Document:

exv10w25

Exhibit 10.25

EXECUTION VERSION

CARDICA, INC.

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (“Agreement”) is made as of August 16, 2010 (the
“Effective Date”), by and between Cardica, Inc., a Delaware corporation (the
“Company”), and Intuitive Surgical Operations, Inc., a Delaware corporation (the
“Purchaser”).

AGREEMENT

     In consideration of the mutual covenants contained in this Agreement, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the Company and the Purchaser
hereby agree as follows:

SECTION 1. AUTHORIZATION OF SALE OF SECURITIES.

     The Company has authorized the sale and issuance of up to 1,249,541 shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), to the Purchaser on the terms and
subject to the conditions set forth in this Agreement. The 1,249,541 shares of Common Stock sold
to the Purchaser hereunder at the Closing (as defined below) shall be referred to as the
“Shares.”

SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SHARES.

     At the Closing (as defined in Section 3), the Company will sell to the Purchaser, and the
Purchaser will purchase from the Company, the Shares for an aggregate purchase price equal to
$3,000,000 (the “Purchase Price”). For purposes of this Agreement, the following terms
shall have the following meanings:

          (a) “Business Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.

          (b) “License Agreement” means the License Agreement, dated as of the date hereof, by
and between the Company and the Purchaser.

          (c) “Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.

          (d) “Registration Statement” means a registration statement meeting the requirements
set forth in the Registration Rights Agreement (as defined below) and covering the resale by the
Purchaser of the Registrable Securities (as defined in the Registration Rights Agreement).

          (e) “Trading Market” means whichever of The NASDAQ Global Select Market, The NASDAQ
Global Market, The NASDAQ Capital Market or the OTC Bulletin Board on which the Common Stock is
listed or quoted for trading on the date in question.

 

 

SECTION 3. CLOSING AND DELIVERY.

     3.1 Closing. The closing of the purchase and sale of the Shares pursuant to this Agreement
(the “Closing”) shall be held on August 17, 2010 at the offices of Cooley LLP, Five Palo
Alto Square, 3000 El Camino Real, Palo Alto, California 94306-2155, or on such other date and place
as may be agreed to by the Company and the Purchaser. At or prior to the Closing, each of the
Company and the Purchaser shall execute any related agreements or other documents required to be
executed hereunder, dated as of the date of the Closing (the “Closing Date”).

     3.2 Issuance of the Shares at the Closing. At the Closing, the Company shall issue or cause
the Company’s transfer agent to issue to the Purchaser stock certificates registered in the name of
the Purchaser, or in such nominee name(s) as designated by the Purchaser, representing the number
of Shares to be purchased by the Purchaser at the Closing against payment of the Purchase Price
(including, if the Company has caused such stock certificates to be issued by the Company’s
transfer agent, evidence reasonably satisfactory to the Purchaser that the Company has provided
irrevocable instructions in respect of such stock certificates to the Company’s transfer agent).
The Purchaser shall provide to the Company the name(s) in which the stock certificates are to be
issued to the Purchaser no later than the Closing Date. The stock certificates shall be delivered
to the Purchaser promptly following the Closing Date, but in any event within ten (10) Business
Days following the Closing Date.

     3.3 Delivery of the Registration Rights Agreement. At the Closing, the Company and the
Purchaser shall execute and deliver the Registration Rights Agreement in the form attached hereto
as Exhibit A (the “Registration Rights Agreement”), with respect to the
registration of the Shares under the Securities Act of 1933, as amended (the “Securities
Act”).

SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.

     Except as set forth in the SEC Documents or on the Schedule of Exceptions delivered to the
Purchaser concurrently with the execution of this Agreement (the “Schedule of Exceptions”),
the Company hereby represents and warrants as of the date hereof to, and covenants with, the
Purchaser as follows:

     4.1 Organization and Standing. The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Delaware, has full corporate power and
authority to own or lease its properties and conduct its business as presently conducted, and is
duly qualified as a foreign corporation and in good standing in all jurisdictions in which the
character of the property owned or leased or the nature of the business transacted by it makes
qualification necessary, except where the failure to be so qualified would not have a material
adverse effect on the business, properties, financial condition or results or operations of the
Company (a “Company Material Adverse Effect”). The Company has no subsidiaries or equity
interest in any other entity.

     4.2 Corporate Power; Authorization. The Company has all requisite corporate power, and has
taken all requisite corporate action, to execute and deliver this Agreement and the Registration
Rights Agreement (together, the “Transaction Documents”), sell and issue the Shares

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and carry out and perform all of its obligations under the Transaction Documents. Each Transaction
Document constitutes the legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of
creditors’ rights generally, (ii) as limited by equitable principles generally, including any
specific performance and (iii) with respect to the Registration Rights Agreement, as rights to
indemnity or contribution may be limited by state or federal laws or public policy underlying such
laws.

     4.3 Issuance and Delivery of the Shares. The Shares have been duly authorized and, when
issued and paid for in compliance with the provisions of this Agreement, will be validly issued,
fully paid and nonassessable. The issuance and delivery of the Shares is not subject to
preemptive, co-sale, right of first refusal or any other similar rights of the stockholders of the
Company or any liens or encumbrances. Assuming the accuracy of the representations made by the
Purchaser in Section 5, the offer and issuance by the Company of the Shares is exempt from
registration under the Securities Act.

     4.4 SEC Documents; Financial Statements. The Company has filed in a timely manner all
documents that the Company was required to file with the Securities and Exchange Commission (the
“Commission”) under Sections 13, 14(a) and 15(d) the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), since becoming subject to the requirements of the Exchange
Act (the foregoing documents (together with any documents filed by the Company under the Exchange
Act, whether or not required) being collectively referred to herein as the “SEC
Documents”). As of their respective filing dates (or, if amended prior to the date of this
Agreement, when amended), all SEC Documents complied in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission promulgated thereunder. None
of the SEC Documents as of their respective dates contained any untrue statement of material fact
or omitted to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were made, not misleading.
The financial statements of the Company included in the SEC Documents (the “Financial
Statements”) comply as to form in all material respects with applicable accounting requirements
and with the published rules and regulations of the Commission with respect thereto. The Financial
Statements have been prepared in accordance with United States generally accepted accounting
principles consistently applied and fairly present the financial position of the Company at the
dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal, recurring adjustments).

     4.5 Capitalization. All of the Company’s outstanding shares of capital stock have been duly
authorized and validly issued and are fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities. The authorized capital
stock of the Company consists of 45,000,000 shares of Common Stock and 5,000,000 shares of
undesignated Preferred Stock. As of the Effective Date, there are no shares
of Preferred Stock issued and outstanding and there are 24,005,813 shares of Common Stock
issued and outstanding, of which no shares are owned by the Company. There are no other shares of
any other class or series of capital stock of the Company issued or outstanding. The Company

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has no capital stock reserved for issuance, except that, as of the Effective Date, there are 2,861,080
shares of Common Stock reserved for issuance pursuant to options and restricted stock unit awards
outstanding on such date pursuant to the Company’s 2005 Equity Incentive Plan (as amended to date,
the “2005 Plan”), 381,671 shares of Common Stock reserved for issuance pursuant to options
on such date pursuant to the Company’s 1997 Equity Incentive Plan (as amended to date, the
“1997 Plan”), and warrants outstanding to purchase an aggregate of 4,718,680 shares of
Common Stock. As of the Effective Date, there are 659,735 shares of Common Stock available for
future issuance under the 2005 Plan and no shares of Common Stock available for future issuance
under the 1997 Plan. There are no bonds, debentures, notes or other indebtedness having general
voting rights (or convertible into securities having such rights) (“Voting Debt”) of the
Company issued and outstanding. Except as stated above, there are no existing options, warrants,
calls, subscriptions or other rights, agreements, arrangements or commitments of any character,
relating to the issued or unissued capital stock of the Company, obligating the Company to issue,
transfer, sell, redeem, purchase, repurchase or otherwise acquire or cause to be issued,
transferred, sold, redeemed, purchased, repurchased or otherwise acquired any capital stock or
Voting Debt of, or other equity interest in, the Company or securities or rights convertible into
or exchangeable for such shares or equity interests or obligations of the Company to grant, extend
or enter into any such option, warrant, call, subscription or other right, agreement, arrangement
or commitment. The issuance of Common Stock or other securities pursuant to any provision of this
Agreement will not give rise to any preemptive rights or rights of first refusal on behalf of any
Person or result in the triggering of any anti-dilution or other similar rights. Except as
disclosed in the SEC Documents, there are no agreements or arrangements under which the Company or
any of its subsidiaries is obligated to register the sale of any of their securities under the
Securities Act. The Company has made available upon request of the Purchaser, a true, correct and
complete copy of the Certificate of Incorporation and Bylaws (as defined below).

     4.6 Litigation. There are no legal or governmental actions, suits or other proceedings
pending or, to the Company’s knowledge, threatened against the Company before or by any court,
regulatory body or administrative agency or any other governmental agency or body, domestic, or
foreign, which actions, suits or proceedings, individually or in the aggregate, could reasonably be
expected to have a Company Material Adverse Effect. The Company is not a party to or subject to
the provisions of any injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental agency or body that might have a Company Material
Adverse Effect.

     4.7 Governmental Consents. No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state, or local governmental
authority on the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement or the Registration Rights Agreement except for (a) the
filing of a Form D with the Commission under the Securities Act and compliance with the securities
and blue sky laws in the states and other jurisdictions in which shares of Common Stock are offered
and/or sold, which compliance will be effected in accordance with such laws, (b) the approval by
The NASDAQ Stock Market of the listing of the Shares and (c) the filing of one or more registration statements and all amendments thereto
with the Commission as contemplated by the Registration Rights Agreement.

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     4.8 No Default or Consents. Neither the execution, delivery or performance of the Transaction
Documents by the Company nor the consummation of any of the transactions contemplated thereby
(including, without limitation, the issuance and sale by the Company of the Shares) will: (i) give
rise to a right to terminate or accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision of, or constitute a default (or an event which
with notice or lapse of time or both would constitute a default) under, or require any consent or
waiver under, or result in the execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company is a party or by which the Company or
any of its properties or businesses is bound, or any franchise, license, permit, judgment, decree,
order, statute, rule or regulation (including federal and state securities laws and regulations and
the rules and regulations, assuming the correctness of the representations and warranties made by
the Purchaser herein, of any self regulatory organization to which the Company or its securities
are subject, including all applicable Trading Markets) applicable to the Company, or (ii) violate
or conflict with any provision of the Company’s Certificate of Incorporation, as amended and as in
effect on the date hereof (the “Certificate of Incorporation”) or the Company’s Bylaws, as
amended and as in effect on the date hereof (the “Bylaws”), except in the case of clause
(i) as would not cause, either individually or in the aggregate, a Company Material Adverse Effect,
and except for such consents or waivers which have already been obtained and are in full force and
effect.

     4.9 No Material Adverse Change. Between June 30, 2009 and the Effective Date, except as
specifically disclosed in the SEC Reports, there have been no events, occurrences or developments
that have had or would reasonably be expected to have, either individually or in the aggregate, a
Company Material Adverse Effect. Except for the transactions contemplated by the Transaction
Documents and the License Agreement, no event, liability or development has occurred or exists with
respect to the Company or its business, properties, operations or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the Effective Date that
has not been publicly disclosed at least one Trading Day prior to the Effective Date.

     4.10 No General Solicitation. Neither the Company, nor any of its affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D promulgated under the Securities Act) in connection
with the offer or sale of the Shares.

     4.11 No Integrated Offering. None of the Company or any of its affiliates, or any Person
acting on their behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would require registration of
any of the Shares under the Securities Act or cause this offering of the Shares to be integrated
with prior offerings by the Company for purposes of the Securities Act or any applicable
stockholder approval provisions, including, without limitation, under the rules and regulations of
The NASDAQ Stock Market.

     4.12 Sarbanes-Oxley Act. To the knowledge of the executive officers of the Company, the
Company is in material compliance with the requirements of the Sarbanes-Oxley Act of 2002 that are
effective and applicable to the Company as of the date hereof, and the rules

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and regulations promulgated by the Commission thereunder that are effective and applicable to the Company as of the
date hereof.

     4.13 Patents and Trademarks. To the knowledge of the executive officers of the Company, the
Company has, or has rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar rights that are
necessary or material for use in connection with its business as described in the SEC Documents and
which the failure to so have could, individually or in the aggregate, have or reasonably be
expected to result in a Company Material Adverse Effect (collectively, the “Intellectual
Property Rights”). The Company has not received a written notice that the Intellectual Property
Rights used by the Company violates or infringes upon the rights of any Person. To the knowledge of
the executive officers of the Company, all such Intellectual Property Rights are enforceable and
there is no existing infringement by another Person of any of the Intellectual Property Rights.

     4.14 Listing and Maintenance Requirements. Except as specified in the SEC Documents, the
Company has not, in the two years preceding the date hereof, received notice from The NASDAQ Stock
Market to the effect that the Company is not in compliance with the listing or maintenance
requirements thereof. Except as disclosed in the SEC Documents, the Company is in compliance with
the listing and maintenance requirements for continued listing of the Common Stock. The issuance
and sale of the Shares under this Agreement does not contravene the rules and regulations of The
NASDAQ Stock Market and no approval of the stockholders of the Company thereunder is required for
the Company to issue and deliver to the Purchaser the Shares.

     4.15 Disclosure. The Company understands and confirms that the Purchaser will rely on the
foregoing representations and covenants in effecting the transactions contemplated by this
Agreement.

     4.16 Contracts.

          (a) Each indenture, contract, lease, mortgage, deed of trust, note agreement, loan or other
agreement or instrument of a character that is required to be described or summarized in the SEC
Documents or to be filed as an exhibit to the SEC Documents under the Exchange Act and the rules
and regulations promulgated thereunder (collectively, the “Material Contracts”) is so
described, summarized or filed.

          (b) The Material Contracts to which the Company is a party have been duly and validly
authorized, executed and delivered by the Company and constitute the legal, valid and binding
agreements of the Company, enforceable by and against the Company in accordance with their
respective terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws relating to enforcement of creditors’ rights
generally, and general equitable principles relating to the availability of remedies, except as
rights to indemnity or contribution may be limited by federal or state securities laws.

     4.17 Properties and Assets. The Company has good and marketable title to all the properties
and assets described as owned by it in the latest Financial Statements included in the

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SEC Documents, free and clear of all liens, mortgages, pledges or encumbrances of any kind except (a)
those, if any, reflected in such Financial Statements or (b) those that are not material in amount
and do not adversely affect the use made and proposed to be made of such property by the Company.
The Company holds its leased properties under valid and binding leases. The Company owns or leases
all such properties as are necessary to its operations as now conducted.

     4.18 Compliance. The Company has not been advised, nor does it have any reason to believe,
that it is not conducting its business in compliance with all applicable laws, rules and
regulations of the jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations, and all applicable
rules and regulations of the Food and Drug Administration (the “FDA”), and all applicable
laws, statutes, ordinances, rule or regulations (including, without limitation, the Federal Food,
Drug And Cosmetic Act of 1938, as amended, and similar foreign laws and regulations) enforced by
the FDA or equivalent foreign authorities, except where failure to be so in compliance would not
have a Company Material Adverse Effect.

     4.19 Taxes. The Company has filed on a timely basis (giving effect to extensions) all
required federal, state and foreign income and franchise tax returns and has paid or accrued all
taxes shown as due thereon, and the Company does not have any knowledge of a tax deficiency that
has been or might be asserted or threatened against it that could have a Company Material Adverse
Effect. All tax liabilities accrued through the date hereof have been adequately provided for on
the books of the Company.

     4.20 Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than
income taxes) that are required to be paid in connection with the sale and transfer of the Shares
to be sold to the Purchaser hereunder will have been fully paid or provided for by the Company and
all laws imposing such taxes will have been fully complied with.

     4.21 Investment Company. The Company is not an “investment company” or an “affiliated person”
of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.

     4.22 Insurance. The Company maintains insurance underwritten by insurers of recognized
financial responsibility, of the types and in the amounts that the Company reasonably believes is
adequate for businesses, including, but not limited to, directors’ and officers’ liability
insurance and insurance covering all real and personal property owned or leased by the Company
against theft, damage, destruction, acts of vandalism and all other risks customarily insured
against, with such deductibles as are customary for companies in the same or similar business, all
of which insurance is in full force and effect.

     4.23 Price of Common Stock. The Company has not taken, and will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted or that might
reasonably be expected to constitute, the stabilization or manipulation of the price of the shares
of the Common Stock to facilitate the sale or resale of the Shares.

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     4.24 Governmental Permits, Etc. The Company has all franchises, licenses, certificates and
other authorizations from such federal, state or local government or governmental agency,
department or body that are currently necessary for the operation of the business of the Company as
currently conducted, except where the failure to possess currently such franchises, licenses,
certificates and other authorizations is not reasonably expected to have a Company Material Adverse
Effect.

     4.25 Internal Control over Financial Reporting. The Company maintains internal control over
financial reporting (as such term is defined in paragraph (f) of Rule 13a-15 under the Exchange
Act) as required by Rule 13a-15 under the Exchange Act. To the best of the Company’s knowledge,
since the end of the Company’s most recent audited fiscal year, there has been no material weakness
in the design or operation of the Company’s internal control over financial reporting (whether or
not remediated) which are reasonably likely to adversely affect the Company’s ability to record,
process, summarize and report financial information.

     4.26 Foreign Corrupt Practices. The Company, nor, to the knowledge of the Company, any
director, officer, agent, employee or other Person acting on behalf of the Company has, in the
course of its actions for, or on behalf of, the Company (a) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; (b) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (c) violated or is in violation of any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government
official or employee.

     4.27 Employee Relations. The Company believes that its relations with its employees are good.
No executive officer of the Company (as defined in Rule 501(f) promulgated under the Securities
Act) has notified the Company that such officer intends to leave the Company or otherwise terminate
such officer’s employment with the Company. To the Company’s knowledge, no executive officer of
the Company is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement, non-competition
agreement, or any other agreement or any restrictive covenant involving or otherwise affecting such
executive officer’s relationship with the Company, and the continued employment of each such
executive officer does not subject the Company to any material liability with respect to any of the
foregoing matters.

     4.28 ERISA. The Company is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder (herein called “ERISA”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company would have any material liability; the Company has not
incurred and does not expect to incur material liability under (a) Title IV of ERISA with respect
to termination of, or withdrawal from, any “pension plan” or (b) Sections 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and published interpretations
thereunder (the “Code”); and each “Pension Plan” for which the Company would have liability
that is intended to be qualified under Section 401(a) of the Code is so qualified in

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all material respects and to the Company’s knowledge, nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.

SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

     5.1 The Purchaser represents and warrants to and covenants with the Company that:

          (a) The Purchaser, taking into account the personnel and resources it can practically bring to
bear on the purchase of the Shares contemplated hereby, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to investments in
securities presenting an investment decision like that involved in the purchase of the Shares,
including investments in securities issued by the Company, and has requested, received, reviewed
and considered all information the Purchaser deems relevant (including the SEC Documents) in making
an informed decision to purchase the Shares.

          (b) The Purchaser is acquiring the Shares pursuant to this Agreement for its own account for
investment only and with no present intention of distributing any of such Shares or any arrangement
or understanding with any other Persons regarding the distribution of such Shares, except in
compliance with Section 5.1(c).

          (c) The Purchaser will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of
the securities purchased hereunder except in compliance with the Securities Act, applicable blue
sky laws, and the rules and regulations promulgated thereunder.

          (d) The Purchaser has, in connection with its decision to purchase the Shares, relied with
respect to the Company and its affairs solely upon the SEC Documents and the representations and
warranties of the Company contained herein.

          (e) The Purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act or a Qualified Institutional Buyer within the meaning of Rule
144A promulgated under the Securities Act.

          (f) The Purchaser has full right, power, authority and capacity to enter into this Agreement
and the Registration Rights Agreement and to consummate the transactions contemplated by this
Agreement and the Registration Rights Agreement and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the Registration Rights Agreement. Upon
the execution and delivery of this Agreement and the Registration Rights Agreement by Purchaser,
this Agreement and the Registration Rights Agreement shall each constitute a valid and binding
obligation of the Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
affecting the enforcement of creditors’ rights generally, (ii) as limited by equitable principles
generally, including any specific performance and (iii) with respect to the Registration Rights
Agreement, as rights to indemnity or contribution may be limited by state or federal laws or public
policy underlying such laws.

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          (g) The Purchaser is not a broker or dealer registered pursuant to Section 15 of the Exchange
Act (a “registered broker dealer”) and is not affiliated with a registered broker dealer.
The Purchaser is not party to any agreement for distribution of any of the Shares.

     5.2 The Purchaser represents, warrants and covenants to the Company that the Purchaser has
not, either directly or indirectly through an affiliate, agent or representative of the Company,
engaged in any transaction in the securities of the Company other than with respect to the
transactions contemplated herein, since the time that the Purchaser was first contacted by the
Company or any other Person regarding the transactions contemplated hereby until the date hereof,
except as set forth in filings made with the Commission pursuant to the Exchange Act. The
Purchaser represents and warrants to and covenants with the Company that the Purchaser has not
engaged and will not engage in any short sales of the Company’s Common Stock prior to the
effectiveness of the Registration Statement (either directly or indirectly through an affiliate,
agent or representative).

     5.3 The Purchaser understands that nothing in this Agreement or any other materials presented
to Purchaser in connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Purchaser has consulted such legal, tax and investment advisors as it, in
its sole discretion, has deemed necessary or appropriate in connection with its purchase of the
Shares.

     5.4 Legends. It is understood that the Shares may bear one or more legends in substantially
the following form and substance:

“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO A TRANSACTION WHICH IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS, AND IN
THE CASE OF A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION, UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT
SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH
OTHER APPLICABLE LAWS.”

In addition stock certificates representing the Shares may contain:

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          (a) Any legend required by the blue sky laws of any state to the extent such laws are
applicable to the sale of such Shares hereunder.

          (c) A legend regarding affiliate status, if applicable.

     5.5 Restricted Securities. The Purchaser understands that the Shares are characterized as
“restricted securities” under the federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under such laws and
applicable regulations such Shares may be resold without registration under the Securities Act only
in certain limited circumstances. In this connection, the Purchaser represents that it is familiar
with Commission Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act.

SECTION 6. CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING.

     The Company’s obligation to complete the sale and issuance of the Shares and deliver Shares to
the Purchaser at the Closing shall be subject to the following conditions to the extent not waived
by the Company:

     6.1 Receipt of Payment. The Company shall have received payment, by wire transfer of
immediately available funds, in the full amount of the Purchase Price for the Shares being
purchased by the Purchaser at the Closing.

     6.2 Representations and Warranties. The representations and warranties made by the Purchaser
in Section 5 hereof shall be true and correct as of, and as if made on, the date of this Agreement
and as of the Closing Date (except that those representations and warranties which address matters
only as of a particular date need only be true and correct as of such date).

     6.3 Receipt of Registration Rights Agreement. The Purchaser shall have executed and delivered
to the Company the Registration Rights Agreement.

     6.4 Consents and Notifications. The Company shall have obtained or filed, as applicable, in a
timely fashion any and all consents, permits, approvals, registrations, waivers and notifications
necessary for consummation of the purchase and sale of the Shares (including, without limitation,
any notifications required pursuant to the rules and regulations of applicable Trading Markets, and
except for such as may be properly obtained or filed subsequent to the Closing), all of which shall
be and remain so long as necessary in full force and effect.

SECTION 7. CONDITIONS TO THE PURCHASER’S OBLIGATIONS AT THE CLOSING.

     The Purchaser’s obligation to accept delivery of the Shares and to pay for the Shares shall be
subject to the following conditions to the extent not waived by the Purchaser:

     7.1 Representations and Warranties Correct. The representations and warranties made by the
Company in Section 4 hereof shall be true and correct as of, and as if made on, the date of this
Agreement and as of the Closing Date (except that those representations and

11

 

warranties which address matters only as of a particular date need only be true and correct as
of such date).

     7.2 Receipt of Executed Registration Rights Agreement. The Company shall have executed and
delivered to the Purchaser the Registration Rights Agreement.

     7.3 Legal Opinion. The Purchaser shall have received an opinion of Cooley LLP, counsel to the
Company, substantially in the form set forth in Exhibit B hereto.

     7.4 Certificate. The Purchaser shall have received a certificate signed by the Chief
Executive Officer and the Chief Financial or Accounting Officer to the effect that the
representations and warranties of the Company in Section 4 hereof are true and correct in all
material respects as of, and as if made on, the date of this Agreement and as of the Closing Date
(except that those representations and warranties which address matters only as of a particular
date need only be true and correct as of such date), and that the Company has satisfied in all of
the conditions required to be satisfied by it on or before the Closing Date.

     7.5 Consents and Notifications. The Company shall have obtained or filed, as applicable, in a
timely fashion any and all consents, permits, approvals, registrations, waivers and notifications
necessary for consummation of the purchase and sale of the Shares (including, without limitation,
any notifications required pursuant to the rules and regulations of applicable Trading Markets, and
except for such as may be properly obtained or filed subsequent to the Closing), all of which shall
be and remain so long as necessary in full force and effect.

SECTION 8. BROKER’S FEE.

     The Company and the Purchaser hereby represent that there are no brokers or finders entitled
to compensation in connection with the sale of the Shares, and shall indemnify each other for any
such fees for which they are responsible.

SECTION 9. INDEMNIFICATION.

     9.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless the
Purchaser and each Person, if any, who controls the Purchaser within the meaning of the Securities
Act (each, an “Indemnified Party”), against any losses, claims, damages, liabilities or
expenses, joint or several, to which such Indemnified Party may become subject under the Securities
Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is effected with the
written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of or are based in whole or in part
on any inaccuracy in the representations and warranties of the Company contained in this Agreement
or any failure of the Company to perform its obligations hereunder, and will reimburse each
Indemnified Party for any legal and other expenses reasonably incurred as such expenses are
reasonably incurred by such Indemnified Party in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action,
provided that any claim for indemnification under this Section 9.1 relating to any
inaccuracy in the representations and warranties of the Company contained in this Agreement is made
within one year from the Closing. Notwithstanding the foregoing, the Company will not be

12

 

liable in any such case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (a) the failure of such Indemnified Party to comply with the
covenants and agreements contained in Section 6 above respecting sale of the Shares, or (b) the
inaccuracy of any representations made by such Indemnified Party herein.

     9.2 Indemnification by Purchaser. The Purchaser shall indemnify and hold harmless the
Company, each of its directors, and each Person, if any, who controls the Company within the
meaning of the Securities Act, against any losses, claims, damages, liabilities or expenses to
which the Company, each of its directors or each of its controlling Persons may become subject,
under the Securities Act, the Exchange Act, or any other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Purchaser) insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (a) any failure by the Purchaser to comply with the covenants and agreements
contained in Section 6 above respecting the sale of the Shares unless such failure by the Purchaser
is directly caused by the Company’s failure to provide written notice to the Purchaser of a
suspension of any registration statement with respect to the resale of the Shares or (b) the
inaccuracy of any representation made by the Purchaser herein, in each case to the extent, and will
reimburse the Company, each of its directors, and each of its controlling Persons for any legal and
other expense reasonably incurred, as such expenses are reasonably incurred by the Company, each of
its directors, and each of its controlling Persons in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability, expense or action,
provided that any claim for indemnification under this Section 9.2 relating to the
inaccuracy of any made by the Purchaser herein is made within one year from the Closing. In no
event shall the liability of the Purchaser hereunder be greater in amount than the dollar amount of
the net proceeds received by the Purchaser upon the sale of the Shares giving rise to such
indemnification claim.

SECTION 10. ACCESS TO INFORMATION.

     From the date hereof until the Closing, the Company will make reasonably available to the
Purchaser’s representatives, consultants and their respective counsels for inspection, such
information and documents as the Purchaser reasonably requests, and will make available at
reasonable times and to a reasonable extent officers and employees of the Company to discuss the
business and affairs of the Company.

SECTION 11. USE OF PURCHASER’S NAME.

     Except as otherwise required by applicable law or regulation and except as otherwise provided
in the License Agreement, the Company shall not use the Purchaser’s name or the name of any of its
affiliates in any advertisement, announcement, press release or other similar public communication
unless it has received the prior written consent of the Purchaser for the specific use
contemplated.

13

 

SECTION 12. NOTICES.

     All notices, requests, consents and other communications hereunder shall be in writing, shall
be sent by confirmed facsimile or electronic mail, or mailed by first-class registered or certified
airmail, or nationally recognized overnight express courier, postage prepaid, and shall be deemed
given when so sent in the case of facsimile or electronic mail transmission, or when so received in
the case of mail or courier, and addressed as follows:

          (a) if to the Company, to:

Cardica, Inc.

900 Saginaw Drive

Redwood City, California 94063

Attention: Chief Financial Officer

Facsimile: (650) 364-3134

     with a copy to (which shall not constitute notice):

Cooley LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, California 94306-2155

Facsimile: (650) 849-7400

Attention: Suzanne Sawochka Hooper, Esq.

     or to such other Person at such other place as the Company shall designate to the Purchaser in
writing; and

          (b) if to the Purchaser, to:

Intuitive Surgical Operations, Inc.

1266 Kifer Road

Sunnyvale, California 94086

Facsimile: Facsimile: (408) 523-1390

Attention: Chief Financial Officer

     with a copy to (which shall not constitute notice):

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Facsimile: (650) 463-4693

Attention: Alan C. Mendelson

                  Kathleen M. Wells

     or to such other Person at such other place as the Purchaser shall designate to the Company in
writing.

14

 

SECTION 13. MISCELLANEOUS.

     13.1 Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, terminated, modified or amended except upon the written consent of the Company
and the Purchaser.

     13.2 Headings. The headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this Agreement.

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

     13.4 Survival. The representations and warranties contained herein shall survive the Closing
and the delivery of the Shares for a period of one (1) year from the Closing Date. The agreements
and covenants contained herein shall survive for the applicable statute of limitations.

     13.5 Governing Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of California.

     13.6 Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute but one instrument,
and shall become effective when one or more counterparts have been signed by each party hereto and
delivered to the other party.

     13.7 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,
executors and administrators of the parties hereto. The Company may not assign this Agreement or
any rights or obligations hereunder without the prior written consent of the Purchaser. The
Purchaser may assign its rights under this Agreement to any affiliate of the Purchaser to whom the
Investor assigns or transfers any Shares, provided such affiliate-transferee agrees in writing to
be bound, with respect to the transferred Shares, by the provisions hereof that apply to the
“Purchaser.”

     13.8 Entire Agreement. The License Agreement, the Transaction Documents and other documents
delivered pursuant hereto or thereto, including the exhibits hereto or thereto and the Schedule of
Exceptions, constitute the full and entire understanding and agreement between the parties with
regard to the subjects hereof and thereof.

     13.9 Payment of Fees and Expenses. Each of the Company and the Purchaser shall bear its own
expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions
contemplated hereby. If any action at law or in equity is necessary to enforce or interpret the
terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees,
costs and necessary disbursements in addition to any other relief to which such party may be
entitled.

[signature pages follow]

15

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.

	 	 	 	 	 
	 	COMPANY:

CARDICA, INC.

 	 
	 	By:  	/s/ Bernard A. Hausen
 	 
	 	 	Name:  	Bernard A. Hausen 	 
	 	 	Title:  	President and CEO 	 
	 

SIGNATURE PAGE TO CARDICA, INC. STOCK PURCHASE AGREEMENT

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.

	 	 	 	 	 
	 	PURCHASER:

INTUITIVE SURGICAL OPERATIONS, INC.

 	 
	 	By:  	/s/ Marshall Mohr
 	 
	 	 	Name:  	Marshall Mohr 	 
	 	 	Title:  	Sr. VP and CFO 	 
	 

SIGNATURE PAGE TO CARDICA, INC. STOCK PURCHASE AGREEMENT

 

 

Exhibit A

Form of Registration Rights Agreement

[Incorporated
by reference to Exhibit 10.26 hereto.]

 

 

Exhibit B

Opinion of Company Counsel

			
	Suzanne Sawochka Hooper
	 	VIA EMAIL
	(650) 843-5180	 	 
	hooperss@cooley.com	 	 

August 17, 2010

Intuitive Surgical Operations, Inc.

1266 Kifer Road

Sunnyvale, California 94086

RE: Cardica, Inc.

Ladies and Gentlemen:

We have acted as counsel for Cardica, Inc., a Delaware corporation (the “Company”), in connection
with the issuance and sale of up to 1,249,541 shares (the “Shares”) of the Company’s common stock,
$0.001 par value per share (the “Common Stock”), to Intuitive Surgical Operations, Inc. under the
Stock Purchase Agreement dated as of August 16, 2010 (the “Purchase Agreement”). We are rendering
this opinion pursuant to Section 7.3 of the Purchase Agreement. Except as otherwise defined herein,
capitalized terms used but not defined herein have the respective meanings given to them in the
Purchase Agreement.

In connection with this opinion, we have examined and relied upon the representations and
warranties as to factual matters contained in and made pursuant to the Purchase Agreement by the
various parties and originals or copies certified to our satisfaction, of such records, documents,
certificates, opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.

As to certain factual matters, we have relied upon certificates of officers of the Company and have
not sought to independently verify such matters. Where we render an opinion “to our knowledge” or
concerning an item “known to us” or “of which we are aware” or our opinion otherwise refers to our
knowledge, it is based solely upon (i) an inquiry of attorneys within this firm who have
represented the Company in this transaction, (ii) receipt of a certificate executed by an officer
of the Company covering such matters and (iii) such other investigation, if any, that we
specifically set forth herein.

In rendering this opinion, we have assumed: the authenticity of all documents submitted to us as
originals; the conformity to originals of all documents submitted to us as copies; the accuracy,
completeness and authenticity of certificates of public officials; the due authorization, execution
and delivery of all documents (except the due authorization, execution and delivery by the Company
of the Purchase Agreement and the Registration Rights Agreement (together, the “Transaction
Documents”)), where authorization, execution and delivery are prerequisites to the effectiveness of
such documents; and the genuineness and authenticity of all signatures on original documents
(except the signatures on behalf of the Company on the Transaction Documents). We have also
assumed: that all individuals executing and delivering documents had the legal capacity to so
execute and deliver; that the Transaction Documents are obligations binding upon the parties
thereto other than the Company; that the parties to the

FIVE PALO ALTO SQUARE, 3000 EL CAMINO REAL, PALO ALTO, CA 94306-2155 T: (650) 843-5000 F: (650) 849-7400 WWW.COOLEY.COM

 

 

Intuitive Surgical Operations, Inc.

August 17, 2010

Page Two

Transaction Documents other than the Company have filed any required California franchise or income
tax returns and have paid any required California franchise or income taxes; and that there are no
extrinsic agreements or understandings among the parties to the Transaction Documents or the
Material Agreements (as defined below) that would modify or interpret the terms of any of the
Transaction Documents or the Material Agreements or the respective rights or obligations of the
parties thereunder.

Our opinion is expressed only with respect to the federal laws of the United States of America and
the laws of the States of California and the General Corporation Law of the State of Delaware.

We express no opinion as to whether the laws of any particular jurisdiction apply, no opinion to
the extent that the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof and no opinion as to the enforceability of any liquidated damages
provisions in the Transaction Documents.

We are not rendering any opinion as to any statute, rule, regulation, ordinance, decree or
decisional law relating to antitrust, banking, land use, environmental, pension, employee benefits,
tax, fraudulent conveyance or usury, laws governing the legality of investments for regulated
entities, Regulations T, U or X of the Board of Governors of the Federal Reserve System, local
laws, any law, rules or regulations relating to the clinical development, manufacture, distribution
or sale of medical device products or the bylaws, rules or regulations of the Financial Industry
Regulatory Association (“FINRA”). Furthermore, we express no opinion with respect to compliance
with antifraud laws, rules or regulations relating to securities or the offer and sale thereof;
compliance with fiduciary duties by the Company’s Board of Directors or stockholders; compliance
with safe harbors for disinterested Board of Director or stockholder approvals; compliance with
state securities or blue sky laws except as specifically set forth below; compliance with the
Investment Company Act of 1940; or compliance with laws that place limitations on corporate
distributions.

With regard to our opinion in paragraphs 1 and 3 below with respect to the good standing and due
qualification as the case may be, of the Company, we have relied solely upon certificates of the
Secretaries of State of the indicated jurisdictions as of a recent date.

With regard to our opinion in paragraph 7 below concerning defaults under and any material breaches
of any Material Agreement, we have relied solely upon (i) inquiries of officers of the Company and
(ii) an examination of the contracts filed by the Company in its SEC Documents, a list of which is
attached hereto as Schedule A (the “Material Agreements”), in the form provided to us by the
Company. We have made no further investigation. Further, with regard to our opinions in paragraphs
6 and 7 below concerning Material Agreements, we express no opinion as to (i) financial covenants
or similar provisions therein requiring financial calculations or determinations to ascertain
compliance, (ii) provisions therein relating to the occurrence of a “material adverse event” or
words of similar import or (iii) any statement or writing that may constitute parol evidence
bearing on interpretation or construction. To the extent that laws other than those of California
govern any of the Material Agreements, we assume that the Material Agreements would be interpreted
in accordance with their plain meaning.

 

 

Intuitive Surgical Operations, Inc.

August 17, 2010

Page Three

With regard to our opinion in paragraph 8 below with respect to pending or overtly threatened
litigation, we have made an inquiry of the attorneys within this firm who have represented the
Company in this transaction, examined and relied upon a certificate executed by an officer of the
Company covering such matters and checked the records of this firm to ascertain that we are not
acting as counsel of record for the Company in any such matter. We have made no further
investigation.

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

With regard to our opinion in paragraph 11 below, we have based our opinion, to the extent we
consider appropriate, on Rule 3a-8 under the Investment Company Act of 1940, as amended (the
“Investment Company Act”), the No-Action Letter of the Commission (Ref. No. 20077121115) responding
to the letter, dated July 12, 2007, to the Commission submitted on our behalf, and a certificate of
officers of the Company as to compliance with each of the requirements necessary to comply with
Rule 3a-8. We have conducted no further investigation.

On the basis of the foregoing, in reliance thereon and with the foregoing qualifications, we are of
the opinion that:

	1.	 	The Company has been duly incorporated and is a validly existing corporation in good standing
under the laws of the State of Delaware.
	 
	2.	 	The Company has the requisite corporate power to own, lease and operate its property and
assets, and to conduct its business as described in the SEC Documents.
	 
	3.	 	The Company is duly qualified to do business as a foreign corporation and is in good standing
under the laws of the State of California.
	 
	4.	 	The Company has the requisite corporate power to execute, deliver and perform its obligations
under the Transaction Documents, including, without limitation, to issue, sell and deliver the
Shares under the Purchase Agreement.
	 
	5.	 	All corporate action on the part of the Company necessary for the authorization, execution
and delivery of the Transaction Documents by the Company, the authorization, sale, issuance
and delivery of the Shares and the performance by the Company of its obligations to be
performed at the Closing under the Transaction Documents has been taken. Each of the
Transaction Documents has been duly and validly authorized, executed and delivered by the
Company and each such agreement constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with its respective terms, except that we
express no opinion as

 

 

Intuitive Surgical Operations, Inc.

August 17, 2010

Page Four

	 	 	to the validity of rights to indemnity and contribution under section 9 of the Purchase
Agreement and section 5 of the Registration Rights Agreement and except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, arrangement, moratorium or other similar laws affecting creditors’ rights
generally, and subject to general equity principles and to limitations on availability of
equitable relief, including specific performance.
	 
	6.	 	The Company’s authorized capital stock consists of (a) forty-five million (45,000,000) shares
of Common Stock, par value $0.001 and (b) five million (5,000,000) shares of Preferred Stock,
par value $0.001. The Shares have been duly authorized and, when issued, sold and delivered
against payment therefor in accordance with the terms of the Purchase Agreement, will be
validly issued, outstanding, fully paid and nonassessable and free of any pre-emptive right or
similar rights contained in the Company’s Certificate of Incorporation or Bylaws or any
Material Agreement.
	 
	7.	 	The execution and delivery of the Transaction Documents and the issuance of the Shares
pursuant thereto do not violate any provision of the Company’s Certificate of Incorporation or
Bylaws, do not constitute a default under or a material breach of any Material Agreement and
do not (a) violate any governmental statute, rule or regulation which in our experience is
typically applicable to transactions of the nature contemplated by the Transaction Documents
or (b) violate any order, writ, judgment, injunction, decree, determination or award which has
been entered against the Company and of which we are aware, except, with respect to clauses
(a) and (b), where such violation would not materially and adversely affect the Company.
	 
	8.	 	To our knowledge, other than as set forth in the Schedule of Exceptions, there is no action,
proceeding or investigation pending or overtly threatened against the Company before any court
or administrative agency that questions the validity of the Transaction Documents or that
could reasonably be expected to result, either individually or in the aggregate, in a material
adverse effect on the Company.
	 
	9.	 	All consents, approvals, authorizations, or orders of, and filings, registrations and
qualifications with any U.S. Federal or California regulatory authority or governmental body
required for the issuance of the Shares have been made or obtained, except (a) for the filing
of a Form D pursuant to Securities and Exchange Commission Regulation D and (b) for the filing
of the notice to be filed under California Corporations Code Section 25102.1(d).
	 
	10.	 	The offer and sale of the Shares are exempt from the registration requirements of the
Securities Act of 1933, as amended, subject to the timely filing of a Form D pursuant to
Securities and Exchange Commission Regulation D.
	 
	11.	 	The Company is not, and, after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof, will not be an “investment company” as defined in the
Investment Company Act.

 

 

Intuitive Surgical Operations, Inc.

August 17, 2010

Page Five

	12.	 	To our knowledge, there are no written contracts, agreements or understandings between the
Company and any person granting such person the right (other than rights which have been
waived in writing or otherwise satisfied) to require the Company to include any securities of
the Company in any registration statement contemplated by Section 2 of the Registration Rights
Agreement.

This opinion is intended solely for your benefit and is not to be made available to or be relied
upon by any other person, firm, or entity without our prior written consent.

	 	 	 	 	 

	Sincerely,	 	 
	 
	 	 	 	 
	Cooley llp	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	By:

	 	/s/ Suzanne Sawochka Hooper
	 	 
	 

	 	 	 	 
	 

	 	Suzanne Sawochka Hooper	 	 

 

 

SCHEDULE A

Material Agreements

	1.	 	1997 Equity Incentive Plan and forms of related agreements and documents.
	 
	2.	 	2005 Equity Incentive Plan and forms of related agreements and documents.
	 
	3.	 	Amended and Restated Investor Rights Agreement, dated August 19, 2003, by and among Cardica,
Inc. and certain stockholders.
	 
	4.	 	Benefit Agreement with Bernard Hausen, M.D., Ph.D.
	 
	5.	 	Office Lease Agreement, dated April 25, 2003, and First Amendment to Office Lease Agreement,
dated January 21, 2004.
	 
	6.	 	Second Amendment to Office Lease Agreement, effective November 19, 2007.
	 
	7.	 	Distribution Agreement, by and between Cardica, Inc. and Century Medical, Inc., dated June
16, 2003
	 
	8.	 	First Amendment to Distribution Agreement, dated March 30, 2007, by and between Cardica, Inc.
and Century Medical, Inc.
	 
	9.	 	Subordinated Convertible Note Agreement with Century Medical, Inc., dated June 16, 2003, and
Amendment No. 1 thereto, dated August 6, 2003.
	 
	10.	 	Amendment No. 2 to Subordinated Convertible Note Agreement, dated March 30, 2007, by and
between Cardica, Inc. and Century Medical, Inc.
	 
	11.	 	Amended and Restated Note issued pursuant to Amendment No. 2 to Subordinated Convertible Note
Agreement with Century Medical, Inc.
	 
	12.	 	Allen & Company LLC Letter of Intent dated September 12, 2005.
	 
	13.	 	Consent to Grant of Registration Rights and Amendment to Amended and Restated Investor Rights
Agreement, dated November 7, 2006, by and between Cardica, Inc. and the investors set forth
therein.
	 
	14.	 	Registration Rights Agreement, dated June 7, 2007, by and among Cardica, Inc., and the
purchasers listed on the signature pages thereto.
	 
	15.	 	Letter Agreement with Frederic M. Bauer.
	 
	16.	 	Cardica, Inc. Change in Control and Severance Benefit Plan.
	 
	17.	 	License, Development and Commercialization Agreement by and between the Company and Cook
Incorporated, dated June 12, 2007.

 

 

	18.	 	Amendment to License, Development and Commercialization Agreement by and between Cardica,
Inc. and Cook Incorporated, dated September 19, 2007.
	 
	19.	 	Second Amendment to License, Development and Commercialization Agreement by and between
Cardica, Inc. and Cook Incorporated, dated June 19, 2009.
	 
	20.	 	Registration Rights Agreement, dated September 25, 2009, by and among Cardica, Inc., and the
purchasers listed on the signature pages thereto.
	 
	21.	 	Amendment No. 4 to Distribution Agreement, dated April 1, 2010, by and between Cardica, Inc.
and Century Medical, Inc.
	 
	22.	 	Amendment No. 3 to Subordinated Convertible Note Agreement, dated April 1, 2010, by and
between Cardica, Inc. and Century Medical, Inc.exv10w26

Exhibit 10.26

EXECUTION VERSION

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is made and entered into as of
August 17, 2010, by and between Cardica, Inc., a Delaware corporation (the “Company”), and
Intuitive Surgical Operations, Inc., a Delaware corporation (the “Purchaser”).

          This Agreement is made pursuant to the Stock Purchase Agreement, dated as of August 16, 2010,
between the Company and the Purchaser (the “Purchase Agreement”).

          NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for
other good and valuable consideration the receipt and adequacy of which are hereby acknowledged,
the Company and the Purchaser agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in
the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used
in this Agreement, the following terms shall have the respective meanings set forth in this Section
1:

          “Common Stock” means the common stock, par value $0.001 per share, of the Company.

          “Effective Date” means the date that a Registration Statement filed pursuant to
Section 2 is first declared effective by the Commission.

          “Effectiveness Date” means: (a) with respect to the Initial Registration Statement,
the 60th day following the Filing Date (or the 90th day following the Filing
Date in the event the Initial Registration Statement is reviewed by the Commission), (b) with
respect to any additional Registration Statements following the Initial Registration Statement that
may be required pursuant to Section 2(b) hereof, the 90th day following the date on
which the Company first knows that such additional Registration Statement is required under such
Section (or the 120th day following the date on which the Company first knows that such
additional Registration Statement is required in the event the additional Registration Statement is
reviewed by the Commission). If an Effectiveness Date falls on a Saturday, Sunday or other date
that the Commission is closed for business, the Effectiveness Date shall be extended to the next
day on which the Commission is open for business.

          “Effectiveness Period” shall have the meaning set forth in Section 2(a).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          “Exempt Registration” means any registration effected pursuant to any Existing Rights
Agreement.

          “Existing Rights Agreement” means any agreement entered into by the Company and
existing as of the date hereof that provides for any registration rights with respect to any of the
Company’s securities.

 

 

          “Filing Date” means: (a) with respect to the Initial Registration Statement, the
120th day following the Closing (the “Initial Filing Date”), and (b) with
respect to any additional Registration Statements following the Initial Registration Statement that
may be required pursuant to Section 2(b) hereof, the 30th day following the date on
which the Company first knows that such additional Registration Statement is required under such
Section.

          “Holder” or “Holders” means the holder or holders, as the case may be, from
time to time of Registrable Securities, but only if such holder is the Purchaser or any assignee
thereof in accordance with Section 6(k).

          “Indemnified Party” shall have the meaning set forth in Section 5(c).

          “Indemnifying Party” shall have the meaning set forth in Section 5(c).

          “Initial Registration Statement” shall mean the initial Registration Statement
required to be filed to cover the resale by the Holders of the Registrable Securities pursuant to
Section 2(a).

          “Losses” shall have the meaning set forth in Section 5(a).

          “Proceeding” means an action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

          “Prospectus” means the prospectus included in a Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A or Rule 430B
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed to be incorporated
by reference in such Prospectus.

          “Reduction Securities” shall have the meaning set forth in Section 2(b).

          “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing a registration statement or similar document (including any pre-
or post-effective amendment or supplement thereto) in compliance with the Securities Act, and, as
applicable, the declaration or ordering of effectiveness of such registration statement or
document.

          “Registrable Securities” means (a) the Shares issued pursuant to the Purchase
Agreement, and (b) any other shares of Common Stock issued as (or issuable upon conversion or
exercise of any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, in exchange for or in replacement of the Shares; provided, however,

2

 

that no shares of Common Stock shall be deemed Registrable Securities for purposes of this
Agreement to the extent such shares (x) have been sold to the public through a registration
statement or pursuant to Rule 144, or (y) have been sold, transferred or otherwise disposed of by a
Person in a transaction in which its rights under this Agreement were not assigned in accordance
with Section 6(k), or (z) are held by a Holder whose rights to cause the Company to register
securities pursuant to this Agreement have terminated in accordance with Section 6(i) of this
Agreement.

          “Registration Statement” means each of the following: (a) the Initial Registration
Statement and (b) each additional registration statement, if any, following the Initial
Registration Statement and contemplated by Section 2(b), and including, in each case, the
Prospectus, amendments and supplements to each such registration statement or Prospectus, including
pre-and post-effective amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such registration statement.

          “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.

          “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.

          “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such Rule.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” shall have the meaning set forth in the Purchase Agreement.

          “Trading Day” means any day on which the Common Stock is traded on its Trading Market.

     2. Registration.

          (a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the resale of all Registrable Securities not already covered by an
existing and effective Registration Statement (except as provided in Section 2(b)) for an offering
to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form
S-3 (except if the Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate form for such purpose)
and shall contain (except if otherwise required pursuant to written comments received from the
Commission upon a review of such Registration Statement) the “Plan of Distribution” in
substantially the form attached hereto as Annex A. The Company shall use its reasonable
best efforts to cause each Registration Statement to be declared effective under the Securities Act
as soon as possible but, in any event, no later than the

3

 

Effectiveness Date for such Registration Statement, and shall use its reasonable best efforts
to keep the Registration Statement continuously effective under the Securities Act until the
earlier of (i) such time as all Registrable Securities covered by such Registration Statement have
been publicly sold by the Holders or (ii) the date that all shares of Common Stock covered by such
Registration Statement cease to be Registrable Securities hereunder (the “Effectiveness
Period”), subject to Section 6(e) hereof.

          (b) Notwithstanding anything contained herein to the contrary, in the event that, following
the filing of the Initial Registration Statement, the Commission limits the amount of Registrable
Securities that may be included and sold by Holders in any Registration Statement, including the
Initial Registration Statement, pursuant to Rule 415 or any other basis, the Company may reduce the
number of Registrable Securities included in such Registration Statement on behalf of the Holders
(in case of an exclusion as to a portion of such Registrable Securities, such portion shall be
allocated pro rata among such Holders in proportion to the respective numbers of Registrable
Securities requested to be registered by each such Holder over the total amount of Registrable
Securities) (such Registrable Securities so reduced, the “Reduction Securities”). In such
event the Company shall give the Holders prompt notice of the number of such Reduction Securities
and, if the Reduction Securities are excluded from the Registration Statement by the Commission as
a result of the application of Rule 415, the Company will not be liable for any liquidated damages
under Section 2(c), or otherwise liable under this Agreement, in connection with the exclusion of
such Reduction Securities. The Company will be subject to liquidated damages under Section 2(c) in
the event the Reduction Securities are excluded from the Registration Statement by the Commission
on a basis other than the application of Rule 415. The Company shall use its reasonable best
efforts at the first opportunity that is permitted by the Commission to register for resale the
Reduction Securities. Such new Registration Statement shall be filed on or prior to the applicable
Filing Date, shall be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case such registration shall be on another
appropriate form for such purpose) and shall contain (except if otherwise required pursuant to
written comments received from the Commission upon a review of such Registration Statement) the
“Plan of Distribution” in substantially the form attached hereto as Annex A. The Company
shall use its reasonable best efforts to cause each such Registration Statement to be declared
effective under the Securities Act as soon as possible but, in any event, no later than the
Effectiveness Date for such Registration Statement, and shall use its reasonable best efforts to
keep such Registration Statement continuously effective under the Securities Act during the entire
Effectiveness Period, subject to Section 6(e) hereof.

          (c) If: (i) a Registration Statement is not filed on or prior to its Filing Date, (ii) a
Registration Statement is not declared effective by the Commission on or prior to its required
Effectiveness Date, or (iii) after its Effective Date, such Registration Statement ceases for any
reason to be effective and available to the Holders as to all Registrable Securities to which it is
required to cover at any time prior to the expiration of its Effectiveness Period for an aggregate
of more than 40 consecutive Trading Days or an aggregate of 80 Trading Days (which need not be
consecutive) in any given 360-day period (any such failure or breach being referred to as an
“Event,” and for purposes of clauses (i) or (ii) the date on which such Event occurs, and
for purposes of clause (iii) the date on which such 40 consecutive or 80 Trading Day-period (as

4

 

applicable) is exceeded, being referred to as the “Event Date”), then, in lieu of any
other rights available to the Holders hereunder or under applicable law: (x) within five (5)
Trading Days after such Event Date, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for its Registrable Securities then held (which remedy
shall be exclusive of any other remedies available under this Agreement or under applicable law);
and (y) on each monthly anniversary of each such Event Date thereof (if the applicable Event shall
not have been cured by such date) until the applicable Event is cured, the Company shall pay to
each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1% of
the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement for its
Registrable Securities then held (which remedy shall be exclusive of any other remedies available
under this Agreement or under applicable law). The partial liquidated damages pursuant to the
terms hereof shall apply on a pro rata basis for any portion of a month prior to the cure of an
Event. If the Company fails to pay any liquidated damages pursuant to this Section 2(c) in full
within five (5) Trading Days after the date payable, the Company will pay interest thereon at a
rate of 1.5% per month (or such lesser maximum amount that is permitted to be paid by applicable
law) to the Holder, accruing daily from the date such liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full. In the event that the Company registers
some but not all of the Registrable Securities, the 1% of liquidated damages referred to above for
any monthly period shall be reduced to equal the percentage determined by multiplying 1% by a
fraction, the numerator of which shall be the number of Registrable Securities for which there is
not an effective Registration Statement at such time and the denominator of which shall be the
number of Registrable Securities at such time. The parties agree that, notwithstanding anything to
the contrary herein, the Effectiveness Date for a Registration Statement shall be extended without
default or liquidated damages hereunder in the event that the Company’s failure to obtain the
effectiveness of such Registration Statement on a timely basis results from (i) the failure of any
Holder to timely provide the Company with information requested by the Company and necessary to
complete such Registration Statement in accordance with the requirements of the Securities Act (in
which the Effectiveness Date would be extended with respect to Registrable Securities held by such
Holder) or (ii) events or circumstances that are not in any way attributable to the Company’s
actions or inactions. The parties further agree that (a) the Company will not be liable for
liquidated damages under this Section 2(c) with respect to Reduction Securities that are excluded
from the Registration Statement by the Commission as a result of the application of Rule 415 and
(b) no liquidated damages shall be payable under this Section 2(c) with respect to any period after
the expiration of the Effectiveness Period (it being understood that this sentence shall not
relieve the Company of any such liquidated damages accruing prior to the Effectiveness Period).

          (d) Each Holder agrees to furnish to the Company a completed notice and questionnaire in the
form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”)
on a date that is not less than five Trading Days prior to the date of filing of a Registration
Statement. Each Holder further agrees that it shall not be entitled to be named as a selling
securityholder in a Registration Statement or use the Prospectus for offers and resales of
Registrable Securities at any time, unless such Holder has returned to the Company a completed and
signed Selling Stockholder Questionnaire. If a Holder of Registrable Securities returns a Selling
Stockholder Questionnaire after the deadline specified in the previous sentence, the

5

 

Company shall use its commercially reasonable best efforts to take such actions as are
required to name such Holder as a selling securityholder in the Registration Statement or any
pre-effective or post-effective amendment thereto and to include (to the extent not theretofore
included) in the Registration Statement the Registrable Securities identified in such late Selling
Stockholder Questionnaire. Each Holder acknowledges and agrees that the information in the Selling
Stockholder Questionnaire will be used by the Company in the preparation of the Registration
Statement and hereby consents to the inclusion of such information in the Registration Statement.

          (e) In the event that Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the Holders and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such form is available, provided that,
subject to Section 6(e), the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the Commission.

     3. Registration Procedures.

          In connection with the Company’s registration obligations hereunder, the Company shall:

          (a) Not less than five Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto, furnish to the Holders copies of all
such documents proposed to be filed (other than those incorporated by reference). Notwithstanding
the foregoing, the Company shall not be required to furnish to the Holders any prospectus
supplement being prepared and filed solely to name new or additional selling securityholders unless
such Holders are named in such prospectus supplement. In addition, in the event that any
Registration Statement is on Form S-1 (or other form which does not permit incorporation by
reference), the Company shall not be required to furnish to the Holders any prospectus supplement
containing information included in a report or proxy statement filed under the Exchange Act that
would be incorporated by reference in such Registration Statement if such Registration Statement
were on Form S-3 (or other form which permits incorporation by reference). The Company shall duly
consider any comments made by Holders and received by the Company not later than two Trading Days
prior to the filing of the Registration Statement, but shall not be required to accept any such
comments to which it reasonably objects.

          (b) Subject to Section 6(e), (i) prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement continuously effective
as to the applicable Registrable Securities for its Effectiveness Period and prepare and file with
the Commission such additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to each

6

 

Registration Statement or any amendment thereto and, as promptly as reasonably possible
provide the Holders true and complete copies of all correspondence from and to the Commission
relating to such Registration Statement that pertains to the Holders as Selling Stockholders but
not any comments that would result in the disclosure to the Holders of material and non-public
information concerning the Company; and (iv) comply in all material respects with the provisions of
the Securities Act and the Exchange Act with respect to the Registration Statements and the
disposition of all Registrable Securities covered by each Registration Statement.

          (c) Notify the Holders as promptly as reasonably possible (and, in the case of (i)(A) below,
not less than three Trading Days prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the day: (i)(A) when a
Prospectus or any prospectus supplement (but only to the extent notice is required under Section
3(a) above) or post-effective amendment to a Registration Statement is proposed to be filed; (B)
when the Commission notifies the Company whether there will be a “review” of such Registration
Statement and whenever the Commission comments in writing on such Registration Statement (in which
case the Company shall provide true and complete copies thereof and all written responses thereto
to each of the Holders that pertain to the Holders as a Selling Stockholder or to the Plan of
Distribution, but not information which the Company reasonably believes would constitute material
and non-public information); and (C) with respect to each Registration Statement or any
post-effective amendment, when the same has been declared effective; (ii) of any request by the
Commission or any other Federal or state governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information that pertains to the Holders as
Selling Stockholders or the Plan of Distribution; (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of a Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or
passage of time that makes the financial statements included or incorporated by reference in a
Registration Statement ineligible for inclusion or incorporation by reference therein or any
statement made in such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that requires any
revisions to such Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus
or supplement thereto, in light of the circumstances under which they were made) not misleading;
and (vi) of the occurrence or existence of any pending corporate development with respect to the
Company that the Company believes may be material and that, in the determination of the Company,
makes it not in the best interest of the Company to allow continued availability of a Registration
Statement or Prospectus; provided, that any and all of such information shall remain
confidential to each Holder until such information otherwise becomes public, unless disclosure by a
Holder is required by law; provided, further, that notwithstanding each Holder’s
agreement to keep such information confidential, each such

7

 

Holder makes no acknowledgement that any such information is material, non-public information.

          (d) Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any
suspension of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

          (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration
Statement and each amendment thereto and all exhibits to the extent reasonably requested by such
Person (including those previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission; provided, that the Company shall have no
obligation to provide any document pursuant to this clause that is available on the EDGAR system.

          (f) Promptly deliver to each Holder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such
Persons may reasonably request. Subject to Section 6(e) hereof, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in
connection with the offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.

          (g) Prior to any public offering of Registrable Securities, use its reasonable best efforts to
register or qualify or cooperate with the selling Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such Registrable Securities
for offer and sale under the securities or Blue Sky laws of those jurisdictions within the United
States as any Holder reasonably requests in writing to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts
or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statements; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not then so qualified
or subject the Company to any material tax in any such jurisdiction where it is not then so
subject.

          (h) Cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to the
Registration Statements, which certificates shall be free, to the extent permitted by the Purchase
Agreement and under applicable law, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any such Holders may
request.

          (i) Upon the occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to
the affected Registration Statements or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, no Registration Statement nor any Prospectus

8

 

will contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or
any form of prospectus or supplement thereto, in light of the circumstances under which they were
made) not misleading.

          (j) If required by the FINRA Corporate Financing Department or any similar entity, promptly
effect a filing with FINRA pursuant to FINRA Rule 5110 with respect to the public offering
contemplated by resales of securities under the Registration Statement (an “Issuer
Filing”), and pay the filing fee required by such Issuer Filing.

     4. Registration Expenses. All fees and expenses incident to the Company’s performance of or
compliance with its obligations under this Agreement (excluding any underwriting discounts and
selling commissions and all legal fees and expenses of legal counsel for any Holder) shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation, fees and expenses
(A) with respect to filings required to be made with the Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky
laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably
requested by the holders of a majority of the Registrable Securities included in the Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so
desires such insurance, and (vi) reasonable fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by this Agreement. In
addition, the Company shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange as required hereunder. In no
event shall the Company be responsible for any underwriting, broker or similar commissions of any
Holder or any legal fees or other costs of the Holders.

     5. Indemnification.

          (a) Indemnification by the Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents, partners,
members, stockholders and employees of each Holder, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the
officers, directors, agents, partners, members, stockholders and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation
and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement
thereto (it being understood that the Holder

9

 

has approved Annex A hereto for this purpose), or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading, except to the extent, but
only to the extent, that (1) such untrue statements, alleged untrue statements, omissions or
alleged omissions are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of Prospectus or in any amendment or
supplement thereto (it being understood that the Holder has approved Annex A hereto for
this purpose) or (2) in the case of an occurrence of an event of the type specified in Section
3(c)(ii)-(vi), the use by such Holder of an outdated or defective Prospectus after the Holder has
received written notice from the Company that the Prospectus is outdated or defective and prior to
the receipt by such Holder of an Advice (as defined below) or an amended or supplemented
Prospectus, but only if and to the extent that following the receipt of the Advice or the amended
or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution, threat or assertion
of any Proceeding of which the Company is aware in connection with the transactions contemplated by
this Agreement.

          (b) Indemnification by Holders. Each Holder shall, notwithstanding any termination of this
Agreement, severally and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents,
partners, members, stockholders or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, arising solely out of or
based solely upon: (x) for so long as the Company is not a “Seasoned Issuer” and the
prospectus delivery requirements of the Securities Act apply to sales by such Holder, such Holder’s
failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any Prospectus, or any form
of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely
upon any omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto,
in light of the circumstances under which they were made) not misleading to the extent, but only to
the extent that, (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder expressly for use therein,
or to the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such
Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus
or in any amendment or supplement thereto (it being understood that the Holder has approved
Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the
type specified in Section 3(c)(ii)-(vi), the use by such Holder of an outdated or defective
Prospectus after the Holder has received written notice from the Company that the Prospectus is
outdated or defective and prior to the receipt by such Holder of an Advice or an amended or
supplemented Prospectus, but only if and

10

 

to the extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been corrected. In no
event shall the liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
“Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense thereof; provided,
that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent
that it shall be finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the Indemnifying Party,
and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party
(in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense thereof and such counsel shall be at the expense of the
Indemnifying Party); provided, that the Indemnifying Party shall not be liable for the fees
and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties
pursuant to this Section 5(c). The Indemnifying Party shall not be liable for any settlement of
any such Proceeding effected without its written consent, which consent shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party,
effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a
party, unless such settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.

          All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such Proceeding in a manner
not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten
Trading Days of written notice thereof to the Indemnifying Party (regardless of whether it is
ultimately determined that an Indemnified Party is not entitled to indemnification hereunder;
provided, that the Indemnifying Party may require such Indemnified

11

 

Party to undertake to reimburse all such fees and expenses to the extent it is finally
judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

          (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to
an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission. The amount paid or payable
by a party as a result of any Losses shall be deemed to include, subject to the limitations set
forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by
such party in connection with any Proceeding to the extent such party would have been indemnified
for such fees or expenses if the indemnification provided for in this Section was available to such
party in accordance with its terms.

          The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually
received by such Holder from the sale of the Registrable Securities subject to the Proceeding
exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties and are not in
diminution or limitation of the indemnification provisions under the Purchase Agreement.

     6. Miscellaneous.

          (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their
obligations under this Agreement, each Holder or the Company, as the case may be, in addition to
being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the

12

 

provisions of this Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that a remedy at law
would be adequate.

          (b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to the Registration Statement and shall sell the Registrable
Securities only in accordance with a method of distribution described in the Registration
Statement.

          (c) Furnishing of Information. The Company may require each selling Holder to furnish to the
Company a certified statement as to (i) the number of shares of Common Stock beneficially owned by
such Holder and any Affiliate thereof, (ii) any FINRA affiliations, (iii) any natural persons who
have the power to vote or dispose of the common stock and (iv) any other information as may be
requested by the Commission, FINRA or any state securities commission. During any periods that the
Company is unable to meet its obligations hereunder with respect to the registration of Registrable
Securities because any Holder fails to furnish such information within three (3) Trading Days of
the Company’s request, any liquidated damages that are accruing at such time as to such Holder
under Section 2(c) only shall be tolled and any Event that may otherwise occur solely because of
such delay shall be suspended as to such Holder only, until such information is delivered to the
Company.

          (d) Subsequent Registration Rights. Without the written consent of the Holder or Holders (as
applicable) of a majority of the then outstanding Registrable Securities, the Company shall not
file any registration statement covering the resale of any Company securities held by any Person
(other than a Holder) (an “Other Registration Statement”) unless prior to or concurrently
with the filing of such Other Registration Statement, the Initial Registration Statement required
hereunder is or has been filed with, and declared effective by, the Commission; provided,
that this Section 6(d) shall not prohibit the Company from fulfilling its obligations under any
Existing Rights Agreement.

          (e) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the occurrence of any event of the
kind described in Section 3(c), such Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until such Holder’s receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement or until it is advised in
writing (the “Advice”) by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph.

          (f) Piggy-Back Registrations. If at any time following the Effectiveness Date with respect to
the Initial Registration Statement and continuing through the applicable Effectiveness Period,
except as contemplated by Section 2(b) hereof, there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall

13

 

determine to prepare and file with the Commission a registration statement (other than a
post-effective amendment to an existing registration statement) relating to an offering for its own
account or the account of others under the Securities Act of any of its equity securities, other
than (i) an Exempt Registration or (ii) a registration statement on Form S-4 or Form S-8 (each as
promulgated under the Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or equity securities
issuable in connection with the stock option or other employee benefit plans, then the Company
shall send to each Holder a written notice of such determination and, if within 15 days after the
date of such notice, any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such Holder requests to be
registered; provided, however, that the Company shall not be required to register
any Registrable Securities pursuant to this Section 6(e) that are the subject of a then effective
Registration Statement.

          (g) Reports Under the Exchange Act. With a view to making available to the Holders the
benefits of Rule 144 and any other rule or regulation of the Commission that may at any time permit
a Holder to sell securities of the Company to the public without registration, the Company agrees,
for so long as a Holder holds (i) all or any portion of the Shares issued pursuant to the Purchase
Agreement, and (ii) any other shares of Common Stock issued as (or issuable upon conversion or
exercise of any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, in exchange for or in replacement of the Shares, to use its
reasonable best efforts to:

               (A) make and keep public information available, as those terms are understood and defined in
Rule 144, at all times on and after the date hereof;

               (B) file with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act (or obtain extensions in respect thereof
and file within the applicable grace period); and

               (C) furnish to any Holder, so long as the Holder owns (1) all or any portion of the Shares
issued pursuant to the Purchase Agreement, and (2) any other shares of Common Stock issued as (or
issuable upon conversion or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, in exchange for or in replacement of the Shares,
forthwith upon request (y) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange Act and (z) such other
information as may be reasonably requested to avail any Holder of any rule or regulation of the
Commission that permits the selling of any such securities without registration.

          (h) Amendments and Waivers. No provision of this Agreement may be waived or amended except in
a written instrument signed by the Company and the Holder or Holders (as applicable) of a majority
of the then outstanding Registrable Securities. The Company shall provide prior notice to all
Holders of any proposed waiver or amendment. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission

14

 

of either party to exercise any right hereunder in any manner impair the exercise of any such
right.

          (i) Termination of Registration Rights. The registration rights granted to the Holders
hereunder shall terminate as to any Holder at such time as all Registrable Securities then held by
such Holder are eligible for resale pursuant to Rule 144 without volume limitation (such Holder’s
“Eligible Shares”). Upon such termination, such Eligible Shares shall cease to be “Registrable
Securities” hereunder for all purposes. For the avoidance of doubt, it is expressly agreed and
understood that (i) in the event that there are no Registrable Securities outstanding as of the
Initial Filing Date, then the Company shall have no obligation to file, caused to be declared
effective or to keep effective any Registration Statement hereunder (including any Registration
Statement previously filed pursuant to this Agreement) and (ii) all registration rights granted to
the Holders hereunder (including the rights set forth in Sections 6(d) and 6(f)), shall terminate
in their entirety effective on the first date on which there shall cease to be any Registrable
Securities outstanding. In the event that the Company determines that the registration rights
granted to the Holders hereunder have terminated as to any Holder, it shall notify such Holder of
such determination, which notice shall set forth in reasonable detail the basis for such
determination. For the avoidance of doubt, it is expressly agreed and understood that the Company’s
determination of whether such registration rights shall have terminated shall not be deemed to be
conclusive or determinative of such matter.

          (j) Notices. All notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or electronic mail, or mailed by first-class
registered or certified airmail, or nationally recognized overnight express courier, postage
prepaid, and shall be deemed given when so sent in the case of facsimile or electronic mail
transmission, or when so received in the case of mail or courier, and addressed as follows:

          if to the Company, to:

Cardica, Inc.

900 Saginaw Drive

Redwood City, California 94063

Attention: Chief Financial Officer

Facsimile: (650) 364-3134

          with a copy to (which shall not constitute notice):

Cooley LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, California 94306-2155

Facsimile: (650) 849-7400

Attention: Suzanne Sawochka Hooper

          or to such other Person at such other place as the Company shall designate to the Purchaser in
writing;

15

 

          if to the Purchaser, to:

Intuitive Surgical Operations, Inc.

1266 Kifer Road

Sunnyvale, California 94086

Facsimile: (408) 523-1390

Attention: Chief Financial Officer

          with a copy to (which shall not constitute notice):

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Facsimile: (650) 463-4693

Attention: Alan C. Mendelson

                  Kathleen M. Wells

          or to such other Person at such other place as the Purchaser shall designate to the Company in
writing; and

          if to any other Person who is then the registered Holder, to the address of such Holder as it
appears in the stock transfer books of the Company, or to such other place as such Holder shall
designate to the Company in writing.

          (k) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties and shall inure to the benefit of each
Holder. The Company may not assign its rights or obligations hereunder without the prior written
consent of the Holder or Holders (as applicable) of a majority of the then outstanding Registrable
Securities (other than by merger or consolidation or to an entity which acquires the Company
including by way of acquiring all or substantially all of the Company’s assets). The rights of any
Holder hereunder, including the right to have the Company register Registrable Securities pursuant
to this Agreement, may be assigned by such Holder to transferees or assignees of all or any portion
of the Registrable Securities, but only if (i) such Holder agrees in writing with the transferee or
assignee to assign such rights and related obligations under this Agreement, and for the transferee
or assignee to assume such obligations, and a copy of such agreement is furnished to the Company,
(ii) the Company is furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are being transferred or
assigned, (iii) the transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein and (iv) the transferee is an “accredited investor,” as that term
is defined in Rule 501 of Regulation D; provided, however, that notwithstanding the foregoing,
until the Initial Filing Date, the rights of the Purchaser hereunder, including the right to have
the Company register Registrable Securities pursuant to this Agreement, may be transferred or
assigned by the Purchaser only to an Affiliate of the Purchaser.

          (l) Counterparts. This Agreement may be executed in counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute but one

16

 

instrument, and shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other party.

          (m) Governing Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of California.

          (n) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.

          (o) Severability. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall
use their best efforts to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or restriction. It is
hereby stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

          (p) Headings. The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

[signature pages follow]

17

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.

	 	 	 	 	 
	 	COMPANY:

CARDICA, INC.

 	 
	 	By:  	/s/ Bernard A. Hausen
 	 
	 	 	Name:  	Bernard A. Hausen 	 
	 	 	Title:  	President and CEO 	 

1

 

	 	 	 	 	 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first above written.

	 	 	 	 	 
	 	PURCHASER:

INTUITIVE SURGICAL OPERATIONS, INC.

 	 
	 	By:  	/s/ Marshall Mohr
 	 
	 	 	Name:  	Marshall Mohr 	 
	 	 	Title:  	Sr. VP and CFO 	 
	 

2

 

ANNEX A

PLAN OF DISTRIBUTION

     We are registering the shares of common stock issued to the selling stockholders to permit the
resale of these shares of common stock by the holders of the shares of common stock from time to
time after the date of this prospectus. We will not receive any of the proceeds from the sale by
the selling stockholders of the shares of common stock. We will bear all fees and expenses incident
to our obligation to register the shares of common stock.

     The selling stockholders and any of their transferees, donees, pledgees or other successors in
interest may, from time to time, sell all or a portion of the shares of common stock beneficially
owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold through underwriters or
broker-dealers, the selling stockholders will be responsible for underwriting discounts or
commissions or agent’s commissions. The shares of common stock may be sold on any national
securities exchange or quotation service on which the securities may be listed or quoted at the
time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges
or systems or in the over-the-counter market and in one or more transactions at fixed prices, at
prevailing market prices at the time of the sale, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or
block transactions. The selling stockholders may use any one or more of the following methods when
selling shares:

	 	•	 	ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
	 
	 	•	 	block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction;
	 
	 	•	 	purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
	 
	 	•	 	an exchange distribution in accordance with the rules of the applicable
exchange;
	 
	 	•	 	privately negotiated transactions;
	 
	 	•	 	settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;
	 
	 	•	 	broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
	 
	 	•	 	through the writing or settlement of options or other hedging
transactions, whether such options are listed on an options exchange or otherwise;
	 
	 	•	 	a combination of any such methods of sale; and
	 
	 	•	 	any other method permitted pursuant to applicable law.

     The selling stockholders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or

1

 

Section 4(1) under the Securities Act, if available, rather than under this prospectus,
provided that they meet the criteria and conform to the requirements of those provisions.

     Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to
participate in sales. If the selling stockholders effect such transactions by selling shares of
common stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or
commissions from the selling stockholders or commissions from purchasers of the shares of common
stock for whom they may act as agent or to whom they may sell as principal. Such commissions will
be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction will not be in excess of a customary brokerage commission in
compliance with FINRA Rule 2440 (and any successor); and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440-1.

     In connection with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers or other financial institutions, which may
in turn engage in short sales of the shares of common stock in the course of hedging in positions
they assume. The selling stockholders may also sell shares of common stock short and if such short
sale shall take place after the date that the registration statement of which this prospectus is a
part is declared effective by the Commission, the selling stockholders may deliver shares of common
stock covered by this prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling stockholders may also loan or pledge shares of common
stock to broker-dealers that in turn may sell such shares, to the extent permitted by applicable
law. The selling stockholders may also enter into option or other transactions with broker-dealers
or other financial institutions or the creation of one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may resell pursuant to
this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the
foregoing, the selling stockholders have been advised that they may not use shares registered on
the registration statement of which this prospectus forms a part to cover short sales of our common
stock made prior to the date the registration statement, of which this prospectus forms a part, has
been declared effective by the Commission.

     The selling stockholders may, from time to time, pledge or grant a security interest in some
or all of the shares of common stock owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the shares of common stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act, as amended, amending, if necessary,
the list of selling stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. The selling stockholders also may transfer and
donate the shares of common stock in other circumstances in which case the transferees, donees,
pledgees or other successors in interest will be the selling beneficial owners for purposes of this
prospectus.

     The selling stockholders and any broker-dealer or agents participating in the distribution of
the shares of common stock may be deemed to be “underwriters” within the meaning of

2

 

Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions
paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on
the resale of the shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Selling stockholders who are “underwriters” within the meaning
of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act and may be subject to certain statutory liabilities of, including but not
limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities
Exchange Act of 1934, as amended, or the Exchange Act.

     Each selling stockholder has informed Cardica that it is not a registered broker-dealer and
does not have any written or oral agreement or understanding, directly or indirectly, with any
person to distribute the common stock. Upon Cardica being notified in writing by a selling
stockholder that any material arrangement has been entered into with a broker-dealer for the sale
of common stock through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing:

	 	•	 	the name of each such selling stockholder and of the participating
broker-dealer(s),
	 
	 	•	 	the number of shares involved,
	 
	 	•	 	the price at which such the shares of common stock were sold,
	 
	 	•	 	the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
	 
	 	•	 	that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this prospectus, and
	 
	 	•	 	other facts material to the transaction.

     In no event shall any broker-dealer receive fees, commissions and markups, which, in the
aggregate, would exceed eight percent (8%).

     Under the securities laws of some states, the shares of common stock may be sold in such
states only through registered or licensed brokers or dealers. In addition, in some states the
shares of common stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied
with.

     There can be no assurance that any selling stockholder will sell any or all of the shares of
common stock registered pursuant to the registration statement, of which this prospectus forms a
part.

     Each selling stockholder and any other person participating in such distribution will be
subject to applicable provisions of the Exchange Act, as amended, and the rules and regulations
thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the
timing of purchases and sales of any of the shares of common stock by the selling stockholder and
any other participating person. Regulation M may also restrict the ability of any

3

 

person engaged in the distribution of the shares of common stock to engage in market-making
activities with respect to the shares of common stock. All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of common stock.

     We will pay all expenses of the registration of the shares of common stock pursuant to the
registration rights agreement, including, without limitation, Securities and Exchange Commission
filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however,
that each selling stockholder will pay all underwriting discounts and selling commissions, if any,
and any legal expenses incurred by it. We will indemnify the selling stockholders against certain
liabilities, including some liabilities under the Securities Act, in accordance with a registration
rights agreement, or the selling stockholders will be entitled to contribution. We may be
indemnified by the selling stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by the selling
stockholders specifically for use in this prospectus, in accordance with the related registration
rights agreements, or we may be entitled to contribution.

4

 

EXECUTION VERSION

ANNEX B

SELLING SECURITY HOLDER NOTICE AND QUESTIONNAIRE

     The undersigned holder of shares of the common stock, par value $0.001 per share, of
Cardica, Inc., a Delaware corporation (the “Company”), issued pursuant to a certain Stock
Purchase Agreement by and between the Company and Intuitive Surgical Operations, Inc., a Delaware
corporation, dated as of August 16, 2010 (the “Agreement”), understands that the Company
intends to file with the Securities and Exchange Commission a registration statement on Form S-3
(the “Resale Registration Statement”) for the registration and the resale under Rule 415 of
the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable
Securities in accordance with the terms of the Agreement. All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Agreement.

     In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale
Registration Statement, a holder of Registrable Securities generally will be required to be named
as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the
“Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including
pursuant to Rule 172 under the Securities Act) and be bound by the provisions of the Agreement.
Holders must complete and deliver this Notice and Questionnaire in order to be named as selling
stockholders in the Prospectus.

     Certain legal consequences arise from being named as a selling stockholder in the Resale
Registration Statement and the Prospectus. Holders of Registrable Securities are advised to
consult their own securities law counsel regarding the consequences of being named or not named as
a selling stockholder in the Resale Registration Statement and the Prospectus.

NOTICE

     The undersigned holder (the “Selling Stockholder”) of Registrable Securities hereby
gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities
owned by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the
Resale Registration Statement. The undersigned, by signing and returning this Notice and
Questionnaire, understands and agrees that it will be bound by the terms and conditions of this
Notice and Questionnaire and the Agreement.

     The undersigned hereby provides the following information to the Company and represents and
warrants that such information is accurate and complete:

QUESTIONNAIRE

	 	1.	 	Name.

	 	(a)	 	Full Legal Name of Selling Stockholder:
	 
	 	(b)	 	Full Legal Name of Registered Holder (if not the same as (a) above)
through which Registrable Securities Listed in Item 3 below are held:

B-1

 

	 	(c)	 	Full Legal Name of Natural Control Person (which means a natural person
who directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):

	 	2.	 	Address for Notices to Selling Stockholder:

	 	 	 	Telephone:

Fax:

Contact Person:

E-mail address of Contact Person:

	 	3.	 	Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase
Agreement:

	 	(a)	 	Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:
	 
	 	(b)	 	Number of shares of common stock to be registered pursuant to this
Notice for resale:

	 	4.	 	Broker-Dealer Status:

	 	(a)	 	Are you a broker-dealer?

	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Yes
	 	 	 	 	 	No	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 

	 	 

	 	(b)	 	If “yes” to Section 4(a), did you receive your Registrable Securities
as compensation for investment banking services to the Company?

	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Yes
	 	 	 	 	 	No	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 

	 	 

	 	 	 	Note: If “no,” the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

	 	(c)	 	Are you an affiliate of a broker-dealer?

	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Yes
	 	 	 	 	 	No	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 

	 	 

	 	 	Note: If “yes,” provide a narrative explanation below:

	 	(d)	 	If you are an affiliate of a broker-dealer, do you certify that you
bought the Registrable Securities in the ordinary course of business, and at the
time of the

B-2

 

	 	 	 	purchase of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	Yes
	 	 	 	 	 	No	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	 

	 	 

	 	 	 	Note: If “no,” the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.

	 	5.	 	Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.
	 
	 	 	 	Except as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable Securities
listed above in Item 3.

	 	(a)	 	Type and amount of other securities beneficially owned:

	 	6.	 	Relationships with the Company:
	 
	 	 	 	Except as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity securities of the
undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
	 
	 	 	 	State any exceptions here:

	 	7.	 	Plan of Distribution:
	 
	 	 	 	The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the
Registration Rights Agreement, and hereby confirms that, except as set forth below, the
information contained therein regarding the undersigned and its plan of distribution is
correct and complete.
	 
	 	 	 	State any exceptions here:

B-3

 

***********

     The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the
information provided herein that may occur subsequent to the date hereof and prior to the effective
date of any applicable Resale Registration Statement. All notices hereunder and pursuant to the
Agreement shall be made in writing, by hand delivery, confirmed or facsimile transmission,
first-class mail or air courier guaranteeing overnight delivery at the address set forth below. In
the absence of any such notification, the Company shall be entitled to continue to rely on the
accuracy of the information in this Notice and Questionnaire.

     By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items (1) through (7) above and the inclusion of such information in the
Resale Registration Statement and the Prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or amendment of any such
Registration Statement and the Prospectus.

     By signing below, the undersigned acknowledges that it understands its obligation to comply,
and agrees that it will comply, with the provisions of the Exchange Act and the rules and
regulations thereunder, particularly Regulation M in connection with any offering of Registrable
Securities pursuant to the Resale Registration Statement. The undersigned also acknowledges that it
understands that the answers to this Questionnaire are furnished for use in connection with
Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or
supplements thereto filed with the Commission pursuant to the Securities Act.

     The undersigned hereby acknowledges and is advised of the following Compliance and Disclosure
Interpretation (“CDI”) of the staff of the Division of Corporation Finance (with respect to
Securities Act Sections) regarding short selling:

     “239.10 An issuer filed a Form S-3 registration statement for a secondary offering of common
stock which is not yet effective. One of the selling shareholders wanted to do a short sale of
common stock “against the box” and cover the short sale with registered shares after the effective
date. The issuer was advised that the short sale could not be made before the registration
statement becomes effective, because the shares underlying the short sale are deemed to be sold at
the time such sale is made. There would, therefore, be a violation of Section 5 if the shares were
effectively sold prior to the effective date. [Nov. 26, 2008]”

     By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing
interpretation.

     I confirm that, to the best of my knowledge and belief, the foregoing statements (including
without limitation the answers to this Questionnaire) are correct.

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     In Witness Whereof the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	 	 	 	 	 
	Dated: 	Beneficial Owner:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Total: 	 
	 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL
BY OVERNIGHT MAIL, TO:

Cooley LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, California 94306-2155

Facsimile: (650) 849-7400

Attention: Suzanne Sawochka Hooper

B-5

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