Distribution Agreement

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This Distribution Agreement involves

CARDICA INC | Century Medical, Inc.

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Title: Distribution Agreement
Governing Law: California Date: 2/2/2006
Industry: HTHEQP Sector: HEALTH

Search Distribution Agreement by:

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

Exhibit 10.6

Distribution Agreement

by and between

Cardica, Inc.
a Delaware Corporation

and

Century Medical, Inc.
a Japanese Corporation

Dated as of June 16, 2003

Table of Contents


			Page
1.	DEFINITION OF TERMS			1
	1.1	“Competing Products”		1
	1.2	“Contract Year”		1
	1.3	“First Commercial Sale”		1
	1.4	“Initial Term”		1
	1.5	“Party” or “Parties”		1
	1.6	“Premarketing Term”		2
	1.7	“Products”		2
	1.8	“Territory”		2
2.	APPOINTMENT OF DISTRIBUTOR			2
	2.1	Appointment as DISTRIBUTOR by COMPANY		2
	2.2	Subdistributors		3
3.	TERM OF DISTRIBUTORSHIP			3
4.	DUTIES OF DISTRIBUTOR			3
	4.1	Duties of DISTRIBUTOR		3
	4.2	Product Approvals		4
5.	DUTIES OF COMPANY			5
	5.1	Duties of COMPANY		5
6.	EXPENSES			6
	6.1	DISTRIBUTOR’s Expenses		6
	6.2	COMPANY’s Expenses		6
7.	RECORDS AND REPORTS			6
	7.1	Records and Reports		6
	7.2	Adverse Experience Reporting		7
	7.3	Updating/Revising Agreement		7
	7.4	Recall		7
8.	SALES OF PRODUCT TO DISTRIBUTOR			7
	8.1	Purchase Prices and Terms		7
	8.2	Risk of Loss, Deliveries		8
	8.3	Acceptance and Cancellation of Orders		8

-i-

Table of Contents
(continued)


			Page
	8.4	Product Specifications		8
	8.5	Taxes		9
	8.6	Purchase Levels		9
9.	PRODUCT LIABILITY			11
	9.1	Claim, Suit or Action		11
	9.2	Product Liability Insurance		11
10.	WARRANTY POLICY			12
	10.1	Warranties		12
	10.2	Rejection of Products		13
11.	PATENTS, TRADEMARKS, COPYRIGHTS; PROPRIETARY AND CONFIDENTIAL INFORMATION			13
	11.1	Trademark License		13
	11.2	Duty to Preserve Confidentiality		14
	11.3	Proprietary		14
12.	INDEMNITIES			14
	12.1	Indemnity		14
	12.2	Infringing Products		15
13.	TERMINATION			15
	13.1	Cancellation for Cause		15
	13.2	Obligations upon Cancellation or Termination		16
14.	GENERAL PROVISIONS			18
	14.1	Force Majeure		18
	14.2	Relationship Between Parties		18
	14.3	Successors, Nonassignability		19
	14.4	Survival of Obligations		19
	14.5	Remedies		19
	14.6	Notices		19
	14.7	Disputes		20
	14.8	Unenforceable Terms		20
	14.9	Waivers		20

-ii-

Table of Contents
(continued)


			Page
	14.10	Governing Law; Headings		20
	14.11	Entire Agreement, Modification		21
	14.12	Further Assurances		21
	14.13	Schedules		21
	14.14	Counterparts		21
SCHEDULE 1.		Products and Prices		22
SCHEDULE 2.		Memorandum of Compliance		23
SCHEDULE 3.		Reporting for Product Defects, Adverse Events, Overseas Corrective Action Reports and Research Reports		25

-iii-

DISTRIBUTION AGREEMENT

This DISTRIBUTION AGREEMENT (“Agreement”) is made this 16th day of June, 2003 (“Effective Date”), by and between Cardica, Inc., a Delaware corporation with its principal place of business located at 171 Jefferson Drive, Menlo Park, CA 94025, USA (hereinafter referred to as “COMPANY”) and Century Medical, Inc., a Japanese Corporation with its principal place of business located at 1-6-4 Ohsaki, Shinagawa-Ku, Tokyo, 141-8588, Japan (hereinafter referred to as “DISTRIBUTOR”) in consideration of the mutual covenants and conditions hereinafter stated.

1. DEFINITION OF TERMS

1.1 “Competing Products”

“Competing Products” shall mean automated anastomosis products that seal coronary artery bypass grafts to accomplish surgical anastomosis except for and excluding hemostasis products that, as of the Effective Date, DISTRIBUTOR distributes in the Territory that are manufactured by CryoLife, Inc. (BioGlue™), which shall not be considered Competing Products or other anastomosis devices that create a surgical anastomosis outside the coronary area of the body.

1.2 “Contract Year”

“Contract Year” shall mean a twelve (12) month period commencing on, and thereafter beginning on the anniversary of, the first day of the first full month following the date of First Commercial Sale in the Territory of any Product.

1.3 “First Commercial Sale”

“First Commercial Sale” shall mean the first sale of any Product with the intended maximum shelf life of twelve (12) months or more by DISTRIBUTOR to a third party in the Territory with all medical device approvals required to market and sell such Product (“Shonin” or “Lui Betsu Kyoka”) from The Japanese Ministry of Health, Labour and Welfare (“MHLW”) and all import permits from the appropriate government authorities (“Hinmoku Kyoka”). COMPANY hereby represents and warrants that, as of the Effective Date, COMPANY has obtained conditional CE Mark approval for the “Proximal Device” Product and the Proximal Device Product is a commercially available Product to DISTRIBUTOR to begin the device approval process stated above.

1.4 “Initial Term”

“Initial Term” shall mean the five (5) year period beginning on the date of expiration of the Premarketing Term.

1.5 “Party” or “Parties”

“Party” or “Parties” shall mean COMPANY or DISTRIBUTOR, individually and collectively.

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

1.6 “Premarketing Term”

“Premarketing Term” shall mean the period beginning on the Effective Date and ending on the first day of the first full month following the date of First Commercial Sale of all Products.

1.7 “Products”

“Products” shall mean those Products specifically listed in Schedule 1, whether manufactured by or for COMPANY or its affiliates, including any improvements or modifications thereto, as such schedule may be amended from time to time. As used herein, “affiliate” means a person or entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a specified person or entity, where “control” means (a) fifty percent (50%) or more common equity ownership, or (b) the ability to direct the management or policies of a person or entity, whether by contract or otherwise.

1.8 “Territory”

“Territory” shall mean Japan.

2. APPOINTMENT OF DISTRIBUTOR