Item 1.01 Entry into a Material Definitive Agreement

On May 10, 2012, Kips Bay Medical, Inc. (the "Company") entered into a Contract Research Support Agreement with North American Science Associates, Inc. ("NAMSA"), dated as of May 10, 2012 (the "Agreement"), which provides that NAMSA will provide certain contract research organization services ("CRO services") to the Company in support of the Company's feasibility trial being performed for the U.S. FDA. These CRO services may include regulatory consulting, preclinical testing and clinical testing. Specific CRO services to be provided to the Company by NAMSA will be set forth in each subsequent Statement of Work executed by the Company and NAMSA.. NAMSA will commence work on a project for the Company following receipt of a fully-executed Statement of Work and a deposit, as set forth on each Statement of Work. Fees payable to NAMSA will vary based on each individual Statement of Work. The Company will reimburse NAMSA for reasonable out-of-pocket expenses, including a 5% service change, subject to pre-approval of such expenses by the Company.

The Agreement contains customary confidentiality, ownership of intellectual property and indemnification provisions and is terminable by either the Company or NAMSA on thirty (30) days written notice. The Agreement shall have a term of three (3) years unless extended in writing by mutual agreement of the Company and NAMSA.

The foregoing description of the Agreement is not a complete description of all the terms of such Agreement. For a complete description of all the terms, please refer to the full text of the Agreement, a copy of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

(a) Financial statements: None

(b) Pro forma financial information: None

(c) Shell company transactions: None

(d) Exhibits:

10.1 Contract Research Support Agreement, by and between the Company and North American Science Associates, Inc., dated as of May 10, 2012.

---