Document:

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                                                                   EXHIBIT 10.38

                             ACQUISITION AGREEMENT

     This ACQUISITION AGREEMENT (the "Agreement") is made and entered into this
19th day of December, 2000 between MEDTRONIC, INC. ("Medtronic"), a Minnesota
corporation, and CARDIMA, INC. ("Cardima"), a Delaware corporation.

                                  WITNESSETH:

     WHEREAS, Cardima has developed and owns certain technology relating to
* * *; and

     WHEREAS, Medtronic desires to acquire from Cardima and Cardima desires to
sell and assign to Medtronic, all of the "Intellectual Property" (as defined
below) upon the terms and conditions set forth in this Agreement.

                                  AGREEMENTS:

     NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable consideration
described herein, the receipt and adequacy of which is hereby acknowledged, the
parties mutually agree as follows:

                                   ARTICLE 1
                                  Definitions
                                  -----------

     1.1)  Specific Definitions.  As used in this Agreement, the following
           --------------------
capitalized terms shall have the meanings set forth below:

     "Affiliate" of any entity means any other entity that directly, or
      ---------
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the first entity.  "Control" shall mean owning
more than fifty percent (50%) of the total voting power of the entity.

     "Agreement" means this Agreement and all Exhibits hereto.
      ---------

     "Cardima Field of Use" means systems and methods directly related to
      --------------------
temporary placement of catheters within the human vascular system for a duration
of time that does not exceed twenty-four hours to perform * * *.

     "Intellectual Property" means: (i) all patents and patent applications,
      ---------------------
together with any patents that may issue based thereon, listed on Exhibit A
attached hereto and all reissues, re-examinations and renewals thereof; (ii) all
foreign applications based on the foregoing referenced U.S. patents and patent
applications, together with all patents which may issue based thereon; (iii)
copyrights, trademarks and service marks which are applicable to, or utilized in
connection with, * * * and which are listed on

***=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Exhibit B attached hereto and (iv) all know-how, trade secrets, formulas,
inventions, invention disclosures, discoveries, ideas, data, processes,
drawings, and designs now owned or controlled by Cardima which are specifically
related to the matters referenced in (i), (ii) and (iii) above.

     "Liens" means liens, mortgages, charges, security interests, pledges,
      -----
encumbrances, assessments, restrictions, or third party ownership interests of
any nature.

     1.2)  Definitional Provisions.
           -----------------------

           (a) The words "hereof," "herein," and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as a
whole and not to any particular provisions of this Agreement.

           (b) Terms defined in the singular shall have a comparable meaning
when used in the plural, and vice-versa.

           (c) References to an "Exhibit" are, unless otherwise specified, to
one of the Exhibits attached to or referenced in this Agreement, and references
to an "Article" or a "Section" are, unless otherwise specified, to one of the
Articles or Sections of this Agreement.

           (d) The term "person" includes any individual, partnership, joint
venture, corporation, trust, unincorporated organization or government or any
department or agency thereof.

                                   ARTICLE 2
                             Acquisition of Assets
                             ---------------------

     2.1)  Purchase of Assets.  Upon the terms and provisions set forth herein,
           ------------------
Medtronic hereby purchases from Cardima, and Cardima hereby sells, conveys,
transfers and assigns to Medtronic, all of the Intellectual Property, subject to
the license back to Cardima as provided in Section 3.1.  Cardima represents and
warrants that the Intellectual Property is sold, conveyed, transferred and
assigned to Medtronic free and clear of all Liens whatsoever, whether fixed or
contingent, known or unknown, determined or determinable, due or not yet due.

     2.2)  Purchase Price.  The purchase price for the Intellectual Property
           --------------
(the "Purchase Price") shall be as follows:

     (a)   Medtronic shall pay Cardima Four Million Dollars ($4,000,000) by wire
transfer to a bank account designated by Cardima upon the:

           (i)   execution of this Agreement;

           (ii)  delivery to Medtronic of duly executed assignments from Cardima
     to Medtronic of the patents and patent applications set forth on Exhibit A
     in form and substance acceptable to Medtronic (the "Assignments"); and

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

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           (iii) delivery to Medtronic of the duly executed Bank Release
     (defined below) and all other third party approvals, releases or consents
     as provided in Section 5.1 in form and substance acceptable to Medtronic.

     (b)   Medtronic shall submit the Assignments for recordation by the U.S
Patent and Trademark Office within five (5) business days of delivery by
Cardima.  Within five (5) business days following the latest to occur of:  (i)
such submission of the Assignments, (ii) delivery of the copies required to be
delivered pursuant to Section 2.3 hereof, (iii) completion of the meetings with
Cardima personnel pursuant to Section 2.3 hereof and (iv) delivery to Medtronic
of all duly executed approvals, releases or consents required to be delivered
under Section 2.2(a) but, with Medtronic's written waiver, were allowed to be
delivered after such Section 2.2(a) payment, Medtronic shall pay Cardima Four
Million Dollars ($4,000,000) by wire transfer to a bank account designated by
Cardima, provided that at such time Cardima is otherwise in compliance with the
terms of this Agreement.

     No payment or other remuneration, other than the Purchase Price set forth
in this Section 2.2 and the reasonable costs of copying the documents to be
provided by Cardima pursuant to Section 2.3, shall be due Cardima from Medtronic
relating to the transfer of the Intellectual Property.

     2.3)  Transfer of Intellectual Property.  Promptly after execution of this
           ---------------------------------
Agreement, Cardima shall transfer to Medtronic all of the Intellectual Property.
Such transfer shall include providing to Medtronic copies of any and all
writings, drawings and materials that document the Intellectual Property,
including copies of the patents, patent applications and documents representing
embodiments of the Intellectual Property, and reasonable access to Cardima's
employees and facilities to facilitate the transfer of the Intellectual
Property.  Cardima may retain a copy of all such writings, drawings and
materials and use the same in carrying out its business within the Cardima Field
of Use.  In addition, Cardima will provide any explanation and assistance to
Medtronic as Medtronic may request to assure the full and complete understanding
and transfer to Medtronic of all of the Intellectual Property, including, but
not limited to the opportunity to review any and all formulas, inventions,
invention disclosures, discoveries, ideas, data, processes, drawings, and
designs related to * * * that are not included within the Intellectual Property.
Such assistance shall include Cardima making its personnel designated by
Medtronic and listed on Exhibit C attached hereto available a maximum of thirty
(30) hours each between the date of this Agreement and January 31, 2001, to meet
with Medtronic personnel. The parties shall use commercially reasonable efforts
to complete the transfer of the Intellectual Property to Medtronic on or before
January 31, 2001.

                                   ARTICLE 3
                                  License Back
                                  ------------

     3.1)  License Back.  Medtronic hereby grants to Cardima a perpetual, fully
           ------------
paid-up, worldwide license under the Intellectual Property to make, have made,
use, offer to sell and sell products or systems and to carry out methods within
the Cardima Field of Use.  Such license shall be co-exclusive with Medtronic,
within the Cardima Field of Use; provided, however, that Medtronic agrees not to
sublicense the Intellectual Property within the Cardima Field of Use to

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

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any party that is not an Affiliate of Medtronic.

     3.2)  Sublicensing and Assignment.  Cardima may sublicense its rights under
           ---------------------------
the license granted it in Section 3.1, and may assign its rights and obligations
under this Agreement, provided, however, that Cardima may not sublicense any of
its rights and obligations under this Agreement to a non-Affiliate of Cardima (a
"Sublicensee") if the Sublicensee or any Affiliate of the Sublicensee is
involved in the design, development, manufacture, marketing, sale or
distribution of any product that could be used for * * * other than products
related solely to the Cardima Field of Use. Any sublicense granted by Cardima
shall automatically terminate if Cardima or the Sublicensee or an Affiliate or
successor of Cardima or the Sublicensee is or becomes involved in the design,
development, manufacture, marketing, sale or distribution of any product that
could be used for * * * other than products related solely to the Cardima Field
of Use. Additionally, any permitted sublicense or assignment of Cardima's rights
and obligations under this Agreement shall only be valid if the Sublicensee or
assignee, as the case may be, agrees to be bound by the terms of this Agreement,
including, specifically, the restrictions set forth in this Section 3.2 and in
Section 3.3. Cardima shall give Medtronic advance written notice of any
sublicenses or assignments to be granted by Cardima, including a copy of such
sublicense or assignment agreement and Medtronic shall have three (3) days to
review such agreement for the purpose of determining whether such agreement
complies with this Section 3.2. No such sublicense or assignment shall
contravene the terms and provisions of this Agreement.

     3.3)  Restrictions on Use.  Cardima agrees, for itself and for its
           -------------------
Affiliates, not to manufacture, market, sell or distribute any products that
could be used for * * * other than products in the Cardima Field of Use. All
products that could be used for * * * that are manufactured, marketed, sold or
distributed by Cardima, its Affiliates, or its Sublicensees, shall be packaged,
labeled, advertised, marketed and otherwise identified and promoted in such
manner in order to attempt to avoid such products being used in an application
outside of the Cardima Field of Use. Upon the request of Medtronic Cardima shall
provide Medtronic with reasonable access to any documents or information
necessary for Medtronic to verify compliance with such requirements by Cardima,
its Affiliates and its Sublicensees. If Medtronic determines that such products
have been used outside of the Cardima Field of Use Cardima shall cooperate with
Medtronic in order to attempt to prevent any future violations of this Section
3.3. Cardima shall use all reasonable commercial efforts to insure that the
restrictions of this Section 3.3 shall be complied with by its agents and
distributors.

     3.4)  Covenant Regarding Claims. Cardima agrees, for itself and for its
           -------------------------
Affiliates, successors and assigns not to sue or otherwise assert any claim
against Medtronic or any of its Affiliates, successors, assigns, sublicensees,
customers, vendors or others in contractual privity with any of the foregoing,
on the ground that Medtronic or any of its Affiliates, or any such other party
infringes * * * or any addition, division, continuation, continuation in part,
substitution, extension, reissue, re-examination or renewal that Cardima or its
Affiliates has as of the date of this Agreement, solely by reason of or with
respect to Medtronic's activities relating to * * *.

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

                                      -4-
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                                   ARTICLE 4
                      Protection of Intellectual Property
                      -----------------------------------

     4.1)  Control of the Intellectual Property.  Medtronic shall have the sole
           ------------------------------------
and exclusive right, in Medtronic's absolute discretion, to exercise complete
control over the Intellectual Property, including, but not limited to, the right
to (i) prosecute any alleged infringement, misappropriation or misuse of the
Intellectual Property, and (ii) apply for, prosecute, or cause the issuance,
amendment, abandonment, maintenance, re-examination or reissue of any patents or
patent applications included within the Intellectual Property.

     4.2)  Infringement by Third Party. Each party shall promptly notify the
           ---------------------------
other party in writing if the notifying party knows or has reason to believe
that the rights of Medtronic or Cardima relating to the Intellectual Property
are being infringed by a third party.

     4.3)  Licensee's Right to Protect.  In the event that Medtronic (i)
           ---------------------------
determines to abandon, (ii) fails to maintain, (iii) determines to not prosecute
or (iv) fails to prosecute any patent or patent application included within the
Intellectual Property which relates to the Cardima Field of Use, Cardima shall
have the right to exercise complete control, at Cardima's expense and upon
written notice to Medtronic, over such patent or patent application and,
thereafter, such patent or patent application shall be assigned by Medtronic to
Cardima.  Medtronic shall copy Cardima on all correspondence with respect to
Medtronic's maintenance or prosecution of any patent or patent application
included within the Intellectual Property such that Cardima has the reasonable
opportunity to take such action as may be necessary to protect such patent or
patent application in the event Medtronic intends to abandon, not prosecute or
not maintain such patent or patent application.   In the event of the assignment
of a patent or patent application to Cardima pursuant to this Section 4.3,
Medtronic shall be given the option to obtain a royalty free, perpetual, non-
exclusive license to such patent or patent application effective upon the
payment of one half of the prosecution costs incurred by Cardima related to such
patent or patent application.  Further, Cardima shall have the right, at
Cardima's expense and upon the prior written consent of Medtronic (which consent
shall not be unreasonably withheld), to prosecute (in Medtronic's name, if
required) any alleged infringement, misappropriation or misuse of the
Intellectual Property within the Cardima Field of Use.

                                   ARTICLE 5
                   Representations and Warranties of Cardima
                   -----------------------------------------

     Cardima hereby represents and warrants to Medtronic as follows, and
acknowledges that the same shall be deemed to have been relied upon by Medtronic
and shall survive as provided in Section 9.6 of this Agreement:

     5.1)  Authority.  Cardima has the corporate power and authority to execute
           ---------
and deliver this Agreement and to perform its obligations under this Agreement
and no additional actions are required on the part of Cardima, including
shareholder approval.  Cardima has taken all corporate actions of its board that
are required to authorize and approve the execution and performance of this
Agreement and there are no other actions required of it including, but not
limited to, shareholder action required of any type to approve or authorize the
Agreement or its

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

                                      -5-
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performance. This Agreement has been duly executed and delivered by Cardima, and
constitutes, and such other agreements and instruments contemplated hereby, when
duly executed and delivered by Cardima, will constitute, valid and binding
obligations of Cardima, enforceable in accordance with their respective terms
except as may be limited by laws affecting creditors' rights generally or by
judicial limitations on the right to specific performance. Neither the execution
nor the delivery of this Agreement or such other agreements, nor the
consummation of the transactions contemplated hereby or thereby nor compliance
with or fulfillment of the terms and provisions hereof or thereof by Cardima
will: (a) conflict with or result in a breach of the terms, conditions or
provisions of or constitute a default under any instrument, agreement, mortgage,
security agreement, lease, judgment, order, award, decree or other instrument or
restriction to which Cardima is a party or by which Cardima or any of the
Intellectual Property is bound or affected; (b) require any affirmative
approval, consent, authorization or other order or action of any court,
governmental authority, regulatory body, creditor or any other person; or (c)
give any party with rights under any such agreement, mortgage, security
agreement, judgment, order, award, decree or other instrument or restriction the
right to terminate, modify or otherwise change the rights or obligations of
Cardima thereunder, except such will require the approval, release or consent of
Transamerica Business Credit Corporation (the "Bank Release") and such other
approvals, releases or consents as are described on Schedule 5.1, all of which
have been fully and unconditionally obtained.

     5.2)  Absence of Material Undisclosed Liabilities.  There are no debts,
           -------------------------------------------
liabilities, claims against or obligations of Cardima, or any reasonable legal
basis therefor, which may adversely affect the ownership of the Intellectual
Property or the use thereof by Medtronic, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, including but not limited to
liabilities on account of taxes, other governmental charges, duties, penalties,
interest or fines.

     5.3)  Assets.  The Intellectual Property includes all intellectual
           ------
property, owned or used by Cardima as of the date of this Agreement, which are
necessary to the research, design, development, manufacture or sale of * * * .
As of the dates of this Agreement, there are no additions, divisions,
continuations, continuations in part, substitutions or extensions to any of the
patents or patent application that claims priority from or are the parent of any
of the patents or patent applications listed on Exhibit A. As of the date of
this Agreement, Cardima has good and marketable title to, and exclusive
ownership of, all of the Intellectual Property, free and clear of all Liens
other than the Liens covered by the Bank Release. Cardima has not granted any
license rights or options with respect to the Intellectual Property.

     5.4)  Intellectual Property.  To the knowledge of Cardima after due
           ---------------------
inquiry, the Intellectual Property does not infringe upon any intellectual
property rights of any third parties.  No current or former stockholder,
employee or consultant of Cardima has any rights in or to any of the
Intellectual Property.  Cardima has made all statutorily required filings, if
any, to record its interests and taken reasonable actions to protect its rights
in such Intellectual Property; and, to the knowledge of Cardima after due
inquiry, no person or entity nor such person's or entity's business or products
has infringed, misused, misappropriated or conflicted with intellectual property
rights included within such Intellectual Property or currently is infringing,
misusing,

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

                                      -6-
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misappropriating or conflicting with such intellectual property rights included
within such Intellectual Property. United States Patent Number 5,645,064 filed
with the United States Patent Office on ______, ___, was withdrawn by Cardima on
______, 2000.

     5.5)  Compliance with Laws, Regulations, Etc.  Cardima has complied, and is
           --------------------------------------
in compliance, in all material respects, with all applicable laws, statutes,
orders, rules, regulations and requirements promulgated by governmental or other
authorities relating to the Intellectual Property and Cardima has not received
any notice of any sort of alleged violation of any such law, statute, order,
rule, regulation or requirement.

     5.6)  Litigation.  There is no action, lawsuit, claim, proceeding, or
           ----------
investigation of any kind pending or threatened against, by or affecting Cardima
which if decided adversely against Cardima would have an adverse effect upon the
Intellectual Property.  Cardima is not in default with respect to any order,
writ, injunction, or decree of any court or of any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting or relating to the Intellectual
Property.

     5.7)  No Finders.  No act of Cardima has given or will give rise to any
           ----------
claim against any of the parties hereto for a brokerage commission, finder's fee
or other like payment in connection with the transactions contemplated by this
Agreement, except the payment to Lehman Brothers which is the sole
responsibility of Cardima.

                                   ARTICLE 6
                  Representations and Warranties of Medtronic
                  -------------------------------------------

     Medtronic represents and warrants to Cardima as follows, and acknowledges
that the same shall be deemed to have been relied upon by Cardima and shall
survive as provided in Section 9.6 of this Agreement:

     6.1)  Organization of Medtronic.  Medtronic is a corporation duly
           -------------------------
organized, validly existing and in good standing under the laws of the State of
Minnesota.

     6.2)  Corporate Power and Authority.  Medtronic has the unrestricted
           -----------------------------
corporate power and authority to execute and deliver this Agreement and to
perform its obligations under this Agreement and no additional actions are
required on the part of Medtronic, including shareholder approval.  Medtronic
has taken all corporate actions of its board that are required to authorize and
approve the execution and performance of this Agreement and there are no other
actions required of it including, but not limited to, shareholder action
required of any type to approve or authorize the Agreement or its performance.
The execution, delivery and performance by Medtronic of this Agreement and the
transactions contemplated hereby has been duly and validly authorized and
approved, by all requisite corporate action on the part of Medtronic.  This
Agreement has been duly executed and delivered by Medtronic, and constitutes,
and such other agreements and instruments contemplated hereby, when duly
executed and delivered by Medtronic will constitute, valid and binding
obligations of Medtronic, enforceable in accordance with their respective terms
except as may be limited by laws affecting creditors' rights generally

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

                                      -7-
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or by judicial limitations on the right to specific performance. Neither the
execution nor the delivery of this Agreement or such other agreements, nor the
consummation of the transactions contemplated hereby or thereby nor compliance
with or fulfillment of the terms and provisions hereby or thereof by Medtronic
will: (a) conflict with or result in a breach of the terms, conditions or
provisions of or constitute a default under any instrument, agreement, mortgage,
security agreement, lease, judgment, order, award, decree or other instrument or
restriction to which Medtronic is a party or by which Medtronic is bound or
affected; (b) require any affirmative approval, consent, authorization or other
order or action of any court, governmental authority, regulatory body, creditor
or any other person; or (c) give any party with rights under any such agreement,
mortgage, security agreement, judgment, order, award, decree or other instrument
or restriction the right to terminate, modify or otherwise change the rights or
obligations of Medtronic thereunder.

     6.3)  No Finders.  No act of Medtronic has given or will give rise to any
           ----------
valid claim against any of the parties hereto for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement.

                                   ARTICLE 7
                                Indemnification
                                ---------------

     7.1)  Indemnification by Cardima.  Cardima shall indemnify, defend and hold
           --------------------------
harmless Medtronic, its Affiliates and Medtronic's and its Affiliates'
respective officers, directors, shareholders, employees and agents
(collectively, all such indemnitees are referred to in this Section 7.1 as
"Medtronic Indemnitees") against and in respect of any and all claims, demands,
losses, obligations, liabilities, damages, deficiencies, actions, settlements,
judgments, costs and expenses (including reasonable costs and legal fees
incident thereto or in seeking indemnification therefore) ("Losses") which the
Medtronic Indemnitees may incur or suffer or with which it may be faced arising
out of or based upon (i) any product liability or other claims resulting from
Cardima's past, present and/or future development, manufacture, use, or sale of
any device or product or the past, present and/or future conduct of Cardima's
business, or (ii) any material breach of this Agreement by Cardima.
Notwithstanding the foregoing, the indemnification provided for herein shall not
apply to the extent that the Losses of an indemnified party are due to such
party's negligence, recklessness or willful misconduct.

     7.2)  Indemnification by Medtronic.  Medtronic shall indemnify and hold
           ----------------------------
harmless Cardima, its Affiliates and Cardima's and its Affiliates' respective
officers, directors, shareholders, employees and agents (collectively, all such
indemnitees are referred to in this Section 7.2 as "Cardima Indemnitees")
against and in respect of any and all demands, losses, obligations, liabilities,
damages, deficiencies, actions, settlements, judgments, costs and expenses which
the Cardima Indemnitees may incur or suffer or with which it may be faced
(including reasonable costs and legal fees incident thereto or in seeking
indemnification therefor) ("Losses") arising out of or based upon (i) any
product liability or other claims resulting from Medtronic's past, present
and/or future development, manufacture, use or sale of any device or product or
the past, present and/or future conduct of Medtronic's business, or (ii) any
material breach of this Agreement by Medtronic. Notwithstanding the foregoing,
the indemnification provided for herein shall not apply to the

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

                                      -8-
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extent that the Losses of an indemnified party are due to such party's
negligence, recklessness or willful misconduct.

     7.3)  Third Party Claims.  If a claim by a third party is made against an
           ------------------
indemnified party and if the indemnified party intends to seek indemnity with
respect thereto under this Article 7, such indemnified party shall promptly
notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party so long
as the failure to give timely notice does not adversely affect the indemnifying
party's ability to defend such claim against a third party.  The indemnified
party shall not settle such claim without the consent of the indemnifying party,
which consent shall not be unreasonably withheld or delayed.  The indemnifying
party may participate at its own cost and expense in the settlement or defense
of any claim for which indemnification is sought.

                                   ARTICLE 8
                            [Intentionally Deleted]
                            -----------------------

                                   ARTICLE 9
                                Other Provisions
                                ----------------

     9.1)  Approvals and Consents.  Cardima will obtain all necessary third
           ----------------------
party consents, releases of Liens or other approvals which may be necessary on
the part of Cardima to consummate the sale of Intellectual Property to Medtronic
pursuant to this Agreement, including, but not limited to, the Bank Release as
referenced in Section 5.1.

     9.2)  Confidentiality.  The parties acknowledge that the patent
           ---------------
applications listed in Exhibit A hereto and included within the Intellectual
Property, the inventions claimed therein, and all trade secrets and know-how
included within the Intellectual Property constitute "Confidential Information"
of Medtronic.  Cardima agrees not to disclose or use any Medtronic Confidential
Information except as expressly permitted in connection with the exercise of its
rights hereunder.  Cardima shall not disclose Medtronic Confidential Information
to any employee or consultant unless such employee or consultant is obligated
under a confidentiality agreement to maintain such Medtronic Confidential
Information in strict confidence, and not to use such information other than, in
accordance with the terms of this Agreement.  Cardima agrees to hold the
Medtronic Confidential Information in strict confidence and treat it with not
less than the same degree of care to avoid disclosure as Cardima employs with
respect to Cardima's information of like importance.  Nothing contained in this
Section 9.2 shall be construed to limit or modify the terms of that certain
Confidential Disclosure Agreement dated as of September 14, 2000 (the "CDA"), by
and between Medtronic and Cardima and in the event of a conflict between the
provisions of this Section 9.2 and the CDA, the terms of the CDA shall control.

     9.3)  Successors and Assigns.  Cardima may assign or transfer its rights
           ----------------------
and obligations hereunder as set forth in Section 3.2.  Any prohibited
assignment or transfer shall be null and void.  Medtronic may assign or
otherwise transfer its rights and obligations under this Agreement to any
successor in interest (by merger, share exchange, sale or issuance of stock,
sale or other transfer of assets, combination or consolidation of any type,
operation of law, purchase, assignment or otherwise), provided that such
assignee or successor agrees to be bound by the terms hereof.

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

                                      -9-
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     9.4)  Further Assistance.  Cardima shall fully cooperate with Medtronic
           ------------------
concerning identification and delivery to Medtronic of the Intellectual
Property.  In addition, Cardima shall, at the request of Medtronic and without
further consideration, execute and deliver such further instruments or perform
such acts as Medtronic may reasonably request in order more effectively to
transfer, evidence, reduce to possession, record title to, protect, or prosecute
Medtronic's rights in the Intellectual Property or under this Agreement.

     9.5)  Complete Agreement.  This Agreement and any Exhibits hereto,
           ------------------
constitute the entire agreement between the parties hereto with respect to the
subject matter hereof and supersede all previous proposals or agreements, oral
or written, and all negotiations, conversations or discussions heretofore had
between the parties related to the subject matter of such agreements.

     9.6)  Survival of Representations and Warranties.  The representations and
           ------------------------------------------
warranties contained in this Agreement shall survive and remain in full force
and effect for eighteen (18) months from the date of this Agreement, except with
respect to the representations and warranties contained in Section 5.3 hereof
which shall survive until the expiration of the life of the particular
Intellectual Property right at issue.   No independent investigation of Cardima
by Medtronic, its counsel, or any of its agents or employees shall in any way
limit or restrict the scope of the representations, warranties, and agreements
made by Cardima in this Agreement.

     9.7)  Waiver, Discharge, Amendment, Etc.  The failure of any party hereto
           ---------------------------------
to enforce at any time any of the provisions of this Agreement shall in no way
be construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of the party
thereafter to enforce each and every such provision.  No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated, nor may any waiver, permit, consent or approval of any kind or
character on the part of any party be effective against such party, other than
by a written instrument signed by the party against whom enforcement of such
amendment, waiver, discharge, termination, permit, consent or approval is sought
and expressly stating the extent to which such instrument shall be an amendment,
waiver, discharge, termination, permit, consent or approval relating to this
Agreement.

     9.8)  Notices.  All notices or other communications to a party required or
           -------
permitted hereunder shall be in writing and shall be delivered personally or by
facsimile (upon appropriate electronic confirmation of successful transmission
thereof to such party (or, in the case of an entity, to an executive officer of
such party) or shall be given by certified mail, postage prepaid with return
receipt requested, addressed as follows:

if to Medtronic to:

     Medtronic, Inc.
     Corporate Center
     7000 Central Avenue N.E.
     Minneapolis, Minnesota 55432

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

                                      -10-
<PAGE>

     with separate copies thereof addressed to:
          Attention:  General Counsel
                      Fax:  (763) 572-5459
     and
          Attention:  Vice President and Chief Development Officer
                      Fax:  (763) 572-5404

and if to Cardima, to:

     Cardima, Inc.
     47266 Benicia Street
     Fremont, CA 94538
     Attention:  Chief Executive Officer

     with a copy to:

     Pillsbury Madison & Sutro LLP
     50 Fremont Street
     San Francisco, CA 94105
     Attention:  Thomas E. Sparks, Jr.

     Any party may change the above-specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed.  All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by facsimile) or on the day shown on the
return receipt (if delivered by mail).

     9.9)  Public Announcement.  In the event any party proposes to issue any
           -------------------
press release or public announcement concerning any provisions of this Agreement
or the transactions contemplated hereby, such party shall so advise the other
parties hereto, and the parties shall thereafter use all commercially reasonable
efforts to cause a mutually agreeable release or announcement to be issued.
Except as otherwise required by law or applicable stock exchange regulations,
neither party will publicly or privately disclose or divulge any provisions of
this Agreement or the transactions contemplated hereby without the other party's
written consent.

     9.10)  Expenses.  Each party hereto shall pay its own expenses incident to
            --------
the negotiations and preparation of this Agreement and the consummation of the
transactions provided for herein.

     9.11  Governing Law.  This Agreement shall be governed by and interpreted
           -------------
in accordance with the laws of the State of Minnesota, including all matters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws.

     9.12)  Arbitration.  Any dispute arising out of or relating to this
            -----------
Agreement, including the formation, interpretation or alleged breach hereof,
shall be settled in accordance with the Alternative Dispute Resolution
provisions in Exhibit D attached hereto.  The results of such

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

                                      -11-
<PAGE>

arbitration proceedings shall be binding upon the parties hereto, and judgment
may entered upon the arbitration award in any court having jurisdiction thereof.
Notwithstanding the foregoing, either party may seek interim injunctive relief
from any court of competent jurisdiction.

     9.13)  Titles and Headings; Construction.  Titles and headings to Sections
            ---------------------------------
herein are inserted for convenience of reference only and are not intended to
affect the meaning or interpretation of this Agreement.  This Agreement shall be
construed without regard to any presumption or other rule requiring construction
hereof against the party causing this Agreement to be drafted.

     9.14)  Benefit.  Nothing in this Agreement, expressed or implied, is
            -------
intended to confer on any person other than the parties hereto or their
respective permitted successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

     9.15)  Independent Contractors.  The parties hereto are independent
            -----------------------
contractors and nothing contained in this Agreement shall be deemed or construed
to create the relationship of a partnership or joint venture or of any
association or relationship between the parties.  Medtronic and Cardima
acknowledge that they do not have the authority to make and shall not make any
representation to any third party, either directly or indirectly, indicating
that they have the authority to act for or on behalf of the other party or to
obligate the other party in any manner whatsoever.

     9.16)  Counterparts.  This Agreement may be executed in any number of
            ------------
counterparts, each of which shall be deemed as original and all of which
together shall constitute one instrument.

     9.17)  Severability.  If a court of competent jurisdiction holds any
            ------------
provision of this Agreement invalid, the remaining provisions shall nonetheless
be enforceable according to their terms.  Further, if any provision is held to
be overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable according
to applicable Law and shall be enforced as amended.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

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

                                      -12-
<PAGE>

     IN WITNESS WHEREOF, each of the parties has caused this Acquisition
Agreement to be executed in the manner appropriate for each, as of the day and
year first above written.

                                     MEDTRONIC, INC.

                                     By:  /s/ Michael D. Ellwein
                                          ----------------------
                                     Its:  Vice President and CDC
                                           ----------------------

                                     CARDIMA, INC.

                                     By:  /s/ Gabriel B. Vegh
                                          -------------------
                                     Its:  President and CEO
                                           -----------------

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

                                      -13-
<PAGE>

                                   Exhibit A
                                   ---------

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------
                                         U.S. Patents
                                         ------------
      Patent No.              Issue Date                  Title                  Inventors
      ----------              ----------                  -----                  ---------
-------------------------------------------------------------------------------------------------
<C>                     <S>                      <C>                      <C>
       * * *                  * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
       * * *                 * * *                 * * *                    * * *

-------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                    U.S. Patent Applications
                                    ------------------------
-------------------------------------------------------------------------------------------------
      Serial No.              Filing Date                 Title                  Inventors
      ----------              -----------                 -----                  ---------
-------------------------------------------------------------------------------------------------
<S>                     <C>                      <C>                      <C>
        * * *                  * * *                       * * *                   * * *
-------------------------------------------------------------------------------------------------
</TABLE>

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

                                      -14-
<PAGE>

<TABLE>
<CAPTION>
                              U.S. Provisional Patent Applications
                              ------------------------------------
-------------------------------------------------------------------------------------------------
      Serial No.              Filing Date                 Title                  Inventors
      ----------              -----------                 -----                  ---------
-------------------------------------------------------------------------------------------------
<S>                     <C>                      <C>                      <C>
                                 * * *                     * * *                    * * *
-------------------------------------------------------------------------------------------------
</TABLE>

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

                                      -15-
<PAGE>

                                   Exhibit B
                                   ---------

                    COPYRIGHTS, TRADEMARKS AND SERVICE MARKS

                                     None.

                                      -16-
<PAGE>

                                   Exhibit C
                                   ---------

                              DESIGNATED EMPLOYEES

                                 Victor Barjas
                                   Eric Chan

(and any 2 direct or indirect reports of each of the foregoing to be designated
by Medtronic after consulting with the foregoing prior to any visit to Cardima's
                              facilities)

                                      -17-
<PAGE>

                                   Exhibit D
                                   ---------

                         ALTERNATIVE DISPUTE RESOLUTION

     1)  Negotiations.  If any dispute arises between Medtronic and Cardima with
         ------------
respect to the Acquisition Agreement or any alleged breach thereof, any party
may, by written notice to the other party, have such dispute referred to their
respective designees listed below or their successors for attempted resolution
by good faith negotiations within 30 days after such notice is received.  Such
designees are as follows:

          For Cardima - the President of Cardima or his/her designee

          For Medtronic - the President of Medtronic, Inc.'s business unit to
          which the Agreements relate, or his/her designee

Any settlement reached by the parties under this Section 1 shall not be binding
until reduced to writing and signed by the above-specified designees of Cardima
and Medtronic.  When reduced to writing, such settlement agreement shall
supersede all other agreements, written or oral, to the extent such agreements
specifically pertain to the matters so settled.  If the designees are unable to
resolve such dispute within such 30-day period, any party may invoke the
provisions of Section 2 below.

     2)  Arbitration.  All claims, disputes, controversies, and other matters in
         -----------
question arising out of or relating to the Acquisition Agreement, including
claims for Indemnifiable Losses and disputes regarding the making of the
Acquisition Agreement, including claims of fraud in the inducement, or to the
alleged breach hereof, shall be settled by negotiation between the parties as
described in Section 1 above or, if negotiation is unsuccessful, by binding
arbitration in accordance with procedures set forth in Section 3 and 4 below.

     3)  Notice.  Notice of demand for binding arbitration shall be given in
         ------
writing to the other party and shall be delivered personally or by facsimile
(receipt confirmed) to an executive officer of such party or shall be sent by a
reputable express delivery service or by certified mail, postage prepaid with
return receipt requested, addressed as follows:

if to Medtronic to:

     Medtronic, Inc.
     Corporate Center
     7000 Central Avenue N.E.
     Minneapolis, Minnesota 55432

     with separate copies thereof addressed to:
          Attention:  General Counsel
                      Fax:  (763) 572-5459

     and

                                      -1-
<PAGE>

          Attention:  Vice President and Chief Development Officer
                      Fax:  (763) 572-5404

and if to Cardima, to:

     Cardima, Inc.
     47266 Benicia Street
     Fremont, CA 94538
     Attention:  Chief Executive Officer

     with a copy to:

     Pillsbury Madison & Sutro LLP
     50 Fremont Street
     San Francisco, CA 94105
     Attention:  Thomas E. Sparks, Jr.

Any party may change the above-specified recipient and/or mailing address by
notice to the other party given in the manner herein prescribed.  All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally or by facsimile (upon appropriate electronic confirmation
of successful transmission)) or on the day shown on the return receipt (if
delivered by mail or delivery service).   In no event may a notice of demand of
any kind be filed more than two years after the date the claim, dispute,
controversy, or other matter in question was asserted by one party against
another, and if such demand is not timely filed, the claim, dispute,
controversy, or other matter in question referenced in the demand shall be
deemed released, waived, barred, and unenforceable for all time, and barred as
if by statute of limitations.

     4)  Binding Arbitration.  Upon filing of a notice of demand for binding
         -------------------
arbitration by any party hereto, arbitration shall be commenced and conducted as
follows:

         (a) Arbitrators.  All claims, disputes, controversies, and other
             -----------
     matters (collectively "matters") in question shall be referred to and
     decided and settled by a standing panel of three independent arbitrators,
     one selected by each of Cardima and Medtronic's representative and the
     third by the two arbitrators so selected. The third shall be a former judge
     of one of the U.S. District Courts or one of the U.S. Court of Appeals or
     such other classes of persons as the parties may agree. Selection of
     arbitrators shall be made within 30 days after the date of the first notice
     of demand given pursuant to Section 3 and within 30 days after any
     resignation, disability or other removal of such arbitrator. Following
     appointment, each arbitrator shall remain a member of the standing panel,
     subject to removal for just cause or resignation or disability; provided,
     however, an arbitrator can be removed by the party who appointed the
     arbitrator, or in the case of the third arbitrator, by either party for any
     reason at any time when no matter is in arbitration.

         (b) Cost of Arbitration.  The cost of each arbitration proceeding,
             ------------------
     including

                                      -2-
<PAGE>

     without limitation the arbitrators' compensation and expenses, hearing room
     charges, court reporter transcript charges etc., shall be borne by the
     party whom the arbitrators determine has not prevailed in such proceeding,
     or borne equally by the parties if the arbitrators determine that neither
     party has prevailed. The arbitrators shall also award the party that
     prevails substantially in its pre-hearing position its reasonable
     attorneys' fees and costs incurred in connection with the arbitration. The
     arbitrators are specifically instructed to award attorneys' fees for
     instances of abuse of the discovery process.

          (c) Location of Proceedings.  All arbitration proceedings shall be
              -----------------------
     held in Minneapolis, Minnesota unless the parties agree otherwise.

          (d) Pre-hearing Discovery.  The parties shall have the right to
              ---------------------
     conduct and enforce pre-hearing discovery in accordance with the then
     current Federal Rules of Civil Procedure, subject to these limitations:
     Document discovery and other discovery shall be under the control of and
     enforceable by the arbitrators. The arbitrators shall permit and facilitate
     such other discovery as they shall determine is appropriate under the
     circumstances, taking into account the needs of the parties and the
     desirability of making discovery expeditious and cost effective. The
     arbitrators shall decide discovery disputes. The arbitrators are empowered:

              (i)   to issue subpoenas to compel pre-hearing document or
          deposition discovery;

              (ii)  to enforce the discovery rights and obligations of the
          parties; and

              (iii) to otherwise control the scheduling and conduct of the
          proceedings.

          Notwithstanding any contrary foregoing provisions, the arbitrators
     shall have the power and authority to, and to the fullest extent
     practicable shall, abbreviate arbitration discovery in a manner that is
     fair to all parties in order to expedite the arbitration proceeding and
     render a final decision within six months after the pre-hearing conference.

          (e) Pre-hearing Conference.  Within 45 days after filing of notice of
              ----------------------
     demand for binding arbitration, the arbitrators shall hold a pre-hearing
     conference to establish schedules for completion of discovery, for exchange
     of exhibit and witness lists, for arbitration briefs, for the hearing, and
     to decide procedural matters and all other questions that may be presented.

          (f) Hearing Procedures.  The hearing shall be conducted to preserve
              ------------------
     its privacy and to allow reasonable procedural due process. Rules of
     evidence need not be strictly followed, and the hearing shall be
     streamlined as follows:

              (i)  Documents shall be self-authenticating, subject to valid
          objection by the opposing party;

                                      -3-
<PAGE>

              (ii)  Expert reports, witness biographies, depositions, and
          affidavits may be utilized, subject to the opponent's right of a live
          cross-examination of the witness in person;

              (iii) Charts, graphs, and summaries shall be utilized to present
          voluminous data, provided (i) that the underlying data was made
          available to the opposing party 30 days prior to the hearing, and (ii)
          that the preparer of each chart, graph, or summary is available for
          explanation and live cross-examination in person;

              (iv)  The hearing should be held on consecutive business days
          without interruption to the maximum extent practicable; and

              (v)   The arbitrators shall establish all other procedural rules
          for the conduct of the arbitration in accordance with the rules of
          arbitration of the Center for Public Resources.

          (g) Governing Law.  This arbitration provision shall be governed by,
              -------------
     and all rights and obligations specifically enforceable under and pursuant
     to, the Federal Arbitration Act (9 U.S.C. (S) 1 et seq.) and the laws of
                                                     -- ---
     the State of Minnesota shall be applied, without reference to the choice of
     law principles thereof, in resolving matters submitted to such arbitration.

          (h) Consolidation.  No arbitration shall include, by consolidation,
              -------------
     joinder, or in any other manner, any additional person not a party to this
     Agreement (other than affiliates of any such party, which affiliates may be
     included in the arbitration), except by written consent of the parties
     hereto containing a specific reference to this Agreement.

          (i) Award.  The arbitrators shall be required to render their final
              -----
     decision within six months after the pre-hearing conference.  The
     arbitrators are empowered to render an award of general compensatory
     damages and equitable relief (including, without limitation, injunctive
     relief), but are not empowered to award punitive or presumptive damages.
     The award rendered by the arbitrators (1) shall be final; (2) shall not
     constitute a basis for collateral estoppel as to any issue; and (3) shall
     not be subject to vacation or modification, except in the event of fraud or
     gross misconduct on the part of the arbitrators.

          (j) Confidentiality.  The parties hereto will maintain the substance
              ---------------
of any proceedings hereunder in confidence and make disclosures to others only
to the extent necessary to properly conduct the proceedings.

                                      -4-Exhibit 4.1

                                (Graphic Omitted)

Number                                                                    Shares
-17-

                             KETTLE RIVER GROUP INC.
                 25,000,000 SHARES AUTHORIZED, PAR VALUE $0.001
               Incorporated under the laws of the State of Nevada

THIS  CERTIFIES  THAT  __________________________________________________is  the
Registered  holder  of  __________________________________________________shares
of the above Corporation, fully paid and non-assessable and transferable only on
the  books of the Corporation by the holder hereof in person or by Attorney upon
surrender  of  this  Certificate  properly  endorsed.

IN  WITNESS  WHEREOF,  the  said  Corporation  has caused this Certificate to be
signed  by  its  duly  authorized  officers and its Corporate Sal to be hereunto
affixed
          this ______________ day of ___________________ A.D. _____________

_______________________________                       __________________________
         President                                            Secretary

<PAGE>
     For  Value  Received,  ____________  hereby  sell,  assign  and  transfer
unto____________________________________________________________________________
_________________________________________________________________________ Shares
represented by the within Certificate , and do hereby irrevocably constitute and
appoint  _____________________________________________________________  Attorney
to  transfer  the  said Shares on the books of the within named Corporation with
full  power  of  substitution  in  the  premises.

     Dated  ____________________________________
     In  presence  of  ___________________________________________

NOTICE:  THE  SIGNATURE  OF  THIS  ASSIGNMENT  MUST  CORRESPOND WITH THE NAME AS
WRITTEN  UPON  THE  FACE  OF  THE  CERTIFICATE,  IN  EVERY  PARTICULAR,  WITHOUT
ALTERATION  OR  ENLARGEMENT,  OR  ANY  CHANGE  WHATEVER.

<PAGE>

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