Form of Registration Rights Agreement



  
 Exhibit 10.6

  
 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is
made and entered into as of December 19, 2003, by and among Cardima, Inc., a Delaware corporation (the “Company”), and the investors signatory hereto (each a “Purchaser” and collectively, the
“Purchasers”). 
  
 This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of December 5, 2003, as amended on December 19, 2003, among the Company and the Purchasers (the “Purchase Agreement”). Capitalized terms not defined herein shall have the
meanings ascribed to them under the Purchase Agreement. 
  
 The
Company and the Purchasers hereby agree as follows: 
  
 1.
Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the
following meanings: 
  
 “Effectiveness
Date” means, with respect to the initial Registration Statement required to be filed hereunder, the date that the Registration Statement is declared effective by the Securities and Exchange Commission. 
  
 “Effectiveness Period” shall have the
meaning set forth in Section 2(a). 
  
 “Filing Date” means, with respect to the initial Registration Statement required to be filed hereunder, the 45th business day following the Closing Date, provided, however, that if any Holder fails to provide the Company with any information that is required under the Securities Act, the Exchange Act or otherwise under applicable
securities laws, to be provided in the Registration Statement with respect to such Holder (including the information required by Section 3(j)) or if counsel to a Holder or to the placement agent does not furnish comments to the Company with respect
to information that is required to be provided in the Registration Statement, then the Filing Date shall be extended three (3) Trading Days following the date of receipt of such information by the Company.  
  
 “Holder” or “Holders”
means the holder or holders, as the case may be, from time to time of Registrable Securities. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning
set forth in Section 5(c). 
  
 “Losses” shall have the meaning set forth in Section 5(a). 
  









 “Major Holder” shall mean a Holder of at least 500,000 shares of then
outstanding Registrable Securities. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included
in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means the Shares, together with any securities issued or issuable upon any stock split, dividend
or other distribution, recapitalization or similar event with respect to the foregoing. 
  
 “Registration Statement” means the registration statements required to be filed hereunder, including (in each case) the
Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such
registration statement. 
  
 “Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as
such Rule. 
  
 “Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

  
 “Securities Act” means the
Securities Act of 1933, as amended. 
  
 “Shares” solely for the purpose of this Agreement means the Shares (as defined in the Purchase Agreement) together with the Warrant Shares issuable upon exercise of the Warrants. 
  
 2. Registration. 
  
 (a) On or prior to the Filing Date, the Company shall use
commercially reasonable efforts to prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. A Registration Statement
required hereunder 

  

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shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such
registration shall be on another appropriate form in accordance herewith), and may include securities for the Company’s own account and/or the account of other holders of the Company’s securities provided that (i) such securities
were issued or sold to the other holders in connection with the financing transactions deemed to have been authorized by the Company’s stockholders in the June 19, 2003 stockholder approval or (ii) such securities are or may be issued pursuant
to any antidilution or other adjustment under existing warrants or contractual arrangements, or are or may be issuable upon exercise of warrants or other Common Stock Equivalents issued pursuant to any antidilution or other adjustment under existing
warrants or contractual arrangements, which antidilution or other adjustment occurs as a result of the consummation of the financing transactions deemed to have been authorized by the Company’s stockholders in the June 19, 2003 stockholder
approval. Each Registration Statement required hereunder shall contain (except if otherwise directed by the Holders) the “Plan of Distribution” attached hereto as Annex A. The Company shall use commercially reasonable efforts
to cause such Registration Statement to become effective and remain effective as provided herein. The Company shall use commercially reasonable efforts to cause each Registration Statement to be declared effective under the Securities Act as
promptly as reasonably practicable after the filing thereof, but in no event later than the earlier of (i) ninety (90) business days after the Closing Date and (ii) the fifth Trading Day following the date on which the Company receives written
notice from the Commission that such Registration Statement will not be reviewed or is no longer subject to further review and comments, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective
under the Securities Act until the date when all Registrable Securities covered by such Registration Statement have been sold or may be sold without volume restrictions pursuant to Rule 144 under the Securities Act or any other rule of similar
effect (the “Effectiveness Period”). 
  
 (b) Notwithstanding anything to the contrary herein, the Company may at any time refuse to permit the Holders to resell any Registrable Securities pursuant to the Registration Statement; provided, however, that in order to exercise this
right, the Company must deliver a certificate in writing to the Holders to the effect that a delay in such sales is necessary because, in the good faith judgment of the Company, sales pursuant to the Registration Statement would require the public
disclosure of information that would not otherwise be required to be disclosed or could in other respects constitute a violation of the federal securities laws or otherwise materially adversely affect the Company. In such an event, the Company shall
notify the Holders promptly after it has determined that such circumstances no longer exist. The Company shall not under any circumstances be entitled to refuse to permit the Holders to resell any Registrable Securities under this Section (i) more
than two (2) times in the twelve (12) month period following the Closing Date, and any individual period during which the Company refuses to permit the Holder to resell any Registrable Securities in the twelve (12) month period following the Closing
Date shall not exceed sixty (60) days, and (ii) more than two (2) times in the second twelve month period following the Closing Date, and any Registrable Securities in the second twelve (12) month period following the Closing Date shall not exceed
forty-five (45) days. Each Purchaser hereby covenants and agrees that it will not sell any Registrable Securities pursuant to the Registration Statement during the periods 

  

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the Company refuses to permit the Holder to resell any Registrable Securities as set forth in this Section. 
  
 (c) Each Holder hereby covenants to comply with the
covenants set forth in the Purchase Agreement including, without limitation, Section 4.10 thereof. 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) To the extent reasonably practicable, not less than one
Trading Day prior to the filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall, (i) furnish to the Holders copies of all such documents proposed to be filed (including documents
incorporated or deemed incorporated by reference to the extent requested by such Person) which documents will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent certified public accountants
to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to conduct a reasonable investigation within the meaning of the Securities Act. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a
Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the
Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and
as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and, as promptly as
reasonably possible, upon request, provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement; and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance with the intended methods of disposition by the Holders thereof set forth in a
Registration Statement as so amended or in such Prospectus as so supplemented. 
  
 (c) Notify the Holders of Registrable Securities to be sold as promptly as reasonably possible when (i) a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement has been filed; (ii) the Registration Statement or any post-effective amendment has become effective; (iii) of any request by the Commission or any other Federal or state
governmental authority during the period of effectiveness of a Registration Statement for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iv) of the issuance by the Commission or any other federal
or state governmental authority of any stop order 

  

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suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (v) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation of any Proceeding
for such purpose; and (vi) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of a Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. 
  
 (d) Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
  
 (e) Furnish to each Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto,
including, to the extent requested by such Holder, financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by
such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission, in each case only if such document is not available on-line on the Company’s or the
Commission’s website. 
  
 (f) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Holder may reasonably request. Subject to Section 3(i), the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

  
 (g) Prior to any resale of Registrable
Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, 

  

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that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction. 
  
 (h) If requested by the Holders, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a sale pursuant to the Registration Statement, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may request.

  
 (i) Upon the occurrence of any event
contemplated by clauses (iii) through (vi) of Section 3(c) above, as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(c) above to suspend the use of the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(i) to suspend the availability of a Registration Statement and
Prospectus for a period not to exceed 60 days (which need not be consecutive days) in any 12 month period. 
  
 (j) The Company may require, as a condition precedent to the Company’s obligations hereunder, each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if requested by the Commission, the controlling person thereof and any other information required to the effect the registration of the
Registrable Securities. 
  
 4. Registration Expenses. All
fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred
to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in a Registration Statement), (iii) messenger, telephone and delivery expenses incurred by the Company, (iv) fees and
disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such 

  

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insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.
Notwithstanding the foregoing, all underwriting discounts, brokerage fees and commission incurred by the Holders and, if applicable, fees and disbursements of any counsel for the Holders, shall be borne by the Holders. 
  
 5. Indemnification 
  
 (a) Indemnification by the Company. The Company
shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, agents and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to
the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such
Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or such form of Prospectus or in
any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an
outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(c). The Company shall notify the
Holders promptly of the institution, threat or assertion by any third party of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Holders. Each Holder shall,
severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, 

  

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from and against all Losses, as incurred, arising out of or based solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by such Holder to the Company specifically for inclusion in such Registration Statement or such Prospectus or (ii) to the extent that (1) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such
Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the
Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(c). In no event shall the liability of any selling Holder hereunder be greater
in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against
any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the
failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review) that such failure shall have prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying 

  

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Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense thereof and the reasonable fees and expenses of one separate counsel for all Indemnified Parties shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  
 All reasonable fees and expenses of the Indemnified Party
(including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten
Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based upon the relative faults of the parties. 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of
public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or 

  

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alleged untrue statement or omission or alleged omission, except in the case of fraud by such Holder. 
  
 The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. 
  
 6. Miscellaneous 
  
 (a) Remedies. In the event of a breach by the Company or by a Holder of any of their obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities
Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement. 
  
 (c) Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in Sections 2(b) or 3(c), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this
paragraph. 
  
 (d) Piggy-Back
Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the stock option or other employee benefit plans, then the Company shall send to each
Major Holder a written notice of such determination and, if within seven days after the date of such notice, any such Major Holder shall so request in writing, the Company shall include in such registration statement all or any part of such
Registrable Securities such Major Holder requests to be 

  

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registered, subject to customary underwriter cutbacks applicable to all holders of registration rights. 
  
 (e) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and
the record holders of a majority of the Registrable Securities issued to the Purchasers that have not previously been sold or transferred by such Purchasers. Notwithstanding anything herein to the contrary, if additional parties purchase securities
of the Company (each such person or entity a “Subsequent Purchaser”) pursuant to the Purchase Agreement, then each such Subsequent Purchaser shall become a party to this agreement as a “Purchaser” or “Holder” hereunder,
without the need for any consent, approval or signature of any Purchaser or Holder. 
  
 (f) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified on the signature pages attached hereto prior to 6:30 p.m.
(New York City time) on a Trading Day and electronic confirmation of successful transmission is received, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number on
the signature pages attached hereto on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth in the Purchase Agreement. 
  
 (g) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent
of the holders of a majority of the Registrable Securities held by the parties then qualifying as Major Holders; provided, however, that the Company may assign this Agreement to any purchaser of all or substantially all of its assets or to any
successor corporation resulting from any merger or consolidation of the Company with or into such corporation, without such consent. Each Holder may assign their respective rights hereunder to a Qualified Transferee (as such term is defined in the
Purchase Agreement; provided, however, that no transferee receiving fewer than 100,000 shares of Registrable Securities from any Holder (or, if such Holder holds less than 100,000 shares, all Registrable Securities held by such Holder) shall be
afforded rights hereunder. 
  
 (h) Execution
and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall 

  

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create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof. 
  
 (i) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of California,
without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of San Francisco, California. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of San Francisco, California for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of the any of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. 
  
 (j) Cumulative Remedies. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law. 
  
 (k) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  

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 (l) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof. 
  
 (m) Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser hereunder are several and not joint with the obligations of any other Purchaser hereunder, and no Purchaser
shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the
transactions contemplated by this Agreement. Each Purchaser shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be
joined as an additional party in any proceeding for such purpose. 
  
 (n) Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. 
  
 ************************* 
  

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 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

	CARDIMA, INC.
		
	 By:
	 	 
	 	

	 Name:
	 	 
	 	

	 Title:
	 	 
	 	



  

 14 








 [SIGNATURE PAGE OF HOLDERS TO REGISTRATION RIGHTS AGREEMENT] 
  

	 Printed Name of Holder: ______________________

		
	 By:
	 	 
	 	

	 Name:
	 	 
	 	

	 Title:
	 	 
	 	

	 Facsimile:
	 	 
	 	

	(Required for Notice)


  

 15 








 ANNEX A 
  
 Plan of Distribution 
  
 The Selling Stockholders and any of their assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on
any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the following methods when selling
shares: 
  

	 	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;


  

	 	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	privately negotiated transactions; 

  

	 	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	a combination of any such methods of sale; and 

  

	 	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. 
  
 Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Selling Stockholders have informed the Company that it does not have any agreement or understanding, directly or indirectly, with any person to distribute the Common Stock. 
  

 A-1 








 The Company is required to pay all fees and expenses incident to the registration of the shares. The
Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act. 
  

 A-2