EXCLUSIVE DISTRIBUTION AGREEMENT

     THIS AGREEMENT is made effective the 25th day of January, 2000, by and
between Daig Corporation, a Minnesota Corporation whose principal place of
business is at 14901 DeVeau Place, Minnetonka, Minnesota ("Distributor") and
Cardima Incorporated whose principal place of business is at 47266 Benicia St.,
Fremont, California ("Manufacturer").

     The Parties, intending to be legally bound, agree as follows:

1.   DISTRIBUTORSHIP TERMS

     1.01  Appointment and Acceptance. Manufacturer hereby appoints Distributor
     as its exclusive distributor of Products in the Territory. Distributor
     accepts this appointment. Manufacturer shall not directly or indirectly
     sell or offer to sell any of the Products in the Territory to any third
     party. In the event Manufacturer receives requests for information relating
     to, or purchase orders for, Products from customers or potential customers
     within the Territory, Manufacturer shall promptly forward such requests or
     orders to Distributor. Distributor shall have the right to appoint sub-
     distributors at its discretion.

     1.02 Products Defined. Products are those described in Schedule A
     (including all modifications, new versions or replacements therefor),
     together with such other electrophysiology catheter products and
     accessories intended for diagnostic use that Manufacturer develops during
     the term of this Agreement in the Field of Use. Distributor acknowledges
     that the Products shall not include any electrophysiology catheter products
     that are intended primarily for therapeutic use. In the event that the
     overall unit sales of Distributor exceed the original forecasts given to
     Manufacturer by Distributor (attached as Schedule E) for any calendar year
     by ***** or greater, Manufacturer may increase the transfer price of the
     Products to Distributor by five (5) percentage points for the following
     calendar year (e.g. if the then current transfer price is ***** off list
     price, the transfer price may be increased to ***** off list price). This
     increase may be taken one time only. All price increases thereafter shall
     be governed by Section 2.03 herein below.

     1.03  Territory Defined. The Territory is defined to be the United States
     of America (including its territories and possessions), exclusive only of
     hospitals in the states of ***** and ***** with ship to addresses
     containing the zip codes outlined in Schedule B. During the term of this
     Agreement, Distributor shall have the first right of refusal at its option
     to expand the Territory in order to distribute the Products on an exclusive
     basis in all other countries of the world. Manufacturer shall give
     Distributor written notice and the terms under which it intends to permit
     distribution, or the terms of any offer or request from a third party for
     rights to distribute, any of the Products in any country not then included
     in the Territory. Distributor shall accept or reject such offer in writing
     within thirty (30) days after receipt thereof, and, if Distributor accepts
     such offer, the Territory shall be

_________
Confidential treatment has been requested with respect to certain portions of
this agreement. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as *****. A complete version
of this exhibit has been filed separately with the Securities and Exchange
Commission.
<PAGE>

     appropriately expanded.

     1.04  Field of Use Defined.  The Field of Use is catheter-based cardiac
     electrophysiology.

     1.05 Manufacturing Materials Defined. Manufacturing Materials shall mean
     all items necessary for Distributor or Distributor's designated party to
     manufacture and sell the Products, including, but not be limited to: design
     specifications and documents; manufacturing specifications, procedures and
     documents; quality assurance and quality control procedures and documents;
     written transfer of regulatory documents such as 510(k) approvals and other
     approvals such as CE marks, to the extent permitted; rights to all patents,
     trademarks, trade secrets and confidential information, worldwide;
     specifications for all equipment used in the manufacture of the Products;
     and, text specifications for all labeling and packaging.

     1.06 No Activities Outside the Territory. Distributor shall not solicit
     sales of Product or promote the sale of Products outside the Territory.
     Distributor shall not establish an office or warehouse outside the
     Territory for the sale of Products.

     1.07 Distributor's Right to Distribute Other Products. During the term of
     this Agreement and afterwards, Distributor shall have the right to
     manufacture, market, distribute and sell any and all products in the
     Territory, regardless of whether such products compete with the Products.

2.   PRICES AND TERMS

     2.01 Prices. Manufacturer shall sell Products to Distributor in such
     quantities and at such times as Distributor may reasonably request.
     Distributor shall submit written orders to Manufacturer. Manufacturer
     shall, at Distributor's option, ship directly to Distributor or a
     purchasing customer(s) at the ship to address provided by Distributor.
     Product pricing is contained in Schedule A. Shipping terms and credit terms
     are listed on Schedule C.

     2.02 Claim for Shortage. Distributor shall submit in writing to
     Manufacturer all claims for shortages in shipments within thirty (30)
     business days of receipt of notice by customers of a shortage.

     2.03 Price Changes. Manufacturer may change the list price of Products only
     once a year on the anniversary of the Agreement, subject to consultation
     with Distributor in advance, by giving Distributor written notice sixty
     days in advance of such price change. Manufacturer list price increases to
     Distributor of greater than 2% for any given Product in a given year must
     be by mutual consent, unless Manufacturer's average selling price ("ASP")
     for any product over the course of the prior year has increased by more
     than 2% in which case the Distributor price increase may equal 75% of the
     relevant ASP percentage increase.
<PAGE>

     2.04  Return Policy.  Manufacturer's return policy is contained in
     Schedule C.

     2.05 Promotional Material. Non-sterile product samples and promotional
     materials shall be made available to Distributor by Manufacturer at prices
     outlined in Schedule D. New materials may be developed and added to this
     list of available promotional materials from time to time. Upon purchase,
     these materials become property of Distributor.

     2.06 Resale Prices. Distributor shall solely determine the prices at which
     it resells the Products in the Territory.

     2.07 Governing Document. This Agreement, together with its Schedules, shall
     supersede any conflicting or additional terms used by Manufacturer or
     Distributor in the ordering, shipment and receiving of Products, unless
     such terms have been agreed to in writing by the parties.

3.   DISTRIBUTOR'S DUTIES

     3.01 Distributor's Efforts. Distributor shall use commercially reasonable
     efforts to promote the sale of Products in the Territory. Distributor shall
     not knowingly detract from the good name of Manufacturer or the reputation
     of Products.

     3.02 Payment of Account. Distributor shall promptly pay its account with
     Manufacturer when due. Terms are net 30 days due, with 1.5% per month late
     fee on past due invoices.

     3.03 Sales Quotas. Distributor shall maintain its exclusive right to
     distribute the Products in the Territory so long as the minimum purchase
     quotas established in Schedule E are met or exceeded in each year of the
     Agreement. If Distributor fails to meet the minimum purchase quotas in the
     first year or in any given six month period thereafter, then Manufacturer
     shall give Distributor written notice of such failure, and Distributor
     shall have ninety (90) days after its receipt of such notice to correct
     such failure (i.e., through submission of purchase orders to Manufacturer
     for additional units of the Products). If Distributor fails to correct such
     failure in a timely manner, then Manufacturer shall have the option to
     convert Distributor's appointment granted in Section 1.1 hereof to a non-
     exclusive appointment in the Territory, notwithstanding anything to the
     contrary in Section 1.1, provided that Manufacturer gives Distributor
     written notice of such conversion within thirty (30) days.

     3.04  Compliance With Law. Distributor shall comply with all laws and
     regulations affecting its business.

     3.05 Recalls. In the event Manufacturer recalls any Products sold by
     Distributor in the Territory, Distributor shall reasonably assist
     Manufacturer with such recall. Manufacturer agrees to give prompt notice to
     Distributor in the event that Manufacturer recalls any
<PAGE>

     Product, or ceases or suspends the sale of any Product due to any problem
     which relates to such Product's efficacy or patient safety. Manufacturer
     shall reimburse Distributor for reasonable expenses incurred by Distributor
     at the request of Manufacturer to effect a recall, and the value of all
     Products purchased by Distributor and recalled shall count towards the
     minimum purchase quotas described in Section 3.03. In order to assist
     Manufacturer in the event of a recall, Distributor shall maintain a
     complete and current listing of the locations of all sterile Products in
     Distributor's inventory, and the names of customers who have purchased
     Products from Distributor. Manufacturer shall maintain a complete and
     current listing of the locations of all sterile Products in Manufacturers
     inventory, and the names of customers who have received shipments from
     Manufacturer, together with the reorder numbers, lot numbers or other
     identifying characteristics of Products purchased and the date of such
     purchase.

     3.06  Traceability. Distributor shall comply with all reasonable
     traceability programs of Manufacturer to the extent it is apprised of them
     by Manufacturer.

     3.07  Training. Distributor shall be responsible for training all of its
     personnel who promote Products so that they are knowledgeable about the
     Products and can adequately represent the Products. Manufacturer shall
     cooperate in effecting such training.

     3.08  Product Warranty. Manufacturer hereby authorizes Distributor to pass
     on the Manufacturer standard warranty set forth in Schedule C to
     Distributor's customers in the Territory. In addition, Manufacturer
     warrants to Distributor that the Products purchased by Distributor shall be
     in saleable condition with a minimum of eighteen (18) months shelf life
     from the date of shipment (based on the present understanding that the
     total shelf life for the Product from the date of manufacturer currently is
     twenty-four (24) months). In the event that Manufacturer receives approval
     from authorities for a shelf life for the Product from the date of
     manufacture in excess of twenty-four (24) months (the "Date of Manufacture
     Shelf Life"), Manufacturer agrees that it shall warrant that Product
     purchased by Distributor shall be in a saleable condition with a minimum
     shelf life from the date of shipment of no less than the lessor of thirty-
     six (36) months or six (6) months less than the Date of Manufacture Shelf
     Life.

     3.09  Distributor's Expenses. All costs, including salaries, commissions,
     bonuses, contributions to social security or other welfare system payments,
     benefits, severance pay and other expenses incurred by Distributor in
     connection with its performance of this Agreement shall be borne solely by
     Distributor.

     3.10  Non Binding Forecast. At the end of each calendar quarter,
     Distributor shall provide Manufacturer with a non-binding forecast of
     Distributor's purchases for the next four quarters .

4.   OBLIGATIONS OF MANUFACTURER

     4.01  Compliance with Laws. Manufacturer shall comply with the laws and
     regulations
<PAGE>

     which govern its business.

     4.02  Insurance. Manufacturer shall carry reasonable amounts of insurance,
     whether through self-insurance or otherwise, to cover its responsibilities
     with respect to indemnification under Section 7 below. Distributor shall
     have the right to examine the policies of insurance of Manufacturer upon
     request.

     4.03  Regulatory Registrations and Approvals. Manufacturer shall obtain and
     maintain all regulatory authorizations required for the sale of the
     Products in all countries in the Territory as requested by Distributor, and
     Manufacturer shall be responsible for all costs and expenses incurred in
     this regard. Manufacturer shall make available to Distributor complete
     copies of all applications and all registrations and approvals obtained
     therefrom relating to the Products and provide Distributor with any other
     information or material it requests to enable Distributor to sell the
     Products in the Territory.

     4.04  Quality Control/Product Complaints. Manufacturer agrees to maintain
     ongoing quality assurance and testing procedures sufficient to satisfy
     applicable regulatory requirements. Manufacturer shall be responsible for
     responding to all product complaints, including whatever response may be
     required to any governmental or certification authority, subject to the
     reasonable cooperation of Distributor as set forth in Section 3.06 hereof.

     4.05  Scientific and Technical Information Manufacturer shall provide to
     Distributor scientific and technical information available to Manufacturer
     and required to obtain registrations, licenses, and permits required for
     the sale and distribution of Products in the Territory, or to respond to
     inquiries from customers, or governmental or regulatory authorities.

     4.06  Training. Manufacturer shall provide training for Distributor's
     employees and sub-distributors relating to the use and application of the
     Products. Such training shall be conducted at least once per year, if
     requested by Distributor, and shall be provided without charge to
     Distributor. Notwithstanding the above, all expenses incurred by
     Distributor's personnel in connection with such training, including,
     without limitation, travel and housing expenses, shall be borne by
     Distributor.

     4.07  Support. Manufacturer, at its own expense, and as deemed reasonable
     by Manufacturer, shall provide consultation to Distributor in a timely
     fashion concerning technical aspects and use of the Products as requested
     by Distributor.

     4.08  Telephone Service. Manufacturer shall provide a telephone number in
     the United States during Manufacturer's normal business hours for
     Distributor's use in placing telephone orders and in obtaining telephone
     advice and support from Manufacturer regarding the Products.
<PAGE>

5.   TRADEMARKS

     5.01  Use of Manufacturer's Trademarks. Manufacturer hereby grants to
     Distributor, and Distributor accepts from Manufacturer, a non-exclusive,
     royalty-free, sublicensable right and license, during the term of this
     Agreement, to indicate to the public that it is an authorized distributor
     of the Products and to advertise only within the Territory such Products
     under the trademarks and trade names that Manufacturer may adopt from time
     to time ("Manufacturer Trademarks"). Distributor shall not alter or remove
     any Manufacturer Trademarks applied to the Products by Manufacturer.
     Nothing herein shall grant to Distributor any right, title, or interest in
     Manufacturer Trademarks, subject to the foregoing limited license. Upon
     termination of this Agreement, Distributor shall cease using all trademarks
     of Manufacturer.

     5.02  Distributor's Use of Trademark. Distributor shall use Manufacturer
     Trademarks only in the manner authorized by Manufacturer.

6.   CONFIDENTIAL INFORMATION

     6.01  Confidentiality. The parties acknowledge that by reason of their
     relationship to each other hereunder, each shall have access to certain
     information and materials concerning the other's business, plans,
     customers, technology, and/or products that is confidential and of
     substantial value to that party, which value would be impaired if such
     information were disclosed to third parties. Except as required in order to
     perform its obligations hereunder, each party agrees that it shall not use
     in any way for its own account or the account of any third party, nor
     disclose to any third party, any such confidential information revealed to
     it by the other party and shall take every reasonable precaution to protect
     the confidentiality of such information during the term of this Agreement
     and for one (1) year thereafter. Each party shall advise the other whether
     or not it considers any particular information or materials to be
     confidential by marking on it "Confidential", "Proprietary" or some similar
     designation.

     6.02  Confidentiality Exceptions. The provisions of Section 6.01 shall not
     apply to confidential information to the extent that:

           (i)  such information was generally known or otherwise in the public
                domain prior to to disclosure hereunder, or becomes so known
                subsequent to such disclosure through no fault of the receiving
                party;

          (ii)  such information was received without restriction from a third
                party not under an obligation to the non-receiving party not to
                disclose it and otherwise not in violation of the non-receiving
                party's rights; or

         (iii)  such information is disclosed pursuant to the order or
                requirement of a court, administrative agency, or other
                governmental body; provided,
<PAGE>

                however, that the disclosing party shall provide prompt notice
                thereof to the non-disclosing party to enable such party to seek
                a protective order or otherwise prevent such disclosure.

           (iv) such information was developed independently by the parties
                without use of the confidential information of the disclosing
                party.

            (v) such information was known by a party prior to its disclosure by
                the other party.

     6.03  Publications. Except as required by law or regulation, or as provided
     herein, no announcement, news release, public statement, publication, or
     presentation relating to the existence of this Agreement, the subject
     matter herein, or either party's performance hereunder (collectively, a
     "Publication") shall be made without the other party's prior written
     approval. Each party agrees to submit each Publication it proposes to make
     to the other party for purposes of such other party's review, comment and
     approval. Each party further agrees to respond as promptly as reasonably
     practicable and agrees that it shall not unreasonably withhold approval of
     such Publication. The parties agree that they shall use reasonable efforts
     to coordinate the initial announcement or press release relating to the
     existence of this Agreement so that such initial announcement or press
     release by each is made contemporaneously. The parties recognize that
     researchers may publish research findings concerning the Products and that
     neither Distributor or Manufacturer may have power to approve the contents
     of such publication even when Distributor and/or Manufacturer participate
     in the funding of such research.

     6.04  Use of Names. Except as provided in Section 5.1, neither party shall,
     without the prior written consent of the other party, use in advertising,
     publicity, promotional materials or otherwise, any tradename, trademark,
     trade device, service mark, symbol, or any abbreviation, contraction or
     simulation thereof owned by the other party.

7.   INDEMNIFICATION; DISCLAIMERS OF LIABILITY

     7.01  Notwithstanding any other provisions of this Agreement, Manufacturer
     shall indemnify and hold harmless Distributor and its affiliated companies,
     and their respective officers, directors, employees, agents,
     subdistributors and customers (collectively, the "Indemnitees"), from and
     against all costs, expenses, claims, demands, causes of action, damages and
     judgements, including without limitation attorney's fees whether or not
     suit is actually commenced, which might be imposed upon or brought against
     an Indemnitee as a result of the manufacture, distribution, import,
     promotion, marketing, sale or offering for sale of Products in breach of
     the obligations contained in Section 4 herein or as permitted hereunder,
     including but not limited to: 1) any product liability for personal
     injuries or death and/or property damages, or 2) any infringement of any
     third party's intellectual property rights. Excluded from this provision
     are any costs, expenses, claims, demands, causes of action, damages and
     judgments which are the result of:
<PAGE>

           A. any warranty, express or implied, that is made by Distributor
              different from or in addition to those made in writing by
              Manufacturer which accompany the Products;

           B. bodily injury, property damage, or death arising out of

                (1)  any physical or chemical change in the form of the
                     Product made intentionally by the Distributor,

                (2)  mishandling of the Product by the Distributor, including
                     but not limited to repacking or removal of the Product from
                     its original packaging or canister, or

                (3)  Products which after distribution or sale by Manufacturer
                     to Distributor have been labeled or relabeled in manner not
                     authorized by Manufacturer.

     7.02  Indemnification by Distributor. Distributor shall indemnify and hold
     Manufacturer harmless from all costs, expenses, claims, demands, causes of
     action, damages and judgements, including without limitation attorney's
     fees whether or not suit is actually commenced, which might be imposed upon
     or brought against Manufacturer as a result of a third party claim A)
     relating to liability of Distributor as an employer for claims by
     Distributor's employees or agents; B) arising from warranties made by
     Distributor different from or in addition to those made in writing by
     Manufacturer which accompany the Product; or C) as a result of or arising
     from the events detailed in subsections 7.01(B)(1), (2) or (3) hereinabove.

     7.03  Conditions of Indemnification. Manufacturer shall not be obligated to
     indemnify an Indemnitee under Section 7.01, and Distributor shall not be
     obligated to indemnify Manufacturer under Section 7.02, unless:

           A. the party seeking indemnification gives the indemnifying party
              prompt written notice of any claim for which it seeks
              indemnification;

           B. the party seeking indemnification cooperates with the indemnifying
              party in the defense of the claim;

           C. the indemnifying party shall have the sole right to manage the
              defense of any such claim in the manner it deems advisable,
              including using counsel of its choice, and;

           D. the indemnifying party shall have the sole right to settle any
              such claim provided any such settlement completely releases the
              parties seeking indemnification, and
<PAGE>

              requires no action by, or financial participation from, the party
              seeking indemnification.

     7.04  Disclaimer of Consequential Damages.  EXCEPT IN THE EVENT OF
     INDEMNIFICATION CLAIMS UNDER SECTION 7.01 OR WARRANTY CLAIMS UNDER SECTION
     3.08 , NEITHER PARTY SHALL HAVE ANY LIABILITY OF ANY KIND FOR ANY PUNITIVE,
     SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGES UNDER OR AS
     A RESULT OF THIS AGREEMENT, EVEN IF SUCH PARTY SHALL HAVE BEEN ADVISED OF
     THE POSSIBILITY OF SUCH POTENTIAL LOSS OR DAMAGE.

     7.05  Distributor Disclaimer. MANUFACTURER ACKNOWLEDGES AND AGREES THAT
     DISTRIBUTOR DISCLAIMS ANY WARRANTY, REPRESENTATION OR GUARANTEE THAT
     DISTRIBUTOR'S DISTRIBUTION OF THE PRODUCTS AS PERMITTED HEREUNDER SHALL
     GENERATE ANY PARTICULAR LEVEL OF ACTUAL SALES OR REVENUE TO MANUFACTURER,
     AND DISTRIBUTOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, SUBDISTRIBUTORS,
     AGENTS AND AFFILIATES SHALL HAVE NO LIABILITY OF ANY KIND OR NATURE
     (INCLUDING, WITHOUT LIMITATION, DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL OR
     ANY OTHER TYPE OF DAMAGES), REGARDLESS OF THE FORM OF ACTION, FOR ANY
     FAILURE TO ACHIEVE ANY PARTICULAR LEVEL OF SALES OR REVENUE TO
     MANUFACTURER.

     7.06  Survival. The provisions of this Section 7 shall survive any
     termination or expiration of this Agreement.

     7.07  Product Liability Insurance. At all times during the term of this
     Agreement and any renewals or extensions thereof, Manufacture shall
     maintain adequate product liability insurance relating to the Products,
     shall name Distributor as an additional named insured under such insurance
     policy, and shall provide Distributor with written evidence of such
     actions.

8.   TERM AND TERMINATION

     8.01  Term. The term of this Agreement shall be 3 year(s) beginning
     February 1, 2000, and ending on January 31, 2003, subject to earlier
     termination as described below in this Section 8. There shall be no
     obligation to renew.

     8.02  Termination For Fault With Right To Cure. Either party may terminate
     this Agreement prior to its normal expiration in the event the other party
     materially breaches its obligations under this Agreement by giving the
     breaching party written notice describing the breach in detail and giving
     the breaching party sixty (60) days to cure the breach. If the breach has
     not been cured within the sixty days notice period, then the party giving
     notice of breach may immediately terminate the Agreement.
<PAGE>

     8.03  Effect of Termination or Expiration. Upon termination or expiration
     of this Agreement:

           A.  Neither party shall be released from the obligation to make
               payment of any and all amounts due and payable pursuant to this
               Agreement, including but not limited to those then due and
               thereafter to become due.

           B.  The rights of each party against the other which may have accrued
               up to or after the date of such termination or expiration, and
               the provisions of this Agreement that are by their nature
               continuing (including but not limited to respective obligations
               regarding non-use and non-disclosure under Section 6.1 and
               obligations regarding indemnification under Section 7) shall
               remain in force after the termination or expiration of this
               Agreement.

           C.  It is expressly understood and agreed that the termination rights
               set forth in this Agreement are absolute and that the parties
               have considered the possibility of the making of expenditures by
               one or both of the Parties hereto in preparing for and in the
               actual performance of this Agreement and have considered the
               possibility of loss and damage resulting from the non-renewal or
               termination hereof. It is the express intent and agreement of the
               Parties that neither shall be liable to the other for damages or
               otherwise by reason of the non-renewal of this Agreement or its
               termination as provided in this Section 8, provided that such
               non-renewal or termination shall not operate to discharge or
               release either party of obligations assumed by it prior to such
               non-renewal or termination.

           D.  Neither party shall be liable to the other for damages or
               otherwise by reason of the termination of this Agreement as
               provided in this Section 8. The parties agree that, subject to
               the provisions of this Agreement that are by their nature
               continuing, and without prejudice to any other remedies at law or
               in equity that either party may have in respect of any breach of
               this Agreement, neither party shall be entitled to or claim that
               it is entitled to any compensation or like payment as a result of
               or arising out of any termination in accordance with this Section
               8, whether claimed as loss of goodwill, foregone profits, lost
               investments, or otherwise.

           E.  If Distributor has exercised the license granted to it in Section
               9.01 prior to the expiration or termination of this Agreement,
               then such license shall continue, and Distributor shall continue
               to have the right to market, promote and distribute the Products,
               for such time period as is necessary in order for Distributor to
               fulfill binding agreements with customers entered into prior to
               the effective date of expiration or termination of this
               Agreement.
<PAGE>

           F.  Upon expiration of this Agreement, or termination of this
               Agreement for any reason, Manufacturer shall have the option, at
               its sole discretion, to purchase back from Distributor, and by
               doing so require Distributor to sell to Manufacturer, any unsold
               inventory of the Products in Distributor's possession or control
               that Distributor purchased from Manufacturer, provided that such
               Products are unopened and in saleable condition and the
               expiration date of sterility of such Products is at least ninety
               (90) days beyond the effective termination date of this
               Agreement. The price to be paid by Manufacturer for the purchase
               of such inventory shall be the purchase price actually paid by
               Distributor for the Products, increased by the cost for the
               transportation of the Products. In the event that Manufacturer
               does not repurchase all unsold inventory of the Products as
               specified above, Distributor shall be permitted to sell said
               unpurchased inventory for a period of one year following the
               termination or expiration of the Agreement pursuant to any terms
               deemed appropriate by Distributor.

     8.04  Bankruptcy.  THE PARTIES INTEND FOR THIS AGREEMENT AND THE
     RIGHTS GRANTED HEREIN TO COME WITHIN SECTION 365(n) OF THE U.S. BANKRUPTCY
     CODE AND, NOTWITHSTANDING THE BANKRUPTCY OR INSOLVENCY OF MANUFACTURER,
     THIS AGREEMENT AND THE RIGHTS GRANTED HEREIN SHALL REMAIN IN FULL FORCE AND
     EFFECT SO LONG AS DISTRIBUTOR IS IN MATERIAL COMPLIANCE WITH THE TERMS AND
     CONDITIONS HEREOF.

9.   MANUFACTURING LICENSE.

     9.01 Grant of License. Manufacturer hereby grants to Distributor a non-
     exclusive, perpetual license, with a right of sublicense, to all
     intellectual property rights anywhere in the territory (including, without
     limitation, all rights in and to all patents, present and future
     copyrights, moral and publicity rights, mask works, trade secrets, know-how
     and confidential business information), in and to the Products and all
     tangible materials that are necessary or helpful in the manufacture of the
     Products, including, without limitation, all manuals and other materials
     that describe the manufacturing processes and procedures for the Products,
     all designs, drawings, sketches, data, computer programs, test results, and
     information or items of a like nature (collectively, the "Manufacturing
     Materials"), so that Distributor or its designee may manufacture, use,
     import, offer for sale, sell the Products (including all improvements,
     additions or new versions thereof) in the Territory if any of the following
     events occur:

           A.  (1) the entry of an order for relief in a proceeding in
               bankruptcy (other than Chapter 11 of Title 11 of the U.S. Code,
               as the same may be amended) in which Manufacturer is the named
               debtor; (2) Manufacturer's making of an assignment for the
               benefit of Manufacturer's creditors, (3) the appointment of a
               receiver for Manufacturer; (4) the filing of (i) any bankruptcy
               proceeding
<PAGE>

               against Manufacturer, other than Chapter 11 of Title 11 of the
               U.S. Code, or (ii) any proceeding for an assignment for the
               benefit of Manufacturer's creditors, or (iii) any proceeding for
               appointment of a receiver or custodian of the assets and property
               of Manufacturer, which proceeding shall be consented to or
               acquiesced to by Manufacturer or has not been discharged or
               terminated within ninety (90) days; or (iv) the rejection by
               Manufacturer or any trustee of Manufacturer of this Agreement
               pursuant to 11 U.S.C. (S)365; or (v) following the filing of a
               proceeding under Chapter 11 of Title 11 of the United States
               Code, the failure by Manufacturer or its trustee to perform its
               obligations under this Agreement;

           B.  Manufacturer ceases to operate as a business for a period of
               thirty (30) days;

           C.  Manufacturer or any successor thereto has materially breached
               this Agreement, and has failed to cure such breach within sixty
               (60) days written notice thereof from Distributor or, if such
               breach is not susceptible of cure within such period, has failed
               to commence such cure within such period; or

           D.  The material failure by Manufacturer to fill purchase orders for
               the Products, including the failure to meet agreed shipping dates
               or Volume Requirements, (i) where such failure continues for a
               period of three (3) months, or (ii) such that less than seventy-
               five percent (75%) of the total units of the Products ordered are
               actually shipped by Manufacturer during any consecutive three (3)
               month period. For the purposes of this subsection, "Volume
               Requirements" shall mean twenty-five percent (25%) more units of
               Product, by Product type, than that submitted by Distributor to
               Manufacturer as the rolling forecast referred to in Section 3.10
               hereinabove;

           E.  The material failure by Manufacturer to manufacture the Products
               to meet the applicable specifications, such that fifteen percent
               (15%) of the total units of the Products ordered by Distributor
               during any consecutive three (3) month period do not meet the
               applicable specifications;

           F.  Manufacturer discontinues a particular Product without the prior
               written consent of Distributor, or fails to make available
               hereunder a reasonably acceptable replacement product for such
               discontinued Product.

     9.02  Exercise of License. If any of the events described in Section 9.01
     occur, then Distributor shall give written notice to Manufacturer of such
     event (including notice of the specific Products to which such event(s)
     apply) and, within fifteen (15) days after Manufacturer's receipt of such
     notice, Manufacturer shall deliver or caused to be delivered to Distributor
     or its designee copies of the then-current Manufacturing Materials for the
     applicable Products.
<PAGE>

     9.03  Technical Assistance. Manufacturer shall provide all engineering and
     technical assistance needed in order to transfer to Distributor or its
     designee all such Manufacturing Materials, so that Distributor may fully
     exercise the license granted in Section 9.01. Pursuant to such license,
     Distributor may copy, display, distribute and create derivative works of
     any copyrightable materials included in the Manufacturing Materials
     released to Distributor.

     9.04  Royalty. If any of the events listed in Section 9.01 (A), (B) or (F)
     occur, then the license granted to Distributor under Section 9.01 shall be
     royalty-free. If any of the events listed in Section 9.01 (C), (D), or (E)
     occur, then the parties shall negotiate in good faith the royalty
     percentage from the applicable Product (including all improvement,
     additions and new versions thereof) that Distributor shall be required to
     pay to Manufacturer for the license granted to Distributor under Section
     9.1, which percentage shall be based on the value of the Manufacturing
     Materials to Distributor and taking into account such factors as, without
     limitation, cost to prepare to manufacture the Products; provided, however,
     that in no event shall the royalty percentage exceed five percent (5%) for
     any particular Product.

     9.05  Escrow of Materials. As mutually agreed to by the parties, the
     parties, along with a mutually acceptable, professional escrow agent, may
     enter into an agreement in order to establish and maintain in escrow during
     the term of this Agreement, copies of the Manufacturing Materials. Such
     agreement shall establish, at a minimum, the times at which Manufacturer is
     required to update the Manufacturing Materials, the release conditions that
     entitle Distributor to obtain such Manufacturing Materials (in addition to
     Section 9.01 hereof), and the costs to maintain such account. Such costs
     shall be reasonable, and shall be the responsibility of Distributor.

10.  GENERAL PROVISIONS.

     10.01  Notices. Any notice, request, or other document to be given to a
     Party under this Agreement shall be in writing and A) sent by registered or
     certified mail, postage prepaid, B) hand delivered, C) sent by express mail
     or other overnight delivery service which provides documentation of
     receipt, or D) sent by telecopy, telex or telegram, addressed as follows:

     If to Distributor:

          Daig Corporation
          14901 DeVeau Place
          Minnetonka, Minnesota 55345
          Attention:  President
<PAGE>

     With a copy to:

          St. Jude Medical, Inc.
          One Lillehei Plaza
          St. Paul, Minnesota 55117
          Attention: General Counsel

     If to Manufacturer:

          Cardima, Inc.
          47266 Benicia
          Fremont, CA  94538
          Attention:  President/CEO

     Any party may change its address for receiving notices, requests or other
documents by giving written notice of the change to the other party.

     10.02  Entire Agreement. The Schedule, Attachments, and Exhibits referred
     to in this Agreement are considered to be part of this Agreement. This
     Agreement contains the entire agreement between the Parties with respect to
     its subject matter and supersedes all previous agreements and
     understandings, whether written or oral between the parties regarding its
     subject matter.

     10.03  No Oral Modification. This Agreement may not be modified except in
     writing signed by an officer of the Parties.

     10.04  No Implied Waivers. The failure of one Party to require performance
     by the other of any provision of this Agreement shall not affect the right
     to require performance at a later time. The waiver by one Party of a breach
     by the other of any provision of this Agreement shall not be a waiver of
     any later breach of the provision.

     10.05  Assignment. This Agreement shall be binding upon and inure to the
     benefit of the parties hereto and their successors and permitted assigns.
     Distributor may assign this Agreement, without Manufacturer's consent, to
     any subsidiary or affiliate of Distributor. Distributor's rights and
     obligations under this Agreement shall automatically transfer in connection
     with a merger, consolidation, reorganization involving Distributor or sale
     of substantially all of Distributor's assets. Manufacturer may assign this
     Agreement, without Distributor's consent, to any subsidiary or affiliate of
     Manufacturer. Manufacturer's rights and obligations under this Agreement
     shall automatically transfer in connection with a merger, consolidation,
     reorganization involving Manufacturer or sale of substantially all of
     Manufacturer's assets. Any attempted assignment in violation of this
     provision shall be null and void.

<PAGE>

     10.06  Relationship of Parties. The relationship established by this
     Agreement is a buyer-seller relationship and not an agency, employment,
     joint venture, franchise, or partnership relationship. Neither Party has
     the authority to bind the other.

     10.07  Severability. In the event that any provision of this Agreement
     shall be held invalid or unenforceable by any court of competent
     jurisdiction, such holding shall not invalidate or render unenforceable any
     other provisions of this Agreement.

     10.08  No Goodwill. The Parties recognize that the creation of goodwill in
     the market is based upon the high quality of Manufacturer's Products and
     Distributor's domestic advertising and marketing. No claim for goodwill may
     be made by either party.

     10.09  Force Majeure. Non-performance by either party hereunder, other than
     an obligation to pay money, shall be excused to the extent that performance
     is rendered impossible by strike, fire, flood, governmental acts, orders or
     restrictions, or any other reason to the extent that the failure to perform
     is beyond the control of the non-performing party.

     10.10  Headings. The Section headings contained in this Agreement are for
     reference purpose only and shall not affect in any way the meaning or
     interpretation of this Agreement.

     10.11  Governing Law. This Agreement shall be governed by and interpreted
     in accordance with the laws of the State of Minnesota without regard to
     such state's principles of conflicts of law.

     10.12  Counterparts. This Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but all of which
     together shall constitute one instrument.
<PAGE>

  To evidence their agreement the Parties have signed below.


DAIG CORPORATION                       CARDIMA INCORPORATED




By:/s/ MICHAEL COYLE           By:/s/ PHILLIP RADLICK
   ------------------             --------------------
   Michael Coyle                  Phillip Radlick, Ph.D.
   President                      President and CEO


Date: Jan. 25, 2000             Date: Jan. 21, 2000
      -------------                   -------------
<PAGE>

                                  SCHEDULE A


                              TRANSFER PRICE LIST
                         (EFFECTIVE FEBRUARY 1, 2000)


                    INTRAVASCULAR EP (IVEP) MICROCATHETERS


<TABLE>
<CAPTION>

Product #     Description                                                               Unit Price
-----------   -----------                                                               ----------
<C>                  <S>                                                                <C>
01-04  1003   PATHFINDER(TM) . 4 (4 electrodes, 9-9-9)/150cm length/2.3F                  *****
01-04  1007   PATHFINDER(TM) . 4 (2 electrode pairs, 2-6-2)/150cm length/2.3F             *****
01-08  1003   PATHFINDER(TM) . 8 (8 electrode pairs, 9-9-9)/150cm length/2.3F             *****
01-08  1007   PATHFINDER(TM) . 8 (4 electrode pairs, 2-6-2)/150cm length/2.3F             *****
01-16  1003   PATHFINDER(TM) . 16 (8 electrode pairs, 2-6-2)/150cm length/2.5F            *****
01-04  3011   PATHFINDER mini(TM) . 4 (4 electrodes, 1-1-1)/135cm length/1.5F             *****
01-04  3012   PATHFINDER mini(TM) . 4 (4 electrodes, 2-2-2)/135cm length/1.5F             *****
01-04  3013   PATHFINDER mini(TM) . 4 (2 electrode pairs, 2-5-2)/135cm length/1.5F        *****
01-04  3014   PATHFINDER mini(TM) . 4 (4 electrodes, 1-1-1)/170cm length/1.5F             *****
01-04  3015   PATHFINDER mini(TM) . 4 (4 electrodes, 2-2-2)/170cm length/1.5F             *****
01-04  3016   PATHFINDER mini(TM) . 4 (2 electrode pairs, 2-5-2)/170cm length/1.5F        *****
01-04  3019   PATHFINDER mini(TM) . 4 (2 electrode pairs, 2-5-2)/150cm length/1.5F        *****
02-16  1002   TRACER(TM) . 16 (8 electrode pairs, 2-5-2)/145cm length/3.4F                *****

</TABLE>

                         ENDOCARDIAL EP MICROCATHETERS
<TABLE>
<CAPTION>

Product #    Description                                                                 Unit Price
---------    -----------                                                                 ----------
<S>           <C>                                                                        <C>
01-08  2001  REVELATION(TM)(8 3mm electrodes, 2-2-2)/135cm length/3.3F                     *****

</TABLE>
---------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.







<PAGE>

<TABLE>
<CAPTION>


                                   CS GUIDING CATHETERS



Product #     Description                                         Unit Price
-----------   -----------                                         ----------
<C>                  <S>                                          <C>
08-00  1000   VENAPORT(R) Damato-type, 90cm, 6F OD                  *****
08-00  1001   VENAPORT(R) Damato-type, 65cm, 6F OD                  *****
08-00  1002   VENAPORT(R)-LR Damato-type, 90cm, 6F OD               *****
08-00  1003   VENAPORT(R)-LR Damato-type, 65cm, 6F OD               *****
08-00  1005   VENAPORT(R) Hockey-type, 90cm, 6F OD                  *****
08-00  1006   VENAPORT(R) Hockey-type, 65cm, 6F OD                  *****
08-00  1007   VENAPORT(R)-LR Hockey-type, 90cm, 6F OD               *****
08-00  1008   VENAPORT(R)-LR Hockey-type, 65cm, 6F OD               *****
08-00  1010   VENAPORT(R) Josephson-type, 90cm, 6F OD               *****
08-00  1011   VENAPORT(R) Josephson-type, 65cm, 6F OD               *****
08-00  1012   VENAPORT(R)-LR Josephson-type, 90cm, 6F OD            *****
08-00  1013   VENAPORT(R)-LR Josephson-type, 65cm, 6F OD            *****
08-00  1015   VENAPORT(R) Multipurpose-type, 90cm, 6F OD            *****
08-00  1016   VENAPORT(R) Multipurpose-type, 65cm, 6F OD            *****
08-00  1017   VENAPORT(R)-LR Multipurpose-type, 90cm, 6F OD         *****
08-00  1018   VENAPORT(R)-LR Multipurpose-type, 65cm, 6F OD         *****
08-00  1020   VENAPORT(R) Cournand-type, 90cm, 6F OD                *****
08-00  1021   VENAPORT(R) Cournand-type, 65cm, 6F OD                *****
08-00  1025   VENAPORT(R) CS-type, 90cm, 6F OD                      *****
08-00  1026   VENAPORT(R) CS-type, 65cm, 6F OD                      *****


</TABLE>
____________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
                                       2
<PAGE>

                BALLOON OCCLUSION GUIDING CATHETERS

<TABLE>
<CAPTION>

Product #     Description                                     Unit Price
-----------   -----------                                     ----------
<C>                  <S>                                      <C>

08-00  2000   VUEPORT(TM) Damato-type, 90cm, 8F OD             *****
08-00  2001   VUEPORT(TM) Damato-type, 65cm, 8F OD             *****
08-00  2005   VUEPORT(TM) Hockey-type, 90cm, 8F OD             *****
08-00  2006   VUEPORT(TM) Hockey-type, 65cm, 8F OD             *****
08-00  2010   VUEPORT(TM) Cournand-type, 90cm, 8F OD           *****
08-00  2011   VUEPORT(TM) Cournand-type, 65cm, 8F OD           *****
08-00  2015   VUEPORT(TM) Multipurpose-type, 90cm, 8F OD       *****
08-00  2016   VUEPORT(TM) Multipurpose-type, 65cm, 8F OD       *****
08-00  2020   VUEPORT(TM) CS-type, 90cm, 8F OD                 *****
08-00  2021   VUEPORT(TM) CS-type, 65cm, 8F OD                 *****
08-00  2025   VUEPORT(TM) Amplatz-type, 90cm, 8F OD            *****
08-00  2026   VUEPORT(TM) Amplatz-type, 65cm, 8F OD            *****


</TABLE>
                DEFLECTABLE TIP GUIDING CATHETERS

<TABLE>
<CAPTION>

Product #    Description                                         Unit Price
---------    ------------                                        ----------
<S>           <C>                                       <C>

08-003001     Naviport, 30 CRV, 90cm, 8F                           *****
08-003045     Naviport, 10 CRV, 90cm, 9F                           *****


</TABLE>
____________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                      3

<PAGE>

                        CONNECTING CABLES

<TABLE>
<CAPTION>


Product #        Description                                                  Unit Price
---------        -----------                                                  ----------
<S>              <C>                                                          <C>
10-01  1001      EP SELECT(TM) 1-1 Connecting Cable (White)                      *****
10-01  1002      EP SELECT(TM) 1-1 Connecting Cable (Blue)                       *****
10-01  1003      EP SELECT(TM) 1-1 Connecting Cable (Black)                      *****
10-01  1004      EP SELECT(TM) 1-1 Connecting Cable (Red)                        *****
10-01  1005      EP SELECT(TM) 1-1 Connecting Cable (4 pk, 1 of each color)      *****
10-08  1001      8 pin Connecting Cable, Distal (1-8), Bare Pin                  *****
10-08  1002      8 pin Connecting Cable, Proximal (9-16), Bare Pin               *****
10-08  1003      8 pin Connecting Cable, Distal (1-8), Retractable Pin           *****
10-08  1004      8 pin Connecting Cable, Proximal (9-16), Retractable Pin        *****
10-08  1013      EP SELECT(TM), ECG Cable, Retractable Pin                       *****
10-08  1014      EP SELECT(TM), ECG Cable, Bare Pin                              *****
10-16  1001      16 pin Connecting Cable, Bare Pin                               *****
10-16  1002      16 pin Connecting Cable, Retractable Pin                        *****


                CONNECTING CABLES


Product #    Description                                                         *****
---------    -----------

11-08 1002  EP SELECT(TM) Switchbox                                              *****
</TABLE>


____________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.






                                       4
<PAGE>

                                  SCHEDULE B

                                     *****







                                     *****











                                     *****
___________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>

                                  Schedule C



1.  APPLICABLE TERMS AND CONDITIONS: The acknowledgment of any order by CARDIMA,
    INC. shall constitute the purchaser's acceptance of CARDIMA's terms and
    conditions. No terms or conditions stated by the purchaser shall be binding
    on CARDIMA unless such terms or conditions are expressly accepted in writing
    by CARDIMA prior to commencement under this order. CARDIMA's terms of sale
    are net 30 payable within 30 days or subject to service charges under
    Section 2 for domestic shipments and net 60 payable within 60 days or
    subject to service charges under Section 2 for foreign shipments.

2.  SERVICE CHARGES: In the event that the purchaser does not pay the amount due
    within the days specified from the due date, CARDIMA may assess service
    charges of one and one-half (1.5%) percent per month on the amount due. Such
    amount is the reasonable estimate of fair compensation for any loss that
    CARDIMA may sustain. Such amount for each month that the purchase price
    remain unpaid has been agreed to in advance because of the impracticability
    of fixing actual damages. In the event legal or other costs are incurred to
    collect on any unpaid balance, the purchaser will be charged for all
    collection costs, including attorney's fees. Also, CARDIMA reserves the
    rights to charge for priority freight expenses.

3.  TAXES: CARDIMA is required to comply with any and all state and local taxes
    where applicable unless a properly executed resale or exempt certificate has
    been received from the purchaser.

4.  PAYMENTS INSTRUCTIONS: All payments shall reference the CARDIMA invoice
    number so that the correct amount of credit will be applied.

    PAYMENTS BY CHECKS SHALL BE FORWARDED TO:
    ATTN:  ACCOUNTS RECEIVABLE
    CARDIMA, INC.
    BOX 14172
    FREMONT, CA  94539-1372

    PAYMENTS BY SWIFT WIRE TRANSFER SHALL BE ROUTED TO:

    CREDIT TO:           CHASE MANHATTAN BANK, NY, USA
    SWIFT CODE:          CHASEUS33
    BENEFICIARY:         FC-SILICON VALLEY BANK
                         LAKESIDE DRIVE
                         SANTA CLARA, CA  95054
    ROUTING #:           \\FW:121140399
    FOR CREDIT OF:       CARDIMA, INC.
    CREDIT ACCT. #:      FNC 02-726866-70






                                       1
<PAGE>

5.  INQUIRIES: For questions regarding your order, please call our Customer
    Service Department at (800) 354-0102, or send fax to (510) 354-0103. For
    questions regarding your invoice, please call our Accounting Department at
    (888) 354-0300, or fax to (510) 657-4476.

6.  LIMITED WARRANTY: CARDIMA warrants each new product sold by CARDIMA to be
    free from defects in material and workmanship under normal use and service.
    The sole obligation and liability of CARDIMA under this warranty is limited
    to, at its option, the refund of the purchase price of, or the replacement
    at its factory of any such product which proves defective within 60 days
    after delivery to the first end user, and is found to be defective in
    material or workmanship by CARDIMA inspection.

7.  APPLICABLE LAW:  These terms and conditions of sale and invoice will be
    governed by the laws of the State of California.



                           CERTIFICATE OF CONFORMANCE

CARDIMA, INC. CERTIFIES THAT DOCUMENTARY EVIDENCE IN THE FORM OF TEST REPORTS
AND INSPECTION RECORDS ON THIS MATERIAL AND/OR ASSOCIATED PROCESSES INDICATING
CONFORMANCE TO APPLICABLE SPECIFICATIONS ARE ON FILE AND AVAILABLE FOR REVIEW AT
ITS HOME OFFICE.

IN THE EVENT THAT ANY OF THE TERMS OF THIS SCHEDULE C CONFLICT WITH ANY OF THE
TERMS IN THE BODY OF THIS EXCLUSIVE DISTRIBUTION AGREEMENT, THE TERM(S) OF THE
EXCLUSIVE DISTRIBUTION AGREEMENT SHALL PREVAIL.




                                       2
<PAGE>

                                  SCHEDULE D


                        PRICES FOR PROMOTIONAL MATERIALS


Manufacturer shall transfer reasonable quantities of any promotional materials
relating to, or useful in the marketing of, the products at manufactures cost
upon the request of distributor.
<PAGE>

                                  SCHEDULE E


                                ANNUAL MINIMUMS

As described in Section 3.03, in order to maintain its exclusive right to
distribute product in the Territory, Distributor must purchase the following
minimum amounts of the Products during the specified time periods:
<TABLE>
<CAPTION>

<C>  <S>                                      <C>
1.   February 1, 2000 - January 31, 2001      *****
2.   February 1, 2001 - January 31, 2002      *****
3.   February 1, 2002 - January 31, 2003      *****

</TABLE>

___________
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

Source: OneCLE Business Contracts.