant.

     In connection with the execution of the Omnibus Agreement, Guidant has required the execution
and delivery of this Agreement by the Borrower and the parties hereby agree as follows:

     NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

     1. Grant of Security Interest. As collateral security for the prompt and complete
payment and performance of the Obligations (as defined in the Omnibus Agreement), the Borrower
hereby irrevocably pledges, assigns, grants, transfers, and conveys a security interest to Guidant,
with power of sale to the extent permitted by law, in and to the Borrower’s entire right, title and
interest in, to and under the following intellectual property (all of which shall collectively be
called the “Collateral”):

          (a) All present and future United States registered copyrights and copyright registrations,
including, without limitation, the registered copyrights, maskworks, software, computer programs
and other works of authorship subject to United States copyright protection listed in Exhibit
A to this Agreement (and including all of the exclusive rights afforded a copyright registrant
in the United States under 17 U.S.C. §106 and any exclusive rights which may in the future arise by
act of Congress or otherwise) and all present and future applications for copyright registrations
(including applications for copyright registrations of derivative works and compilations)
(collectively, the “Registered Copyrights”), whether now owned or hereafter acquired, and any and
all royalties, payments, and other amounts payable to the Borrower in connection with the
Registered Copyrights, together with all renewals and extensions of the Registered Copyrights, the
right to recover for all past, present, and future infringements of the Registered Copyrights, and
all computer programs, computer databases, computer program flow diagrams, source codes, object
codes and all tangible property embodying or incorporating the Registered Copyrights, and all other
rights of every kind whatsoever accruing thereunder or pertaining thereto.

          (b) All present and future copyrights, maskworks, software, computer programs and other works
of authorship subject to (or capable of becoming subject to) United

1.

 

States copyright protection which are not registered in the United States Copyright Office
(the “Unregistered Copyrights”), whether now owned or hereafter acquired, and any and all
royalties, payments, and other amounts payable to the Borrower in connection with the Unregistered
Copyrights, together with all renewals and extensions of the Unregistered Copyrights, the right to
recover for all past, present, and future infringements of the Unregistered Copyrights, and all
computer programs, computer databases, computer program flow diagrams, source codes, object codes
and all tangible property embodying or incorporating the Unregistered Copyrights, and all other
rights of every kind whatsoever accruing thereunder or pertaining thereto. The Registered
Copyrights and the Unregistered Copyrights collectively are referred to herein as the “Copyrights.”

          (c) All present and future license agreements with respect to intellectual property to which
the Borrower is a licensee or sublicensee (the “Licenses”), including without limitation the
license agreements listed in Exhibit B to this Agreement.

          (d) All present and future accounts, accounts receivable and other rights to payment arising
from, in connection with or relating to the Collateral.

          (e) Any and all factual knowledge and information that gives to one the ability to produce or
market something that one otherwise would not have known how to produce or market with the same
accuracy or precision, including without limitation all formulae, algorithms, processes,
procedures, writings, data, protocols, techniques, proposals, designs, ideas, concepts, strategic,
research and development information and related documentation, business and other plans, research,
inventions and invention disclosure (whether patentable or unpatentable or whether reduced to
practice), and all records of the foregoing, test, engineering and technical data, proprietary
information and methodologies, communications and associated peripheral devices and resources;
computer software, programs and code, both object and source, in whatever form and media,
databases, specifications and other information processing tangible and intangible items, whether
now owned or hereafter acquired by the Borrower (the “Know-How”).

          (f) Any and all information that generally facilitates the production, manufacturing,
marketing, or sale of products or services, increases revenues, or provides an advantage over the
competition, is not generally known, whether now owned or hereafter acquired by the Borrower (the
“Trade Secrets”).

          (g) Any and all design rights which may be available to the Borrower now or hereafter
existing, created, acquired or held.

          (h) All classes or types of patents, design patents, utility patents whether now owned or
hereafter acquired by the Borrower, including, without limitation, originals, divisions,
continuations, continuations-in-part, extensions, reexaminations, or reissues, published and
non-published patent applications and invention disclosures for these classes or types of patent
rights (whether or not patentable and whether or not reduced to practice) in any country of the
world, including without limitation those listed on Exhibits C-1 to C-3 attached
hereto (collectively, the “Patents”).

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2.

 

          (i) Any trademark and servicemark rights whether now owned or hereafter acquired by the
Borrower, whether registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of the Borrower connected with and
symbolized by such trademarks, including without limitation those set forth on Exhibit D
attached hereto (collectively, the “Trademarks”); provided, however, that Guidant
shall not acquire any interest in any intent to use a federal trademark application for a
trademark, servicemark, or other mark filed on the Borrower’s behalf prior to the filing under
applicable law of a verified statement of use (or equivalent) for such mark that is the subject of
such application.

          (j) Any and all claims for damages by way of past, present and future infringements of any of
the rights in the Collateral, with the right, but not the obligation, to sue for and collect such
damages for said use or infringement of the intellectual property rights identified above.

          (k) All licenses or other rights to use any of the Collateral, and all license fees and
royalties arising from such use to the extent permitted by such license or rights.

          (l) All amendments, extensions, renewals and extensions of any of the Collateral.

          (m) All proceeds and products of the foregoing, including without limitation all payments
under insurance or any indemnity or warranty payable in respect of any of the Collateral.

     2. Authorization and Request. The Borrower authorizes and requests that the Register
of Copyrights and the Commissioner of Patents and Trademarks record this Agreement.

     3. Covenants and Warranties. Except as otherwise specifically set forth in the
Disclosure Schedule attached hereto as Exhibit E (the “Disclosure Schedule”), the Borrower
represents, warrants, covenants and agrees as follows:

          (a) Schedules. Listed on Exhibit A are all Registered Copyrights and all material
Unregistered Copyrights. Listed on Exhibit B are all material Licenses related to intellectual
property to which the Borrower is a licensee or sublicensee. Listed on Exhibit C-1 to C-3 are all
Patents. Listed on Exhibit D are all material Trademarks.

          (b) Title. Except for Permitted Liens, the Borrower owns all legally enforceable
right, title and interest to all Collateral free and clear of all liens, claims, encumbrances and
other restrictions without an obligation to pay any royalties, license fees or other amounts to any
other person or entity. The Borrower has not received, and the Borrower does not have any
knowledge of, any notice, claim or allegation from any person or entity questioning the right of
the Borrower to use, possess, transfer, convey or otherwise dispose of any Collateral or
questioning the right of the Borrower to use any Collateral.

          (c) Employees. To the knowledge of the Borrower, each employee, agent, consultant and
contractor, who has contributed to or participated in the conception, creation or development of
the Collateral (other than licensed Collateral) on behalf of the Borrower has

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3.

 

executed valid written assignment in favor of the Borrower as assignee, that has caused the
conveyance to such the Borrower all right, title and interest in and to all Collateral arising from
such individual’s work throughout the world. The Borrower shall undertake all reasonable measures
to cause its employees, agents and independent contractors to assign to the Borrower all rights in
Collateral in which the Borrower may subsequently acquire any right or interest.

          (d) Third-Party Infringement. To the knowledge of the Borrower, there is no
unauthorized use, disclosure, infringement, dilution, misappropriation, or other violation by any
third party (including any employee or former employee of the Borrower) of any Collateral of the
Borrower or of any right of any third party in Collateral licensed by or through the Borrower the
result of which would reasonably be expected to cause a Material Adverse Effect.

          (e) Freedom to Operate. To the knowledge of the Borrower, the Borrower’s use of the
Collateral in its business as presently conducted, has not and will not violate, interfere with or
infringe upon the rights of any other individual or entity nor does such use by the Borrower
constitute a breach of any agreement, obligation, promise or commitment by which the Borrower may
be bound or constitute a violation of any laws, regulations, ordinances, codes or statutes in any
jurisdiction.

          (f) Know-How and Trade Secrets. The Borrower has taken all actions that a reasonably
prudent person in the Borrower business would take to maintain Know-How and Trade Secrets as
confidential and proprietary, to protect against the loss, theft or unauthorized use of such
Know-How and Trade Secrets. To the knowledge of the Borrower, the Know-How and Trade Secrets are
not in the public domain and have not been divulged or appropriated to the detriment of the
Borrower. The Borrower’s records include sufficient documentation of the Know-How and Trade
Secrets, such as manufacturing and engineering plans, blueprints, designs, process instructions,
formulae, quality assurance protocols and procedures and the like, to enable persons who are
reasonably skilled and proficient in the relevant subject matter to continue the same in the
ordinary course of business without unreasonable delay, expense, or reliance on the memory of any
individual.

          (g) Licenses. The Borrower has not (A) granted any licenses or other rights, and the
Borrower has no obligation to grant any licenses or other rights, with respect to any Collateral or
(B) entered into any covenant not to compete or contract limiting or purporting to limit the
ability of the Borrower to exploit fully any Collateral or to transact business in any market or
geographical area or with any person. With respect to third party licenses, (A) the Borrower is
not in breach or default with respect thereto, and no event has occurred which with notice or lapse
of time would reasonably be expected to cause a Material Adverse Effect and (B) the Borrower has
not repudiated any provision thereof. The Borrower has no agreement to indemnify any individual or
entity against any charge of infringement of any Collateral, other than indemnification provisions
normal and usual for the Borrower’s industry contained in purchase orders or license agreements
arising in the ordinary course-of business.

          (h) Validity. There is no interference, opposition, cancellation, reexamination or
other contest, proceeding, action, suit, hearing, investigation, charge, complaint, demand, notice,
claim, dispute nor any claim of infringement, dilution, misappropriation or other violation by the
Borrower of any Collateral or other proprietary rights of any other individual or entity

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

4.

 

pending or, to the knowledge of the Borrower, threatened or pending against the Borrower. To
the knowledge of the Borrower, all statements and representations made by the Borrower in any
pending Collateral applications, filings or registrations were true in all material respects as of
the time they were made. No Registered Copyright, Trademark, or Patent used in the business (other
than in circumstances where the Borrower has intentionally allowed Registered Copyright, Trademark,
or Patent not material to the business to lapse, expire, become abandoned or be canceled) has
lapsed, is being allowed to lapse, expired or been abandoned, invalidated, or canceled, in whole or
in part, or is subject to any injunction, judgment, order, decree, ruling or charge or is subject
to any pending or, to the knowledge of the Borrower, threatened oppositions, cancellations,
interferences or other proceedings before the United State Patent and Trademark Office, the
Trademark Trials and Appeals Board, the United States Copyright Office or in any other registration
authority in any country.

          (i) No Conflict. Performance of this Agreement does not conflict with or result in a
breach of any material agreement to which the Borrower is bound, except to the extent that certain
intellectual property agreements prohibit the assignment of the rights thereunder to a third party
without the licensor’s or other party’s consent and this Agreement constitutes an assignment.

          (j) Prohibition on Transfers. During the term of this Agreement, the Borrower will
not transfer or otherwise encumber any interest in the Collateral, except for non-exclusive
licenses granted by the Borrower in the ordinary course of business.

          (k) Material Adverse Changes. The Borrower shall promptly advise Guidant of any
material adverse change in the composition of the Collateral, including but not limited to any
subsequent ownership right of the Borrower in or to any material Trademark, Patent or Registered
Copyright not specified in this Agreement. Upon any executive officer of the Borrower obtaining
actual knowledge thereof, the Borrower will promptly notify Guidant in writing of any event that
materially adversely affects the value of any of the Collateral, the right of the Borrower to
dispose of any material Collateral or the rights and remedies of Guidant in relation thereto,
including the levy of any legal process against any of the Collateral.

          (l) Duty to Protect and Defend. The Borrower shall (i) protect, defend and maintain
the validity and enforceability of all Collateral that is material to the business of the Borrower,
taken as a whole, unless the Borrower determines that reasonable business practices suggest that
such protection, defense or maintenance is not appropriate, and not allow any such Collateral to be
abandoned, forfeited or dedicated to the public without the written consent of Guidant, which shall
not be unreasonably withheld, unless the Borrower determines that reasonable business practices
suggest that abandonment is appropriate.

          (m) After Acquired Collateral. This Agreement creates, and in the case of after
acquired Collateral, this Agreement will create at the time the Borrower first has rights in such
after acquired Collateral, in favor of Guidant a valid and perfected first priority security
interest (subject only to Permitted Liens, if any (as defined in the Omnibus Agreement), that are
specifically entitled pursuant to applicable law, or specifically acknowledged in writing by
Guidant, to have priority over Guidant’s security interest) in the Collateral securing the payment
and performance of the Obligations.

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

5.

 

          (n) Accuracy of Information. All information now or hereafter supplied to Guidant by
or on behalf of the Borrower herein or pursuant hereto with respect to the Collateral is or will
be, when so supplied, accurate and complete in all material respects.

          (o) Other Impairments. The Borrower shall not enter into any agreement that would
materially impair or conflict with the Borrower’s obligations hereunder without Guidant’s prior
written consent, which consent shall not be unreasonably withheld. The Borrower shall not permit
the inclusion in any material contract to which it becomes a party of any provisions that could or
might in any way prevent the creation of a security interest in the Borrower’s rights and interest
in any intellectual property included within the definition of the Collateral acquired under such
contract, except that contracts may contain anti-assignment provisions that could in effect
prohibit the creation of a security interest in such contracts.

     4. Secured Party’s Rights. Guidant shall have the right, but not the obligation, to
take, at the Borrower’s sole expense, any actions that the Borrower is required under this
Agreement to take but which the Borrower fails to take, after fifteen (15) days written notice to
the Borrower. The Borrower shall reimburse and indemnify Guidant for all reasonable costs and
reasonable expenses incurred in the reasonable exercise of its rights under this section 4.

     5. Further Assurances; Attorney in Fact.

          (a) The Borrower will, subject to Permitted Liens, make, execute, acknowledge and deliver, and
file and record in the proper filing and recording places in the United States, all such
instruments, including appropriate financing and continuation statements and collateral agreements
and filings with the United States Patent and Trademarks Office and the Register of Copyrights, and
take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested
by Guidant, to perfect Guidant’s security interest in all Collateral and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to Guidant the grant or
perfection of a security interest in all Collateral.

          (b) Upon the occurrence and during the continuation of an Event of Default, the Borrower
hereby appoints Guidant as the Borrower’s attorney-in-fact, with full authority in the place and
stead of the Borrower and in the name of the Borrower, Guidant or otherwise, from time to time in
Guidant’s reasonable business judgment, upon the Borrower’s failure or inability to do so, to take
any action and to execute any instrument which Guidant may deem necessary or advisable in Guidant’s
reasonable business judgment to accomplish the purposes of this Agreement, including:

          (i) To modify, in Guidant’s reasonable business judgment, this Agreement without first
obtaining the Borrower’s approval of or signature to such modification by amending Exhibit
A, Exhibit B, Exhibits C-1 to C-3 and Exhibit D hereof, as appropriate, to include reference
to any right, title or interest in any Collateral acquired by the Borrower after the
execution hereof or to delete any reference to any right, title or interest in any
Collateral in which the Borrower no longer has or claims any right, title or interest; and

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

6.

 

          (ii) To file, in Guidant’s reasonable business judgment, one or more financing or
continuation statements and amendments thereto, relative to any of the Collateral without
the signature of the Borrower where permitted by law.

     Such appointment is coupled with an interest and is irrevocable until payment and performance
in full of the Obligations.

     6. Events of Default. The occurrence of an Event of Default as defined in the Omnibus
Agreement shall constitute an “Event of Default” under this Agreement.

     7. No Waiver. No course of dealing between the Borrower and Guidant, nor any failure
to exercise nor any delay in exercising, on the part of Guidant, any right, power, or privilege
under this Agreement or any other document, shall operate as a waiver. No single or partial
exercise of any right, power, or privilege under this Agreement or any other document by Guidant
shall preclude any other or further exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege by Guidant.

     8. Rights Are Cumulative. All of Guidant’s rights and remedies with respect to the
Collateral whether established by this Agreement or any other documents or agreements, or by law
shall be cumulative and may be exercised concurrently or in any order.

     9. Attorneys’ Fees. If any action relating to this Agreement is brought by any party
hereto against any other party, the prevailing party shall be entitled to recover reasonable
attorneys’ fees, costs and disbursements.

     10. Amendments. Neither this Agreement nor any of the other documents or instruments
delivered herewith or executed pursuant hereto may be modified or amended in any respect except in
a writing signed by both parties expressly setting forth such modification or amendment.

     11. Severability. In case any provision of the Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

     12. Governing Law; Jurisdiction. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements between California
residents entered into and performed entirely in California.

     13. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which shall constitute one instrument.

[Remainder of Page Intentionally Left Blank]

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

7.

 

     In Witness Whereof, the parties hereto have executed this Agreement on the day and
year first above written.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	CARDICA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	s/	 	Bernard Hausen	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	 	 	Bernard Hausen	 	 
	 	 	 	 	 	 	Title:	 	President & CEO	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	     STATE OF CALIFORNIA

	 	 	)	 	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 	 	 	 	 
	     COUNTY OF SAN MATEO

	 	 	)	 	 	 	 	 	 	 	 	 

     The foregoing Intellectual Property Security Agreement was acknowledged before me this
18th day of august, 2003, by Bernard Hausen, the President and CEO of Cardica, Inc., a
Delaware corporation, on behalf of such corporation.

	 	 	 	 	 
	 

	 	s/ John B. Sorci	 	 
	 

	 	 

Notary Public
	 	 

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

8.

 

EXHIBIT A

REGISTERED AND MATERIAL UNREGISTERED COPYRIGHTS

None

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

9

 

EXHIBIT B

DESCRIPTION OF LICENSE AGREEMENTS

None

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

10

 

EXHIBIT C-1

U.S. PATENTS AND PUBLISHED APPLICATIONS

U.S. Patents Issued:

	 	 	 	 	 	 	 
	Patent No.	 	Issue Date	 	Invention	 	Inventor
	6,179,849

	 	1/30/01
	 	Sutureless Closure
for Connecting a
Bypass Graft to a
Target Vessel
	 	Stephen A. Yencho;
Michael Hendricksen;
Jaime Vargas; Jamey
Nielsen; Bernard A.
Hausen; Scott Vance
	 
	 	 	 	 	 	 
	6,206,913

	 	3/27/01
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 
	6,371,964

	 	4/16/02
	 	Trocar for Use in
Deploying an
Anastomosis Device
and Method of
Performing
Anastomosis
	 	Jaime Vargas;
Brendan M. Donohoe;
Scott C. Anderson;
Theodore Bender;
Stephen Yencho;
Bernard Hausen;
Michael Hendricksen
	 
	 	 	 	 	 	 
	6,391,038

	 	5/21/02
	 	Anastomosis System
and Method for
Controlling a Tissue
Site
	 	Jaime Vargas;
Michael Hendricksen;
Stephen A. Yencho;
Jamey Nielsen;
Bernard A. Hausen;
Brendan Donohoe
	 
	 	 	 	 	 	 
	6,398,797

	 	6/4/02
	 	Tissue Bonding
System and Method
for Controlling a
Tissue Site During
Anastomosis
	 	David Bombard;
Theodore Bender;
Tenny Chang; Jaime
Vargas; Michael
Hendricksen; Stephen
A. Yencho; Jamey
Nielsen; Bernard A,
Hausen; Brendan
Donohoe
	 
	 	 	 	 	 	 
	6,402,764

	 	6/11/02
	 	Everter and
Threadthrough System
for Attaching Graft
Vessel to
Anastomosis Device
	 	Michael Hendricksen;
Theodore Bender;
Brendan M. Donohoe;
Jaime Vargas; Andrew
Frazier, Stephen
Yencho; Bernard
Hausen
	 
	 	 	 	 	 	 
	6,419,681

	 	7/16/02
	 	Implantable Medical Device Such as an Anastomosis Device
	 	Jaime Vargas; James
T. Nielsen; Michael
Hendricksen; Brendan
M. Donohoe; Stephen
Yencho; Bernard
Hausen
	 
	 	 	 	 	 	 
	6,428,550

	 	8/6/02
	 	Sutureless Closure
and Deployment
System for
Connecting Blood
Vessels
	 	Jaime Vargas;
Stephen A. Yencho;
Jamey Nielsen;
Michael Hendricksen;
Bernard A. Hausen

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

11

 

	 	 	 	 	 	 	 
	Patent No.	 	Issue Date	 	Invention	 	Inventor
	6,461,320

	 	10/8/02
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 
	6,471,713

	 	10/29/02
	 	System for Deploying
an Anastomosis
Device and Method of
Performing
Anastomosis
	 	Jaime Vargas;
Stephen A. Yencho;
Jamey Nielsen;
Michael Hendricksen;
Bernard A. Hausen;
Russell C. Mead,
Jr.; Heather
Klaubert; Brendan M.
Donohoe; Theodore
Bender
	 
	 	 	 	 	 	 
	6,478,8042

	 	11/12/02
	 	Anastomosis System
and Method for
Controlling a Tissue
Site
	 	Jaime Vargas;
Michael Hendricksen;
Stephen A. Yencho;
Jamey Nielsen;
Bernard A. Hausen;
Brendan Donohoe
	 
	 	 	 	 	 	 
	6,497,710

	 	12/24/02
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 
	6,537,287

	 	3/25/03
	 	Sutureless Closure
for Connecting a
Bypass Graft to a
Target Vessel
	 	Stephen A. Yencho;
Michael Hendricksen;
Jaime Vargas; Jamey
Nielsen; Bernard A.
Hausen; Scott Vance
	 
	 	 	 	 	 	 
	6,537,288

	 	3/25/03
	 	Implantable Medical Device such as
an Anastomosis Device
	 	Jaime Vargas; James
T. Nielsen; Michael
Hendricksen; Brendan
M. Donohoe; Stephen
Yencho; Bernard
Hausen
	 
	 	 	 	 	 	 
	6,554,764

	 	4/29/03
	 	Graft Vessel
Preparation Device
and Methods for
Using the Same
	 	Jaime Vargas; Ted
Bender; David
Bombard; Jeremy
Frank

 

U.S. Published Applications Pending:

	 	 	 	 	 	 	 
	App./Publication	 	Date Filed/	 	 	 	 
	No.	 	Published	 	Invention	 	Inventor
	09/886,074

2001/0037139

	 	6/18/01

11/1/01
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;

Bernard A. Hausen
	 
	 	 	 	 	 	 
	09/924,556

2002/0026137

	 	8/9/01

2/28/02
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;

Bernard A. Hausen
	 
	 	 	 	 	 	 
	09/967,684

2003/0065343

	 	9/28/01

4/3/03
	 	Access Port System

for Anastomosis
	 	Stephen A. Yencho;

Bernard A. Hausen;
Jaime S. Vargas

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

12

 

	 	 	 	 	 	 	 
	App./Publication	 	Date Filed/	 	 	 	 
	No.	 	Published	 	Invention	 	Inventor
	09/989,055

2002/0077637

	 	11/21/01

6/20/02
	 	Trocar for Use in
Deploying an
Asastomosis [sic]
Device and Method
of Performing
Anastomosis
	 	Jaime Vargas;
Brendan M. Donohoe;
Scott C. Anderson;
Theodore Bender;
Stephen Yencho;
Bernard Hausen;
Michael Hendricksen
	 
	 	 	 	 	 	 
	10/001,962

2002/0082626

	 	12/5/01

6/27/02
	 	Integrated
Anastomosis Tool
with Graft Vessel
Attachment Device
and Cutting Device
	 	Brendan M. Donohoe;
Jaime Vargas;
Stephen A. Yencho;
James T. Nielsen;
Theodore M. Bender;
Michael
Hendricksen; Scott
C. Anderson
	 
	 	 	 	 	 	 
	10/253,347

2003/0028205

	 	9/24/02

2/6/03
	 	Anastomosis Method
	 	Jaime Vargas;
Michael
Hendricksen;
Stephen A. Yencho;
Jamey Nielsen;
Bernard A. Hausen;
Brendan Donohoe
	 
	 	 	 	 	 	 
	10/253,376

2003/0023253

	 	9/24/02

1/30/03
	 	Anastomosis System
	 	Jaime Vargas;
Michael
Hendricksen;
Stephen A. Yencho;
Jamey Nielsen;
Bernard A. Hausen;
Brendan Donohoe
	 
	 	 	 	 	 	 
	10/273,910

2003/0109893

	 	10/18/02

6/12/03
	 	Implantable Medical

Device Such as an

Anastomosis Device
	 	Jaime Vargas; James
T. Nielsen; Michael
Hendricksen;
Brendan M. Donohoe;
Stephen Yencho;
Bernard Hausen

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

13

 

Exhibit C-2

U.S. PATENT APPLICATIONS

U.S. Patent Applications Pending:

	 	 	 	 	 	 	 
	09/542,976

	 	4/4/00
	 	 
	 	 
	09/664,588

	 	9/18/00	 	 	 	 
	09/664,589

	 	9/18/00	 	 	 	 
	09/687,216

	 	10/12/00	 	 	 	 
	09/764,218

	 	1/16/01	 	 	 	 
	[*]

	 	9/4/01	 	 	 	 
	09/993,438

	 	11/13/01	 	 	 	 
	10/041,542

	 	1/7/02	 	 	 	 
	[*]

	 	1/22/02	 	 	 	 
	10/055,179

	 	1/23/02	 	 	 	 
	[*]

	 	1/23/02	 	 	 	 
	10/083,235

	 	2/26/02	 	 	 	 
	[*]

	 	4/24/02	 	 	 	 
	[*]

	 	4/30/02	 	 	 	 
	[*]

	 	4/30/02	 	 	 	 
	[*]

	 	5/20/02	 	 	 	 
	10/159,838

	 	5/31/02	 	 	 	 
	[*]

	 	6/14/02	 	 	 	 
	10/197,352

	 	7/16/02	 	 	 	 
	[*]

	 	8/16/02	 	 	 	 
	[*]

	 	9/4/02	 	 	 	 
	[*]

	 	12/4/02	 	 	 	 
	[*]

	 	12/30/02	 	 	 	 
	10/367,175

	 	2/14/03	 	 	 	 
	[*]

	 	3/19/03	 	 	 	 
	[*]

	 	4/11/03	 	 	 	 
	[*]

	 	4/21/03	 	 	 	 
	[*]

	 	4/21/03	 	 	 	 
	[*]

	 	4/30/03	 	 	 	 
	[*]

	 	5/16/03	 	 	 	 
	[*]

	 	6/13/03	 	 	 	 
	[*]

	 	6/26/03	 	 	 	 
	[*]

	 	6/26/03	 	 	 	 
	60/399,880

	 	7/31/02	 	 	 	 
	60/483,078

	 	6/26/03	 	 	 	 
	60/483,079

	 	6/26/03	 	 	 	 

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

14

 

Exhibit C-3

FOREIGN PATENT AND PUBLISHED APPLICATIONS

Published and/or Pending Foreign Patent Applications:

	 	 	 	 	 	 	 	 	 
	 	 	App./	 	 	 	 	 	 
	 	 	Publication	 	Date	 	 	 	 
	Country	 	No.	 	Filed	 	Invention	 	inventor
	PCT

	 	WO 00/09040
	 	8/11/99
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 00/69343
	 	5/18/00
	 	Sutureless Closure
and Deployment
System for
Connecting Blood
Vessels
	 	Jaime Vargas;
Stephen A. Yencho;
Jamey Nielsen;
Michael
Hendricksen;
Bernard A. Hausen
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 00/69346
	 	5/18/00
	 	Trocar for Use in
Deploying an
Anastomosis Device
and Method of
Performing
Anastomosis
	 	Jaime Vargas;
Brendan M. Donohoe;
Scott C. Anderson;
Theodore Bender;
Stephen Yencho;
Bernard Hausen;
Michael Hendricksen
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 00/69349
	 	5/18/00
	 	Tissue Punch
	 	Jaime Vargas;
Brendan M. Donohoe;
Scott C. Anderson;
Theodore Bender;
Stephen Yencho;
Bernard Hausen;
Michael Hendricksen
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 00/69364
	 	5/18/00
	 	Implantable Medical Device Such as
an Anastomosis Device
	 	Jaime Vargas; James
T. Nielsen; Michael
Hendricksen;
Brendan M. Donohoe;
Stephen Yencho;
Bernard Hausen
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 00/76405
	 	5/19/00
	 	Sutureless Closure
for Connecting a
Bypass Graft to a
Target Vessel
	 	Stephen Yencho;
Michael
Hendricksen; Jaime
Vargas; Jamey
Nielsen; Bernard
Hausen; Scott Vance
	 
	 	 	 	 	 	 	 	 
	PCT

	 	WO 01/08601
	 	7/27/00
	 	Anastomosis System
and Method of Use
	 	Jaime Vargas;
Michael
Hendrickson;
Stephen A. Yencho;
James T. Nielsen;
Bernard A. Hausen;
Brendan M. Donohoe

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

15

 

	 	 	 	 	 	 	 	 	 
	 	 	App./	 	 	 	 	 	 
	 	 	Publication	 	Date	 	 	 	 
	Country	 	No.	 	Filed	 	Invention	 	inventor
	PCT

	 	WO 01/41654
	 	11/8/00
	 	Everter and
Threadthrough
System for
Attaching Graft
Vessel to
Anastomosis Device
	 	Michael
Hendricksen;
Theodore Bender;
Brendan M. Donohoe;
Jaime Vargas;
Andrew Frazier;
Stephen Yencho;
Bernard Hausen
	 
	 	 	 	 	 	 	 	 
	EPO

	 	9994 1967.4
	 	8/11/99
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 	 	 
	EPO

	 	EP 1149567
	 	8/11/99
	 	Stent for Attaching
a Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen
	 
	 	 	 	 	 	 	 	 
	DE

	 	DE 100 84 618
	 	11/19/01
	 	Trocar for Use in Deploying an Anastomosis Device
	 	Jaime Vargas;
Brendan M. Donohoe;
Scott C. Anderson;
Theodore Bender;
Stephen Yencho;
Bernard Hausen;
Michael Hendricksen
	 
	 	 	 	 	 	 	 	 
	DE

	 	DE 100 84 620
	 	11/19/01
	 	Sutureless Anastomosis System
	 	Jaime Vargas;
Stephen Yencho;
Jamey Nielsen;
Michael
Hendricksen;
Bernard Hausen
	 
	 	 	 	 	 	 	 	 
	DE

	 	DE 100 84 856
	 	1/28/02
	 	Anastomosis System
and Method for
Controlling a
Tissue Site
	 	Jaime Vargas;
Michael
Hendricksen;
Stephen Yencho;
James T. Nielsen;
Bernard A. Hausen;
Brendan M. Donohoe
	 
	 	 	 	 	 	 	 	 
	JP

	 	2000-564545
	 	2/13/01
	 	Method and System
for Attaching a
Graft to a Blood
Vessel
	 	Stephen A. Yencho;
Bernard A. Hausen

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

16

 

Exhibit D

TRADEMARKS

Trademarks Pending:

	 	 	 	 	 
	Serial Number	 	Filing Date	 	Trademark Description
	78162848

	 	7/31/2001
	 	Word Mark: CARDICA

Typed Drawing
	 
	 	 	 	 
	78094302

	 	11/20/2001
	 	Word Mark: PAS-PORT

Typed Drawing
	 
	 	 	 	 
	78096583

	 	12/4/2001
	 	Word Mark: PASPORT

Design plus words, letters and/or numbers
	 
	 	 	 	 
	78099022

	 	12/18/2001
	 	Word Mark: CARDICA

Design plus words, letters and/or numbers
	 
	 	 	 	 
	78140994

	 	7/3/2002
	 	Word Mark: C-PORT

Typed Drawing
	 
	 	 	 	 
	78201801

	 	1/9/2003
	 	Word Mark: PAS-PORT

Design plus words, letters and/or numbers
	 
	 	 	 	 
	78201791

	 	1/9/2003
	 	Word Mark: C-PORT

Design plus words, letters and/or numbers

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

17

 

Exhibit E

DISCLOSURE SCHEDULE

[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

18

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