printer-friendly

Sample Business Contracts

License Agreement - Target Therapeutics Inc. and Cardima Inc.

Sponsored Links

                              LICENSE AGREEMENT
                              -----------------

         This Agreement ("Agreement") is entered into effective as of May 21,
1993 (the "Effective Date"), by and between Target Therapeutics, Inc., a
Delaware corporation with an office at 47201 Lakeview Boulevard, Fremont,
California 94537 ("Target"), and CaRDiMa, Inc., a Delaware corporation with an
office at 47201 Lakeview Boulevard, Fremont, California 94537 ("CaRDiMa").

         WHEREAS, Target has developed catheter, coil and guidewire technology
that it utilizes principally in the areas of interventional radiology and
neuroradiology;

         WHEREAS, Target's desire to have such technology developed primarily
for use in cardiac electrophysiology applications has led to the formation of a
subsidiary called CaRDiMa, Inc.;

         WHEREAS, Target is willing to license such technology to CaRDiMa
primarily for use in cardiac electrophysiology applications, and CaRDiMa is
willing to obtain such license to such technology;

         NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, Target and CaRDiMa agree as follows:

1.       Definitions.
         -----------

         1.1  "Target Technology" shall mean the Target Patent Rights and Target
Know-How existing as of the Effective Date, and during the period from the
Effective Date to the expiration of the Technology Inclusion Period.

         1.2  "Target Patent Rights" shall mean (i) all patents owned by Target
(other than 4,832,047, [***])and (ii) all patent applications owned by Target,
and all U.S. and foreign patents issuing therefrom, including any additions,
continuations or continuations-in-part, divisions, reissues or extensions
thereof, and (iii) all patents licensed by Target from third party licensors;
but in each case only to the extent that Target is permitted to sublicense such
patents to CaRDiMa.

         1.3  "Target Know-How" shall mean all Target trade secrets and other
confidential information, including, without limitation, design data and
information,  formulations, specifications, developments, techniques, methods,
processes, apparatus, products and other information and data, whether or not
patentable, relating to the design, manufacture, assembly and use of Target's
catheters, guidewires and coils.

         1.4  "CaRDiMa Technology" shall mean the CaRDiMa Patent Rights and
CaRDiMa Know-How owned by CaRDiMa during the period from the Effective Date to
the expiration of the Technology Inclusion Period.

                     [*] CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

         1.5  "CaRDiMa Patent Rights" shall mean (i) all patents owned by
CaRDiMa, and (ii) all patent applications owned by CaRDiMa, and all U.S. and
foreign patents issuing therefrom, including any additions, continuations or
continuations-in-part, divisions, reissues or extensions thereof, which patents
and patent applications relate to development and improvement by CaRDiMa of the
Target Technology or which relate to new technology developed by CaRDiMa for use
in the CaRDiMa Field or the Cardiology Field.

         1.6  "CaRDiMa Know-How" shall mean all CaRDiMa trade secrets and other
confidential  information,  including,  without  limitation,  design  data  and
information, formulations, specifications, developments, techniques, methods,
processes, apparatus, products and other information and data, whether or not
patentable, which relate to development and improvement by CaRDiMa of the Target
Technology or which relate to new technology developed by CaRDiMa for use in the
CaRDiMa Field or the Cardiology Field.

         1.7  "Technology Inclusion Period" shall mean that period during the
term of this Agreement after the Effective Date and prior to the date [***]
after the Effective Date.

         1.8  "Substantial Improvement" shall mean any modification, improvement
or enhancement by CaRDiMa of Target Technology incorporated in a particular
product that results in a material change in the function, purpose or
application of such product.

         1.9  "CaRDiMa Field" shall mean the diagnosis and treatment of
irregularities or disease related to the production of electrical currents by
human tissues or organs, the proper function of such electrical currents and the
human tissues and organs affected by such electrical currents (a) in the heart
and (b) elsewhere in the body, other than in the central nervous system
(including the brain).

         1.10 "Target Field"  shall  mean  neurology (including, without
limitation, the diagnosis and treatment of epilepsy),  interventional
neuroradiology, interventional radiology, diagnosis and treatment of male and
female reproductive disorders, and design, development, manufacture and sale of
vascular prostheses, including, without limitation, stents and grafts.

         1.11 "Cardiology Field" shall mean the diagnosis and treatment of
diseases of the heart, other than the diagnosis or treatment of malfunctions or
diseases of the coronary vasculature by use of a catheter system employing a
balloon, which excepted applications shall include percutaneous coronary
angioplasty.

         1.12 "Valid Claim" shall mean a claim of an issued and unexpired patent
that has not been held unenforceable, unpatentable or invalid by a court or
other governmental agency of competent jurisdiction, and which has not been
admitted to be invalid or unenforceable through reexamination, reissue,
disclaimer or otherwise.

         1.13 "CaRDiMa Product" shall mean any CaRDiMa product or component (i)
whose sale would in the absence of this Agreement infringe a Valid Claim of a
patent within the Target Technology in the country for which such product or
component is sold, or whose manufacture would in the absence of this Agreement
infringe a Valid Claim of a patent within the Target

                                      -2-

                     [*] CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

Technology in the country in which such product is manufactured, or (ii) that
is made in accordance with or by use of Target Know-How.

         1.14 "Target Product" shall mean any Target product or component (i)
whose sale would in the absence of this Agreement infringe a Valid Claim of a
patent within the CaRDiMa Technology in the country for which such product or
component is sold, or whose manufacture would in the absence of this Agreement
infringe a Valid Claim of a patent within the CaRDiMa Technology in the country
in which such product is manufactured, or (ii) that is made in accordance with
or by use of CaRDiMa Know-How.

2.       License Grants.
         --------------

         2.1  Grant to CaRDiMa.
              ----------------

              (a) Target hereby grants to CaRDiMa an exclusive, royalty-free,
worldwide license, with right to sublicense, to use the Target Technology in the
CaRDiMa Field, and to make, have made, use and sell or otherwise distribute
CaRDiMa Products for use within the CaRDiMa Field.

              (b) Target hereby grants to CaRDiMa a non-exclusive, royalty-free
license, with right of sublicense, to use the Target Technology in the
Cardiology Field and to make, use and sell or otherwise distribute CaRDiMa
Products for use within the Cardiology Field; provided, however, that for all
                                              --------  -------             
purposes of this Section 2.1(b), the Target Technology and CaRDiMa Products must
include a Substantial Improvement.

         2.2  Grant to Target.  CaRDiMa hereby grants to Target an exclusive,
              ---------------                                               
royalty-free, worldwide license, with right to sublicense, to use the CaRDiMa
Technology in the Target Field, and to make, have made, use and sell or
otherwise distribute Target Products for use within the Target Field.

3.       Proprietary Rights.
         ------------------

         Except as expressly set forth in this Agreement, CaRDiMa shall have no
right, title and interest in and to the Target Technology. Except as expressly
set forth in this Agreement, Target shall have no right, title and interest in
and to the CaRDiMa Technology; provided, however, that Target or its licensors
shall retain their right, title and interest in and to the Target Technology
underlying the CaRDiMa Technology.

4.       Patent Issues.
         -------------

         4.1  Target Technology.   Target shall prosecute, in its sole
              -----------------                                      
discretion and at its expense, patent applications within the Target Technology,
and shall implement such procedures and undertake such actions as it deems
necessary to protect the Target Technology against infringers, provided, that
Target shall use reasonable precautions to prevent the unauthorized use or
disclosure of Target Know-How.  If CaRDiMa reasonably believes that Target is
failing to pursue diligently any of such patent applications and, within 30 days
after CaRDiMa's written request (or, if earlier, five days prior to the date
that statutory or regulatory time periods for making necessary filings will

                                      -3-
<PAGE>

expire), fails to initiate such actions as may be set forth in such request
respecting the prosecution of any of such patent applications, or if Target
abandons any such patent applications, CaRDiMa, at its expense, shall have the
right to take such actions.

         4.2  CaRDiMa Technology. CaRDiMa shall prosecute, in its sole
              ------------------                                     
discretion and at its expense, patent applications within the CaRDiMa
Technology, and shall implement such procedures and undertake such actions as it
deems necessary to protect the CaRDiMa Technology against infringers; provided,
that CaRDiMa shall use reasonable precautions to prevent the unauthorized use or
disclosure of CaRDiMa Know-How. If Target reasonably believes that CaRDiMa is
failing to pursue diligently any of such patent applications and, within 30 days
after Target's written request (or, if earlier, five days prior to the date that
statutory or regulatory time periods for making necessary filings will expire),
fails to initiate such actions as may be set forth in such request respecting
the prosecution of any of such patent applications, or if CaRDiMa abandons any
such patent applications, Target, at its expense, shall have the right to take
such actions.

         4.3  Infringers of Patents and Know-How within the CaRDiMa Technology
              ----------------------------------------------------------------
Operating in the Target Field or Cardiology Field.  Target shall have the right
-------------------------------------------------                             
to noncontrolling representation by counsel of its choice, at its expense, in
any action brought by CaRDiMa regarding the CaRDiMa Technology who are operating
within the Target Field or Cardiology Field. CaRDiMa shall be entitled to retain
all damages and other monies awarded in such action. In the event that CaRDiMa
shall not have brought such an action against such an infringer, or obtained the
discontinuance of such infringement, within ninety (90) days of receiving
written notice by Target of such infringement, Target shall have the right,
subject to CaRDiMa' approval, which shall not be unreasonably withheld, to
enforce patents or rights to know-how within the CaRDiMa Technology against
infringers of such patents or rights to know-how operating within the Target
Field or Cardiology Field.   CaRDiMa shall have the right to noncontrolling
representation by counsel of its choice, at its expense, in any action brought
by Target against such infringers. Target shall be entitled to retain all
damages and other monies awarded in such action.

         4.4  Infringers of Patents and Know-How within the Target Technology
              ---------------------------------------------------------------
Operating in the CaRDiMa Field or Cardiology Field.  CaRDiMa shall have the
--------------------------------------------------                        
right to noncontrolling representation by counsel of its choice, at its expense,
in any action brought by Target regarding the Target Technology who are
operating within the CaRDiMa Field or Cardiology Field. Target shall be entitled
to retain all damages and other monies awarded in such action.  In the event
that Target shall not have brought such an action against such an infringer, or
obtained the discontinuance of such infringement, within ninety (90) days of
receiving written notice by Target of such infringement, CaRDiMa shall have the
right, subject to Target's approval, which shall not be unreasonably withheld,
to enforce patents or rights to know-how within the Target Technology against
infringers of such patents or rights to know-how operating within the CaRDiMa
Field or Cardiology Field.  Target shall have the right to noncontrolling
representation by counsel of its choice, at its expense, in any action brought
by CaRDiMa against such infringers. CaRDiMa shall be entitled to retain all
damages and other monies awarded in such action.

                                      -4-
<PAGE>

         4.5  Patent Counsel.  CaRDiMa shall retain as its principal patent
              --------------                                              
counsel for purposes of filing patents relating to Target Technology for the
three (3) year period following the Effective Date the same patent counsel
retained by Target during such period; provided, however, that CaRDiMa shall
have the ability to retain other patent counsel in the event that CaRDiMa
believes, in good faith, that there exists or may exist a conflict of interest
between CaRDiMa and Target with respect to the subject matter for which such
separate counsel has been retained; and provided further that CaRDiMa may retain
separate patent counsel at any time if approved in advance by Target, which
approval shall not be unreasonably withheld.

5.       Technology Transfer.
         -------------------

         5.1  Training and Consultation Provided by Target.   Upon request by
              --------------------------------------------                  
CaRDiMa during a period of [***] after the Effective Date, Target shall provide
up to [***] person-hours per calendar quarter of training or consultation
without charge, at a site specified by CaRDiMa. Target shall use all reasonable
efforts to provide any additional training or consultation requested by CaRDiMa
at an hourly rate equal to [***] of the total hourly wage rate (excluding
benefits) of the Target employees providing such additional training or
consultation thereafter in such calendar quarter. After the conclusion of such
[***], Target shall, for [***] thereafter, provide a mutually agreed upon amount
of training or consultation to CaRDiMa at a site specified by CaRDiMa (which
shall not be less than [***] per year). Such training or consultation shall be
provided at an hourly rate equal to [***] of the total hourly wage rate
(excluding benefits) of the Target employees providing such additional training
or consultation. CaRDiMa shall bear the reasonable, preapproved travel, food and
lodging expenses of Target employees providing such training and consultation at
a site not owned, leased or rented by Target. Training and consultation may be
provided by Target after the expiration of the [***] period specified above,
upon terms mutually agreeable to both parties.

         5.2  Training and Consultation Provided by CaRDiMa.   Upon request by
              ---------------------------------------------                  
Target during a period of [***] after the Effective Date, CaRDiMa shall provide
a mutually agreed upon amount of training or consultation to Target (which shall
not be less than [***] hours per year) at a site specified by Target. Such
training or consultation shall be provided at an hourly rate equal to [***] of
the total hourly wage rate (excluding benefits) of the CaRDiMa employees
providing such training or consultation. Target shall bear the reasonable,
preapproved travel, food and lodging expenses of CaRDiMa employees providing
such training and consultation at a site not owned, leased or rented by CaRDiMa.
Training and consultation may be provided by CaRDiMa after the expiration of the
[***] period set forth above, upon terms mutually acceptable to both parties.

         5.3  Technology Review Meetings.  During the term of this Agreement,
              --------------------------                                    
Target and CaRDiMa shall meet on a quarterly basis to inform each other of
additions and modifications to the Target Technology and CaRDiMa Technology,
respectively.

6.       Warranty, Disclaimer.
         --------------------

         6.1  Target represents and warrants that (i) it has full right, power
and authority to enter into this Agreement and to grant the rights granted to
CaRDiMa hereunder, and (ii) it has not

                                      -5-

                     [*] CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

entered into, and during the term of this Agreement will not enter into, any
agreement with any third party that would conflict with the license granted to
CaRDiMa herein.

         6.2  Target further represents and warrants that as of the Effective
Date (i) to the best of its knowledge Target is the sole and exclusive owner of
the Target Technology, or has the right to license such Target Technology to
CaRDiMa, and (ii) it is not aware of any claim or any basis therefor that might
render invalid the Target Patent Rights or limit use of the Target Know-How as
provided in the license grant to CaRDiMa herein.

         6.3  CaRDiMa warrants that (i) it has full right, power and authority
to enter into this Agreement and to carry out its obligations hereunder, and
(ii) it has not entered into, and during the term of this Agreement will not
enter into, any agreement with any third party that would conflict with the
license granted to Target herein.

7.       Intellectual Property Indemnity by Target.
         -----------------------------------------

         Target shall defend at its expense any action brought against CaRDiMa
to the extent such action is based on a claim that the Target Technology, or any
part thereof, infringes any United States copyright or trade secret owned by any
third party, and Target shall pay any settlements consented to by CaRDiMa (which
consent shall not be unreasonably withheld), and any costs, damages and
attorneys' fees finally awarded against CaRDiMa in such action which are
attributable to such claim; provided, the foregoing obligation shall be subject
to CaRDiMa notifying Target promptly in writing of the claim, giving Target the
exclusive control of the defense and settlement thereof, and providing all
reasonable assistance in connection therewith. Notwithstanding the foregoing,
Target shall not settle any such claim without the written consent of CaRDiMa,
which shall not be unreasonably withheld. If the Target Technology, or any part
thereof, are, or in the opinion of Target may become, the subject of any claim,
suit or proceeding for infringement of any United States copyright or trade
secret owned by a third party, or if it is adjudicatively determined that the
use by CaRDiMa of the Target Technology, or any part thereof, is enjoined, then
Target shall, at its expense, procure for CaRDiMa the right under such third
party's copyright or trade secret to use the Target Technology. Target shall not
be liable for any costs or expenses incurred without its prior written
authorization.  THE FOREGOING STATES THE ENTIRE LIABILITY AND OBLIGATION OF
TARGET WITH RESPECT TO INFRINGEMENT  OR  CLAIMS  OF  INFRINGEMENT  OF  ANY
THIRD  PARTY INTELLECTUAL PROPERTY RIGHTS.

8.       Limitation of Liability.
         -----------------------

IN NO EVENT WILL EITHER PARTY HAVE ANY LIABILITY FOR ANY SPECIAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT
IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS WILL
APPLY NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.

9.       Confidential Information.
         ------------------------

         9.1  Confidential Information.  "Confidential Information" shall mean
              ------------------------                                       
any proprietary information which is specifically designated as such, which is
disclosed by either party to the other

                                      -6-
<PAGE>

in any form in connection with this Agreement. Each party shall treat as
confidential all Confidential Information provided by the other party, shall
not use such Confidential Information except as expressly set forth herein or
otherwise authorized in writing, shall implement reasonable procedures to
prohibit the disclosure, unauthorized duplication, misuse or removal of the
Confidential Information and shall not disclose such Confidential Information
to any third party. Without limiting the foregoing, each of the parties shall
use at least the same procedures and degree of care to prevent the disclosure
of Confidential Information as it uses to prevent the disclosure of its own
confidential information of like importance, and shall in any event use no
less than reasonable procedures and a reasonable degree of care.

         9.2  Exceptions.  Notwithstanding the above, neither party shall have
              ----------                                                     
liability to the other with regard to any Confidential Information that:

              (i)    was generally known and available in the public domain at
the time it was disclosed, or becomes generally known and available in the
public domain through no fault of the receiver;

              (ii)   was known to the receiver at the time of disclosure as
shown by the files of the receiver in existence at the time of disclosure;

              (iii)  is disclosed with the prior written approval of the
discloser;

              (iv)   was independently developed by the receiver without any
use of the Confidential Information and by employees or other agents of the
receiver who have not been exposed to the Confidential Information, provided
that the receiver can demonstrate such independent development by documented
evidence prepared contemporaneously with such independent development;

              (v)    becomes known to the receiver from a source other than
the discloser without breach of this Agreement by the receiver and in a manner
which is otherwise not in violation of the discloser's rights; or

              (vi)   is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided, that the
receiver shall provide reasonable advance notice thereof to enable the
discloser to seek a protective order or otherwise prevent such disclosure.

10.      Regulatory Approvals.
         --------------------

         CaRDiMa shall be responsible for, and shall bear the expenses of,
obtaining all necessary regulatory approvals for CaRDiMa Products. Target shall
be responsible for, and shall bear the expenses of, obtaining all necessary
regulatory approvals for Target Products.

11.      Accountants.
         -----------

                                      -7-
<PAGE>

         CaRDiMa shall retain as its independent accountants for the three (3)
year period following the Effective Date the firm of Ernst & Young for
purposes of performing audits of the CaRDiMa financial statements.

12.      Labeling.
         --------

         CaRDiMa and Target agree to label CaRDiMa Products and Target Products,
respectively, that are commercially distributed in any country in a manner that
is consistent with the provisions of this Agreement and the laws of the country
in which such products are distributed.

13.      Trademarks.
         ----------

         Neither party grants any license, right or interest relating to any
trademarks, service marks, names and logos that it may own or adopt from time to
time, to the other party, except as set forth in Section 3.3.2 of the
Intercompany Agreement between the parties of even date herewith.

14.      Term, Termination.
         -----------------

         14.1 Term.  This Agreement shall become effective as of the Effective
              ----                                                           
Date and shall continue in force, unless earlier terminated in accordance with
this Section 14, until the expiration or invalidation of all claims of patents
within the Target Technology and/or the CaRDiMa Technology.

         14.2 Termination for Cause.  This Agreement may be terminated by either
              ---------------------                                            
party upon written notice if the other party (i) breaches any material term or
condition of this Agreement and fails to remedy the breach within thirty (30)
days after being given written notice thereof, or (ii) is dissolved or
liquidated or the assets and/or business of such party shall be placed in the
hands of a trustee, receiver or assignee for the benefit of creditors, unless
such act is reversed within 90 days. In addition, this Agreement may be
terminated upon written notice (a) by CaRDiMa, if Target ceases to be actively
engaged in business for a period of twelve (12) months, or (b) by Target, if
CaRDiMa ceases to be actively engaged in business in the CaRDiMa Field and the
Cardiology Field for a period of twelve (12) months.

         14.3 Return of Materials.  Within ten (10) days after the expiration or
              -------------------                                              
termination of this Agreement, each party shall return any Confidential
Information received from the other party.

         14.4 Effect of Termination.  The provisions of Sections 1, 3, 6, 7, 8,
              ---------------------                                           
9, 13, 14.3 and 15 shall survive the termination or expiration of this
Agreement.

15.      Target Covenant.
         ---------------

         In the event that Target Patent Rights include any rights obtained by
Target from third-party licensors ("In-Licensed Rights") and, during the term of
this Agreement, Target determines to let any of such In-Licensed Rights
terminate or expire, Target shall promptly notify CaRDiMa of any such decision
and shall use its reasonable efforts to assist CaRDiMa, at CaRDiMa's request and
expense, in negotiations with the licensor of such In-Licensed Rights with the
objective of obtaining for CaRDiMa the ability to use such In-Licensed Rights on
terms substantially similar to those

                                      -8-
<PAGE>

granted to Target. In the event that negotiations to provide for such direct
relationship between CaRDiMa and the licensor are not successful, Target
shall, to the extent permissible under the terms of the license, assign the In-
Licensed Rights to CaRDiMa so long as Target can be reasonably assured that it
shall have no ongoing obligations or liability after the date of such
assignment whether by operation of law, indemnity or otherwise. Nothing
contained in this Section 15 shall be construed to impose upon Target any
obligation to refrain from terminating any such third -party license agreement
or take any particular steps, other than as described above, to make such In-
Licensed Rights available to CaRDiMa.

16.      Miscellaneous.
         -------------

         16.1 Governing Law.  This Agreement shall be governed by and
              -------------                                         
interpreted under the laws of the State of California, without regard to
conflict of laws provisions.

         16.2 Arbitration.  Any dispute or claim arising out of or in connection
              -----------                                                      
with this Agreement will be finally settled by binding arbitration in San Jose,
California, under the Rules of Arbitration of the American Arbitration
Association, by one arbitrator appointed in accordance with said rules. Judgment
on the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to
any court of competent jurisdiction for preliminary or interim equitable relief
without breach of this arbitration provision.

         16.3 Solicitation.  After the Effective Date, CaRDiMa may conduct
              ------------                                               
employment negotiations with Target employees on a list finalized and approved
by Target as of the Effective Date.  Except as set forth in the preceding
sentence, during the term of this Agreement CaRDiMa shall not solicit employees
of Target to leave Target's employ and commence employment at CaRDiMa, and
Target shall not solicit employees of CaRDiMa to leave CaRDiMa' employ and
commence employment at Target.

         16.4 Non-Competition.
              ---------------

         (a)  Target hereby covenants and agrees that it will not, without
approval by CaRDiMa:

              (i)   Conduct material research or development efforts for
                    products in the CaRDiMa Field;

              (ii)  Make or sell products in the CaRDiMa Field; or

              (iii) Acquire any other entity the majority of whose revenues or
                    research and development expenses are derived from or
                    devoted to products in the CaRDiMa Field;

         (b)  CaRDiMa hereby covenants and agrees that it will not, without
approval by Target:

              (i)   Conduct material research or development efforts for
                    products in the Target Field;


                                      -9-
<PAGE>

              (ii)  Make or sell products in the Target Field;

              (iii) Acquire any other entity the majority of whose revenues or
                    research and development expenses are derived from or
                    devoted to products in the Target Field;

              (iv)  Sell products, other than products utilizing Target
                    Technology, in the field described in subsection (b) of the
                    definition of CaRDiMa Field, without first notifying Target
                    of the decision to sell such products and negotiating in
                    good faith with Target for at least 90 days prior to
                    negotiating with any third party (or initiating direct sales
                    to consumers) with the objective of granting to Target
                    distribution rights with respect to such products; or

              (v)   Sell products utilizing Target Technology in the field
                    described in subsection (b) of the definition of CaRDiMa
                    Field, without

                    (A)       if selling to a third party distributor, first
                              notifying Target of the decision to sell such
                              products and the terms and conditions under which
                              such products are to be sold (the "Terms") and
                              offering Target the opportunity to accept or
                              reject the Terms within 30 days from the date of
                              receipt of such notice, after which time if Target
                              shall reject or not accept the Terms, CaRDiMa
                              shall be free to offer the Terms to third parties;
                              provided, however, that CaRDiMa shall not offer
                              more favorable Terms to any such third party
                              without first following Target's notice and
                              refusal rights set forth herein; or

                    (B)       if selling directly to the consumer, paying to
                              Target a fee equal to [***] of the difference
                              between the actual selling price for such product
                              and CaRDiMa's fully burdened cost of producing and
                              selling such product (calculated in CaRDiMa's
                              standard manner of calculating such fully burdened
                              costs) with such payment to be made within 30 days
                              after the end of each month in which such sales
                              occur.

         16.5 Force Majeure.  If the performance of this Agreement or any
              -------------                                              
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation, ordinance, demand or requirement of any
government agency, or any other act or condition beyond the control of the
parties hereto, the party so affected, upon giving prompt notice to the other
party, shall be excused from such performance (other than the obligation to pay
money) during such prevention, restriction or interference.

         16.6 Assignment.  Each party hereto may assign its rights or
              ----------                                            
obligations under this Agreement without the prior written consent of the other
party, provided that prior to the effective date of such assignment the assignee
enters into an agreement with the nonassigning party which contains terms and
conditions identical to the terms and conditions of this Agreement.

                                      -10-

                     [*] CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

         16.7   Notices.  All notices, requests, consents and other
                -------
communications under this Agreement shall be in writing and (i) delivered by
hand, or (ii) mailed by first class registered mail, return receipt requested,
postage prepaid, or (iii) sent via facsimile transmission, or (iv) shipped
through a private courier system designated for overnight delivery, and shall
be addressed as follows:

                        To Target:

                        President and CEO
                        47201 Lakeview Boulevard
                        Fremont, CA 94538-5210
                        (510) 440-7700 - phone
                        (510) 440-7630 - fax

                        To CaRDiMa:

                        President and CEO
                        47201 Lakeview Boulevard
                        Fremont, CA 94538-5210
                        (510) 440-7700 - phone
                        (510) 440-7630 - fax

or to such other address or person as the parties may from time to time
designate by written notice delivered as specified above to the other.  Notices
shall be effective upon tender,  if delivered by hand, three (3) days after
mailing if mailed by first class mail, one (1) day after mailing if sent by
private overnight courier, or on the day of transmission if sent by facsimile.

         16.8   Severability.  In the event that any provision of this Agreement
                ------------                                                   
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.

         16.9   Waiver.  The failure of either party to enforce at any time the
                ------                                                        
provisions of this Agreement shall in no way be constituted to be a present or
future waiver of such provisions, and shall not in any way affect the right of
either party to enforce each and every such provision thereafter.

         16.10  Independent Contractors.  The relationship of Target and CaRDiMa
                -----------------------                                        
hereunder is that of independent contractors, and nothing herein shall be
construed to (i) give either party the right to direct or control the day-to-day
activities of the other, or (ii) constitute the parties as partners, joint
venturers, co-owners or otherwise as participants in a joint or common
undertaking.

         16.11  Entire Agreement.  The terms and conditions herein contained
                ----------------                                           
constitute the entire agreement between the parties and supersede all previous
agreements and understandings, whether oral or written, between the parties
hereto with respect to the subject matter hereof, and no agreement or
understanding varying or extending the same shall be binding upon either party
hereto unless in a written document signed by both parties.

                                      -11-
<PAGE>

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

         16.13  Counterparts.  This Agreement may be executed in two or more
                ------------                                               
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

         16.14  Public Announcements.  Neither party shall make any initial
                --------------------                                      
public disclosure or publicity release pertaining to the existence of this
Agreement, the subject matter hereof, or any of the transactions related hereto
without the prior consent of the other party; provided, however, that upon
notice to the other party's legal counsel, each party shall be permitted to make
such disclosures to the public or to governmental agencies as its legal counsel
shall deem necessary to comply with any applicable laws.  Without limiting the
foregoing, the parties currently anticipate that initial public disclosure by
the parties of this Agreement and the transactions related hereto shall take
place on May 12, 1993.

                                      -12-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by duly authorized officers or representatives as of the date first above
written.



TARGET THERAPEUTICS, INC.                CARDIMA, INC.


By: /s/ TARGET THERAPEUTICS, INC.        By: /s/ CARDIMA, INC.
    -------------------------------          -------------------------------

Name:                                    Name:
      ----------------------------             -----------------------------

Title:                                   Title:
       ---------------------------              ----------------------------

                                      -13-