ex41.htm


     

    Exhibit
      4.1

    
 

    CARDIMA,
      INC.

    


    SUBSCRIPTION
      AGREEMENT

    


    The
      undersigned (hereinafter “Subscriber”) hereby confirms
      his/her/its subscription for the purchase of shares of common stock, par value
      $0.001 per share, (“Shares”) of Cardima Inc.,
      a
      Delaware corporation (the “Company”), on the terms
      described below.

     

    In
      connection with this subscription, Subscriber and the Company agree as
      follows:

    


    1.           
      Purchase and Sale
      of
      the Shares.

    


    (a)           
      The Company hereby agrees to issue and to sell to Subscriber, and Subscriber
      hereby agrees to purchase from the Company __________ Shares at a price equal
      to
      $0.50 per Share (the “Share
      Price”) for the aggregate subscription amount set forth on the signature
      page hereto.  For every twenty (20) Shares purchased by Subscriber,
      the Company will issue to Subscriber a warrant (“Warrant”) to purchase three (3)
      shares of the common stock of the Company, par value $0.001 per share (“Warrant
      Shares”).  The exercise price of each Warrant shall be
      $0.55.  Each Warrant shall be exercisable commencing six (6) months
      after the date of issuance and expiring on the Expiration Date, as more fully
      described in the Warrant.  Further, in accordance with the terms of
      the Warrant, the number of Warrant Shares subject to purchase shall be
      permanently reduced on a share-for-share basis by the number of shares of common
      stock and other Company securities (including short sales and sales or purchases
      of derivative securities) sold by Subscriber during such six (6) month period
      after the date of issuance.  The Warrants are subject to a forced
      exercise by the Company at a price of $0.001 per Warrant Share upon notice
      to
      record holders of the Warrants, as more fully described in the Warrant and
      accompanying documents.  The Warrants are also subject to a mandatory
      exchange or termination in the case of certain reorganizations, mergers, or
      divestitures.  The form of Warrant is as annexed hereto as Exhibit
      A.  Upon acceptance of this Subscription Agreement by the Company, the
      Company shall issue and deliver to Subscriber a stock certificate and a Warrant
      evidencing the applicable number of Shares and Warrant Shares subscribed for
      against payment in U.S. Dollars of the Purchase Price (as defined
      below).

     

    (b)           
      Subscriber hereby agrees to pay the aggregate purchase price (the “Purchase Price”) set forth on
      the signature page hereof required to purchase the Shares and Warrant subscribed
      for hereunder, which amount has been paid in U.S. Dollars by cash, wire transfer
      or check.  The wiring instructions are set forth on the signature
      pages.

    


    (c)           
      Subscriber understands and acknowledges that this subscription is part of a
      private placement by the Company of up to the maximum of 24,000,000 Shares
      and
      3,600,000 Warrant Shares (the “Maximum
      Offering”).  If this subscription is not accepted, whether in
      whole or in part, or if the Company chooses to forego the private placement,
      the
      subscription funds held by the Company will be returned to the investor (in
      whole or in part, as appropriate) without interest or deduction.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.           
      Covenants,
      Representations and Warranties of Subscriber.  Subscriber
      covenants with, represents and warrants to, the Company and the Placement Agent
      as follows:

    


    (a)           
      The Confidential Purchaser Questionnaire, in the form attached hereto as Exhibit
      B, completed by the Subscriber and submitted to the Company is, as of the date
      thereof, true, complete, and correct in all respects.

    


    (b)           
      Subscriber is an “accredited investor” as defined by Rule 501 under the
      Securities Act of 1933, as amended (the “Act”), and Subscriber
      is
      capable of evaluating the merits and risks of Subscriber’s investment in the
      Company and has the capacity to protect Subscriber’s own interests.

    


    (c)           
      Subscriber understands that the securities being subscribed to under this
      Subscription Agreement (the “Securities”) are not presently registered, but
      Subscriber is entitled to certain rights with respect to the registration of
      the
      Shares and Warrant Shares (see Section 4 below).  Subscriber further
      understands the Company may require the Subscriber (or holder of the Warrant)
      to
      exercise the Warrant at such time and upon the terms as described in the Warrant
      and that the required exercise by the Company may occur at time when the
      Subscriber (or holder of the Warrant) may be unable, due to his own personal
      financial condition, to exercise the Warrant.

    


    (d)           
      Subscriber acknowledges and understands that the Securities are being purchased
      for investment purposes and not with a view to distribution or resale, nor
      with
      the intention of selling, transferring or otherwise disposing of all or any
      part
      thereof for any particular price, or at any particular time, or upon the
      happening of any particular event or circumstances, except selling,
      transferring, or disposing the Securities made in full compliance with all
      applicable provisions of the Act, the rules and regulations promulgated by
      the
      Securities and Exchange Commission (“SEC”) thereunder, and applicable state
      securities laws.

    


    (e)           
      Subscriber acknowledges the Securities must be held indefinitely until
      registered under the Act or unless an exemption from such registration is
      available. Subscriber is aware of the provisions of Rule 144 promulgated under
      the Act which permit limited resale of common stock purchased in a private
      placement subject to the satisfaction of certain conditions, including, among
      other things, the existence of a public market for the common stock, the
      availability of certain current public information about the Company, the resale
      occurring not less than one year after a party has purchased and paid for the
      security to be sold, the sale being effected through a “broker’s transaction” or
      in transactions directly with a “market maker” and the number of shares of
      common stock being sold during any three-month period not exceeding specified
      limitations.

    


    (f)           
      Subscriber acknowledges that Subscriber has had the opportunity to ask questions
      of, and receive answers from the Company or any person acting on its behalf
      concerning the Company and its business and to obtain any additional
      information, to the extent possessed by the Company (or to the extent it could
      have been acquired by the Company without unreasonable effort or expense)
      necessary to verify the accuracy of the information received by Subscriber.
      In
      connection therewith, Subscriber acknowledges that Subscriber has had the
      opportunity to discuss the Company’s business, management and financial affairs
      with the Company’s management or any person acting on its
      behalf.  Without limiting the generality of the foregoing, Subscriber
      has been furnished with or has had the opportunity to acquire, and to review:
      (i) copies of all of the Company’s publicly available documents, and (ii) all
      information, both written and oral, it desires with respect to the Company’s
      business, management, financial affairs and prospects.  In determining
      whether to make this investment, Subscriber has relied solely on Subscriber’s
      own knowledge and understanding of the Company and its business based upon
      Subscriber’s own due diligence investigations and the information furnished
      pursuant to this paragraph.  Subscriber understands that no person has
      been authorized to give any information or to make any representations which
      were not furnished pursuant to this paragraph and Subscriber has not relied
      on
      any other representations or information.

    


    
      
        
        

      

      
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      (g)            Subscriber
      has all requisite legal and other power and authority to execute and deliver
      this Subscription Agreement and to carry out and perform Subscriber’s
      obligations under the terms of this Subscription Agreement.  This
      Subscription Agreement constitutes a valid and legally binding obligation of
      Subscriber, enforceable in accordance with its terms, and subject to laws of
      general application relating to bankruptcy, insolvency and the relief of debtors
      and rules of law governing specific performance, injunctive relief or other
      general principals of equity, whether such enforcement is considered in a
      proceeding in equity or law.

    


    (h)           
      Subscriber has carefully considered and has discussed with the Subscriber’s
      professional legal, tax, accounting and financial advisors, to the extent
      Subscriber has deemed necessary, the suitability of this investment and the
      transactions contemplated by this Subscription Agreement for the Subscriber’s
      particular federal, state, local and foreign tax and financial situation and
      has
      determined that this investment and the transactions contemplated by this
      Subscription Agreement are a suitable investment for the
      Subscriber.  Subscriber relies solely on such advisors and not on any
      statements or representations of the Company or any of its
      agents.  Subscriber understands that Subscriber (and not the Company)
      shall be responsible for Subscriber’s own tax liabilities which may arise as a
      result of this investment or the transactions contemplated by this Subscription
      Agreement.

    


    (i)           
      Neither this Subscription Agreement nor the Confidential Purchaser Questionnaire
      contain any untrue statement of a material fact or omit any material fact
      concerning Subscriber.

    


    (j)           
      There are no actions, suits, proceedings or investigations pending against
      Subscriber or Subscriber’s properties before any court or governmental agency
      (nor, to Subscriber’s knowledge, is there any threat thereof) which would impair
      in any way Subscriber’s ability to enter into and fully perform Subscriber’s
      commitments and obligations under this Subscription Agreement or the
      transactions contemplated hereby.

    


    (k)           
      The execution, delivery and performance of and compliance with this Subscription
      Agreement and the issuance of the Securities will not result in any material
      violation of, or conflict with, or constitute a material default under, any
      of
      Subscriber’s articles of incorporation or bylaws, if applicable, or any of
      Subscriber’s material agreements nor result in the creation of any mortgage,
      pledge, lien, encumbrance or charge against any of the assets or properties
      of
      Subscriber or the Securities.

    


    
      
        
        

      

      
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      (l)            Subscriber
      acknowledges the Securities are speculative and involve a high degree of risk
      and that Subscriber can bear the economic risk of the purchase of the
      Securities, including a total loss of his/her/its investment.

    


    (m)           
      Subscriber recognizes that no federal, state or foreign agency has recommended
      or endorsed the purchase of the Securities.

    


    (n)           
      Subscriber is aware the Securities are and will be, when issued, “restricted
      securities” as that term is defined in Rule 144 of the general rules and
      regulations under the Act.

    


    (o)           
      Subscriber understands any and all certificates representing the Securities
      and
      any and all securities issued in replacement thereof or in exchange therefore
      shall bear the following legend or one substantially similar thereto, which
      Subscriber has read and understands:

    


    “THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT
      OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
      NOR
      ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
      DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
      ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH
      LAWS
      WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS
      AVAILABLE.”

    


    (p)           
      Because of the restrictions imposed on resale, Subscriber understands the
      Company shall have the right to note stop-transfer instructions in its stock
      transfer records to prohibit transfer in violation with this Subscription
      Agreement or with applicable securities laws, and Subscriber has been informed
      of the Company’s intention to do so.  Any sales, transfers, or any
      other dispositions of the Securities by Subscriber, if any, will be in
      compliance with the Act.

    


    (q)           
      Subscriber represents: (i) Subscriber is able to bear the economic risks of
      an
      investment in the Securities and to afford the complete loss of the investment,
      and (ii) (A) Subscriber could be reasonably assumed to have the capacity to
      protect his/her/its own interests in connection with this subscription; or
      (B)
      Subscriber has a pre-existing personal or business relationship with either
      the
      Company or any affiliate thereof of such duration and nature as would enable
      a
      reasonably prudent purchaser to be aware of the character, business acumen
      and
      general business and financial circumstances of the Company or such affiliate
      and is otherwise personally qualified to evaluate and assess the risks, nature
      and other aspects of this subscription.

    


    (r)           
      Subscriber further represents the address set forth in the Confidential
      Purchaser Questionnaire is his/her principal residence (or, if Subscriber is
      a
      company, partnership or other entity, the address of its principal place of
      business); that Subscriber is purchasing the Securities for Subscriber’s own
      account and not, in whole or in part, for the account of any other person;
      and
      Subscriber has not formed any entity for the purpose of purchasing the
      Securities.

     

    
      
        
        

      

      
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    (s)           
      Subscriber understands the Company shall have the unconditional right to accept
      or reject each subscription, in whole or in part, for any reason or without
      a
      specific reason, in the sole and absolute discretion of the Company (even after
      receipt and clearance of Subscriber’s funds).  No subscription will be
      binding upon any company until accepted by an authorized officer of the
      Company.  In the event the subscription is rejected, Subscriber’s
      subscription funds will be returned without interest thereon or deduction
      therefrom.

    


    (t)           
      Subscriber represents that Subscriber is not subscribing for Securities as
      a
      result of or subsequent to any advertisement, article, notice or other
      communication published in any newspaper, magazine or similar media or broadcast
      over the Internet, television or radio or presented at any seminar or
      meeting.

    


                   
      (u)            Subscriber
      has carefully read this Subscription Agreement and the Warrant, and Subscriber
      has accurately completed the Confidential Purchaser Questionnaire which
      accompanies this Subscription Agreement.

     

                   
      (v)            Subscriber
      represents and warrants, to the best of its knowledge, that other than the
      placement agent, if any, no finder, broker, agent, financial advisor or other
      intermediary, nor any purchaser representative or any broker-dealer acting
      as a
      broker, is entitled to any compensation in connection with the transactions
      contemplated by this Subscription Agreement.

    


    (w)           
      If Subscriber is a trust, this investment, together with all other securities
      of
      the Company held by the trust, does not exceed 10% of the trust
      assets.

    


    (x)           
      Regulation S.  The
      Subscriber is not acquiring the Securities for the account or benefit of,
      directly or indirectly, any U.S. Person.  The Subscriber is not a U.S.
      Person. The Subscriber is acquiring the Securities for investment only and
      not
      with a view to resale or distribution and, in particular, it has no intention
      to
      distribute either directly or indirectly any of the Securities in the United
      States or to U.S. Persons.  The Subscriber acknowledges that the
      Subscriber has not acquired the Securities as a result of, and will not itself
      engage in, any "directed selling efforts" (as defined in Regulation S under
      the
      1933 Act) in the United States in respect of the Securities which would include
      any activities undertaken for the purpose of, or that could reasonably be
      expected to have the effect of, conditioning the market in the United States
      for
      the resale of the Securities; provided, however, that the Subscriber may sell
      or
      otherwise dispose of the Securities pursuant to registration of the Securities
      pursuant to the 1933 Act and any applicable state and provincial securities
      laws
      or under an exemption from such registration requirements and as otherwise
      provided herein.

     

    3.           
      Covenants,
      Representations and Warranties of the Company.  The Company
      covenants with, and represents and warrants to, Subscriber as
      follows:

    


    (a)           
      The Company is duly organized and validly exists as a corporation in good
      standing under the laws of the State of Delaware.

    


    (b)           
      The Company has all such corporate power and authority to enter into, deliver
      and perform this Subscription Agreement and the Warrant.

     

    
      
        
        

      

      
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    (c)           
      All necessary corporate action has been duly and validly taken by the Company
      to
      authorize the execution, delivery and performance of this Subscription Agreement
      and the Warrant by the Company, and the issuance and sale of the Securities
      to
      be sold by the Company pursuant to this Subscription Agreement and the Warrant.
      This Subscription Agreement and the Warrant have been duly and validly
      authorized, executed and delivered by the Company and constitutes the legal,
      valid and binding obligation of the Company enforceable against the Company
      in
      accordance with its terms, except as the enforceability thereof may be limited
      by bankruptcy, insolvency, reorganization, moratorium or other similar laws
      affecting the enforcement of creditors’ rights generally and by general
      equitable principles.

    


    (d)           
      To its best knowledge, the Company has not infringed, is not infringing, nor
      has
      received notice of any claim that the Company has infringed with respect to
      asserted intellectual property rights (including, without limitation, copyright,
      patent, trademark, trade dress, service mark and any other intellectual property
      rights) of others. To the best knowledge of the Company, none of the patents,
      patent applications, trademarks, service marks, trade names and copyrights,
      and
      licenses and rights to the foregoing presently owned or held by the Company,
      materially infringe upon any like right of any other person or entity. The
      Company: (i) owns or has the right to use, free and clear of all liens, charges,
      claims, encumbrances, pledges, security interests, defects or other restrictions
      of any kind whatsoever, sufficient patents, trademarks, service marks, trade
      names, copyrights, licenses and rights with respect to the foregoing, , and
      (ii)
      is not obligated or under any liability whatsoever to make any payments by
      way
      of royalties, fees or otherwise to any owner or licensee of, or other claimant
      to, any patent, trademark, service mark, trade name, copyright, know-how,
      technology or other intangible asset, with respect to the use thereof or in
      connection with the conduct of its business as now conducted or otherwise.
      The
      Company has direct ownership of title to all its intellectual property
      (including all United States and foreign patent applications and patents),
      other
      proprietary rights, confidential information and know-how; owns all the rights
      to its intangibles assets as are currently used in or have potential for use
      in
      its business.

    


    (e)           
      The Shares and Warrant Shares to be issued and sold to the undersigned as
      provided in this Subscription Agreement have been duly authorized and when
      issued and delivered against payment therefor, will be validly issued, fully
      paid and non-assessable. The Warrants are exercisable for shares of the common
      stock of the Company, par value $0.001 per share, and these shares of common
      stock issuable upon exercise of the Warrants have been duly authorized and
      when
      issued and delivered upon exercise and due payment therefor will be validly
      issued, fully paid and non-assessable and there are no preemptive or other
      rights to subscribe for or to purchase, no encumbrances or liens, nor any
      restriction upon the voting or transfer of, any shares of common stock issuable
      to Subscriber (whether issued directly as part of the Shares or upon exercise
      of
      the Warrants) pursuant to the Company's certificate of incorporation or by-laws
      or any agreement or other outstanding instrument to which the Company is a
      party
      or is otherwise known to the Company. The Company has reserved sufficient shares
      of Common Stock to be issued upon exercise of the Warrants.

    


    (f) The
      Company shall provide for the transfer, upon request of the Subscriber, or
      removal of any legends on the Securities, all as may be allowed in accordance
      with SEC Rule 144, and provide any required opinions of counsel to the Company’s
      transfer agents, at no cost to Subscriber.

     

    
      
        
        

      

      
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    (g)  As
      of the date of this Subscription Agreement, the Company’s authorized capital
      stock consists of (a) 300,000,000 shares of common stock of which 98,316,311
      shares are issued and outstanding and (b) 10,000,000 shares of Preferred Stock,
      par value $0.001 per share, of which 10,000,000 shares are designated Series
      A
      Participating Preferred Stock, of which 5,000,000 shares are issued and
      outstanding.  All 98,316,311 shares of common stock of the Company
      outstanding have been duly authorized and validly issued and are fully paid
      and
      non-assessable.

     

    (h)  The
      Company has not taken any action inconsistent with the treatment of the sale
      of
      the Shares and Warrants as a private placement exempt from the registration
      requirements of the Act pursuant to the provisions of Section 4(2) thereof
      and
      Regulation D thereunder or under Regulation S.  Assuming the accuracy
      of each Subscriber’s representations and warranties, the offer, sale, and
      issuance by the Company of the Shares and Warrants to the Subscribers as
      contemplated herein constitute transactions exempt from the registration
      requirements of Section 5 of the Act.

     

    (i)  All
      Company filings with the SEC, including, without limitation, annual reports
      on
      Form 10-KSB, quarterly reports on Form 10-QSB and reports by the Company on
      Form
      8-K (the “SEC Documents”), conform in all material respects to the requirements
      of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as
      applicable, and the rules, regulations and instructions of the SEC
      thereunder.  The SEC Documents did not as of their dates contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements made therein, in light
      of
      the circumstances in 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 SEC with respect thereto.  Except as may be indicated in the
      notes to the Financial Statements, the Financial Statements have been prepared
      in accordance with generally accepted accounting principles consistently applied
      and fairly present, in all material respects, the financial position of the
      Company at the dates thereof and the results of its operations, stockholders’
equity and cash flows for the periods then ended (subject, in the case of
      unaudited statements, to normal, recurring adjustments).

     

    (j)  Except
      as set forth in the SEC Documents, (i) the Company has not incurred any
      liabilities or obligations, contingent or otherwise, that are material in the
      aggregate to the Company taken as a whole, except in the ordinary course of
      business, (ii) there has been no material adverse change in the condition or
      results of operations, financial or otherwise, of the Company, taken as a whole;
      and (iii) there are no material legal proceedings to which the Company is a
      party or of which property of the Company is the subject and, to the Company’s
      knowledge, no such proceedings are contemplated by governmental authorities
      or
      others.

     

    
      
        
        

      

      
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    4.          
      Registration Rights.
      The Company shall use its best efforts to secure effectiveness of, as
      soon as reasonably practicable after the issuance and delivery of the Shares
      and
      Warrants, a registration statement on Form SB-2 (the “Registration Statement”)
      with the SEC pursuant to the Securities Act to register the resale of the Shares
      and the Warrant Shares (the “Registrable Securities”).  In no case,
      however, shall the filing of the Registration Statement with the SEC occur
      later
      than forty-five (45) calendar days after the issuance and delivery of the Shares
      and Warrants under this Subscription Agreement;

    


    (a)    Registration
      Expenses .  The
      Company shall pay all Registration Expenses (as defined below) in connection
      with any registration, qualification or compliance hereunder, and each holder
      of
      Registrable Securities (a “Holder;” collectively, the “Holders”) shall pay all
      Selling Expenses related to such Holder’s sale of Registrable Securities and
      other expenses that are not Registration Expenses relating to the Registrable
      Securities resold by such Holder.  “Registration Expenses” shall mean
      all expenses, except for Selling Expenses, incurred by the Company in complying
      with the registration provisions herein described, including, without
      limitation, all registration, qualification and filing fees, printing expenses,
      fees and disbursements of counsel for the Company, blue sky fees and expenses
      and the expense of any special audits incident to or required by any such
      registration.  “Selling Expenses” shall mean all selling commissions,
      underwriting fees and stock transfer taxes applicable to the Registrable
      Securities and all fees and disbursements of counsel for any Holder, not to
      exceed $25,000 in the aggregate.

     

     (b)   Providing
      Information   .  Each
      Holder of Registrable Securities shall furnish to the Company such information
      regarding such Holder and the distribution proposed by such Holder as the
      Company may reasonably request in writing and as shall be reasonably required
      in
      connection with any registration, qualification or compliance described
      herein.  Such Holder shall represent that such information is true and
      complete.

     

    (c)    Additional
      Company Obligations

     

    (1)  In
      the case of any registration effected by the Company pursuant to these
      registration provisions, the Company will use its best efforts to: (i) keep
      such
      registration effective until two years after the Closing Date (or such earlier
      date as all of the Registrable Securities have been sold or may be sold under
      Rule 144(k); (ii) prepare and file with the SEC such amendments and supplements
      to the Registration Statement and the prospectus used in connection with the
      Registration Statement as may be necessary to comply with the provisions of
      the
      Act with respect to the disposition of the Registrable Securities; (iii) furnish
      such number of prospectuses and other documents incident thereto, including
      any
      amendment of or supplement to the prospectus, as a Holder from time to time
      may
      reasonably request; (iv) cause all such Registrable Securities registered as
      described herein to be listed on each securities exchange and quoted on each
      quotation service on which similar securities issued by the Company are then
      listed or quoted; (v) provide a transfer agent and registrar for all Registrable
      Securities registered pursuant to the Registration Statement and a CUSIP number
      for all such Registrable Securities; (vi) use its reasonable efforts to comply
      with all applicable rules and regulations of the SEC and (vii) notify Holders
      of
      the happening of any event as a result of which the prospectus included in
      the
      Registration Statement, as then in effect, includes an untrue statement of
      a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in light of the
      circumstances then existing; and (viii) file the documents required of the
      Company and otherwise use its best efforts to maintain requisite blue sky
      clearance in (A) all jurisdictions in which any of the Registrable Securities
      are originally sold and (B) all other states specified in writing by a Holder
      as
      may reasonably be required to sell such Holder’s Registrable Securities,
      provided as to clause (B), however, that the Company shall not be required
      to
      qualify to do business or consent to service of process in any state in which
      it
      is not now so qualified or has not so consented.

     

    
      
        
        

      

      
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    (2)  With
      a view to make available to the Subscribers or Holders the benefits of Rule
      144
      promulgated under the Act and any other rule or regulation of the SEC that
      may
      at any time permit a Subscriber or Holder to sell Securities to the public
      without registration or pursuant to a registration, the Company will covenant
      and agree to: (i) make and keep public information available, as those terms
      are
      understood and defined in Rule 144, at all times; (ii) file with the SEC in
      a
      timely manner all reports and other documents required of the Company under
      the
      Exchange Act; and (iii) furnish to any Subscriber or Holder, so long as the
      Subscriber or Holder owns any Securities forthwith upon request, (A) a written
      statement by the Company that it has complied with the reporting requirements
      of
      Rule 144, the Act and the Exchange Act, (B) a copy of the most recent annual
      or
      quarterly report of the Company, and (C) such other information as may be
      reasonably requested in order to avail any Subscriber or Holder of any rule
      or
      regulation of the SEC that permits the selling of any such Securities without
      registration.

     

    5.           
      Indemnification.

    


    (a)  Indemnification
      by the Company. The Company
      agrees to indemnify and hold harmless each Holder from and against any losses,
      claims, damages or liabilities (or actions or proceedings in respect thereof)
      to
      which such Holder may become subject (under the Act or otherwise) insofar as
      such losses, claims, damages or liabilities (or actions or proceedings in
      respect thereof) arise out of, or are based upon, any claim by a third party
      asserting any untrue statement of a material fact contained in the Registration
      Statement, on the effective date thereof, or arise out of any failure by the
      Company to fulfill any undertaking included in the Registration Statement,
      and
      the Company will, as incurred, reimburse such Holder for any legal or other
      expenses reasonably incurred in investigating, defending or preparing to defend
      any such action, proceeding or claim; provided,
however,
      that the Company shall not be liable
      in any such case to the extent that such loss, claim, damages or liability
      arises out of, or is based upon (i) an untrue statement or alleged untrue
      statement made in such Registration Statement in reliance upon and in conformity
      with written information furnished to the Company by or on behalf of such Holder
      specifically for use in preparation of the Registration Statement or (ii))
      any
      untrue statement in any prospectus that is corrected in any subsequent
      prospectus that was delivered to the Holder prior to the pertinent sale or
      sales
      by the Holder.

     

    (b)  Indemnification
      by Holder. Each
      Holder, severally and not jointly, agrees to indemnify and hold harmless the
      Company from and against any losses, claims, damages or liabilities (or actions
      or proceedings in respect thereof) to which the Company may become subject
      (under the Securities Act or otherwise) insofar as such losses, claims, damages
      or liabilities (or actions or proceedings in respect thereof) arise out of,
      or
      are based upon any claim by a third party asserting (i) an untrue statement
      made
      in such Registration Statement in reliance upon and in conformity with written
      information furnished to the Company by or on behalf of such Holder specifically
      for use in preparation of the Registration Statement, provided, however,
      that no
      Holder shall be liable in any such case for any untrue statement included in
      any
      prospectus which statement has been corrected, in writing, by such Holder and
      delivered to the Company at least three business days before the sale from
      which
      such loss occurred or (ii) any untrue statement in any prospectus that is
      corrected in any subsequent prospectus that was delivered to the Holder prior
      to
      the pertinent sale or sales by the Holder, and each Holder, severally and not
      jointly, will, as incurred, reimburse the Company for any legal or other
      expenses reasonably incurred in investigating, defending or preparing to defend
      any such action, proceeding or claim.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c)  Controlling
      Persons Indemnified. The
      obligations of the Company and the Holders under this Section 5 shall be in
      addition to any liability which the Company and the respective Holders may
      otherwise have and shall extend, upon the same terms and conditions, to each
      person, if any, who controls the Company or any Holder within the meaning of
      the
      Act.

     

    6.           
      Patriot Act
      Compliance. (Terms used in this section are defined in paragraph (d)
      below.)

     

    To
      induce
      the Company to accept the undersigned’s investment, the undersigned hereby makes
      the following representations, warranties and covenants to the
      Company:

     

    (a) The
      undersigned represents and warrants that no holder of any beneficial interest
      in
      the undersigned’s equity securities of the Company (each a “Beneficial Interest Holder”)
      and, no Related Person (in the case the undersigned is an entity) is or will
      be:

     

    
      	
              (1)  

            	
              A
                person or entity whose name appears on the list of specially designated
                nationals and blocked persons maintained by the Office of Foreign
                Asset
                Control from time to time;

            


    

     

    
      	
              (2)  

            	
              A
                Foreign Shell Bank; or

            


    

     

    
      	
              (3)  

            	
              A
                person or entity resident in or whose subscription funds are transferred
                from or through an account in a Non-Cooperative
                Jurisdiction.

            


    

     

    (b) The
      undersigned represents that the bank or other financial institution (the “Wiring Institution”) from
      which the undersigned’s funds will be wired is located in a FATF
      Country.

     

    (c) The
      undersigned represents that:

     

    
      	
              (1)  

            	
              Neither
                it, any Beneficial Interest Holder nor any Related Person (in the
                case of
                the undersigned is an entity) is a Senior Foreign Political Figure,
                any
                member of a Senior Foreign Political Figure’s Immediate Family or any
                Close Associate of a Senior Foreign Political Figure;
                or

            


    

     

    
      	
              (2)  

            	
              Neither
                it, any Beneficial Interest Holder nor any Related Person (in the
                case the
                undersigned is an entity) is resident in, or organized or chartered
                under
                the laws of, a jurisdiction designated by the Secretary of the Treasury
                under Section 311 or 312 of the USA PATRIOT Act as warranting special
                measures due to money laundering
                concerns.

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	
              (3)  

            	
              Its
                investment funds do not originate from, nor will they be routed through,
                an account maintained at a Foreign Shell Bank, an “offshore bank,” or a
                bank organized or chartered under the laws of a Non-Cooperative
                Jurisdiction.

            


    

     

    (d)           
      Definitions:

     

    Close
      Associate: With
      respect to a Senior Foreign Political Figure, a person who is widely and
      publicly known internationally to maintain an unusually close relationship
      with
      the Senior Foreign Political Figure, and includes a person who is in a position
      to conduct substantial domestic and international financial transactions on
      behalf of the Senior Foreign Political Figure.

     

    FATF:
      The Financial
      Action Task Force on Money Laundering.

     

    FATF
      Country: A
      country that is a member of FATF.  As of September 1, 2003, the
      countries which are members of FATF are: Argentina; Australia; Austria; Belgium;
      Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong; Iceland;
      Ireland; Italy; Japan; Luxembourg; Mexico; Kingdom of the Netherlands; New
      Zealand; Norway; Portugal; Singapore; South Africa; Spain; Sweden; Switzerland;
      Turkey; United Kingdom and United States.  For a current list of FATF
      members see http://www1.oecd.org/fatf/Members_en.htm.

     

    Foreign
      Bank: An
      organization which (i) is organized under the laws of a country outside the
      United States; (ii) engages in the business of banking; (iii) is recognized
      as a
      bank by the bank supervisory or monetary authority of the country of its
      organization or principal banking operations; (iv) receives deposits to a
      substantial extent in the regular course of its business; and (v) has the power
      to accept demand deposits, but does not include the U.S. branches or agencies
      of
      a foreign bank.

     

    Foreign
      Shell Bank: A
      Foreign Bank without a Physical Presence in any country, but does not include
      a
      Regulated Affiliate.

     

    Government
      Entity:
      Any government or any state, department or other political subdivision thereof,
      or any governmental body, agency, authority or instrumentality in any
      jurisdiction exercising executive, legislative, regulatory or administrative
      functions of or pertaining to government.

     

    Immediate
      Family:
      With respect to a Senior Foreign Political Figure, typically includes the
      political figure’s parents, siblings, spouse, children and in-laws.

     

    Non-Cooperative
      Jurisdiction: Any foreign country or territory that has been designated
      as non-cooperative with international anti-money laundering principles or
      procedures by an intergovernmental group or organization, such as FATF, of
      which
      the United States is a member and with which designation the United States
      representative to the group or organization continues to concur.  See
      http://www1.oecd.org/fatf/NCCT_en.htm for FATF’s list of non-cooperative
      countries and territories.

     

    Physical
      Presence: A
      place of business maintained by a Foreign Bank and is located at a fixed
      address, other than solely a post office box or an electronic address, in a
      country in which the Foreign Bank is authorized to conduct banking activities,
      at which location the Foreign Bank: (a) employs one or more individuals on
      a
      full-time basis; (b) maintains operating records related to its banking
      activities; and (c) is subject to inspection by the banking authority that
      licensed the Foreign Bank to conduct banking activities.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Publicly
      Traded
      Company: An entity whose securities are listed on a recognized securities
      exchange or quoted on an automated quotation system in the U.S. or country
      other
      than a Non-Cooperative Jurisdiction or a wholly-owned subsidiary of such an
      entity.

     

    Qualified
      Plan: A tax
      qualified pension or retirement plan in which at least 100 employees participate
      that is maintained by an employer organized in the U.S. or is a U.S. Government
      Entity.

     

    Regulated
      Affiliate:
      A Foreign Shell Bank that: (a) is an affiliate of a depository institution,
      credit union or Foreign Bank that maintains a Physical Presence in the U.S.
      or a
      foreign country, as applicable; and (b) is subject to supervision by a banking
      authority in the country regulating such affiliated depository institution,
      credit union or Foreign Bank.

     

    Related
      Person: With
      respect to any entity, any interest holder, director, senior officer, trustee,
      beneficiary or grantor of such entity; provided that in the case of an entity
      that is a Publicly Traded Company or a Qualified Plan, the term “Related Person”
shall exclude any interest holder holding less than 5% of any class of
      securities of such Publicly Traded Company and beneficiaries of such Qualified
      Plan.

     

    Senior
      Foreign Political
      Figure: A senior official in the executive, legislative, administrative,
      military or judicial branches of a non-U.S. government (whether elected or
      not),
      a senior official of a major non-U.S. political party, or a senior executive
      of
      a non-U.S. government-owned corporation.  In addition, a Senior
      Foreign Political Figure includes any corporation, business or other entity
      that
      has been formed by, or for the benefit of, a Senior Foreign Political
      Figure.

     

    USA
      PATRIOT Act: The
      Uniting and Strengthening America by Providing Appropriate Tools Required to
      Intercept and Obstruct Terrorism (USA PATRIOT Act) Act of 2001 (Pub. L.
      No. 107-56).

     

    7.           
      Independent Nature
      of
      Investor’s Obligations and Rights.  The obligations of the
      Subscriber under this Agreement and any other documents delivered in connection
      herewith and therewith (collectively, the “Transaction Documents”) are several
      and not joint with the obligations of any other purchaser of Shares, and the
      Subscriber is not responsible in any way for the performance of the obligations
      of any other purchaser of Shares under any Transaction Document.  The
      decision of the Subscriber to purchase Shares pursuant to the Transaction
      Documents has been made by the Subscriber independently of any other purchaser
      of Shares.  Nothing contained herein or in any Transaction Document,
      and no action taken by any purchaser of Shares pursuant thereto, shall be deemed
      to constitute such purchasers as a partnership, an association, a joint venture,
      or any other kind of entity, or create a presumption that the purchasers of
      Shares are in any way acting in concert or as a group with respect to such
      obligations or the transactions contemplated by the Transaction
      Documents.  The Subscriber acknowledges that no other purchaser of
      Shares has acted as agent for the Subscriber in connection with making its
      investment hereunder and that no other purchaser of Shares will be acting as
      agent of the Subscriber in connection with monitoring its investment in the
      Shares or enforcing its rights under the Transaction Documents.  The
      Subscriber shall be entitled to independently protect and enforce its rights,
      including without limitation the rights arising out of this Agreement or out
      of
      the other Transaction Documents, and it shall not be necessary for any other
      purchaser of Shares to be joined as an additional party in any proceeding for
      such purpose.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    8.           
      Miscellaneous.

    


    (a)           
      Subscriber agrees not to transfer or assign this Subscription Agreement or
      any
      of Subscriber’s interest herein and further agrees that the transfer or
      assignment of the Securities acquired pursuant hereto shall be made only in
      accordance with all applicable laws.

    


    (b)           
      Subscriber agrees that Subscriber cannot cancel, terminate or revoke this
      Subscription Agreement or any agreement of Subscriber made hereunder, and this
      Subscription Agreement shall survive the death or legal disability of Subscriber
      and shall be binding upon Subscriber’s heirs, executors, administrators,
      successors and permitted assigns.

    


    (c)           
      Subscriber has read and accurately completed this entire Subscription
      Agreement

    


    (d)           
      This Subscription Agreement constitutes the entire agreement among the parties
      hereto with respect to the subject matter hereof and may be amended only by
      a
      written execution by all parties.

    


    (e)           
      Subscriber acknowledges it has been advised to consult with his/her/its own
      attorney regarding this subscription and Subscriber has done so to the extent
      that Subscriber deems appropriate. Subscriber understands and agrees that
      Subscriber has not been represented in this transaction by counsel to the
      Company or the Placement Agent.

    


    (f)           
      Any notice or other document required or permitted to be given or delivered
      to
      the Subscriber shall be in writing and sent: (i) by registered or certified
      mail
      with return receipt requested (postage prepaid) or (ii) by a recognized
      overnight delivery service (with charges prepaid).

    


    If
      to the
      Company, at:

    


    47266
      Benicia Street

    Fremont,
      CA 94538

    (510)
      354-0300

    Attn.:
      Chris Mak, Chief Financial Officer

    


               
      If to the Subscriber, at its address set forth on the signature page to this
      Subscription Agreement or such other address as it shall have specified to
      the
      Company in writing.

    


    (g)           
      Failure of the Company to exercise any right or remedy under this Subscription
      Agreement or any other agreement between the Company and the Subscriber, or
      otherwise, or delay by the Company in exercising such right or remedy, will
      not
      operate as a waiver thereof. No waiver by the Company will be effective unless
      and until it is in writing and signed by the Company.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (h)           
      This Subscription Agreement shall be enforced; governed and construed in all
      respects in accordance with the laws of the State of California as such laws
      are
      applied to agreements between California residents entered into and to be
      performed entirely within California. The Subscriber hereby irrevocably submits
      to the jurisdiction of any State or United States Federal court sitting in
      Alameda or San Francisco counties in the State of California over any action
      or
      proceeding arising out of or relating to this Subscription Agreement or any
      agreement contemplated hereby, and the Purchaser hereby irrevocably agrees
      that
      all claims in respect of such action or proceeding may be heard and determined
      in such State or Federal court. The Subscriber further waives any objection
      to
      venue in such State and any objection to an action or proceeding in such State
      on the basis of a non-convenient forum. The Subscriber further agrees that
      any
      action or proceeding brought against the Company shall be brought only in the
      State or United States Federal courts sitting in Alameda or San Francisco
      counties in the State of California. The Subscriber agrees to waive its right
      to
      a jury trial on any claim or cause of action based upon or arising out of this
      Subscription Agreement or any document or agreement contemplated
      hereby.

    


    (i)           
      If any provision of this Subscription Agreement is held to be invalid or
      unenforceable under any applicable statute or rule of law, then such provision
      shall be deemed modified to conform to such statute or rule of law. Any
      provision hereof that may prove invalid or unenforceable under any law shall
      not
      affect the validity or enforceability of any other provisions
      hereof.

    


    (j)           
      The parties understand and agree money damages would not be a sufficient remedy
      for any breach of the Subscription Agreement by the Company or the Subscriber
      and that the party against which such breach is committed shall be entitled
      to
      equitable relief, including injunction and specific performance, as a remedy
      for
      any such breach. Such remedies shall not be deemed to be the exclusive remedies
      for a breach by either party of the Subscription Agreement but shall be in
      addition to all other remedies available at law or equity to the party against
      which such breach is committed.

    


    (k)           
      All pronouns and any variations thereof used herein shall be deemed to refer
      to
      the masculine, feminine, singular or plural, as identity of the person or
      persons may require.

    


    (l)           
      This Subscription Agreement may be executed in counterparts and by facsimile,
      each of which shall be deemed an original, but all of which shall constitute
      one
      and the same instrument.

     

    [Signature
      Pages Follow]


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Signature
      Page for Individuals:

    


    IN
      WITNESS WHEREOF, Subscriber has
      caused this Subscription Agreement to be executed as of the date indicated
      below.

    


    
      	
              
              

              $______________________($0.50
                per
                Share)

            	
              
              

              ______________________________________________________________________

            
	
              Purchase
                Price

              
              

            	
              Number
                of
                Shares

            
	 	
              
              

              ______________________________________________________________________

            
	 	
              Entitled
                to Warrants for Number of
                Warrant Shares

            
	 	 
	
              ______________________________________________________________________

            	
              ______________________________________________________________________

            
	
              Print
                or Type
                Name

              
              

            	
              Print
                or Type Name
                (Joint-owner)

              
              

            
	
              ______________________________________________________________________

            	
              ______________________________________________________________________

            
	
              Signature

              
              

            	
              Signature
                (Joint-owner)

              
              

            
	
              ___________________________________

            	
              __________________________________

            
	
              Date

              
              

            	
              Date
                (Joint-owner)

              
              

            
	
              ____________________________________

            	
              ___________________________________

            
	
              IRS
                Taxpayer Identification
                Number

              
              

            	
              IRS
                Taxpayer Identification Number
                (Joint-owner)

              
              

            
	
              ___________________________________

            	
              ____________________________________

            
	
              Address

            	
              Address
                (Joint-owner)

            
	
              ___________________________________

            	
              ____________________________________

            
	
              Telephone
                Number

            	
              Telephone
                Number

            
	
              ___________________________________

            	
              ____________________________________

            
	
              Fax
                Number

            	
              Fax
                Number

            
	
              ___________________________________

            	
              ____________________________________

            
	
              E-mail
                Address

            	
              E-mail
                Address

            


    

    


    Type
      of
      Ownership

    


    
      	
              ⁭

            	
              Individual
                

            


    

    
      	
              ⁭

            	
              Tenants
                in common 

            


    

    
      	
              ⁭

            	
              Joint
                tenants with right of survivorship 

            


    

    
      	
              ⁭

            	
              Community
                property (check only if resident of community property state)
                

            


    

    ⁭           
      Other (please specify:____________________)

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Wiring
      Instructions:

     

    
    

    
      	TO: 	SILICON
              VALLEY
              BANK
	 	3003
              TASMAN
              DRIVE
	 	SANTA
              CLARA, CA
              95054
	 	 
	ROUTING
&
              TRANSIT:	121140399
	FOR
              CREDIT
              OF:  	CARDIMA
	CREDIT
              ACCOUNT
              #:  	0272686670
	BY
              ORDER
              OF: 	NAME
              OF
              SENDER}


    

    
 

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

                                                                                                                              

    Partnerships,
      Corporations or Other Entities:

    


    IN
      WITNESS WHEREOF, Subscriber has
      caused this Subscription Agreement to be executed as of the date indicated
      below.

    


    


    $
      ______________________($0.50 per
      Share)                                                                                                
_____________________________

       Total
      Purchase
      Price                                                                                                                                            
Number of Shares

                                                                                                                     ____________________________________________
                                                                                                                                                      
      Entitled to Warrants for Number of Warrant Shares

    


    _____________________________________________________________________________

    Print
      or
      Type Name of Entity

    ______________________________________________________________________________

    Address

    


    ______________________________

    Telephone
      Number

    


    ______________________________

    Fax
      Number

    


    ______________________________

    Email
      Address

    


    


    ____________________________________                                                                                                
      ____________________________________

    Taxpayer
      I.D. No. (if
      applicable)                                                                           
                                                
Date

    


    


    By:
      ____________________________________                                                                                          ____________________________________

    Signature:
      Name:                                                                                                                                                       Print
      or Type Name and Indicate

         Title:                                                                                                                                                      
      Title or Position with Entity

    


    


    ____________________________________                                                                                                
      ____________________________________

    Signature
      (other authorized
      signatory)                                                                                                                
Print or Type Name and Indicate

                                                                        
      Title or Position with Entity

    


    Type
      of
      Ownership

    


    
      	
              ⁭

            	
              Individual
                

            


    

    
      	
              ⁭

            	
              Tenants
                in common 

            


    

    
      	
              ⁭

            	
              Joint
                tenants with right of survivorship 

            


    

    
      	
              ⁭

            	
              Community
                property (check only if resident of community property state)
                

            


    

    ⁭           
      Other (please specify:____________________)

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    


    All
      subscriptions from partnerships, corporations, trusts or limited liability
      companies must be accompanied by resolutions of the appropriate corporate
      authority (board of directors, trustee or managing partner or members, as
      applicable) and trust documents evidencing the authorization and power to make
      the subscription.

    


    Wiring
      Instructions:

    


    
       

      
      

      
        	TO: 	SILICON
                VALLEY
                BANK
	 	3003
                TASMAN
                DRIVE
	 	SANTA
                CLARA, CA
                95054
	 	 
	ROUTING
&
                TRANSIT:	121140399
	FOR
                CREDIT
                OF:  	CARDIMA
	CREDIT
                ACCOUNT
                #:  	0272686670
	BY
                ORDER
                OF: 	NAME
                OF
                SENDER}


      

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    SUBSCRIPTION
      ACCEPTANCE BY CARDIMA, INC.

    


    


    IN
      WITNESS WHEREOF, the Company has
      caused this Subscription Agreement to be executed, and the foregoing
      subscription accepted, as of the date indicated below.

    


    


    _______________________________________

    


    


    


    By:  __________________________________

           
      Name: _____________________________

           
      Title: _______________________________

    


    


    


    Date:
      _______________________, 20__

    


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    [Warrant
      No. _______________

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
      AND
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”).  THE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
      ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND
      QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
      ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES
      LAWS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
      THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.  THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF
      ARE
      SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE
      HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE
      HOLDERS) IS BOUND BY THE TERMS OF A SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL
      PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
      COMPANY).

     

    REDEEMABLE
      WARRANT TO PURCHASE SHARES

    OF
      COMMON STOCK OF CARDIMA, INC.

     

    This
      certifies that _________________ (the “Holder”), for value received is entitled
      to purchase from Cardima, Inc., a Delaware corporation (the “Company”),
      ________________ (________)1
      fully paid and nonassessable shares of the
      Company’s Common Stock (the “Warrant Shares”) at a price of $ 0.55 [which
      exercise price shall be equal to 110% of the Purchase Price] per share (the
      “Stock Purchase Price”) at any time or from time to time on or after the
      Commencement Date (as defined below) up to and including 5:00 p.m. (Pacific
      time) on the Expiration Date (as defined below), upon surrender to the Company
      at its principal office at 47266 Benicia Street, Fremont, California 94538
      (or
      at such other location as the Company may advise Holder in writing) of this
      Warrant properly endorsed with the Form of Subscription attached hereto duly
      filled in and signed and upon payment by cash, cashier’s check or wire transfer
      of immediately available funds of the aggregate Stock Purchase Price for the
      number of shares for which this Warrant is being exercised determined in
      accordance with the provisions hereof, such exercise to be conditioned upon
      the
      accuracy of all representations and warranties contained in such Form of
      Subscription.  The Stock Purchase Price and the number of shares
      purchasable hereunder are subject to adjustment as provided in Section 3 of
      this
      Warrant.  “Commencement Date” means the date which is six (6) months
      after the date of issuance of this Warrant and “Expiration Date” means the
      earlier of (i) five (5) years from the date hereof, (ii) the occurrence of
      an
      event, proposal of which is described in subsection (d) of Section 3.4 which
      causes termination of this Warrant under Section 3.4, or (iii) on the date
      specified in the Notice of Redemption (as defined below) pursuant to Section
      7.  This Warrant is issued pursuant to the Subscription Agreement
      between the Company and Holder dated as of the date hereof (the “Subscription
      Agreement”).

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    This
      Warrant is subject to the following terms and conditions:

     

    1.           
      Exercise of
      Warrant

     

    1.1           
      Issuance
      of
      Certificates

     

    .  This
      Warrant is exercisable at the option of Holder at any time or from time to
      time
      on or after the Commencement Date and prior to or on the Expiration Date for
      all
      or a portion of the shares of Warrant Shares which may be purchased hereunder
      but if this Warrant is to be exercised only in part, not for less than the
      greater of (a) twenty-five (25%) of the number of Warrant Shares which may
      initially be purchased hereunder or (b) one thousand (1,000) Warrant Shares
      (in
      either case as adjusted for any stock dividend, split, combination,
      recapitalization or the like with respect to such shares).  The
      Company agrees that the Warrant Shares purchased under this Warrant shall be
      and
      are deemed to be issued to Holder as the record owner of such shares as of
      the
      close of business on the date on which this Warrant shall have been surrendered
      and payment made for such shares.  Subject to the provisions of
      Section 2, certificates for the Warrant Shares so purchased, together with
      any
      other securities or property to which Holder is entitled upon such exercise,
      shall be delivered to Holder by the Company’s transfer agent at the Company’s
      expense within a reasonable time after this Warrant has been
      exercised.  Each stock certificate so delivered shall be in such
      denominations of Warrant Shares as may be requested by Holder and shall be
      registered in the name of Holder or such other name as shall be designated
      by
      Holder, subject to the limitations contained in Section 2.  If, upon
      exercise of this Warrant, fewer than all of the Warrant Shares evidenced by
      this
      Warrant are purchased prior to the date of expiration of this Warrant, one
      or
      more new warrants substantially in the form of, and on the terms in, this
      Warrant will be issued for the remaining number of Warrant Shares not purchased
      upon exercise of this Warrant.

     

    1.2           
      Payment

     

    .  Payment
      of the Stock Purchase Price shall be made by surrender to the Company of this
      Warrant properly endorsed with the Form of Subscription attached hereto duly
      filled in and signed and payment by cash, cashier’s check or wire transfer of
      immediately available funds and specifying the number of Warrant Shares to
      be
      purchased, during normal business hours on any day that is not a Saturday or
      Sunday or a day on which banks are required or permitted to be closed in the
      State of California.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    2.           
      Shares to be Fully
      Paid; Reservation of Shares

     

    .  The
      Company covenants and agrees that all Warrant Shares which may be issued upon
      the exercise of the rights represented by this Warrant will, upon issuance,
      be
      duly authorized, validly issued, fully paid and nonassessable and free from
      all
      preemptive rights of any stockholder and free of all taxes, liens and charges
      with respect to the issue thereof.  The Company further covenants and
      agrees that during the period within which the rights represented by this
      Warrant may be exercised, the Company will use its best efforts to at all times
      have authorized and reserved, for the purpose of issue or transfer upon exercise
      of this Warrant, a sufficient number of shares of authorized but unissued Common
      Stock.  When and as required to provide for the exercise of the rights
      represented by this Warrant, the Company will take all such action as may be
      necessary to assure that such shares of Common Stock may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of any domestic securities exchange or automated quotation system
      upon which the Common Stock may be listed.

     

    3.           
      Adjustment of Stock
      Purchase Price; Number of Shares

     

    .  The
      Stock Purchase Price and the number of shares of Warrant Shares purchasable
      upon
      the exercise of this Warrant shall be subject to adjustment from time to time
      upon the occurrence of certain events described in this Section 3.

     

    3.1           
      Adjustment
      of Purchase Price

     

    .  In
      the event that the Company at any time or from time to time after the issuance
      of this Warrant shall declare or pay, without consideration, any dividend on
      the
      Common Stock payable in Common Stock or in any right to acquire Common Stock
      for
      no consideration, or shall effect a subdivision of the outstanding shares of
      Common Stock into a greater number of shares of Common Stock (by stock split,
      reclassification or otherwise than by payment of a dividend in Common Stock
      or
      in any right to acquire Common Stock), or in the event the outstanding shares
      of
      Common Stock shall be combined or consolidated, by reclassification or
      otherwise, into a lesser number of shares of Common Stock, then the Stock
      Purchase Price in effect immediately prior to such event shall, concurrently
      with the effectiveness of such event, be proportionately decreased or increased,
      as appropriate.  In the event that the Company shall declare or pay,
      without consideration, any dividend on the Common Stock payable in any right
      to
      acquire Common Stock for no consideration, then the Company shall be deemed
      to
      have made a dividend payable in Common Stock in an amount of shares equal to
      the
      maximum number of shares issuable upon exercise of such rights to acquire Common
      Stock.  Upon each adjustment of the Stock Purchase Price pursuant to
      this Section 3.1, the holder of this Warrant shall thereafter be entitled to
      purchase, at the Stock Purchase Price resulting from such adjustment, the number
      of shares of Common Stock obtained by multiplying the Stock Purchase Price
      in
      effect immediately prior to such adjustment by the number of shares of Common
      Stock purchasable pursuant hereto immediately prior to such adjustment, and
      dividing the product thereof by the Stock Purchase Price resulting from such
      adjustment.

     

    3.2           
      Adjustments
      for Reclassification and Reorganization

     

    .  If
      the Common Stock shall be changed into the same or a different number of shares
      of any other class or classes of stock, whether by capital reorganization,
      reclassification or otherwise (other than a subdivision or combination of shares
      provided for in Section 3.1), the Stock Purchase Price then in effect shall,
      concurrently with the effectiveness of such reorganization or reclassification,
      be proportionately adjusted so that this Warrant shall represent the right
      to
      purchase, in lieu of the number of shares of Common Stock which this Warrant
      would otherwise represent the right to purchase, a number of shares of such
      other class or classes of stock equivalent to the number of shares of Common
      Stock which this Warrant would have otherwise entitled the holder to purchase
      immediately before that change.

     

    3.3           
      Notice
      of Adjustment

     

    .  Upon
      any adjustment of the Stock Purchase Price or any increase or decrease in the
      number of shares of Common Stock purchasable upon the exercise of this Warrant,
      the Company shall within five business days give written notice thereof, by
      first class mail, postage prepaid, (or by international delivery service, for
      international addresses) addressed to the registered holder of this Warrant
      at
      the address of such holder as shown on the books of the Company.  The
      notice shall be signed by the Company’s chief financial officer and shall state
      the Stock Purchase Price resulting from such adjustment and the increase or
      decrease, if any, in the number of shares purchasable at such price upon the
      exercise of this Warrant, setting forth in reasonable detail the method of
      calculation and the facts upon which such calculation is based.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    3.4           
      Certain
      Termination Events; Other Notices

     

    .  If
      at any time the Company shall propose to:

     

    (a)
      declare any cash dividend upon its Common Stock;

     

    (b)
      declare or make any dividend or other distribution to the holders of its Common
      Stock, whether in cash, property or other securities;

     

    (c)
      effect any reorganization or reclassification of the capital stock of the
      Company or any consolidation or merger of the Company with or into another
      corporation or any sale, lease or conveyance of all or substantially all of
      the
      property of the Company; or

     

    (d)
      effect a voluntary or involuntary dissolution, liquidation or winding-up of
      the
      Company;

     

    then,
      in
      any one or more of said cases, the Company shall give, by certified or
      registered mail, postage prepaid, or international delivery service for
      international deliveries, addressed to the holder of this Warrant at the address
      of such holder as shown on the books of the Company, (i) at least fifteen (15)
      business days’ prior written notice of the date on which the books of the
      Company shall close or a record shall be taken for such dividend or distribution
      or for determining rights to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
      liquidation or winding up, and (ii) in the case of any such reorganization,
      reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
      liquidation or winding up, at least fifteen (15) business days’ written notice
      of the date when the same shall take place.  Any notice given in
      accordance with clause (i) above shall also specify, in the case of any such
      dividend or distribution, the record date for such dividend or distribution,
      if
      after the Commencement Date.  Any notice given in accordance with
      clause (ii) above shall also specify the date on which the holders of Common
      Stock shall be entitled to exchange their Common Stock for securities or other
      property, if any, deliverable upon such reorganization, reclassification,
      consolidation/merger, sale, lease, conveyance, dissolution, liquidation or
      winding up, as the case may be and in connection with the occurrence of an
      event
      described in clause (d) above such notice shall specify the anticipated net
      equity value that will accrue to Common Stock holders so that the Holder can
      make an informed decision whether or not to exercise this Warrant.  In
      the event that the Holder of the Warrant does not exercise this Warrant prior
      to
      the occurrence of an event described in clause (a) or (b) above, the Holder
      shall not be entitled to receive the benefits accruing to existing holders
      of
      the Common Stock in such event.  Upon the occurrence of an event
      described in clause (c) in which the holders of the Company’s voting securities
      of the Company immediately prior to the event do not hold at least fifty percent
      (50%) of the voting securities of the Company or the surviving entity (in a
      sale
      of assets, the Company shall be the surviving entity) resulting from such event
      immediately after such event, this Warrant shall terminate unless the Company
      has negotiated (which it is under no obligation to do) for the assumption of
      this Warrant.  Upon the occurrence of an event described in clause (c)
      and, subject to the immediately preceding sentence, the Holder shall be entitled
      thereafter, upon payment of the Stock Purchase Price in effect immediately
      prior
      to such action, to receive upon exercise of this Warrant the class and number
      of
      shares which the Holder would have been entitled to receive after the occurrence
      of such event had this Warrant been exercised immediately prior to such
      event.  In connection with the transactions described in clause (c)
      and provided that this Warrant does not terminate as provided in the second
      sentence immediately preceding this sentence, the Company will require each
      person (other than the Company) that may be required to deliver any cash, stock,
      securities or other property upon the exercise of this Warrant as provided
      herein to assume, by written instrument delivered to the Holder of this Warrant
      (x) the obligations of the Company under this Warrant and (y) the obligation
      to
      deliver to such Holder such cash, stock, securities or other property as such
      Holder may be entitled to receive in accordance with the provisions of this
      Section 3. Upon the occurrence of an event the proposal of which is described
      in
      clause (d), this Warrant shall terminate.  Notwithstanding any other
      provision hereof, no Holder shall have the right to obtain an injunction or
      restraining order or otherwise interfere with or prevent the occurrence of
      any
      of the actions described in (a) - (d) above.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    3.5           
      Adjustment
      of Number of Warrant Shares

     

    .  The
      number of Warrant Shares purchasable hereunder shall be reduced on a one-for-one
      basis by the number of shares of Common Stock (or Common Stock equivalents)
      sold
      directly or indirectly, including, without limitation, any short sale, third
      party short sales or holdings of a “put equivalent position” (as defined in Rule
      16a-1 of the 1934 Act), of the Company’s Common Stock by the Holder from the
      date hereof until the Commencement Date.  Prior to or simultaneously
      with the first exercise of this Warrant by the Holder (or the transfer of this
      Warrant), the Holder shall provide the Company with an affidavit and other
      reasonable supporting materials as to the foregoing.

     

    4.           
      Issue
      Tax

     

    .  The
      issuance of certificates for the Warrant Shares upon the exercise of the Warrant
      shall be made without charge to the Holder of the Warrant for any issue tax
      in
      respect thereof; provided, however, that the Company shall not be required
      to
      pay any tax which may be payable in respect of any transfer involved in the
      issuance and delivery of any certificate in a name other than that of the then
      Holder of the Warrant being exercised.

     

    5.           
      No Voting or Dividend
      Rights; Limitation of Liability

     

    .  Nothing
      contained in this Warrant shall be construed as conferring upon the Holder
      hereof the right to vote or to consent or to receive notice as a stockholder
      in
      respect of meetings of stockholders for the election of directors of the Company
      or any other matters or any rights whatsoever as a stockholder of the
      Company.  Except for the adjustment to the Stock Purchase Price
      pursuant to Section 3.1 in the event of a dividend on the Common Stock payable
      in shares of Common Stock, no dividends or interest shall be payable or accrued
      in respect of this Warrant or the interest represented hereby or the shares
      purchasable hereunder until, and only to the extent that, this Warrant shall
      have been exercised.  No provisions hereof, in the absence of
      affirmative action by the Holder to purchase shares of Warrant Shares, and
      no
      mere enumeration herein of the rights or privileges of the Holder hereof, shall
      give rise to any liability of such Holder for the Stock Purchase Price or as
      a
      stockholder of the Company whether such liability is asserted by the Company
      or
      by its creditors.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    6.           
      Restrictions on
      Transferability of Securities: Compliance with Securities
      Act

     

    6.1           
      Restrictions
      on Transferability

     

    .  The
      Warrant and the Warrant Shares (collectively, the “Securities”) shall not be
      transferable except upon the conditions specified in the Subscription Agreement,
      which conditions are intended to insure compliance with the provisions of the
      Securities Act and applicable “blue sky” law.

     

    6.2           
      Restrictive
      Legend

     

    .  Each
      certificate representing the Securities or any other securities issued in
      respect of the Securities upon any stock split, stock dividend,
      recapitalization, merger, consolidation or similar event, shall (unless
      otherwise permitted by the provisions of the Subscription Agreement) be stamped
      or otherwise imprinted with a legend substantially in the following form (in
      addition to any legend required under applicable state securities
      laws):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
      AND
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”).  THE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
      ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND
      QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
      ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
      THE
      SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES
      LAWS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
      THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.  THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF
      ARE
      SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE
      HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING ANY FUTURE
      HOLDERS) IS BOUND BY THE TERMS OF A SUBSCRIPTION AGREEMENT BETWEEN THE ORIGINAL
      PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM THE
      COMPANY).

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    6.3           
      Exchange
      of
      Warrant

     

    .  Subject
      to the terms and conditions hereof, including the restrictions on transfer
      in
      this Section 6 and in the Subscription Agreement, upon surrender of this Warrant
      to the Company with a duly executed Assignment Form in the form attached hereto
      and funds sufficient to pay any transfer tax, the Company shall, without charge,
      execute and deliver a new Warrant or Warrants of like tenor in the name of
      the
      assignee named in such Assignment Form and this Warrant shall promptly be
      canceled; provided, however, that if the transfer is for less than all of this
      Warrant, the transferor shall pay all reasonable costs of the Company in
      connection with a transfer of Warrants to purchase less than the greater of
      (a)
      twenty-five percent (25%) of the Warrant Shares which may initially be purchased
      hereunder or (b) one thousand (1,000) Warrant Shares (in either case as adjusted
      for any stock dividend, split, combination, recapitalization or the like with
      respect to such shares).  The term “Warrant” as used herein shall be
      deemed to include any Warrants issued in exchange for this Warrant.

     

    6.4           
      Ownership
      of
      Warrant

     

    .  The
      Company may deem and treat the person in whose name this Warrant is registered
      as the holder and owner hereof (notwithstanding any notations of ownership
      or
      writing hereon made by anyone other than the Company) for all purposes and
      shall
      not be affected by any notice to the contrary, until presentation of this
      Warrant for registration of transfer as provided in
      Section 6.3.

     

    7.           
      Forced Exercise
      by the
      Company.                                                                           
At the option of the Company, the Company may force the Holder to exercise
      the
      Warrant at a price per share equal to $0.55, provided that (i) the average
      closing bid price of the Company’s Common Stock as reported by the National
      Association of Securities Dealers Automated Quotation or the OTC Bulletin board
      shall have been equal to or greater than $1.00 for a period of fifteen (15)
      consecutive trading days ending on the date preceding the date on which the
      Holder receives a notice from the Company in which it announces its intention
      to
      force the exercise of the Warrants and (ii) a registration statement is in
      effect with respect to the Warrant Shares.  Upon Holder receipt of
      said notice, the Holder shall have fifteen (15) Trading Days [This term is
      not
      defined] to submit to the Company a completed Form of Subscription, together
      with a check for full payment in accordance with the provisions of this
      Warrant.  If the Company does not receive payment within said time
      period, this Warrant shall expire immediately and the Holder shall have no
      further rights hereunder.

     

    8.           
      Modification and
      Waiver

     

    .  Except
      as otherwise provided herein, this Warrant and any provision hereof may be
      changed, waived, discharged or terminated only by an instrument in writing
      signed by the party against which enforcement of the same is
      sought.

     

    9.           
      Notices

     

    .  Except
      as otherwise provided herein, any notices and other communications required
      or
      permitted hereunder shall be in writing and shall be deemed effectively given
      (a) upon personal delivery to the party to be notified, (b) upon electronic
      confirmation of successful facsimile transmission, (c) three (3) days after
      deposit with the United States mail, by registered or certified mail, postage
      prepaid, or (d) one (1) business day after timely delivery to an overnight
      air
      courier for next business day delivery, in each case addressed (i) if to the
      Subscriber, at the address set forth on the signature to the Subscription
      Agreement or at such other address as the Subscriber shall have furnished the
      Company in writing, or (ii) if to the Company, at its address set forth in
      the
      Subscription Agreement, or at such other address as the Company shall have
      furnished to the Subscriber in writing.

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    10.           
      Descriptive Headings
      and Governing Law

     

    .  The
      descriptive headings of the several sections and paragraphs of this Warrant
      are
      inserted for convenience only and do not constitute a part of this
      Warrant.  This Warrant shall be construed and enforced in accordance
      with, and the rights of the parties shall be governed by, the laws of the State
      of California (without regard to its conflicts of law
      provisions).  The Holder hereby irrevocably submits to the
      jurisdiction of any State or United States Federal court sitting in the Alameda
      or San Francisco counties in the State of California over any action or
      proceeding arising out of or relating to this Warrant or any agreement
      contemplated hereby, and the Holder irrevocably agrees that all claims in
      respect of such action or proceeding may be heard and determined in such State
      or Federal court.  The Holder further waives any objection to venue in
      such State and any objection to an action or proceeding in such State based
      on
      non-convenient forum.  The Holder further agrees that any action or
      proceeding brought against the Company shall be brought in the State or United
      States Federal courts sitting in Alameda or San Francisco counties in the State
      of California. The Holder agrees to waive its rights to a jury trial or any
      claim for cause of action based upon or arising out of this Warrant or any
      document or agreement contemplated hereby.

     

    11.           
      Lost Warrants or
      Stock
      Certificates

     

    .  The
      Company represents and warrants to Holder that upon receipt of evidence
      reasonably satisfactory to the Company of the loss, theft, destruction, or
      mutilation of any Warrant or stock certificate and, in the case of any such
      loss, theft or destruction, upon receipt of an indemnity and, if requested,
      bond
      reasonably satisfactory to the Company, or, in the case of any such mutilation,
      upon surrender and cancellation of such Warrant or stock certificate, the
      Company at its expense will make and deliver a new Warrant or stock certificate,
      of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant
      or
      stock certificate.

     

    12.           
      Amendment

     

    .  This
      Warrant is one of a series of warrants (the “Warrant Series”) to purchase in the
      aggregate up to three million six hundred thousand (3,600,000) shares of the
      Company’s Common Stock.  This Warrant may be amended only with the
      written approval of the Company and (i) the Holder of this Warrant or (ii)
      the
      holders of warrants representing a majority of the Warrant Shares; provided,
      however, that any amendment affected pursuant to (ii) above shall be made in
      the
      same manner to all warrants in the Warrant Series.

     

    13.           
      Binding Effect;
      Benefits

     

    .  This
      Warrant shall inure to the benefit of and shall be binding upon the Company
      and
      the Holder and their respective heirs, legal representatives, successors and
      assigns.  Nothing in this Warrant, expressed or implied, is intended
      to or shall confer on any person other than the Company and the Holder, or
      their
      respective heirs, legal representatives, successors or assigns, any rights,
      remedies, obligations or liabilities under or by reason of this
      Warrant.

     

    14.           
      Fractional
      Shares

     

    .  No
      fractional shares shall be issued upon exercise of this Warrant.  The
      Company shall, in lieu of issuing any fractional share, pay the Holder entitled
      to such fraction a sum in cash equal to such fraction multiplied by the market
      price of the Common Stock on such exercise date, which shall be, on such date,
      the closing price for the Common Stock or the closing bid if no sales were
      reported, as quoted on the exchange or market that is the primary trading market
      for the Company.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officers, thereunto duly authorized this ____ day of ____, 2007.

     

    


    


    CARDIMA,
      INC., a Delaware corporation

    


    


    


    By:                                                                           
      

    


    Name:
      ____________________________

    


    Title:
      _____________________________

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    FORM
      OF
      SUBSCRIPTION

    


    (To
      be
      signed only upon exercise of Warrant)

    


    To:           
      Cardima, Inc.

    


     

    The
      undersigned, the holder of the
      within Warrant, hereby irrevocably elects to exercise such Warrant for, and
      to
      purchase thereunder, ________________ (________) shares of Common Stock of
      [_____________] Inc. (the “Company”), and herewith makes payment in the amount
      of $________ therefor.  The certificates for such shares should be
      issued in the name of, and delivered to, ________________ whose address is
      ________________________________ __________________________________________________________.

     

    The
      undersigned represents, unless the exercise of this Warrant has been registered
      under the Securities Act of 1933, as amended (the “Securities Act”), that (i)
      the undersigned is acquiring such Common Stock for his or its own account for
      investment and not with a view to or for sale in connection with any
      distribution thereof (except for any resale pursuant to a registration statement
      under the Securities Act), (ii) the undersigned has such knowledge and
      experience in financial and business matters as to be capable of evaluating
      the
      merits and risks of the undersigned’s investment in the shares of Common Stock,
      (iii) the undersigned has received all of the information the undersigned
      requested from the Company and the undersigned considers necessary or
      appropriate for deciding whether to purchase the shares, (iv) the undersigned
      has the ability to bear the economic risks of the undersigned’s prospective
      investment and (v) the undersigned is able, without materially impairing his
      financial condition, to hold the shares of Common Stock for an indefinite period
      of time and to suffer complete loss on the undersigned’s
      investment.

     

    The
      undersigned is an “accredited investor” as defined in Regulation D of the
      Securities and Exchange Commission on the date hereof.

     

    DATED:                                                                
      

     

    _______________________________________

    (Signature
      must conform in all respects to name of holder as specified on the face of
      the
      Warrant)

    


    


    _______________________________________

    


    


    _______________________________________

    (Address)

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    THIS
      WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD
      OR
      OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
      FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH
      ACT.

     

    ASSIGNMENT
      FORM

    


    (To
      be
      executed only upon transfer of this Warrant)

    


    For
      value
      received, the undersigned registered holder of the within Warrant hereby sells,
      assigns and transfers unto ____________________ (the “Assignee”) the right
      represented by such Warrant to purchase __________ Warrant Shares and all other
      rights of the Holder with respect thereto under the within Warrant, and appoints
      _________________ as Attorney to make such transfer on the books of Cardima,
      Inc. maintained for such purpose, with full power of substitution in the
      premises.

     

    The
      undersigned also represents that, by assignment hereof, the Assignee
      acknowledges that this Warrant and the Warrant Shares to be issued upon exercise
      hereof are being acquired for investment and that the Assignee will not offer,
      sell or otherwise dispose of this Warrant or any Warrant Shares to be issued
      upon exercise hereof except under circumstances that will not result in a
      violation of the Securities Act of 1933, as amended, or any state securities
      laws.  Further, the Assignee has acknowledged that upon exercise of
      this Warrant, the Assignee shall, if requested by the Company, confirm in
      writing, in a form satisfactory to the Company, that the Warrant Shares so
      purchased are being acquired for investment and not with a view toward
      distribution or resale.

     

    Dated:  ____________________.

     

    
      	
              [MEDALLION
                GUARANTEE]

            	
              ______________________________
                

            


    

    (Signature)

     

    ______________________________

    (Print
      Name)

     

    ______________________________

    (Street
      Address)

     

    ______________________________

    (City)                  (State)        (Zip
      Code)

    


    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

    


    CONFIDENTIAL
      PURCHASER QUESTIONNAIRE

    CONFIDENTIAL
      PURCHASER QUESTIONNAIRE

    


    THIS
      QUESTIONNAIRE WILL BE USED IN CONNECTION WITH VARIOUS INVESTMENTS MADE BY THE
      UNDERSIGNED FROM TIME TO TIME, WHICH SUCH INVESTMENTS SHALL BE BROUGHT TO THE
      UNDERSIGNED BY, AND MADE THROUGH, SMH CAPITAL

    


    THE
      COMPANY SHALL HAVE THE RIGHT TO FULLY RELY ON THE REPRESENTATIONS AND WARRANTIES
      CONTAINED HEREIN UNTIL SUCH TIME AS THE UNDERSIGNED HAS FURNISHED AN AMENDED
      CONFIDENTIAL PURCHASER QUESTIONNAIRE.

    


    THIS
      QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED TO SMH CAPITAL

    


    THE
      INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT
      CONFIDENCE.  NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT
      THAT SUCH DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY
      PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY IN WHICH YOU ARE
      INVESTING AND ITS CONTROLLING PERSONS.

    


    (1)           
      The undersigned represents and warrants that he, she or it comes within at
      least
      one category marked below, and that for any category marked, he, she or it
      has
      truthfully set forth, where applicable, the factual basis or reason the
      undersigned comes within that category. The undersigned agrees to furnish any
      additional information which any issuer of securities deems neces­sary in
      order to verify the answers set forth below.

    


    
      	
              Category
                A  

            	
              The
                undersigned is an individual (not a partnership, corporation, etc.)
                whose
                individual net worth, or joint net worth with his or her spouse,
                presently
                exceeds $1,000,000. 

            


    

    


    Explanation:
      In calculating net worth you may include equity in personal property and real
      estate, including your principal residence, cash, short-term investments, stock
      and securities.  Equity in personal property and real estate should be
      based on the fair market value of such property less debt secured by such
      property.

    


    
      	
              Category
                B  

            	
              The
                undersigned is an individual (not a partnership, corporation, etc.)
                who
                had an income in excess of $200,000 in each of the two most recent
                years,
                or joint income with his or her spouse in excess of $300,000 in each
                of
                those years (in each case including foreign income, tax exempt income
                and
                full amount of capital gains and losses but excluding any income
                of other
                family members and any unrealized capital appreciation) and has a
                reasonable expectation of reaching the same income level in the current
                year. 

            


    

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              Category
                C  

            	
              The
                undersigned is a director or executive officer of the company which
                is
                issuing and selling the Securities.


            


    

    


    
      	
              Category
                D  

            	
              The
                undersigned is (i) a bank, as defined in Section 3(a)(2) of the
                Securities Act of 1933, as amended (the “Act”); (ii) a savings and loan
                associa­tion or other institution as defined in
                Section 3(a)(5)(A) of the Act, whether acting in its individual or
                fiduciary capacity; (iii) an insurance company as defined in
                Section 2(13) of the Act; (iv) an investment company registered under
                the Investment Company Act of 1940 or a business development company
                as
                defined in Section 2(a)(48) of that Act; (v) a Small Business
                Investment Company (SBIC) licensed by the U.S. Small Business
                Administration under Section 301(c) or (d) of the Small Business
                Investment Act of 1958; or (vi) a plan established and maintained
                by a
                state, its political subdivisions, or any agency or instrumentality
                of a
                state or its political subdivisions, for the benefit of its employees,
                if
                such plan has total assets in excess of $5,000,000;
                

            


    

     

    
      	
              Category
                E ___

            	
              The
                undersigned is an (i) employee benefit plan within the meaning of
                the
                Employee Retirement Income Security Act of 1974 if the investment
                decision
                is made by a plan fiduciary, as defined in Section 3(21) of such act,
                which is either a bank, savings and loan association, insurance company,
                or registered investment advisor, (ii) an employee benefit plan with
                total
                assets in excess of $5,000,000, or (iii) a self-directed employee
                benefit
                plan (including a self-directed individual retirement account or
                IRA,
                Keough or SEP plan) with investment decisions made solely by persons
                that
                are accredited investors (describe entity).


            


    

     

    
      	
              Category
                F  

            	
              The
                undersigned is a private business development company as defined
                in
                section 202(a) (22) of the Investment Advisors Act of 1940 (describe
                entity) 

            


    

    


    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

       

    

    
      	
              Category
                G  

            	
              The
                undersigned is either a corporation, limited liability company,
                partnership, Massachusetts business trust, or non-profit organization
                within the meaning of Section 501(c)(3) of the Internal Revenue Code,
                in each case not formed for the specific purpose of acquiring the
                Securities and with total assets in excess of $5,000,000. (describe entity)
                

            


    

     

    
      	
              Category
                H  

            	
              The
                undersigned is a trust with total assets in excess of $5,000,­000, not
                formed for the specific purpose of acquiring the Securities, where
                the
                purchase is directed by a “sophisticated investor” as defined in
                Regulation  506(b)(2)(ii) under the Act. (must also answer
                Question 5
                below).

            


    

    


    
      	
              Category
                I  

            	
              The
                undersigned is an entity (other than a trust) in which all of the
                equity
                owners are “accredited investors” within one or more of the above
                categories.  If relying upon this category alone, each equity
                owner must complete a separate copy of this Purchaser
                Questionnaire.  (describe entity
                below)
                

            


    

     

    The
      undersigned agrees that the undersigned will notify SMH Capital at any time
      in
      the event that the representations and warranties in this Purchaser
      Questionnaire shall cease to be true, accurate and complete.

    


    (2)           
      Suitability (please answer each question)

    


    
      	
               

            	
              (a)

            	
              For
                an individual, please describe your current employment, including
                the
                company by which you are employed and its principal business:
                

            


    

     

    
      	
               

            	
              (b)

            	
              For
                an individual, please describe any college or graduate degrees held
                by
                you: 

            


    

     

    (c)           
      For all subscribers, please list types of prior investments:

    


    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (d)

            	
              For
                all subscribers, please state whether you have you participated in
                other
                private
                placements before: 

            


    

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    
      	
               

            	
              (e)

            	
              If
                your answer to question (d) above was “YES”, please indicate frequency of
                such prior participation in private
                placements of: 

            


    

    


    
      	 	
              
                Public

                Companies

                
                

              

              
              

            	
              
                Private

                Companies

                
                

              

              
              

            
	
              Frequently

            	 	 
	
              Occasionally

            	 	 
	
              Never

            	 	 


    

     

    
      	
               

            	
              (f)

            	
              For
                individuals, do you expect your current level of income to significantly
                decrease in the foreseeable future?


            


    

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    
      	
               

            	
              (g)

            	
              For
                trust, corporate, partnership and other institutional subscribers,
                do you
                expect your total assets to significantly decrease in the foreseeable
                future? 

            


    

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    
      	
               

            	
              (h)

            	
              For
                all subscribers, do you have any other investments or contingent
                liabilities which you reasonably anticipate could cause you to need
                sudden
                cash requirements in excess of cash readily available to you?
                

            


    

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    
      	
               

            	
              (i)

            	
              For
                all subscribers, are you familiar with the risk aspects and the
                non-liquidity of investments such as the Securities for which you
                seek to
                purchase? 

            


    

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    
      	
               

            	
              (j)

            	
              For
                all subscribers, do you understand that there is no guarantee of
                financial
                return on this investment and that you run the risk of losing your
                entire
                investment? 

            


    

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              YES

            	 	 	
              NO

            	 


    

    


    (3)           
      Manner in which title is to be held: (circle one)

    


    (a)           
      Individual Ownership

    (b)           
      Community Property

    (c)           
      Joint Tenant with Right of Survivorship (both parties must sign)

    (d)           
      Partnership

    (e)           
      Tenants in Common

    (f)           
      Limited Liability Company

    (g)           
      Corporation

    (h)           
      Trust

    (i)           
      Other

    


    (4)           
      NASD Affiliation.

    


    Are
      you
      affiliated or associated with an NASD member firm (please check
      one):

    


    
      	
              YES

            	 	 	
              NO

            	 


    

    


    If
      Yes,
      please describe:

    


    _________________________________________________________

    _________________________________________________________

    _________________________________________________________

    


    *If
      subscriber is a Registered Representative with an NASD member firm, have the
      following acknowledgment signed by the appropriate party:

    


    The
      undersigned NASD member firm acknowledges receipt of the notice required by
      the
      NASD Conduct Rules.

    


    _________________________________

    Name
      of
      NASD Member Firm

    


    


    By:
      ______________________________

    Authorized
      Officer

    


    Date:
      ____________________________

    


    


    (5)
      For Trust Subscribers

    


    A.
      Certain trusts generally may not qualify as accredited investors except under
      special circumstances.  Therefore, if you intend to hold securities in
      whole or in part through a trust, please answer each of the following
      questions.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    Is
      the trustee of the trust a national
      or state bank that is acting in its fiduciary capacity in making the investment
      on behalf of the trust?

    


    Yes
o                                
      No o

    


    B.
      If the
      trust is a revocable
      trust, please complete Question 1 below.  If the trust is an irrevocable trust, please
      complete Question 2 below.

    


    1.           
      REVOCABLE
      TRUSTS

    


    Can
      the trust be amended or revoked at
      any time by its grantors:

    


    Yes
o                                
      No o

    


    If
      yes,
      please answer the following questions relating to each
      grantor (please add sheets if necessary):

    


    Grantor
      Name: _________________________

    


    Net
      worth of grantor (including spouse,
      if applicable), including home, home furnishings and automobiles exceeds
      $1,000,000?

    


    Yes
o                                
      No o

    


    


    OR

    


    Income
      (exclusive of any income attributable to spouse) was in excess of $200,000
      for
      the prior two taxable years and is reasonably expected to be in excess of
      $200,000 for the current taxable year?

    


    Yes
o                                
      No o

    


    OR

    


    Income
      (including income attributable to spouse) was in excess of $300,000 for the
      prior two taxable years and is reasonably expected to be in excess of $300,000
      for the current taxable year?

    


    Yes
o                                
      No o

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    2.           
      IRREVOCABLE
      TRUSTS

    


    If
      the
      trust is an irrevocable trust, please answer the following
      questions:

    


    Please
      provide the name of each
      trustee:

    


    Trustee
      Name: ________________________________________

    


    Trustee
      Name: ________________________________________

    


    Does
      the trust have assets greater than
      $5 million?

    


    Yes
o                                
      No o

    


    Indicate
      how often you invest in:

    


    Marketable
      Securities

    


    Often
      o                      
Occasionally
o                                           
      Seldom o                                
Never o

    


    Restricted
      Securities

    


    Often
      o                      
Occasionally
o                                           
      Seldom o                                
Never o

    


    Venture
      Capital Companies

    


    Often
      o                      
Occasionally
o                                           
      Seldom o                                
Never o

    


    This
      completes the questions applicable to Trust Investors.  Please sign
      below.

    


    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    The
      undersigned has been informed of the significance of the foregoing
      representations and answers contained in this Confidential Purchaser
      Questionnaire and such representations and answers have been provided with
      the
      understanding that all companies in which you are purchasing securities through
      the placement agent, will rely on them.

    


    


                                                                               
      Individual

    


    Date:                      
      ________________________                                                                           
_______________________________

    Name
      of Individual

    (Please
      type or print)

    


    _______________________________

    Signature
      of Individual

    


    


    _______________________________

    Name
      of Joint Owner

    (Please
      type or print)

    


    


    _______________________________

    Signature
      (Joint Owner)

    


    


    Partnership,
      Corporation
      or

    Other
      Entity

    


    


    Date:                      
      ________________________                   _______________________________

    Print
      or Type Entity Name

    


    


          By:
      _______________________

    Name:

    Title:

    


    


           ________________________________

    Signature
      (other authorized signatory, if any)

    


    
      
        
        

      

      
        38