EXHIBIT 10.1

INDEMNITY AGREEMENT

THIS AGREEMENT is made and entered into this _____ day of ______, 200__ by and between INTUITIVE SURGICAL, INC., a Delaware corporation (the "Corporation"), and __________ ("Agent").

RECITALS

WHEREAS, Agent performs a valuable service to the Corporation in his capacity as _______ of the Corporation;

WHEREAS, the stockholders of the Corporation have adopted bylaws (the "Bylaws") providing for the indemnification of the directors, officers, employees and other agents of the Corporation, including persons serving at the request of the Corporation in such capacities with other corporations or enterprises, as authorized by the Delaware General Corporation Law, as amended (the "Code");

WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit contracts between the Corporation and its agents, officers, employees and other agents with respect to indemnification of such persons; and

WHEREAS, in order to induce Agent to continue to serve as _________ of the Corporation, the Corporation has determined and agreed to enter into this Agreement with Agent;

NOW, THEREFORE, in consideration of Agent's continued service as ________ after the date hereof, the parties hereto agree as follows:

AGREEMENT

1. SERVICES TO THE CORPORATION. Agent will serve, at the will of the Corporation or under separate contract, if any such contract exists, as __________ of the Corporation or as a director, officer or other fiduciary of an affiliate of the Corporation (including any employee benefit plan of the Corporation) faithfully and to the best of his ability so long as he is duly elected and qualified in accordance with the provisions of the Bylaws or other applicable charter documents of the Corporation or such affiliate; provided, however, that Agent may at any time and for any reason resign from such position (subject to any contractual obligation that Agent may have assumed apart from this Agreement) and that the Corporation or any affiliate shall have no obligation under this Agreement to continue Agent in any such position.

2. INDEMNITY OF AGENT. The Corporation hereby agrees to hold harmless and indemnify Agent to the fullest extent authorized or permitted by the provisions of the Bylaws and the Code, as the same may be amended from time to time (but, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than the Bylaws or the Code permitted prior to adoption of such amendment).

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3. ADDITIONAL INDEMNITY. In addition to and not in limitation of the indemnification otherwise provided for herein, and subject only to the exclusions set forth in Section 4 hereof, the Corporation hereby further agrees to hold harmless and indemnify Agent:

(a) against any and all expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay because of any claim or claims made against or by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative (including an action by or in the right of the Corporation) to which Agent is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Agent is, was or at any time becomes a director, officer, employee or other agent of Corporation, or is or was serving or at any time serves at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise; and

(b) otherwise to the fullest extent as may be provided to Agent by the Corporation under the non-exclusivity provisions of the Code and the Bylaws.

4. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to Section 3 hereof shall be paid by the Corporation:

(a) on account of any claim against Agent solely for an accounting of profits made from the purchase or sale by Agent of securities of the Corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law;

(b) on account of Agent's conduct that is established by a final judgment as knowingly fraudulent or deliberately dishonest or that constituted willful misconduct;

(c) on account of Agent's conduct that is established by a final judgment as constituting a breach of Agent's duty of loyalty to the Corporation or resulting in any personal profit or advantage to which Agent was not legally entitled;

(d) for which payment is actually made to Agent under a valid and collectible insurance policy or under a valid and enforceable indemnity clause, bylaw or agreement, except in respect of any excess beyond payment under such insurance, clause, bylaw or agreement;

(e) if indemnification is not lawful (and, in this respect, both the Corporation and Agent have been advised that the Securities and Exchange Commission believes that indemnification for liabilities arising under the federal securities laws is against public policy and is, therefore, unenforceable and that claims for indemnification should be submitted to appropriate courts for adjudication); or

(f) in connection with any proceeding (or part thereof) initiated by Agent, or any proceeding by Agent against the Corporation or its directors, officers, employees or other agents, unless (i) such indemnification is expressly required to be made by law, (ii) the

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proceeding was authorized by the Board of Directors of the Corporation, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.

5. CONTINUATION OF INDEMNITY. All agreements and obligations of the Corporation contained herein shall continue during the period Agent is a director, officer, employee or other agent of the Corporation (or is or was serving at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise) and shall continue thereafter so long as Agent shall be subject to any possible claim or threatened, pending or completed action, suit or proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of the fact that Agent was serving in the capacity referred to herein.

6. PARTIAL INDEMNIFICATION. Agent shall be entitled under this Agreement to indemnification by the Corporation for a portion of the expenses (including attorneys' fees), witness fees, damages, judgments, fines and amounts paid in settlement and any other amounts that Agent becomes legally obligated to pay in connection with any action, suit or proceeding referred to in Section 3 hereof even if not entitled hereunder to indemnification for the total amount thereof, and the Corporation shall indemnify Agent for the portion thereof to which Agent is entitled.

7. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after receipt by Agent of notice of the commencement of any action, suit or proceeding, Agent will, if a claim in respect thereof is to be made against the Corporation under this Agreement, notify the Corporation of the commencement thereof; but the omission so to notify the Corporation will not relieve it from any liability which it may have to Agent otherwise than under this Agreement. With respect to any such action, suit or proceeding as to which Agent notifies the Corporation of the commencement thereof:

(a) the Corporation will be entitled to participate therein at its own expense;

(b) except as otherwise provided below, the Corporation may, at its option and jointly with any other indemnifying party similarly notified and electing to assume such defense, assume the defense thereof, with counsel reasonably satisfactory to Agent. After notice from the Corporation to Agent of its election to assume the defense thereof, the Corporation will not be liable to Agent under this Agreement for any legal or other expenses subsequently incurred by Agent in connection with the defense thereof except for reasonable costs of investigation or otherwise as provided below. Agent shall have the right to employ separate counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Agent unless (i) the employment of counsel by Agent has been authorized by the Corporation, (ii) Agent shall have reasonably concluded, and so notified the Corporation, that there is an actual conflict of interest between the Corporation and Agent in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such

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action, in each of which cases the fees and expenses of Agent's separate counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which Agent shall have made the conclusion provided for in clause (ii) above; and

(c) the Corporation shall not be liable to indemnify Agent under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent, which shall not be unreasonably withheld. The Corporation shall be permitted to settle any action except that it shall not settle any action or claim in any manner which would impose any penalty or limitation on Agent without Agent's written consent, which may be given or withheld in Agent's sole discretion.

8. EXPENSES. The Corporation shall advance, prior to the final disposition of any proceeding, promptly following request therefor, all expenses incurred by Agent in connection with such proceeding upon receipt of an undertaking by or on behalf of Agent to repay said amounts if it shall be determined ultimately that Agent is not entitled to be indemnified under the provisions of this Agreement, the Bylaws, the Code or otherwise.

9. ENFORCEMENT. Any right to indemnification or advances granted by this Agreement to Agent shall be enforceable by or on behalf of Agent in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. Agent, in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting his claim. It shall be a defense to any action for which a claim for indemnification is made under Section 3 hereof (other than an action brought to enforce a claim for expenses pursuant to Section 8 hereof, provided that the required undertaking has been tendered to the Corporation) that Agent is not entitled to indemnification because of the limitations set forth in Section 4 hereof. Neither the failure of the Corporation (including its Board of Directors or its stockholders) to have made a determination prior to the commencement of such enforcement action that indemnification of Agent is proper in the circumstances, nor an actual determination by the Corporation (including its Board of Directors or its stockholders) that such indemnification is improper shall be a defense to the action or create a presumption that Agent is not entitled to indemnification under this Agreement or otherwise.

10. SUBROGATION. In the event of payment under this Agreement, the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of Agent, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Corporation effectively to bring suit to enforce such rights.

11. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by this Agreement shall not be exclusive of any other right which Agent may have or hereafter acquire under any statute, provision of the Corporation's Certificate of Incorporation or Bylaws, agreement, vote of stockholders or directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding office.

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12. SURVIVAL OF RIGHTS.

(a) The rights conferred on Agent by this Agreement shall continue after Agent has ceased to be a director, officer, employee or other agent of the Corporation or to serve at the request of the Corporation as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise and shall inure to the benefit of Agent's heirs, executors and administrators.

(b) The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Corporation, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform if no such succession had taken place.

13. SEPARABILITY. Each of the provisions of this Agreement is a separate and distinct agreement and independent of the others, so that if any provision hereof shall be held to be invalid for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions hereof. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Corporation shall nevertheless indemnify Agent to the fullest extent provided by the Bylaws, the Code or any other applicable law.

14. GOVERNING LAW. This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

15. AMENDMENT AND TERMINATION. No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by both parties hereto.

16. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute but one and the same Agreement. Only one such counterpart need be produced to evidence the existence of this Agreement.

17. HEADINGS. The headings of the sections of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction hereof.

18. NOTICES. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon delivery if delivered by hand to the party to whom such communication was directed or (ii) upon the third business day after the date on which such communication was mailed if mailed by certified or registered mail with postage prepaid:

(a) If to Agent, at the address indicated on the signature page hereof.

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(b) If to the Corporation, to:

INTUITIVE SURGICAL, INC.
1340 W. Middlefield Road
Mountain View, CA 94043

or to such other address as may have been furnished to Agent by the Corporation.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

INTUITIVE SURGICAL, INC.

AGENT

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EXHIBIT 10.2

INTUITIVE SURGICAL, INC.

2000 EQUITY INCENTIVE PLAN

ADOPTED MARCH __, 2000
APPROVED BY STOCKHOLDERS _________, 2000
TERMINATION DATE: _________, 2010

1. PURPOSES.

(a) AMENDMENT AND RESTATEMENT OF INITIAL PLAN. The Plan initially was established as the 1996 Equity Incentive Plan, effective as of January 31, 1996 (the "Initial Plan"). The Initial Plan, as amended, hereby is amended and restated in its entirety and renamed the 2000 Equity Incentive Plan, effective upon the completion of the Company's initial public offering. The terms of the Initial Plan (other than the aggregate number of shares issuable thereunder) shall remain in effect and apply to all Stock Awards granted pursuant to the Initial Plan. Section 11 of the Plan shall supersede Section 12 of the Initial Plan.

(b) ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive Stock Awards are the Employees, Directors and Consultants of the Company and its Affiliates.

(c) AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

(d) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

2. DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(b) "BOARD" means the Board of Directors of the Company.

(c) "CODE" means the Internal Revenue Code of 1986, as amended.

(d) "COMMITTEE" means a committee of one or more members of the Board appointed by the Board in accordance with subsection 3(c).

(e) "COMMON STOCK" means the common stock of the Company.

(f) "COMPANY" means Intuitive Surgical, Inc., a Delaware corporation.

(g) "CONSULTANT" means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate. However, the term "Consultant" shall not include either Directors who are not compensated by the Company for their services as Directors or Directors who are merely paid a director's fee by the Company for their services as Directors.

(h) "CONTINUOUS SERVICE" means that the Participant's service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Participant's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant's Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

(i) "COVERED EMPLOYEE" means the chief executive officer and the four
(4) other highest compensated officers of the Company for whom total compensation is required to be reported to stockholders under the Exchange Act, as determined for purposes of Section 162(m) of the Code.

(j) "DIRECTOR" means a member of the Board of Directors of the Company.

(k) "DISABILITY" means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

(l) "EMPLOYEE" means any person employed by the Company or an Affiliate. Mere service as a Director or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate.

(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(n) "FAIR MARKET VALUE" means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the

greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.

(o) "INCENTIVE STOCK OPTION" means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(p) "LISTING DATE" means the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has been certified in accordance with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.

(q) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a current Employee or Officer of the Company or its parent or a subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or a subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

(r) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as an Incentive Stock Option.

(s) "OFFICER" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(t) "OPTION" means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.

(u) "OPTION AGREEMENT" means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

(v) "OPTIONHOLDER" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(w) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current employee of the Company or an "affiliated corporation" (within the meaning of Treasury Regulations

promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time and is not currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code.

(x) "PARTICIPANT" means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(y) "PLAN" means this Intuitive Surgical, Inc. 2000 Equity Incentive Plan.

(z) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

(aa) "SECURITIES ACT" means the Securities Act of 1933, as amended.

(bb) "STOCK AWARD" means any right granted under the Plan, including an Option, a stock bonus and a right to acquire restricted stock.

(cc) "STOCK AWARD AGREEMENT" means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.

(dd) "TEN PERCENT STOCKHOLDER" means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

3. ADMINISTRATION.

(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subsection 3(c).

(b) POWERS OF BOARD. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person.

(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any

Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(iii) To amend the Plan or a Stock Award as provided in Section 12.

(iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company which are not in conflict with the provisions of the Plan.

(c) DELEGATION TO COMMITTEE.

(i) GENERAL. The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term "Committee" shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.

(ii) COMMITTEE COMPOSITION WHEN COMMON STOCK IS PUBLICLY TRADED. At such time as the Common Stock is publicly traded, in the discretion of the Board, a Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, and/or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3. Within the scope of such authority, the Board or the Committee may (1) delegate to a committee of one or more members of the Board who are not Outside Directors the authority to grant Stock Awards to eligible persons who are either (a) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Stock Award or (b) not persons with respect to whom the Company wishes to comply with Section 162(m) of the Code and/or) (2) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Stock Awards to eligible persons who are not then subject to Section 16 of the Exchange Act.

(d) EFFECT OF BOARD'S DECISION. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

4. SHARES SUBJECT TO THE PLAN.

(a) SHARE RESERVE. Subject to the provisions of Section 11 relating to adjustments upon changes in Common Stock, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Ten Million (10,000,000) shares of Common Stock.

(b) EVERGREEN SHARE RESERVE INCREASE.

(i) Notwithstanding subsection 4(a) hereof, on the day after each annual meeting of stockholders of the Company (the "Calculation Date") for a period of ten (10) years, commencing with the annual meeting of stockholders in 2001, the aggregate number of shares of Common Stock that is available for issuance under the Plan shall automatically be increased by that number of shares equal to the greater of (1) five percent (5%) of the Diluted Shares Outstanding or (2) the number of shares of Common Stock subject to Stock Awards granted under the Plan during the prior 12-month period; provided, however, that the Board, from time to time, may provide for a lesser increase in the aggregate number of shares of Common Stock that is available for issuance under the Plan.

(ii) Subject to the provisions of Section 11 hereof relating to adjustments upon changes in securities, the increase in the maximum aggregate number of shares of Common Stock that is available for issuance pursuant to Incentive Stock Options granted under the Plan shall not exceed Twenty Million (20,000,000) shares of Common Stock.

(iii) "Diluted Shares Outstanding" shall mean, as of any date,
(1) the number of outstanding shares of Common Stock of the Company on such Calculation Date, plus (2) the number of shares of Common Stock issuable upon such Calculation Date assuming the conversion of all outstanding Preferred Stock and convertible notes, plus (3) the additional number of dilutive Common Stock equivalent shares outstanding as the result of any options or warrants outstanding during the fiscal year, calculated using the treasury stock method.

(c) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Stock Award shall revert to and again become available for issuance under the Plan. If any shares are repurchased, such repurchased shares shall revert to and again become available for issuance under the Plan for all Stock Awards other than Incentive Stock Options.

(d) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY.

(a) ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

(b) TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

(c) SECTION 162(m) LIMITATION. Subject to the provisions of Section 11 relating to adjustments upon changes in the shares of Common Stock, no Employee shall be eligible to be granted Options covering more than Five Million (5,000,000) shares of Common Stock during any calendar year. This subsection 5(c) shall not apply prior to the Listing Date and, following the Listing Date, this subsection 5(c) shall not apply until (i) the earliest of: (1) the first material modification of the Plan (including any increase in the number of shares of Common Stock reserved for issuance under the Plan in accordance with
Section 4); (2) the issuance of all of the shares of Common Stock reserved for issuance under the Plan; (3) the expiration of the Plan; or (4) the first meeting of stockholders at which Directors are to be elected that occurs after the close of the third calendar year following the calendar year in which occurred the first registration of an equity security under Section 12 of the Exchange Act; or (ii) such other date required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.

(d) CONSULTANTS.

(i) A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, a Form S-8 Registration Statement under the Securities Act ("Form S-8") is not available to register either the offer or the sale of the Company's securities to such Consultant because of the nature of the services that the Consultant is providing to the Company, or because the Consultant is not a natural person, or as otherwise provided by the rules governing the use of Form S-8, unless the Company determines both (i) that such grant (A) shall be registered in another manner under the Securities Act (e.g., on a Form S-3 Registration Statement) or (B) does not require registration under the Securities Act in order to comply with the requirements of the Securities Act, if applicable, and (ii) that such grant complies with the securities laws of all other relevant jurisdictions.

(ii) Form S-8 generally is available to consultants and advisors only if (i) they are natural persons; (ii) they provide bona fide services to the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer's parent; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the issuer's securities.

6. OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

(a) TERM. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option granted on or after the Listing Date shall be exercisable after the expiration of ten (10) years from the date it was granted.

(b) EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the provisions of subsection 5(b) regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(c) EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(d) CONSIDERATION. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with the Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board. Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). At any time that the Company is incorporated in Delaware, payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment.

In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement.

(e) TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.

(f) TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.

(g) VESTING GENERALLY. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this subsection 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

(h) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's Continuous Service (or such longer or shorter period specified in the Option Agreement),or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate.

(i) EXTENSION OF TERMINATION DATE. An Optionholder's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in subsection 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration requirements.

(j) DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.

(k) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's Continuous Service terminates as a result of the Optionholder's death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder's Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder's death pursuant to subsection 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement), or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.

(l) EARLY EXERCISE. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder's Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate.

7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

(a) STOCK BONUS AWARDS. Each stock bonus agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate stock bonus agreements need not be identical, but each stock bonus agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) CONSIDERATION. A stock bonus may be awarded in consideration for past services actually rendered to the Company or an Affiliate for its benefit.

(ii) VESTING. Shares of Common Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

(iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event a Participant's Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the stock bonus agreement.

(iv) TRANSFERABILITY. Rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the stock bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the stock bonus agreement remains subject to the terms of the stock bonus agreement.

(b) RESTRICTED STOCK AWARDS. Each restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) PURCHASE PRICE. The purchase price under each restricted stock purchase agreement shall be such amount as the Board shall determine and designate in such restricted stock purchase agreement. The purchase price shall not be less than eighty-five percent (85%) of the Common Stock's Fair Market Value on the date such award is made or at the time the purchase is consummated.

(ii) CONSIDERATION. The purchase price of Common Stock acquired pursuant to the restricted stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board in its discretion; provided, however, that at any time that the Company is incorporated in Delaware, then payment of the Common Stock's "par value," as defined in the Delaware General Corporation Law, shall not be made by deferred payment.

(iii) VESTING. Shares of Common Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.

(iv) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the event a Participant's Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination under the terms of the restricted stock purchase agreement.

(v) TRANSFERABILITY. Rights to acquire shares of Common Stock under the restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement.

8. COVENANTS OF THE COMPANY.

(a) AVAILABILITY OF SHARES. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

(b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of

the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.

9. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.

10. MISCELLANEOUS.

(a) ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

(b) STOCKHOLDER RIGHTS. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms.

(c) NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(d) INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options.

(e) INVESTMENT ASSURANCES. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant's knowledge and experience in financial and

business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant's own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if
(1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

(f) WITHHOLDING OBLIGATIONS. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company's right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock.

11. ADJUSTMENTS UPON CHANGES IN STOCK.

(a) CAPITALIZATION ADJUSTMENTS. If any change is made in the Common Stock subject to the Plan, or subject to any Stock Award, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to subsection 4(a) and the maximum number of securities subject to award to any person pursuant to subsection 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction "without receipt of consideration" by the Company.)

(b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to such event.

(c) ASSET SALE, MERGER, CONSOLIDATION OR REVERSE MERGER. In the event of
(i) a sale, lease or other disposition of all or substantially all of the assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (collectively, a "change in control"), then any surviving corporation or acquiring corporation shall assume any Stock Awards outstanding under the Plan or shall substitute similar stock awards (including an award to acquire the same consideration paid to the stockholders in the change in control for those outstanding under the Plan). In the event any surviving corporation or acquiring corporation refuses to assume such Stock Awards or to substitute similar stock awards for those outstanding under the Plan, then with respect to Stock Awards held by Participants whose Continuous Service has not terminated, the vesting of such Stock Awards (and, if applicable, the time during which such Stock Awards may be exercised) shall be accelerated in full, and the Stock Awards shall terminate if not exercised (if applicable) at or prior to the change in control. With respect to any other Stock Awards outstanding under the Plan, such Stock Awards shall terminate if not exercised (if applicable) prior to the change in control.

12. AMENDMENT OF THE PLAN AND STOCK AWARDS.

(a) AMENDMENT OF PLAN. The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 11 relating to adjustments upon changes in Common Stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

(b) STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

(c) CONTEMPLATED AMENDMENTS. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.

(d) NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.

(e) AMENDMENT OF STOCK AWARDS. The Board at any time, and from time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

13. TERMINATION OR SUSPENSION OF THE PLAN.

(a) PLAN TERM. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth
(10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the Participant.

14. EFFECTIVE DATE OF PLAN.

The Plan shall become effective upon adoption by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

15. CHOICE OF LAW.

The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state's conflict of laws rules.

INTUITIVE SURGICAL, INC.
STOCK OPTION GRANT NOTICE
(2000 EQUITY INCENTIVE PLAN)

Intuitive Surgical, Inc. (the "Company"), pursuant to its 2000 Equity Incentive Plan (the "Plan"), hereby grants to Optionholder an option to purchase the number of shares of the Company's Common Stock set forth below. This option is subject to all of the terms and conditions as set forth herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.

Optionholder:                                     ______________________________
Date of Grant:                                    ______________________________
Vesting Commencement Date:                        ______________________________
Number of Shares Subject to Option:               ______________________________
Exercise Price (Per Share):                       ______________________________
Total Exercise Price:                             ______________________________
Expiration Date:                                  ______________________________

TYPE OF GRANT:     [ ] Incentive Stock Option(1)  [ ]  Nonstatutory Stock Option

EXERCISE SCHEDULE: Early Exercise Permitted

VESTING SCHEDULE: 1/4th of the shares vest one year after the Vesting Commencement Date.

                   1/48th of the shares vest monthly thereafter over the next
                   four years.

PAYMENT:           By one or a combination of the following items (described in
                   the Stock Option Agreement):

                   By cash or check
                   Pursuant to a Regulation T Program if the Shares are publicly
                   traded
                   By delivery of already-owned shares if the Shares are
                   publicly traded

ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionholder acknowledges receipt of, and understands and agrees to, this Grant Notice, the Stock Option Agreement and the Plan. Optionholder further acknowledges that as of the Date of Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between Optionholder and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of (i) options previously granted and delivered to Optionholder under the Plan, and (ii) the following agreements only:

INTUITIVE SURGICAL, INC.                    OPTIONHOLDER:


By:
   -------------------------------          ------------------------------------
            Signature                                    Signature

Title:                                      Date:
      ----------------------------               -------------------------------

Date:
     -----------------------------

ATTACHMENTS: Stock Option Agreement, 2000 Equity Incentive Plan and Notice of Exercise

INTUITIVE SURGICAL, INC.
2000 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT
(INCENTIVE AND NONSTATUTORY STOCK OPTIONS)

Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement, Intuitive Surgical, Inc. (the "Company") has granted you an option under its 2000 Equity Incentive Plan (the "Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan.

The details of your option are as follows:

1. VESTING.

(a) Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

(b) Notwithstanding the foregoing vesting schedule, if you are a full time Employee and if the Company consummates a Change of Control (as defined in subsection 1(c) below), and if within twenty-four (24) months after a Change of Control one of the following events occurs: (i) your employment is terminated without Cause (as defined in subsection 1(d) below); (ii) the principal place of the performance of your employment responsibilities (the "Employment Location") is changed to a location more than twenty-five (25) miles from your Employment Location immediately prior to the Change of Control; or (iii) there is a material reduction in your compensation or employment responsibilities without Cause, then the unvested portion of your option shall immediately become fully vested and exercisable.

(c) A "Change of Control," as used herein shall mean any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization in which the stockholders of the Company prior to such consolidation, merger or reorganization shall own less than fifty percent (50%) of the voting stock of the continuing or surviving entity of such consolidation, merger or reorganization.

(d) As used herein, "Cause" shall mean misconduct, including: (i) conviction of any felony or any crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or act of dishonesty against the Company; (iii) willful and material breach of the Company's policies; (iv) intentional and material damage to the Company's property; (v) material breach of your Proprietary Information and Inventions Agreement; or (vi) death, severe physical or mental disability.

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

3. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in your Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of your option is permitted) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the nonvested portion of your option; provided, however, that:

(a) a partial exercise of your option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

(b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise shall be subject to the purchase option in favor of the Company as described in the Company's form of Early Exercise Stock Purchase Agreement;

(c) you shall enter into the Company's form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

(d) if your option is an incentive stock option, then, as provided in the Plan, to the extent that the aggregate Fair Market Value (determined at the time of grant) of the shares of Common Stock with respect to which your option plus all other incentive stock options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as nonstatutory stock options.

4. METHOD OF PAYMENT. Payment of the exercise price is due in full upon exercise of all or any part of your option. You may elect to make payment of the exercise price in cash or by check or in any other manner PERMITTED BY YOUR GRANT NOTICE, which may include one or more of the following:

(a) In the Company's sole discretion at the time your option is exercised and provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.

(b) Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the Company's reported earnings (generally six months) or that you did not acquire, directly or

indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock.

5. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

7. TERM. The term of your option commences on the Date of Grant and expires upon the EARLIEST of the following:

(a) three (3) months after the termination of your Continuous Service for any reason other than your Disability or death, provided that if during any part of such three- (3-) month period your option is not exercisable solely because of the condition set forth in the preceding paragraph relating to "Securities Law Compliance," your option shall not expire until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;

(b) twelve (12) months after the termination of your Continuous Service due to your Disability;

(c) eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates;

(d) the Expiration Date indicated in your Grant Notice; or

(e) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an incentive stock option, note that, to obtain the federal income tax advantages associated with an "incentive stock option," the Code requires that at all times beginning on the date of grant of your option and ending on the day three (3) months before the date of your option's exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability

of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an "incentive stock option" if you continue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment terminates.

8. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock acquired upon such exercise.

(c) If your option is an incentive stock option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the date of your option grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

(d) By exercising your option you agree that the Company (or a representative of the underwriter(s)) may, in connection with the first underwritten registration of the offering of any securities of the Company under the Securities Act, require that you not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of time specified by the underwriter(s) (not to exceed one hundred eighty (180) days) following the effective date of the registration statement of the Company filed under the Securities Act. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company and/or the underwriter(s) that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period.

9. TRANSFERABILITY. Your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option.

10. RIGHT OF FIRST REFUSAL. Shares of Common Stock that you acquire upon exercise of your option are subject to any right of first refusal that may be described in the Company's bylaws in effect at such time the Company elects to exercise its right. The Company's right of first refusal shall expire on the Listing Date.

11. RIGHT OF REPURCHASE. To the extent provided in the Company's bylaws as amended from time to time, the Company shall have the right to repurchase all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.

12. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective shareholders, Boards of Directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

13. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a "cashless exercise" pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your option.

(b) Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise

your option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein.

14. NOTICES. Any notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

15. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control.

EXHIBIT 10.3

INTUITIVE SURGICAL, INC.

2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

ADOPTED MARCH ___, 2000
APPROVED BY STOCKHOLDERS _______ ___, 2000

EFFECTIVE DATE: _________, 2000
TERMINATION DATE: NONE

1. PURPOSES.

(a) ELIGIBLE OPTION RECIPIENTS. The persons eligible to receive Options are the Non-Employee Directors of the Company.

(b) AVAILABLE OPTIONS. The purpose of the Plan is to provide a means by which Non-Employee Directors may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Nonstatutory Stock Options.

(c) GENERAL PURPOSE. The Company, by means of the Plan, seeks to retain the services of its Non-Employee Directors, to secure and retain the services of new Non-Employee Directors and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

2. DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(b) "ANNUAL GRANT" means an Option granted annually to all Non-Employee Directors who meet the specified criteria pursuant to subsection 6(b) of the Plan.

(c) "ANNUAL MEETING" means the annual meeting of the stockholders of the Company.

(d) "BOARD" means the Board of Directors of the Company.

(e) "CODE" means the Internal Revenue Code of 1986, as amended.

(f) "COMMON STOCK" means the common stock of the Company.

(g) "COMPANY" means Intuitive Surgical, Inc., a Delaware corporation.

(h) "CONSULTANT" means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) who is a member of the Board of Directors of an Affiliate. However, the

term "Consultant" shall not include either Directors of the Company who are not compensated by the Company for their services as Directors or Directors of the Company who are merely paid a director's fee by the Company for their services as Directors.

(i) "CONTINUOUS SERVICE" means that the Optionholder's service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Optionholder's Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionholder renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Optionholder renders such service, provided that there is no interruption or termination of the Optionholder's Continuous Service. For example, a change in status from a Non-Employee Director of the Company to a Consultant of an Affiliate or an Employee of the Company will not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave.

(j) "DIRECTOR" means a member of the Board of Directors of the Company.

(k) "DISABILITY" means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

(l) "EMPLOYEE" means any person employed by the Company or an Affiliate. Mere service as a Director or payment of a director's fee by the Company or an Affiliate shall not be sufficient to constitute "employment" by the Company or an Affiliate.

(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(n) "FAIR MARKET VALUE" means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable.

(ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined in good faith by the Board.

(o) "INITIAL GRANT" means an Option granted to a Non-Employee Director who meets the specified criteria pursuant to subsection 6(a) of the Plan.

(p) "IPO DATE" means the effective date of the initial public offering of the Common Stock.

(q) "NON-EMPLOYEE DIRECTOR" means a Director who is not an Employee.

(r) "NONSTATUTORY STOCK OPTION" means an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(s) "OFFICER" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(t) "OPTION" means a Nonstatutory Stock Option granted pursuant to the Plan.

(u) "OPTION AGREEMENT" means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.

(v) "OPTIONHOLDER" means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(w) "PLAN" means this Caliper Technologies Corp. 1999 Non-Employee Directors' Stock Option Plan.

(x) "RULE 16b-3" means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

(y) "SECURITIES ACT" means the Securities Act of 1933, as amended.

3. ADMINISTRATION.

(a) ADMINISTRATION BY BOARD. The Board shall administer the Plan. The Board may not delegate administration of the Plan to a committee.

(b) POWERS OF BOARD. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine the provisions of each Option to the extent not specified in the Plan.

(ii) To construe and interpret the Plan and Options granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Option Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(iii) To amend the Plan or an Option as provided in Section 12.

(iv) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company that are not in conflict with the provisions of the Plan.

(c) EFFECT OF BOARD'S DECISION. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.

4. SHARES SUBJECT TO THE PLAN.

(a) SHARE RESERVE. Subject to the provisions of Section 11 relating to adjustments upon changes in the Common Stock, the Common Stock that may be issued pursuant to Options shall not exceed in the aggregate Three Hundred Thousand (300,000) shares of Common Stock.

(b) EVERGREEN SHARE RESERVE INCREASE.

(i) Notwithstanding subsection 4(a) hereof, on the day after each Annual Meeting (the "Calculation Date") for a period of ten (10) years, commencing with the Annual Meeting in 2000, the aggregate number of shares of Common Stock that is available for issuance under the Plan shall automatically be increased by that number of shares equal to the greater of (1) three-tenths of one percent (0.3%) of the Diluted Shares Outstanding or (2) the number of shares of Common Stock subject to Options granted during the prior 12-month period; provided, however, that the Board, from time to time, may provide for a lesser increase in the aggregate number of shares of Common Stock that is available for issuance under the Plan

(ii) "Diluted Shares Outstanding" shall mean, as of any date, (1) the number of outstanding shares of Common Stock of the Company on such Calculation Date, plus (2) the number of shares of Common Stock issuable upon such Calculation Date assuming the conversion of all outstanding Preferred Stock and convertible notes, plus (3) the additional number of dilutive Common Stock equivalent shares outstanding as the result of any options or warrants outstanding during the fiscal year, calculated using the treasury stock method.

(c) REVERSION OF SHARES TO THE SHARE RESERVE. If any Option shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Option shall revert to and again become available for issuance under the Plan.

(d) SOURCE OF SHARES. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.

5. ELIGIBILITY.

The Options as set forth in section 6 automatically shall be granted under the Plan to all Non-Employee Directors.

6. NON-DISCRETIONARY GRANTS.

(a) INITIAL GRANTS. Without any further action of the Board, each person who is elected or appointed for the first time to be a Non-Employee Director automatically shall, upon the date of his or her initial election or appointment to be a Non-Employee Director, be granted an Initial Grant to purchase Twenty Thousand (20,000) shares of Common Stock on the terms and conditions set forth herein.

(b) ANNUAL GRANTS. Without any further action of the Board, on the day following each Annual Meeting, commencing with the Annual Meeting in 2001, each person who is then a Non-Employee Director, and has been a Non-Employee Director for at least six (6) months, automatically shall be granted an Annual Grant to purchase Five Thousand (5,000) shares of Common Stock on the terms and conditions set forth herein.

7. OPTION PROVISIONS.

Each Option shall be in such form and shall contain such terms and conditions as required by the Plan. Each Option shall contain such additional terms and conditions, not inconsistent with the Plan, as the Board shall deem appropriate. Each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

(a) TERM. No Option shall be exercisable after the expiration of ten
(10) years from the date it was granted.

(b) EXERCISE PRICE. The exercise price of each Option shall be one hundred percent (100%) of the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.

(c) CONSIDERATION. The purchase price of stock acquired pursuant to an Option may be paid, to the extent permitted by applicable statutes and regulations, in any combination of (i) cash or check, (ii) delivery to the Company of other Common Stock or (iii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. The purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been

held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes).

(d) TRANSFERABILITY. An Option is transferable by will or by the laws of descent and distribution. An Option also is transferable if, at the time of transfer, a Form S-8 registration statement under the Securities Act is available for the exercise of the Option and the subsequent resale of the underlying securities.1 In addition, Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.

(e) VESTING. Options shall vest as follows:

(i) Initial Grants shall provide for vesting of 1/36th of the shares subject to the Option each month for three (3) years after the date of the grant.

(ii) Annual Grants shall provide for vesting of 1/12th of the shares subject to the Option each month for one (1) year after the date of the grant.

(f) EXERCISE. Options shall be exercisable in full immediately upon grant.

(g) TERMINATION OF CONTINUOUS SERVICE. In the event an Optionholder's Continuous Service terminates (other than upon the Optionholder's death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder's Continuous Service, or
(ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate.

(h) EXTENSION OF TERMINATION DATE. If the exercise of the Option following the termination of the Optionholder's Continuous Service (other than upon the Optionholder's death or Disability) would be prohibited at any time solely because the issuance of shares would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in subsection 7(a) or (ii) the

(1) See the General Instructions to the Form S-8 Registration Statement, Rule
A.1.(5). Currently a Form S-8 is available for the exercise of the Option and the subsequent resale of the underlying securities by the Optionholder's family member who has acquired the Option from the Optionholder through a gift or a domestic relations order. For purposes of Form S-8, "family member" currently includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Optionholder's household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than fifty percent (50%) of the voting interests. Form S-8 currently is not available for the exercise of an Option transferred for value. The following transactions currently are not prohibited transfers for value: (i) a transfer under a domestic relations order in settlement of marital property rights; and (ii) a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by family members (or the Optionholder) in exchange for an interest in that entity.

expiration of a period of three (3) months after the termination of the Optionholder's Continuous Service during which the exercise of the Option would not be in violation of such registration requirements.

(i) DISABILITY OF OPTIONHOLDER. In the event an Optionholder's Continuous Service terminates as a result of the Optionholder's Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise it as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.

(j) DEATH OF OPTIONHOLDER. In the event (i) an Optionholder's Continuous Service terminates as a result of the Optionholder's death or (ii) the Optionholder dies within the three-month period after the termination of the Optionholder's Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise the Option as of the date of death) by the Optionholder's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder's death, but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.

8. COVENANTS OF THE COMPANY.

(a) AVAILABILITY OF SHARES. During the terms of the Options, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Options.

(b) SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Options and to issue and sell shares of Common Stock upon exercise of the Options; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Option or any stock issued or issuable pursuant to any such Option. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such Options unless and until such authority is obtained.

9. USE OF PROCEEDS FROM STOCK.

Proceeds from the sale of stock pursuant to Options shall constitute general funds of the Company.

10. MISCELLANEOUS.

(a) STOCKHOLDER RIGHTS. No Optionholder shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Option unless and until such Optionholder has satisfied all requirements for exercise of the Option pursuant to its terms.

(b) NO SERVICE RIGHTS. Nothing in the Plan or any instrument executed or Option granted pursuant thereto shall confer upon any Optionholder any right to continue to serve the Company as a Non-Employee Director or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant's agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(c) INVESTMENT ASSURANCES. The Company may require an Optionholder, as a condition of exercising or acquiring stock under any Option, (i) to give written assurances satisfactory to the Company as to the Optionholder's knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Option; and (ii) to give written assurances satisfactory to the Company stating that the Optionholder is acquiring the stock subject to the Option for the Optionholder's own account and not with any present intention of selling or otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if
(iii) the issuance of the shares upon the exercise or acquisition of stock under the Option has been registered under a then currently effective registration statement under the Securities Act or (iv) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the stock.

(d) WITHHOLDING OBLIGATIONS. The Optionholder may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under an Option by any of the following means (in addition to the Company's right to withhold from any compensation paid to the Optionholder by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of the Common Stock otherwise issuable to the Optionholder as a result of the exercise or acquisition of stock under the Option, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of the Common Stock.

11. ADJUSTMENTS UPON CHANGES IN STOCK.

(a) CAPITALIZATION ADJUSTMENTS. If any change is made in the stock subject to the Plan, or subject to any Option, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject both to the Plan pursuant to subsection 4(a) and to the nondiscretionary Options specified in Section 5, and the outstanding Options will be appropriately adjusted in the class(es) and number of securities and price per share of stock subject to such outstanding Options. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction "without receipt of consideration" by the Company.)

(b) DISSOLUTION OR LIQUIDATION. In the event of a dissolution or liquidation of the Company, then all outstanding Options shall terminate immediately prior to such event.

(c) ASSET SALE, MERGER, CONSOLIDATION OR REVERSE MERGER.

(i) In the event of (i) a sale, lease or other disposition of all or substantially all of the assets of the Company, (ii) a merger or consolidation in which the Company is not the surviving corporation or (iii) a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise (collectively, a "change in control"), then any surviving corporation or acquiring corporation shall assume any Options outstanding under the Plan or shall substitute similar Options (including an option to acquire the same consideration paid to the stockholders in the change in control transaction for those outstanding under the Plan).

(ii) In the event any surviving corporation or acquiring corporation refuses to assume such Options or to substitute similar Options for those outstanding under the Plan, then the vesting of such Options and the vesting of any shares of Common Stock acquired pursuant to such Options shall be accelerated in full, and the Options shall terminate if not exercised at or prior to the change in control.

(iii) In the event any surviving corporation or acquiring corporation assumes such Options or substitutes similar Options for those outstanding under the Plan but the Optionholder is not elected or appointed to the board of directors of the surviving corporation or acquiring corporation at the first meeting of such board of directors after the change in control, then the vesting of such Options and the vesting of any shares of Common Stock acquired pursuant to such Options shall be accelerated by eighteen (18) months on the day after the first meeting of the board of directors of the surviving corporation or acquiring corporation.

(iv) In the event any surviving corporation or acquiring corporation assumes such Options or substitutes similar Options for those outstanding under the Plan and the Optionholder is elected or appointed to the board of directors of the surviving corporation or acquiring corporation at the first meeting of such board of directors after the change in control, then the vesting of such Options and the vesting of any shares of Common Stock acquired pursuant to such Options shall not be accelerated.

12. AMENDMENT OF THE PLAN AND OPTIONS.

(a) AMENDMENT OF PLAN. The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 11 relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Rule 16b-3 or any Nasdaq or securities exchange listing requirements.

(b) STOCKHOLDER APPROVAL. The Board may, in its sole discretion, submit any other amendment to the Plan for stockholder approval.

(c) NO IMPAIRMENT OF RIGHTS. Rights under any Option granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless
(i) the Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing.

(d) AMENDMENT OF OPTIONS. The Board at any time, and from time to time, may amend the terms of any one or more Options; provided, however, that the rights under any Option shall not be impaired by any such amendment unless (i) the Company requests the consent of the Optionholder and (ii) the Optionholder consents in writing.

13. TERMINATION OR SUSPENSION OF THE PLAN.

(a) PLAN TERM. The Board may suspend or terminate the Plan at any time. No Options may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan shall not impair rights and obligations under any Option granted while the Plan is in effect except with the written consent of the Optionholder.

14. EFFECTIVE DATE OF PLAN.

The Plan shall become effective on the IPO Date, but no Option shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.

15. CHOICE OF LAW.

All questions concerning the construction, validity and interpretation of this Plan shall be governed by the law of the State of Delaware, without regard to such state's conflict of laws rules.

INTUITIVE SURGICAL, INC.

2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN

STOCK OPTION AGREEMENT
(NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice ("Grant Notice") and this Stock Option Agreement, Intuitive Surgical, Inc. (the "Company") has granted you an option under its 2000 Non-Employee Directors' Stock Option Plan (the "Plan") to purchase the number of shares of the Company's Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same definitions as in the Plan.

The details of your option are as follows:

1. VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service.

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share referenced in your Grant Notice may be adjusted from time to time for Capitalization Adjustments, as provided in the Plan.

3. EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). As permitted in your Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of your option is permitted) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the nonvested portion of your option; provided, however, that:

(a) a partial exercise of your option shall be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

(b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise shall be subject to the purchase option in favor of the Company as described in the Company's form of Early Exercise Stock Purchase Agreement; and

(c) you shall enter into the Company's form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred.

4. METHOD OF PAYMENT. Payment of the exercise price is due in full upon exercise of all or any part of your option. You may elect to make payment of the exercise price in cash or by check or by one or more of the following:

(a) Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds.

(b) Provided that at the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either that you have held for the period required to avoid a charge to the Company's reported earnings (generally six months) or that you did not acquire, directly or indirectly from the Company, that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. "Delivery" for these purposes, in the sole discretion of the Company at the time you exercise your option, shall include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company of Common Stock to the extent such tender would violate the provisions of any law, regulation or agreement restricting the redemption of the Company's stock.

5. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

6. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

7. TERM. The term of your option commences on the Date of Grant and expires upon the EARLIEST of the following:

(a) three (3) months after the termination of your Continuous Service for any reason other than your Disability or death, provided that if during any part of such three- (3-) month period your option is not exercisable solely because of the condition set forth in the preceding paragraph relating to "Securities Law Compliance," your option shall not expire until the earlier of the Expiration Date or until it shall have been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;

(b) twelve (12) months after the termination of your Continuous Service due to your Disability;

(c) eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates; or

(d) the Expiration Date indicated in your Grant Notice; or

(e) the day before the tenth (10th) anniversary of the Date of Grant.

8. EXERCISE.

(a) You may exercise your option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of the exercise of your option.

9. TRANSFERABILITY. Your option is not transferable, except (i) by will or by the laws of descent and distribution, or (ii) as permitted under the Form S-8 registration statement regulations in effect at the time of the transfer.(1) Your option is exercisable during your life only by you or a transferee satisfying the above-stated conditions. The right of a transferee to exercise the transferred portion of your option after termination of your Continuous Service shall terminate in accordance with your right to exercise your option as specified in your option. In the event that your Continuous Service terminates due to your death, your transferee will be treated as a person who acquired the right to exercise your option by bequest or inheritance. In addition to the foregoing, the Company may require, as a condition of the transfer of your option to a trust or by gift, that your transferee enter into an option transfer agreement provided by, or acceptable to, the Company. The terms of your option shall be binding upon your transferees, executors, administrators, heirs, successors, and assigns. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option.

10. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

11. NOTICES. Any notices provided for in your option or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

12. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of your option and those of the Plan, the provisions of the Plan shall control.

EXHIBIT 10.4

INTUITIVE SURGICAL, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN

ADOPTED BY BOARD OF DIRECTORS MARCH __, 2000
APPROVED BY STOCKHOLDERS ___________, 2000
TERMINATION DATE: NONE

1. PURPOSE.

(a) The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Affiliates may be given an opportunity to purchase Shares of the Company.

(b) The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.

(c) The Company intends that the Rights to purchase Shares granted under the Plan be considered options issued under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Code.

2. DEFINITIONS.

(a) "AFFILIATE" means any parent corporation or subsidiary corporation, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(b) "BOARD" means the Board of Directors of the Company.

(c) "CODE" means the United States Internal Revenue Code of 1986, as amended.

(d) "COMMITTEE" means a Committee appointed by the Board in accordance with subsection 3(c) of the Plan.

(e) "COMPANY" means Intuitive Surgical, Inc., a Delaware corporation.

(f) "DIRECTOR" means a member of the Board.

(g) "ELIGIBLE EMPLOYEE" means an Employee who meets the requirements set forth in the Offering for eligibility to participate in the Offering.

(h) "EMPLOYEE" means any person, including Officers and Directors, employed by the Company or an Affiliate of the Company. Neither service as a Director nor payment of a director's fee shall be sufficient to constitute "employment" by the Company or the Affiliate.

(i) "EMPLOYEE STOCK PURCHASE PLAN" means a plan that grants rights intended to be options issued under an "employee stock purchase plan," as that term is defined in Section 423(b) of the Code.

(j) "EXCHANGE ACT" means the United States Securities Exchange Act of 1934, as amended.

(k) "FAIR MARKET VALUE" means the value of a security, as determined in good faith by the Board. If the security is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, then, except as otherwise provided in the Offering, the Fair Market Value of the security shall be the closing sales price (rounded up where necessary to the nearest whole cent) for such security (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the relevant security of the Company) on the trading day prior to the relevant determination date, as reported in The Wall Street Journal or such other source as the Board deems reliable.

(l) "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not a current Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act ("Regulation S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee director" for purposes of Rule 16b-3.

(m) "OFFERING" means the grant of Rights to purchase Shares under the Plan to Eligible Employees.

(n) "OFFERING DATE" means a date selected by the Board for an Offering to commence.

(o) "OUTSIDE DIRECTOR" means a Director who either (i) is not a current employee of the Company or an "affiliated corporation" (within the meaning of the Treasury regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an "affiliated corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time, and is not currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director, or (ii) is otherwise considered an "outside director" for purposes of Section 162(m) of the Code.

(p) "PARTICIPANT" means an Eligible Employee who holds an outstanding Right granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Right granted under the Plan.

(q) "PLAN" means this 2000 Employee Stock Purchase Plan.

(r) "PURCHASE DATE" means one or more dates established by the Board during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering.

(s) "RIGHT" means an option to purchase Shares granted pursuant to the Plan.

(t) "RULE 16B-3" means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3 as in effect with respect to the Company at the time discretion is being exercised regarding the Plan.

(u) "SECURITIES ACT" means the United States Securities Act of 1933, as amended.

(v) "SHARE" means a share of the common stock of the Company.

3. ADMINISTRATION.

(a) The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in subsection 3(c). Whether or not the Board has delegated administration, the Board shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.

(b) The Board (or the Committee) shall have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine when and how Rights to purchase Shares shall be granted and the provisions of each Offering of such Rights (which need not be identical).

(ii) To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan.

(iii) To construe and interpret the Plan and Rights granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.

(iv) To amend the Plan as provided in Section 14.

(v) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Affiliates and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan.

(c) The Board may delegate administration of the Plan to a Committee of the Board composed of two (2) or more members, all of the members of which Committee may be, in the discretion of the Board, Non-Employee Directors and/or Outside Directors. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the

Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee of two (2) or more Outside Directors any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or such a subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.

4. SHARES SUBJECT TO THE PLAN.

(a) Subject to the provisions of Section 13 relating to adjustments upon changes in securities, the Shares that may be sold pursuant to Rights granted under the Plan shall not exceed in the aggregate One Million (1,000,000) Shares. If any Right granted under the Plan shall for any reason terminate without having been exercised, the Shares not purchased under such Right shall again become available for the Plan.

(b) The aggregate number of Shares that may be sold pursuant to Rights granted under the Plan as specified in Section 4(a) hereof automatically shall be increased as follows:

(i) On the day after each annual meeting of stockholders of the Company (the "Calculation Date") for a period of ten (10) years, commencing with the annual meeting of stockholders in 2001, the aggregate number of shares of Common Stock that is available for issuance under the Plan shall automatically be increased by that number of shares equal to the greater of (1) five-tenths of one percent (0.5%) of the Diluted Shares Outstanding or (2) the number of shares of Common Stock sold pursuant to Rights during the prior 12-month period; provided, however, that the Board, from time to time, may provide for a lesser increase in the aggregate number of shares of Common Stock that is available for issuance under the Plan

(ii) Subject to the provisions of Section 13 hereof relating to adjustments upon changes in securities, the increase in the maximum aggregate number of shares of Common Stock that is available for issuance pursuant to Rights granted under the Plan shall not exceed Ten Million (10,000,000) Shares.

(iii) "Diluted Shares Outstanding" shall mean, as of any date, (1) the number of outstanding shares of Common Stock of the Company on such Calculation Date, plus (2) the number of shares of Common Stock issuable upon such Calculation Date assuming the conversion of all outstanding Preferred Stock and convertible notes, plus (3) the additional number of dilutive Common Stock equivalent shares outstanding as the result of any options or warrants outstanding during the fiscal year, calculated using the treasury stock method.

(c) The Shares subject to the Plan may be unissued Shares or Shares that have been bought on the open market at prevailing market prices or otherwise.

5. GRANT OF RIGHTS; OFFERING.

(a) The Board may from time to time grant or provide for the grant of Rights to purchase Shares of the Company under the Plan to Eligible Employees in an Offering on an Offering Date or Dates selected by the Board. Each Offering shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all Employees granted Rights to purchase Shares under the Plan shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in Sections 6 through 9, inclusive.

(b) If a Participant has more than one Right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice delivered by that Participant will be deemed to apply to all of his or her Rights under the Plan, and (ii) an earlier-granted Right (or a Right with a lower exercise price, if two Rights have identical grant dates) will be exercised to the fullest possible extent before a later-granted Right (or a Right with a higher exercise price if two Rights have identical grant dates) will be exercised.

6. ELIGIBILITY.

(a) Rights may be granted only to Employees of the Company or, as the Board may designated as provided in subsection 3(b), to Employees of an Affiliate. Except as provided in subsection 6(b), an Employee shall not be eligible to be granted Rights under the Plan unless, on the Offering Date, such Employee has been in the employ of the Company or the Affiliate, as the case may be, for such continuous period preceding such grant as the Board may require, but in no event shall the required period of continuous employment be equal to or greater than two (2) years.

(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Right under that Offering, which Right shall thereafter be deemed to be a part of that Offering. Such Right shall have the same characteristics as any Rights originally granted under that Offering, as described herein, except that:

(i) the date on which such Right is granted shall be the "Offering Date" of such Right for all purposes, including determination of the exercise price of such Right;

(ii) the period of the Offering with respect to such Right shall begin on its Offering Date and end coincident with the end of such Offering; and

(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Right under that Offering.

(c) No Employee shall be eligible for the grant of any Rights under the Plan if, immediately after any such Rights are granted, such Employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Affiliate. For purposes of this subsection 6(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding rights and options shall be treated as stock owned by such Employee.

(d) An Eligible Employee may be granted Rights under the Plan only if such Rights, together with any other Rights granted under all Employee Stock Purchase Plans of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such Eligible Employee's rights to purchase Shares of the Company or any Affiliate to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of the fair market value of such Shares (determined at the time such Rights are granted) for each calendar year in which such Rights are outstanding at any time.

(e) The Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate.

(f) The Board may provide in an Offering that Employees whose customary employment is twenty (20) hours or less per week shall not be eligible to participate.

(g) The Board may provide in an Offering that Employees whose customary employment is for not more than five (5) months in any calendar year shall not be eligible to participate.

7. RIGHTS; PURCHASE PRICE.

(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted the Right to purchase up to the number of Shares purchasable either:

(i) with a percentage designated by the Board not exceeding fifteen percent (15%) of such Employee's Earnings (as defined by the Board in each Offering) during the period which begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering; or

(ii) with a maximum dollar amount designated by the Board that, as the Board determines for a particular Offering, (1) shall be withheld, in whole or in part, from such Employee's Earnings (as defined by the Board in each Offering) during the period which begins

on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering and/or (2) shall be contributed, in whole or in part, by such Employee during such period.

(b) The Board shall establish one or more Purchase Dates during an Offering on which Rights granted under the Plan shall be exercised and purchases of Shares carried out in accordance with such Offering.

(c) In connection with each Offering made under the Plan, the Board may specify a maximum amount of Shares that may be purchased by any Participant as well as a maximum aggregate amount of Shares that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a maximum aggregate amount of Shares which may be purchased by all Participants on any given Purchase Date under the Offering. If the aggregate purchase of Shares upon exercise of Rights granted under the Offering would exceed any such maximum aggregate amount, the Board shall make a pro rata allocation of the Shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable.

(d) The purchase price of Shares acquired pursuant to Rights granted under the Plan shall be not less than the lesser of:

(i) an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Offering Date; or

(ii) an amount equal to eighty-five percent (85%) of the fair market value of the Shares on the Purchase Date.

8. PARTICIPATION; WITHDRAWAL; TERMINATION.

(a) An Eligible Employee may become a Participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board of such Employee's Earnings during the Offering (as defined in each Offering). The payroll deductions made for each Participant shall be credited to a bookkeeping account for such Participant under the Plan and either may be deposited with the general funds of the Company or may be deposited in a separate account in the name of, and for the benefit of, such Participant with a financial institution designated by the Company. To the extent provided in the Offering, a Participant may reduce (including to zero) or increase such payroll deductions. To the extent provided in the Offering, a Participant may begin such payroll deductions after the beginning of the Offering. A Participant may make additional payments into his or her account only if specifically provided for in the Offering and only if the Participant has not already had the maximum permitted amount withheld during the Offering.

(b) At any time during an Offering, a Participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by delivering to the Company a

notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board in the Offering. Upon such withdrawal from the Offering by a Participant, the Company shall distribute to such Participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the Participant) under the Offering, without interest unless otherwise specified in the Offering, and such Participant's interest in that Offering shall be automatically terminated. A Participant's withdrawal from an Offering will have no effect upon such Participant's eligibility to participate in any other Offerings under the Plan but such Participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan.

(c) Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating Employee's employment with the Company or a designated Affiliate for any reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such terminated Employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire Shares for the terminated Employee) under the Offering, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company's general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subsection 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering.

(d) Rights granted under the Plan shall not be transferable by a Participant otherwise than by will or the laws of descent and distribution, or by a beneficiary designation as provided in Section 15 and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such Rights are granted.

9. EXERCISE.

(a) On each Purchase Date specified therefor in the relevant Offering, each Participant's accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the purchase of Shares up to the maximum amount of Shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional Shares shall be issued upon the exercise of Rights granted under the Plan unless specifically provided for in the Offering.

(b) Unless otherwise specifically provided in the Offering, the amount, if any, of accumulated payroll deductions remaining in any Participant's account after the purchase of Shares that is equal to the amount required to purchase one or more whole Shares on the final Purchase Date of the Offering shall be distributed in full to the Participant at the end of the Offering, without interest. If the accumulated payroll deductions have been deposited with the Company's general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a

separate account with a financial institution as provided in subsection 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering.

(c) No Rights granted under the Plan may be exercised to any extent unless the Shares to be issued upon such exercise under the Plan (including Rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no Rights granted under the Plan or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not registered and in such compliance, no Rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire Shares) shall be distributed to the Participants, without interest unless otherwise specified in the Offering. If the accumulated payroll deductions have been deposited with the Company's general funds, then the distribution shall be made from the general funds of the Company, without interest. If the accumulated payroll deductions have been deposited in a separate account with a financial institution as provided in subsection 8(a), then the distribution shall be made from the separate account, without interest unless otherwise specified in the Offering.

10. COVENANTS OF THE COMPANY.

(a) During the terms of the Rights granted under the Plan, the Company shall ensure that the amount of Shares required to satisfy such Rights are available.

(b) The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to issue and sell Shares upon exercise of the Rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Shares under the Plan, the Company shall be relieved from any liability for failure to issue and sell Shares upon exercise of such Rights unless and until such authority is obtained.

11. USE OF PROCEEDS FROM SHARES.

Proceeds from the sale of Shares pursuant to Rights granted under the Plan shall constitute general funds of the Company.

12. RIGHTS AS A STOCKHOLDER.

A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, Shares subject to Rights granted under the Plan unless and until the Participant's Shares acquired upon exercise of Rights under the Plan are recorded in the books of the Company.

13. ADJUSTMENTS UPON CHANGES IN SECURITIES.

(a) If any change is made in the Shares subject to the Plan, or subject to any Right, without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), the Plan will be appropriately adjusted in the class(es) and maximum number of Shares subject to the Plan pursuant to subsection 4(a), and the outstanding Rights will be appropriately adjusted in the class(es), number of Shares and purchase limits of such outstanding Rights. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction that does not involve the receipt of consideration by the Company.)

(b) In the event of: (i) a dissolution, liquidation, or sale of all or substantially all of the assets of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) a reverse merger in which the Company is the surviving corporation but the Shares outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, then: (1) any surviving or acquiring corporation shall assume Rights outstanding under the Plan or shall substitute similar rights (including a right to acquire the same consideration paid to Stockholders in the transaction described in this subsection 13(b)) for those outstanding under the Plan, or (2) in the event any surviving or acquiring corporation refuses to assume such Rights or to substitute similar rights for those outstanding under the Plan, then, as determined by the Board in its sole discretion such Rights may continue in full force and effect or the Participants' accumulated payroll deductions (exclusive of any accumulated interest which cannot be applied toward the purchase of Shares under the terms of the Offering) may be used to purchase Shares immediately prior to the transaction described above under the ongoing Offering and the Participants' Rights under the ongoing Offering thereafter terminated.

14. AMENDMENT OF THE PLAN.

(a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 13 relating to adjustments upon changes in securities and except as to minor amendments to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favorable tax, exchange control or regulatory treatment for Participants or the Company or any Affiliate, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary for the Plan to satisfy the requirements of Section 423 of the Code, Rule 16b-3 under the Exchange Act and

any Nasdaq or other securities exchange listing requirements. Currently under the Code, stockholder approval within twelve (12) months before or after the adoption of the amendment is required where the amendment will:

(i) Increase the amount of Shares reserved for Rights under the Plan;

(ii) Modify the provisions as to eligibility for participation in the Plan to the extent such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3; or

(iii) Modify the Plan in any other way if such modification requires stockholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3.

(b) It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Employee Stock Purchase Plans and/or to bring the Plan and/or Rights granted under it into compliance therewith.

(c) Rights and obligations under any Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan, except with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Plan and/or Rights granted under the Plan comply with the requirements of Section 423 of the Code.

15. DESIGNATION OF BENEFICIARY.

(a) A Participant may file a written designation of a beneficiary who is to receive any Shares and/or cash, if any, from the Participant's account under the Plan in the event of such Participant's death subsequent to the end of an Offering but prior to delivery to the Participant of such Shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant's account under the Plan in the event of such Participant's death during an Offering.

(b) The Participant may change such designation of beneficiary at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant's death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

16. TERMINATION OR SUSPENSION OF THE PLAN.

(a) The Board in its discretion may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate at the time that all of the Shares subject to the Plan's reserve, as increased and/or adjusted from time to time, have been issued under the terms of the Plan. No Rights may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) Rights and obligations under any Rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of the person to whom such Rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Plan and/or Rights granted under the Plan comply with the requirements of Section 423 of the Code.

17. EFFECTIVE DATE OF PLAN.

The Plan shall become effective as determined by the Board, but no Rights granted under the Plan shall be exercised unless and until the Plan has been approved by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board, which date may be prior to the effective date set by the Board.

EXHIBIT 10.5

INTUITIVE SURGICAL, INC.

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

MARCH 31, 1999

TABLE OF CONTENTS

                                                                                          PAGE
                                                                                          -----
1.      GENERAL............................................................................  2
        1.1    Definitions.................................................................  2

2.      REGISTRATION; RESTRICTIONS ON TRANSFER.............................................  3
        2.1    Restrictions on Transfer....................................................  3
        2.2    Demand Registration.........................................................  4
        2.3    Piggyback Registrations.....................................................  6
        2.4    Form S-3 Registration.......................................................  7
        2.5    Expenses of Registration....................................................  8
        2.6    Obligations of the Company..................................................  8
        2.7    Termination of Registration Rights..........................................  9
        2.8    Delay of Registration; Furnishing Information............................... 10
        2.9    Indemnification............................................................. 10
        2.10   Assignment of Registration Rights........................................... 12
        2.11   Amendment of Registration Rights............................................ 12
        2.12   Limitation on Subsequent Registration Rights................................ 12
        2.13   "Market Stand-Off" Agreement................................................ 13

3.      COVENANTS OF THE COMPANY........................................................... 14
        3.1    Basic Financial Information and Reporting................................... 14
        3.2    Inspection Rights........................................................... 15
        3.3    Confidentiality of Records.................................................. 15
        3.4    Proprietary Information..................................................... 16
        3.5    Stock Vesting............................................................... 16
        3.6    Right of First Refusal...................................................... 16
        3.7    Visitation Rights........................................................... 18
        3.8    Reservation of Common Stock................................................. 18
        3.9    Termination of Covenants.................................................... 18

4.      MISCELLANEOUS...................................................................... 18
        4.1    Governing Law............................................................... 18
        4.2    Survival.................................................................... 18
        4.3    Successors and Assigns...................................................... 19
        4.4    Severability................................................................ 19
        4.5    Amendment and Waiver........................................................ 19
        4.6    Delays or Omissions......................................................... 19
        4.7    Notices..................................................................... 20
        4.8    Attorney's Fees............................................................. 20
        4.9    Titles and Subtitles........................................................ 20
        4.10   Counterparts................................................................ 20
        4.11   Entire Agreement............................................................ 20

SCHEDULES

Schedule of Investors

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of the 31st day of March, 1999, by and among INTUITIVE SURGICAL, INC., a Delaware corporation (the "Company"), ROBERT G. YOUNGE, FREDERIC H. MOLL and JOHN G. FREUND (the "Founders"), and the holders of the Company's Preferred Stock and Common Stock set forth on Exhibit A attached hereto. Such holders shall be referred to hereinafter as the "Investors" and each individually as an "Investor."

R E C I T A L S

WHEREAS, the Company proposes to sell and issue shares of its Preferred Stock from time to time, including the sale and issuance of Series E Preferred Stock and warrants to purchase Series F Preferred Stock pursuant to that certain Series E Preferred Stock Purchase Agreement (the "Purchase Agreement") and Warrant Purchase Agreement (the "Warrant Agreement"), respectively;

WHEREAS, as a condition of entering into the Purchase Agreement and the Warrant Agreement, the purchaser of Series E Preferred Stock under the Purchase Agreement and recipient of the warrant to purchase Series F Preferred Stock under the Warrant Agreement (the "Purchaser") has requested that the Company extend to it registration rights and other rights as set forth below;

WHEREAS, the Company, the Founders and those undersigned Investors holding the Company's Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock Series D Preferred Stock and Series E Preferred Stock desire to grant such rights to the Purchaser by substituting this Agreement, to which the Purchaser is a party, for that Investors Rights Agreement entered into as of the 20th day of December, 1995 and amended on the 31st day of January, 1996; the 29th day of January, 1997; the 14th day of November, 1997, and the 31st day of July, 1998, by and among the Company, the Founders and the holders of all of the then outstanding shares of the Company's Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock (collectively the "Prior Agreements"); and

WHEREAS, the Company and the Investors wish to grant certain rights to and impose certain restrictions on the Founders, as set forth below;

NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants and conditions set forth in this Agreement and in the Purchase Agreement, the parties mutually agree (i) that effective upon the closing of the sale and issuance of the Series E Preferred Stock pursuant to the Series E Stock Purchase Agreement, and execution of this Agreement by Investors holding at least fifty percent (50%) of the Company's Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock, all provisions of, rights granted by, and covenants made in the Prior Agreements

are hereby waived, released and terminated in their entirety and shall have no further force or effect whatsoever and (ii) as follows:

1. GENERAL

1.1 DEFINITIONS. As used in this Agreement the following terms shall have the following respective meanings:

"Form S-3" means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.

"Holder" means any Investor owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.10 hereof.

"Register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.

"Registrable Securities" means (i) Common Stock of the Company issued or issuable upon conversion of the Shares; (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities, and (iii) shares of Common Stock issued to Massachusetts Institute of Technology ("M.I.T.") pursuant to that certain License Agreement by and between M.I.T and the Company. Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144, or (ii) sold in a private transaction in which the transferror's rights under Article II of this Agreement are not assigned.

"Registrable Securities then outstanding" shall be the number of shares determined by calculating the total number of shares of the Company's Common Stock that are Registrable Securities and either (1) are then issued and outstanding or (2) are issuable pursuant to then exercisable or convertible securities.

"Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements not to exceed Ten Thousand Dollars ($10,000) of a single special counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).

"SEC" or "Commission" means the Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes, if any, applicable to the sale of Registrable Securities.

"Shares" shall mean shares of the Company's Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.

2. REGISTRATION; RESTRICTIONS ON TRANSFER

2.1 RESTRICTIONS ON TRANSFER.

(a) Each Holder agrees not to make any disposition of all or any portion of the Registrable Securities (or the Common Stock issuable upon the conversion thereof) unless and until the transferee has agreed in writing for the benefit of the Company to be bound by this Section 2.1, provided and to the extent such Section is then applicable and:

(i) There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

(ii) (A) Such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a detailed statement of the circumstances surrounding the proposed disposition, and (B) if reasonably requested by the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Securities Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144 except in unusual circumstances.

(iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such registration statement or opinion of counsel shall be necessary for a transfer by a Holder which is (A) a partnership to its partners or former partners in accordance with partnership interests, or a corporation to its affiliates, (B) a corporation to its shareholders in accordance with their interest in the corporation or (C) to the Holder's family member or trust for the benefit of an individual Holder, provided the transferee will be subject to the terms of this Section 2.1 to the same extent as if he were an original Holder hereunder.

(b) Each certificate representing Shares or Registrable Securities shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws or as provided elsewhere in this Agreement and except that the Regulation S legend shall be applied only to those securities issued to Regulation S Purchasers):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR

BASED ON OTHER WRITTEN EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHETICATED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH.

(c) The Company shall be obligated to reissue promptly unlegended certificates at the request of any holder thereof if the holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may lawfully be so disposed of without registration, qualification or legend. Upon removal of such legend, the provisions of Section 2.1(a) shall no longer apply.

(d) Each Regulation S Purchaser is aware that the Company will, and the Company agrees that the Company shall, to the extent required by Regulation S, refuse to register any transfer of the Shares purchased by such Regulation S Purchaser that is not made in accordance with Regulation S.

(e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal.

2.2 DEMAND REGISTRATION.

2.2.1 Subject to the conditions of this Section 2.2, if the Company shall receive at any time after the earlier of either (i) January 29, 2000 or (ii) ninety (90) days after the effective date of the registration statement pertaining to the initial public offering of the Company's Common Stock (the "Initial Offering"), a written request from the Holders of at least thirty percent (30%) of the Registrable Securities then outstanding (the "Initiating Holders") that the Company file a registration statement under the Securities Act covering the registration of (i) at least twenty percent (20%) of Registrable Securities or (ii) less than twenty percent (20%) of the Registrable Securities provided such lesser percentage of Registrable Securities have an aggregate offering price to the public of not less than $7,500,000, then the Company shall, within thirty (30) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this
Section 2.2, shall use its best efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request to be registered.

2.2.2 If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 and the Company shall

include such information in the written notice referred to in Section 2.2.1. In such event, the right of any Holder to include his Registrable Securities in such registration shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision of this Section 2.2, if the underwriter advises the Company in writing that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities) then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

2.2.3 The Company shall not be required to effect a registration pursuant to this Section 2.2:

(i) after the Company has effected two (2) registrations pursuant to this Section 2.2 and such registrations have been declared or ordered effective; or

(ii) during the period starting with the date of filing of, and ending on the date ninety (90) days following the effective date of the Initial Offering, provided that the Company is making reasonable and good faith efforts to cause such registration statement to become effective; or

(iii) if within thirty (30) days of receipt of a written request from Initiating Holders pursuant to Section 2.2.1, the Company gives notice to the Holders of the Company's bona fide good faith intention to make its Initial Offering within ninety (90) days; or

(iv) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2, a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided that such right to delay a request shall be exercised by the Company no more than twice in any one-year period.

2.3 PIGGYBACK REGISTRATIONS. The Company promptly shall notify all Holders in writing of the Company's determination to file any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to employee benefit plans and corporate

reorganizations) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder. Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within twenty
(20) days after mailing of the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Registrable Securities by such Holder. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.

2.3.1 Underwriting. If the registration statement under which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to be included in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of the Agreement, if the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders on a pro rata basis based on the total number of Registrable Securities held by the Holders; and third, to any shareholder of the Company (other than a Holder) on a pro rata basis. No such reduction shall reduce the securities being offered by the Company for its own account to be included in the registration and underwriting, and in no event shall the amount of securities of the selling Holders included in the registration be reduced below thirty percent (30%) of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling shareholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding sentence. In no event will shares of any other selling shareholder be included in such registration which would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable Securities proposed to be sold in the offering.

2.3.1.1 Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated or withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.

2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any Holder or Holders a written request or requests that the Company effect a registration on Form S-3 (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:

2.4.1 Promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and

2.4.2 As soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder's or Holders' Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within twenty (20) days after mailing of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4:

(i) if Form S-3 (or such successor or similar form) is not available for such offering by the Holders; or

(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $750,000; or

(iii) if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board of Directors of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 2.4, provided that the Company may exercise such right only once in each 12-month period;

(iv) after the Company has effected two (2) registrations pursuant to this Section 2.4 in any twelve (12) month period; or

(v) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

2.4.3 Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders.

2.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered. The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders unless the withdrawal is based upon material adverse information

concerning the Company of which the Initiating Holders were not aware at the time of such request. If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested.

2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the registration of any Registrable Securities, the Company shall use its best efforts, as expeditiously as reasonably possible, to:

2.6.1 Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to one hundred eighty (180) days or, if earlier, until the Holder or Holders have completed the distribution related thereto.

2.6.2 Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.

2.6.3 Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

2.6.4 Use its best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

2.6.5 In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

2.6.6 Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.

2.6.7 Furnish, at the request of a majority of the Holders participating in the registration, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, or, if such securities are not being sold through underwriters, on the date that the registration statement with respect to such

securities becomes effective, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and to the Holders requesting registration of Registrable Securities and (ii) a letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering and reasonably satisfactory to a majority in interest of the Holders requesting registration, addressed to the underwriters, if any, and if permitted by applicable accounting standards, to the Holders requesting registration of Registrable Securities.

2.6.8 Cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed.

2.6.9 Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such registration statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted under this Article II shall terminate and be of no further force and effect five (5) years after the closing of the Company's Initial Offering. In addition, a Holder's registration rights shall expire if all Registrable Securities held by and issuable to such Holder may be sold under Rule 144 during any ninety (90) day period.

2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION.

(a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Article II.

(b) It shall be a condition precedent to the obligations of the Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.

2.9 INDEMNIFICATION. In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3 or 2.4:

2.9.1 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Securities Exchange Act of 1934, as amended, (the "1934 Act"), against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations

(collectively a "Violation") by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Securities Act, the 1934 Act or any state securities law in connection with the offering covered by such registration statement; and the Company will, as incurred, reimburse each such Holder, partner, officer or director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.9.1 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, officer, director, underwriter or controlling person of such Holder.

2.9.2 To the extent permitted by law, each selling Holder, if Registrable Securities held by such Holder are included in the securities as to which such registration is being effected, will indemnify and hold harmless the Company, each of its directors, each of its officers, each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder's partners, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse, as incurred, any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Violation; provided, however, that the indemnity agreement contained in this Section 2.9.2 shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.9 exceed the gross proceeds from the offering received by such Holder.

2.9.3 Promptly after receipt by an indemnified party under this Section 2.9 of notice of the commencement of any action (including any governmental action),

such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.9, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.9, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.9.

2.9.4 If the indemnification provided for in this Section 2.9 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

2.9.5 Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

2.9.6 The obligations of the Company and Holders under this Section 2.9 shall survive the completion of any offering of Registrable Securities in a registration statement, and otherwise.

2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to register Registrable Securities pursuant to this Article II may be assigned by a Holder to a transferee or assignee of Registrable Securities which
(i) is a subsidiary, parent, general partner, limited partner or retired partner of a Holder, (ii) is a Holder's family member or trust for the benefit of an individual Holder, or (iii) acquires at least one hundred thousand (100,000) shares of Registrable Securities (as adjusted for stock splits and combinations); provided, however, (A) the transferor shall, within ten (10) days after such transfer, furnish to the Company written

notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (B) such transferee shall agree to be subject to all restrictions set forth in this Agreement.

2.11 AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Article II may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders of not less than fifty percent (50%) of the Registrable Securities. Any amendment or waiver effected in accordance with this Section 2.11 shall be binding upon each Holder and the Company. By acceptance of any benefits under this Article II, Holders of Registrable Securities hereby agree to be bound by the provisions hereunder.

2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of this Agreement, the Company shall not, without the prior written consent of the Holders not less than fifty percent (50%) of the Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder registration rights senior to those granted to the Holders hereunder.

2.13 "MARKET STAND-OFF" AGREEMENT. If requested by a representative of the underwriters of Common Stock (or other securities) of the Company, each Holder and Founder shall not sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by such Holder or Founder (other than those included in the registration) for a period specified by the representative of the underwriters, not to exceed one hundred eighty
(180) days following the effective date of a registration statement of the Company filed under the Securities Act (the "Effective Date"), provided that:

(a) such agreement shall apply only to the Company's Initial Offering; and

(b) all officers and directors of the Company enter into similar agreements.

The obligations described in this Section 2.13 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred eighty (180) day period.

2.14 RULE 144 REPORTING. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to:

(a) Make and keep public information available, as those terms are understood and defined in SEC Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;

(b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Securities Act and the 1934 Act; and

(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 of the Securities Act, and of the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company; and such other reports and documents as a Holder may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.

3. COVENANTS OF THE COMPANY

3.1 BASIC FINANCIAL INFORMATION AND REPORTING.

3.1.1 The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with generally accepted accounting principles consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under generally accepted accounting principles consistently applied.

3.1.2 So long as an Investor (with its affiliates) shall own not less than (i) two million (2,000,000) shares of Registrable Securities (as adjusted for stock splits and combinations), (ii) two hundred thousand (200,000) shares of Series C Preferred Stock (as adjusted for stock splits and combinations), (iii) two hundred thousand (200,000) shares of Series D Preferred Stock (as adjusted for stock splits and combinations), (iv) two hundred thousand (200,000) shares of Series E Preferred Stock, or (v) two hundred thousand (200,000) shares of Series F Preferred Stock (as adjusted for stock splits and combinations) (a "Major Investor" which term shall include each Founder regardless of the number of shares such Founder holds) as soon as practicable after the end of each fiscal year of the Company, and in any event within ninety
(90) days thereafter, the Company will furnish each Major Investor a consolidated balance sheet of the Company, as at the end of such fiscal year, and a consolidated statement of income and a consolidated statement of cash flows of the Company, for such year, all prepared in accordance with generally accepted accounting principles and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail. Such financial statements shall be accompanied by a report and opinion thereon by independent public accountants of national standing selected by the Company's Board of Directors.

3.1.3 The Company will furnish each Major Investor as soon as practicable after the end of the first, second and third quarterly accounting periods in each fiscal year of the Company, and in any event within forty-five
(45) days thereafter, a consolidated balance sheet of the Company as of the end of each such quarterly period, and a consolidated statement of income and a consolidated statement of cash flows of the Company for such period and for the current fiscal year to date, prepared in accordance with generally accepted accounting principles, with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.

3.1.4 The Company will furnish each such Major Investor
(i) at least thirty (30) days prior to the beginning of each fiscal year an annual budget and operating plans for such fiscal year (and as soon as available, any subsequent revisions thereto); and (ii) as soon as practicable after the end of each month, and in any event within twenty (20) days thereafter, a consolidated balance sheet of the Company as of the end of each such month, and a consolidated statement of income and a consolidated statement of cash flows of the Company for such month and for the current fiscal year to date, including a comparison to plan figures for such period, prepared in accordance with generally accepted accounting principles, with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.

3.2 INSPECTION RIGHTS. Each Major Investor shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review such information regarding the Company as is reasonably requested all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 with respect to a competitor of the Company or with respect to information which the Board of Directors determines in good faith is confidential and should not, therefore, be disclosed.

3.3 CONFIDENTIALITY OF RECORDS.

3.3.1 Each Investor agrees not to use Confidential Information (as hereinafter defined) of the Company for its own use or for any purpose except to evaluate and enforce its equity investment in the Company. Except as permitted under subsection (b) below, each Investor agrees to use its best efforts not to disclose such Confidential Information to any third parties. Each Investor shall undertake to treat such Confidential Information in a manner consistent with the treatment of its own information of such proprietary nature and agrees that it shall protect the confidentiality of and use reasonable best efforts to prevent disclosure of the Confidential Information to prevent it from falling into the public domain or the possession of unauthorized persons. Each transferee of any Investor who receives Confidential Information shall agree to be bound by such provisions. For purposes of this Section, "Confidential Information" means any information, technical data, or know-how, including, but not limited to, the Company's licenses, research, products, software, services, development, inventions, consultants' identities, processes, designs, drawings, engineering, marketing, finances, or business partners disclosed by the Company either directly or indirectly in writing, orally or by drawings or inspection of parts or equipment.

3.3.2 Confidential Information does not include information, technical data or know-how which (i) is in the Investor's possession at the time of disclosure as shown by Investor's files and records immediately prior to the time of disclosure; (ii) before or after it has been disclosed to the Investor, it is part of the public knowledge or literature, not as a result of any action or inaction of the Investor; (iii) is approved for release by written authorization of Company; or (iv) is rightfully disclosed to Investor by a third party without restriction. The provisions of this Section shall not apply (i) to the extent that an Investor is required to disclose Confidential Information pursuant to any law, statute, rule or regulation or any order of any court or jurisdiction process or pursuant to any direction, request or requirement (whether or not

having the force of law but if not having the force of law being of a type with which institutional investors in the relevant jurisdiction are accustomed to comply) of any self-regulating organization or any governmental, fiscal, monetary or other authority; (ii) to the disclosure of Confidential Information to an Investor's employees, counsel, accountants or other professional advisors or to affiliates for reporting purposes only; (iii) to the extent that an Investor needs to disclose Confidential Information for the protection of any of such Investor's rights or interest against the Company, whether under this Agreement or otherwise; or (iv) to the disclosure of Confidential Information to a prospective transferee of securities which agrees to be bound by the provisions of this Section in connection with the receipt of such Confidential Information.

3.4 PROPRIETARY INFORMATION. The Company shall require all employees of and consultants to the Company who have access to proprietary information of the Company to enter into agreements in the Company's standard form providing for the protection of proprietary information and inventions.

3.5 STOCK VESTING. Unless otherwise approved by the Board of Directors, all stock options and other stock equivalents issued after the date of this Agreement to employees, directors, consultants and other service providers, except with respect to the Founders, shall be subject to vesting monthly over a four (4) year period. With respect to any shares of stock purchased by any such person, the Company's repurchase option shall provide that
(i) upon such person's termination of employment or service with the Company, with or without cause, the Company or its assignee (to the extent permissible under applicable securities laws and other laws) shall have the option to purchase at cost any unvested shares of stock held by such person, (ii) no such stock may be transferred prior to vesting, and (iii) the sale of all such stock shall be subject to a right of first refusal in favor of the Company or its assignees.

3.6 RIGHT OF FIRST REFUSAL. The Company hereby grants to each Major Investor, unless waived by the holders of at least a majority of the shares held by the Major Investors, the right of first refusal to purchase a pro rata share of New Securities (as defined below) that the Company may, from time to time, propose to sell and issue. For purposes of this Section 3.6 only, the term "Major Investor" shall include Guidant Corporation ("Guidant"). The Company shall provide such information to a mutually-agreed upon Guidant employee ("Guidant Reviewer") in connection with the exercise of Guidant's rights under this Section 3.6, as Guidant may reasonably request. The Company and Guidant acknowledge and agree that any information delivered in accordance with this
Section 3.6 is (i) Confidential Information, (ii) subject to the confidentiality provisions as set forth in Section 3.3 hereof and (iii) is to be provided to the Guidant Reviewer only and is not to be disclosed to any other employee, agent or affiliate of Guidant. Each Major Investor's pro rata share, for purposes of this right of first refusal, is the ratio of (X) the number of shares of Registrable Securities then owned by such Major Investor to (Y) the total number of shares of Common Stock of the Company outstanding immediately prior to the issuance of the New Securities, assuming full conversion of all shares of outstanding Preferred Stock of the Company and exercise of all outstanding options and warrants to purchase securities of the Company. This right of first refusal shall be subject to the following provisions:

3.6.1 "New Securities" shall mean any offering by the Company of any Common Stock or Preferred Stock of the Company, whether now authorized or not, and rights,

options, or warrants to purchase said Common Stock or Preferred Stock, and securities of any type whatsoever that are, or may become, convertible into said Common Stock or Preferred Stock; provided, however, that "New Securities" does not include (i) securities issuable upon conversion of the Shares; (ii) securities issued upon conversion or exchange of currently outstanding securities, (iii) securities offered to the public pursuant to a registration statement filed under the Securities Act; (iv) securities issued pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of the assets, or other reorganization whereby the Company owns more than 50% of the voting power of such corporation; (v) shares of the Company's Common Stock (or related options) issued or issuable at any time to employees, directors or consultants of the Company, or any subsidiary, pursuant to any employee stock offering, plan, or arrangement approved by the Board of Directors; (vi) shares of the Company's Common Stock or Preferred Stock issued in connection with any stock split, stock dividend, or recapitalization by the Company; (vii) securities issued in connection with equipment lease financings or other financings with commercial lenders; (viii) shares of the Company's Common Stock or Preferred Stock issued in connection with strategic transactions involving the Company and other entities, including (A) joint ventures, manufacturing, marketing or distribution arrangements or (B) technology transfer or development arrangements; provided that such strategic transactions and the issuance of shares therein, has been approved by the Company's Board of Directors.

3.6.2 In the event that the Company proposes to undertake an issuance of New Securities, it shall give each Holder written notice of its intention, describing the type of New Securities, the price, and the general terms upon which the Company proposes to issue the same. Each Holder shall have twenty (20) business days from the date of mailing of any such notice to agree to purchase its pro rata share of such New Securities for the price and upon the general terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. Notwithstanding the foregoing, the Company shall not be required to offer or sell New Securities to any Holder who would cause the Company to be in violation of applicable federal or state securities laws by virtue of such offer or sale.

3.6.3 In the event that any Holder fails or Holders fail to exercise in full the right of first refusal within said twenty (20) business day period, the Company shall give written notice of such failure to every other Holder who gave timely notice to the Company of its exercise in full of its first refusal rights (a "Fully Participating Holder"). Any such Fully Participating Holder may then elect to purchase the New Securities respecting which the Holders' rights were not exercised ("Available New Securities"), at a price and upon general terms materially no more favorable to the purchasers thereof than specified in the Company's notice, by notifying the Company in writing within ten (10) business days from the date of mailing of any such notice. In the event that the Fully Participating Holders give timely notice of elections to purchase, in addition to their original pro rata share of the New Securities, an aggregate of more than the Available New Securities available, such Fully Participating Holders shall purchase that percentage of the total of Available New Securities as each such Fully Participating Holder's present ownership of Registrable Securities bears to the total number of shares of all Fully Participating Holders who have given timely notice of their election to purchase additional shares.

3.6.4 In the event (i) there are no Fully Participating Holders or (ii) the Fully Participating Holders do not timely elect to purchase all Available New Securities, the Company shall have one hundred and twenty
(120) days thereafter to sell (or enter into an agreement pursuant to which the sale of Available New Securities covered thereby shall be closed, if at all, within thirty (30) days from the date of said agreement) the Available New Securities respecting which the Fully Participating Holders' rights were not exercised at a price and upon general terms materially no more favorable to the purchasers thereof than specified in the Company's notice. In the event the Company has not sold the Available New Securities within said one hundred and twenty (120) day period (or sold and issued Available New Securities in accordance with the foregoing within one hundred and twenty (120) days from the date of said agreement), the Company shall not thereafter issue or sell any Available New Securities without first offering such securities to the Holders in the manner provided above.

3.6.5 The right of first refusal of each Holder under this
Section 3.6 may be transferred to any transferee who is or becomes a Holder. For purposes of this Section 3.6, Holder includes any general partner or affiliate of Holder. A Holder shall be entitled to apportion the right of first refusal granted it among itself and its partners and affiliates in such proportions as it deems appropriate.

3.6.6 Notwithstanding the foregoing, the consent of Guidant shall be required for any amendment or waiver of this Section 3.6.

3.7 VISITATION RIGHTS. To the extent a Founder is not a member of the board of directors, the Company shall allow one representative designated by each of the Founders to attend all meetings of the Company's board of directors in a nonvoting capacity, and in connection therewith, the Company shall give such representative copies of all notices, minutes, consents and other materials, financial or otherwise, which the Company provides to its board of directors.
3.8 RESERVATION OF COMMON STOCK. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion.

3.9 TERMINATION OF COVENANTS. All covenants of the Company contained in Article III of this Agreement shall expire and terminate as to each Investor and the Founders on the Effective Date of the Company's first firm commitment underwritten public offering registered under the Securities Act.

4. MISCELLANEOUS

4.1 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California.

4.2 SURVIVAL. The representations, warranties, covenants, and agreements made herein shall survive any investigation made by any Holder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in

connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument.

4.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.

4.4 SEVERABILITY. In case any provision of the Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.5 AMENDMENT AND WAIVER.

4.5.1 Except as otherwise expressly provided, this Agreement may be amended or modified only upon the written consent of the Company and the holders of not less than fifty percent (50%) of the Registrable Securities.

4.5.2 Except as otherwise expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived only with the written consent of the holders of not less than fifty percent (50%) of the Registrable Securities.

4.5.3 Notwithstanding the foregoing, subject to Section 2.12, this Agreement may be amended with only the written consent of the Company to modify Exhibit A to include additional purchasers of Shares as "Investors," "Holders" and parties hereto.

4.5.4 Notwithstanding the foregoing, the consent of the Founder shall be required for any amendment or waiver of this Agreement which materially increases such Founder's obligations or diminishes such Founder's rights hereunder.

4.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any Holder, upon any breach, default or noncompliance of the Company under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any Holder's part of any breach, default or noncompliance under the Agreement or any waiver on such Holder's part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not alternative.

4.7 NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii)

when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, having specified next day delivery, with written verification of receipt. All communications shall be sent to the Company or a Founder at the address as set forth on the signature page hereof and to the Investors at the address set forth on the Schedule of Investors or at such other address as any party may designate by ten (10) days advance written notice to the other parties hereto.

4.8 ATTORNEY'S FEES. In the event that any dispute among the parties to this Agreement should result in litigation, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.

4.9 TITLES AND SUBTITLES. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

4.10 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

4.11 ENTIRE AGREEMENT. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof. The Prior Agreements are hereby amended and restated in their entirety by this Agreement and the Company, the Founders and the Investors agree that this Agreement shall supersede and replace the rights and obligations of the Company, the Founders and the Investors granted to them under the Prior Agreements.

IN WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:                             INVESTORS:

INTUITIVE SURGICAL, INC.             MAYFIELD VIII
                                     a California Limited Partnership
                                     By: Mayfield VIII Management, L.L.C.
                                         a Delaware Limited Liability
By: /s/ LONNIE M. SMITH                  Company, its General Partner
   -------------------------------
    Lonnie M. Smith
    Chief Executive Officer

                                     By: /s/ RUSSELL C. HIRSCH
                                        ----------------------------------------
FOUNDERS:                                Russell C. Hirsch, Managing Member


                                     MAYFIELD ASSOCIATES FUND II
/s/ FREDERIC H. MOLL                 a California Limited Partnership
----------------------------------
FREDERIC H. MOLL


/s/ ROBERT G. YOUNGE                  By: /s/ A. GRANT HEIDRICH
----------------------------------       ---------------------------------------
ROBERT G. YOUNGE                         A. Grant Heidrich, III, General Partner



/s/ JOHN G. FREUND                        SIERRA VENTURES V, L.P.
----------------------------------    By: SV Associates V, L.P.,
JOHN G. FREUND                            its General Partner


                                      By: /s/ PETRI T. VAINIO
                                          --------------------------------------
                                          Petri T. Vainio, General Partner

ALLAN G. LOZIER

/s/ ALLAN G. LOZIER
------------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

GC&H INVESTMENTS

By: /s/ JOHN L. CARDOZA
   -----------------------------------
    John L. Cardoza, Executive Partner

ALLAN JOHNSTON

/s/ ALLAN JOHNSTON
-------------------------------------
GUIDANT CORPORATION

RWI GROUP, L.P.

By: /s/ DONALD A. LUCAS
   -----------------------------------
    Donald A. Lucas

WILLIAM H. ABBOTT, TRUSTEE FOR THE
ABBOTT LIVING TRUST DATED 08/20/87

By: /s/ WILLIAM H. ABBOTT
   -----------------------------------
    William H. Abbott, Trustee

PAUL A. BROOKE

/s/ PAUL A. BROOKE
-------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

STANFORD UNIVERSITY

By: /s/ CAROL GILMER
   -----------------------------------
Its: Assistant Secretary
    ----------------------------------

JOSEPH M. MANDATO AND ELIZABETH R.
MANDATO TTEES OF THE MANDATO
FAMILY TRUST

By: /s/ JOSEPH M. MANDATO
   -----------------------------------
    Joseph M. Mandato, Trustee

ROBERT OKUN

/s/ ROBERT OKUN
--------------------------------------

HOWARD M. HOLSTEIN

/s/ HOWARD M. HOLSTEIN
--------------------------------------

PETER DICKSTEIN

WILLIAM JENKINS

/s/ WILLIAM JENKINS
--------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

MORGAN STANLEY VENTURE PARTNERS III, L.P.

By: Morgan Stanley Venture Partners III, L.L.C.
Its General Partner

By: Morgan Stanley Venture Capital III, Inc.
Institutional Managing Member

By: /s/ SCOTT S. HALSTED
   ---------------------------------------------
    Scott S. Halsted
    General Partner

MORGAN STANLEY VENTURE INVESTORS III, L.P.

By: Morgan Stanley Venture Partners III, L.L.C.
Its General Partner

By: Morgan Stanley Venture Capital III, Inc.
Institutional Managing Member

By: /s/ SCOTT S. HALSTED
   ---------------------------------------------
    Scott S. Halsted
    General Partner

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

PATMARK COMPANY, INC.

By: /s/ JAMES D. VAN DE VELDE
   ------------------------------------
    James D. Van De Velde
    President

HUNTERSVILLE ROAD INVESTORS L.P.

By: /s/ W. AUGUST HILLENBRAND
   ------------------------------------
Its:
    -----------------------------------

WESTWOOD ASSOCIATES, L.P.

By: /s/ LAWRENCE T. KENNEDY
   ------------------------------------
    Lawrence T. Kennedy
    Chairman, Treasurer

W. AUGUST HILLENBRAND

/s/ W. AUGUST HILLENBRAND
---------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

PRICE BROTHERS INVESTMENT PARTNERSHIP
By: Price Brothers Investment Corp.,
its General Partner

By: /s/ JOHN PRICE
   ------------------------------------
    John Price
    Vice President

ROSE REVOCABLE TRUST

By: /s/ G. LYNN ROSE
   ------------------------------------
Its: Trustee

HARRY S. ROBBINS AND SUSAN K. ROBBINS,
TRUSTEES OF THE ROBBINS FAMILY TRUST
D/T/D 4/15/91

By: /s/ HARRY S. ROBBINS
   ------------------------------------
    Harry S. Robbins, Trustee



By: /s/ SUSAN K. ROBBINS
   ------------------------------------
    Susan K. Robbins, Trustee

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

JUDD MELTZER

/s/ JUDD MELTZER
---------------------------------------

WENDY MELTZER

/s/ WENDY MELTZER
---------------------------------------

SEELIG FREUND

/s/ SEELIG FREUND
---------------------------------------

CHARMIAN FREUND

/s/ CHARMIAN FREUND
---------------------------------------

BERNARD WEISS

/s/ BERNARD WEISS
---------------------------------------

DORIS WEISS

/s/ DORIS WEISS
---------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

STAR BAY PARTNERS, L.P.,
a California Limited Partnership

By: APH Capital Management LLC,
a California Limited Liability Company,
its General Partner

By: Levensohn Capital Management LLC,
a California Limited Liability Company,
its Managing Member

By: /s/ PASCAL N. LEVENSOHN
   ----------------------------------------
    Pascal N. Levensohn
    Managing Member

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

TRIAXIS TRUST AG

By: /s/ H.P. JOHN
   ----------------------------------------
Its: Chairman
    ---------------------------------------

BANK JULIUS BAER & CO. LTD.

By:
   ----------------------------------------
    Michele Streuli     Thierry Mory
    Vice President      Mandator

LGT BANK IN LIECHTENSTEIN AG

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

RICHARD C. BLUM

/s/ RICHARD C. BLUM
----------------------------------------

N. COLIN LIND

/s/ N. COLIN LIND
----------------------------------------

JEFFREY W. UBBEN

/s/ JEFFREY W. UBBEN
----------------------------------------

MURRAY A. INDICK

/s/ MURRAY A. INDICK
----------------------------------------

GEORGE F. HAMEL, JR.

MARC T. SCHOLVINCK

/s/ MARC T. SCHOLVINCK
----------------------------------------

R. CRAIG LIND

/s/ R. CRAIG LIND
----------------------------------------

TIMOTHY H. UBBEN

/s/ TIMOTHY H. UBBEN
----------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

INSURANCE COMPANY SUPPORTED
ORGANIZATIONS PENSION PLAN TRUST

By: Mellon Bank, N.A., solely in its
capacity as Trustee for the Insurance
Company Supported Organizations Pension
Plan Trust (as directed by The Benefits
Connection Group, Inc.), and not in its
individual capacity.

By: /s/ CAROLE BRUNO
   -------------------------------------
    Carole Bruno, Authorized Signatory

BK CAPITAL PARTNERS, IV, L.P.

By: Richard C. Blum & Associates, L.P.
Its General Partner

By: /s/ MARC T. SCHOLVINCK
   -------------------------------------
    Marc T. Scholvinck, Managing Director

PRISM PARTNERS I, L.P.

By: /s/ JERALD M. WEINTRAB
   -------------------------------------
Its: Managing General Partner
    ------------------------------------

RICHARD C. BLUM & ASSOCIATES, L.P.

By: /s/ MARC T. SCHOLVINCK
   -------------------------------------
    Marc T. Scholvinck, Managing Director

THOMAS L. KEMPNER TRUST AND WILLIAM
PERLMUTH TRUSTEES U/W CARL M. LOEB FBO
THOMAS L. KEMPNER

By: /s/ THOMAS L. KEMPNER
   -------------------------------------
Its: Trustee
    ------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

SUSAN J. SCHMIDT

/s/ SUSAN J. SCHMIDT
----------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

OR TRUST

By: /s/ GEORGE A. PAVLOV
   -------------------------------------
    George A. Pavlov
    Authorized Signatory

RUSSELL C. HIRSCH

/s/ RUSSELL C. HIRSCH
----------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

DBI I, L.P.

By: /s/ DOUG BOSCH
   ------------------------------------

Print Name:  Doug Bosch
           ----------------------------

Title:  CEO, Doug Bosch Interests,
        General Partner
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

MORTON MEYERSON

/s/ TERRY PENDLETON
----------------------------------------
Attorney in fact

/s/ JANICE HUDSON
----------------------------------------
Attorney in fact

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

DAVID N. MEYERSON EDS TRUST U/A
R. GORDON APPLEMAN TRUSTEE DTD
6/01/70

By:  /s/ R. GORDON APPLEMAN TRUSTEE
   ------------------------------------

Print Name:  R. Gordon Appleman
           ----------------------------

Title:  Trustee
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

THE MARTI A. MEYERSON EDS TRUST
U/A R. GORDON APPLEMAN TRUSTEE
DTD 6/01/70

By:  /s/ R. GORDON APPLEMAN TRUSTEE
   ------------------------------------

Print Name:  R. Gordon Appleman
           ----------------------------

Title:  Trustee
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

MARUBENI AMERICA CORPORATION

By: /s/ T. NAKABAYASHI
   ------------------------------------

Print Name: T. Nakabayashi
           ----------------------------

Title: Group Executive & SVP,
       Power Systems,
       Telecommunications & Electronics
       Group
      ---------------------------------

MARUBENI CORPORATION

By:  /s/ M. OKAMURA
   ------------------------------------

Print Name:  M. Okamura
           ----------------------------

Title:  General Manager of Electronics
        Dept.
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

INVESTOR (GUERNSEY) LIMITED

By:  /s/ OUJE HELMBERG
   ------------------------------------

Print Name:  Ouje Helmberg
           ----------------------------

Title:  Director
      ---------------------------------

By:  /s/ DAVID C. JEFFRIES
   ------------------------------------

Print Name:  David C. Jeffries
           ----------------------------

Title:  Director
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

FORETHOUGHT LIFE INSURANCE COMPANY

By:  /s/ GUY M. COOPER
   ------------------------------------

Print Name:  Guy M. Cooper
           ----------------------------

Title:  Chief Investment Officer
      ---------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

IS INVESTMENTS, LLC

By:  /s/ FRED GUMBINNER
   ------------------------------------

Print Name:  Fred Gumbinner
           ----------------------------

Title:  Manager
      ---------------------------------

LESLIE J. GOLDMAN

/s/ LESLIE J. GOLDMAN
---------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

FRANEY, PARR & MUHA, INC.

By: /s/ JOHN R. MUHA
   -------------------------------------
    John R. Muha
    President

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

FRANKLIN R. SILBEY

/s/ FRANKLIN R. SILBEY
----------------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

RUSSELL C. HIRSCH TRUST

By: /s/ RUSSELL C. HIRSCH, TRUSTEE
   -------------------------------------
    Russell C. Hirsch, Trustee

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

UNGER FAMILY TRUST

By: /s/ WILLIAM D. UNGER
   -------------------------------------
    William D. Unger, Trustee

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

DALAL REVOCABLE TRUST U/D/T DTD 7/31/90,
YOGEN K. & MARGARET J. DALAL, TTEES

By: /s/ YOGEN K. DALAL
   -------------------------------------
    Yogen K. Dalal



By: /s/ MARGARET J. DALAL
   -------------------------------------
    Margaret J. Dalal

NINA M. DALAL 1993 TRUST U/T/A 7/21/93,
RAJEN K. DALAL, TRUSTEE

By: /s/ RAJEN K. DALAL, TRUSTEE
   -------------------------------------
    Rajen K. Dalal, Trustee

ALEX R. DALAL 1993 TRUST U/T/A 7/21/93,
RAJEN K. DALAL, TRUSTEE

By: /s/ RAJEN K. DALAL, TRUSTEE
   -------------------------------------
    Rajen K. Dalal, Trustee

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

By:  /s/ LORI PRESSMAN
   -------------------------------------

Print Name:  Lori Pressman
           -----------------------------

Title:       Assistant Director
        Technology Licensing Officer
      ----------------------------------

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Mayfield VIII                               2,565,000           --        912,000        337,630        118,750        118,750
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Attn: Russell C. Hirsch

Mayfield Associates Fund II                   135,000           --         48,000         17,770          6,250          6,250
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Attn: A. Grant Heidrich, III

Sierra Ventures V, L.P.                     2,300,000           --        600,000        125,000        125,000        125,000
3000 Sand Hill Road
Building 4, Suite 210
Attn: Petri T. Vainio

Frederic H. Moll                              150,000           --             --             --             --             --
P.O. Box 620635
Woodside, CA 94062

Robert G. Younge                              100,000           --             --             --             --             --
550 Westridge Drive
Portola Valley, CA 94028

John G. Freund and Linda G                     50,000           --             --             --             --             --
  Sexton, Trustees of the Freund/
  Sexton Living Trust Dated
  February 8, 1991
86 Alejandra Avenue
Atherton, CA 94027

William H. Abbott, Trustee                     25,000           --             --             --             --             --
  For the Abbott Living Trust
  dated 08/20/87
1507 Louisa Court
Palo Alto, CA 94303

Paul A. Brooke                                 25,000           --             --             --             --             --
Tower Hill Road
Tuxedo Park, NY 10987

Stanford University                            25,000           --             --             --             --             --
c/o Stanford Management Company
2770 Sand Hill Road
Menlo Park, CA 94025
Attn: Carol Gilmer

GC&H Investments                               20,000           --         10,000             --          6,500          6,500
One Maritime Plaza, 20th Floor
San Francisco, CA 94111

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Joseph M. Mandato and Elizabeth R              20,000           --         10,000             --             --             --
  Mandato TTEES of the Mandato
  Family Trust
82 Monte Vista Avenue
Atherton, CA 94027

Harry S. Robbins & Susan K.                    20,000           --             --             --             --             --
  Robbins Trustees of the Robbins
  Family Trust D/T/D 4/15/91
15244 Montalvo Heights Court
Saratoga, CA 95070

Howard M. Holstein                              7,500           --             --             --             --             --
850 Potomac School Terrace
Potomac, MD 20854

Guidant Corporation                                --      470,000        290,000             --             --             --
c/o Origin Medsystems, Inc.
135 Constitution Drive
Menlo Park, CA 94025
Attn: F. Thomas Watkins

Allan G. Lozier                                    --           --      1,200,000        116,000        312,500        312,500
c/o Lozier Corporation
6226 Pershing Drive
Omaha, NE 678110

RWI Group, L.P.                                    --           --        100,000             --             --             --
720 University Avenue, Suite 103
Palo Alto, CA 94301
Attn: Donald A. Lucas

Allan Johnston                                     --           --          5,000             --             --             --
c/o Synergy Partners International
1010 El Camino Real, Suite 300
Menlo Park, CA 94025

Robert Okun                                        --           --          5,000             --             --             --
c/o Synergy Partners International
1010 El Camino Real, Suite 300
Menlo Park, CA 94025

William M. Jenkins                                 --           --          4,000             --             --             --
2208 16th Avenue East
Seattle, WA 98112

Peter M. Dickstein                                 --           --          1,000             --             --             --
3746 Sacramento Street
San Francisco, CA 94118

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Morgan Stanley Venture                             --           --      1,368,600             --        114,050        114,050
  Partners III, L.P.
3000 Sand Hill Road
Building 4, Suite 250
Menlo Park, CA 94025
Attn: Scott S. Halsted

Morgan Stanley Venture                             --           --        131,400             --         10,950         10,950
  Investors III, L.P.
3000 Sand Hill Road
Building 4, Suite 250
Menlo Park, CA 94025
Attn: Scott S. Halsted

PaTMarK Company, Inc.                              --           --      1,000,000         37,500      1,250,000      1,250,000
c/o Hillenbrand Industries, Inc.
700 State Route, 46 East
Batesville, IN 47006
Attn: Thomas E. Brewer

Huntersville Road Investors L.P.                   --           --        250,000         87,500        125,000        125,000
c/o Hillenbrand Industries, Inc.
700 State Route, 46 East
Batesville, IN 47006
Attn: Thomas E. Brewer

Rose Revocable Trust                               --           --             --         28,600             --             --
c/o Goldman, Sachs & Co.
555 California Street, 44th Floor
San Francisco, Ca 94104
Attn: G. Lynn Rose

Westwood Associates, L.P.                          --           --         33,000             --        125,000        125,000
c/o Hillenbrand Industries, Inc.
700 State Route, 46 East
Batesville, IN 47006
Attn: Thomas E. Brewer

Price Brothers Investment                          --           --         12,000             --             --             --
  Partnership
1218 Third Avenue, #1115
Seattle, WA 98101
Attn: John Price

Mr. Judd Meltzer                                   --           --         10,000             --             --             --
Mrs. Wendy Meltzer
900 Park Avenue
New York, NY 10028

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Dr. Seelig Freund                                  --           --          5,000             --             --             --
Mrs. Charmian Freund
1185 Park Avenue, Apt. 3F
New York, NY 10128

Dr. Bernard Weiss                                  --           --          5,000             --             --             --
Mrs. Doris Weiss
119 East 84th Street, Apt. 8A
New York, NY 10028

Star Bay Partners, L.P.                            --           --             --        375,000        125,000        125,000
c/o Levensohn Capital Management
44 Montgomery Street
Suite 2000
San Francisco, CA 94104
Attn:  Pascal N. Levensohn

Triaxis Trust AG                                   --           --             --        184,500             --             --
Buerglistrasse 6
8027 Zuerich
Attn: Hans-Peter John

Bank Julius Baer & Co. Ltd.                        --           --             --        165,500             --             --
Bahmhoifstmasse 36
8010 Zuerich
Switzerland
Attn: Simon Newson

CBG Compagnie Bancaire Geneve                      --           --             --        125,000             --             --
Avenue de Rumine 20
Case postale 220
CH-1005 LAUSANNE
Switzerland
Attn: Thierry Mory

LGT Bank in Liechtenstein AG                       --           --             --         25,000             --             --
P.O. Box 85
FL-9490
Vaduz Liechtenstein

Insurance Company Supported                        --           --             --         75,000         25,000         25,000
  Organizations Pension Plan Trust
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
BK Capital Partners IV, L.P.                       --           --             --        187,500         56,250         56,250
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133
Attn: Marc T. Scholvinck

Prism Partners I, L.P.                             --           --             --         62,500             --             --
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Richard C. Blum & Associates, L.P.                 --           --             --         90,500         22,100         22,100
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133
Attn: Marc T. Scholvinck

Richard C. Blum                                    --           --             --         18,750          4,975          4,975
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

N. Colin Lind                                      --           --             --          8,750          2,225          2,225
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Jeffrey W. Ubben                                   --           --             --          2,500            650            650
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Timothy H. Ubben                                   --           --             --         18,750          4,975          4,975
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Murray A. Indick                                   --           --             --          1,250            325            325
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
George F. Hamel, Jr.                               --           --             --            625            150            150
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Marc T. Scholvinck                                 --           --             --          2,500            650            650
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

R. Craig Lind                                      --           --             --          1,250            325            325
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Thomas L. Kempner Trust and                        --           --             --         28,250          6,875          6,875
  William Permuth Trustee u/w Carl
  M. Loeb FBO Thomas L. Kempner
c/o Richard C. Blum &
  Associates, L.P.
909 Montgomery Street, Suite 400
San Francisco, CA 94133

Susan J. Schmidt                                   --           --             --          1,875            500            500
3111 Jackson Street, #3
San Francisco, CA 94115

W August Hillenbrand                               --           --             --             --        125,000        125,000
c/o Hillenbrand Industries, Inc.
700 State Route, 46 East
Batesville, IN 47006

Russell C. Hirsch                                  --           --             --             --          3,125          3,125
c/o Mayfield Fund, Suite 250
2800 Sand Hill Road
Menlo Park, CA 94025

OR Trust                                           --           --             --             --         52,875         52,875
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025

DBI I, L.P.                                        --           --             --             --        125,000        125,000
c/o Kim Combs
3760 Olympia
Houston, TX 77019

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Morton Meyerson                                    --           --             --             --        125,000        125,000
c/o Morgan Stanley
1221 Avenue of the Americas, 4th Floor
New York, NY 10020
Attn:  Alan D. Glatt

David N. Meyerson EDS Trust U/A                    --           --             --             --         62,500         62,500
R. Gordon Appleman Trustee DTD
6/01/70
c/o Morgan Stanley
1221 Avenue of the Americas, 4th Floor
New York, NY 10020
Attn:  Alan D. Glatt

The Marti A. Meyerson EDS Trust U/A                --           --             --             --         62,500         62,500
R. Gordon Appleman Trustee DTD
6/01/70
c/o Morgan Stanley
1221 Avenue of the Americas, 4th Floor
New York, NY 10020
Attn:  Alan D. Glatt

Marubeni America Corporation                       --           --             --             --        312,500        312,500
450 Lexington Avenue, 36th Floor
New York, NY 10017
Attn: H. Fukuda or his successor

Marubeni Corporation                               --           --             --             --        312,500        312,500
4-2, Ohtemachi
1-Chome, Chiyoda-Ku
Tokyo 100-8800 Japan
Attn: M. Okamura, Electronic Dept.

Investor (Guernsey) Limited                        --           --             --             --      1,250,000      1,250,000
PO Box 626
National Westminster House
Le Tuchot St Peter Port
Guernsey Channel Islands
GY 1 4PW

Forethought Life Insurance Company                 --           --             --             --        125,000        125,000
Forethought Center
Batesville, IN 47006
Attn:  Guy Mac Cooper

IS Investments, LLC                                --           --             --             --         37,500         37,500
c/o Columbia Energy Group
13880 Dulles Corner Lane
Herndon, VA 20171-4600
Attn: Frederic R. Gumbinner

                                            Series A      Series B      Series C       Series D       Series E       Series F
Name and Address                            Preferred     Preferred     Preferred      Preferred      Preferred      Warrants
===============================================================================================================================
Leslie J. Goldman                                  --           --             --             --         12,500         12,500
c/o Skadden, Arps, Slate, Meagher &
  Flom LLP
1440 New York Avenue, N.W
Washington, D.C. 20005-2111

Franey, Parr & Muha, Inc.                          --           --             --             --          6,250          6,250
Dulles Gateway Center I
13921 Park Center Road, Suite 160
Herndon, VA 20171

Franklin R. Silbey                                 --           --             --             --          6,250          6,250
9430 Sunnyfield Court
Potomac, MD 20854

Russell C. Hirsch Trust                            --           --             --             --          3,125          3,125
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025

Unger Family Trust                                 --           --             --             --         12,500         12,500
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Attn: William D. Unger

Dalal Revocable Trust U/D/T DTD                    --           --             --             --         12,500         12,500
  7/31/90, Yogen K. & Margaret J.
  Dalal, TTEE
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025

Nina M. Dalal 1993 Trust U/T/A                     --           --             --             --          3,125          3,125
  7/21/93, Rajen K. Dalal, TTEE
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025

Alex R. Dalal 1993 Trust U/T/A                     --           --             --             --          3,125          3,125
  7/21/93, Rajen K. Dalal, TTEE
c/o Mayfield Fund
2800 Sand Hill Road, Suite 250
Menlo Park, CA 94025

TOTAL                                       5,442,500      470,000      6,000,000      2,125,000      5,096,875      5,096,875

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT

Massachusetts Institute of Technology 35,834 SHARES OF COMMON STOCK Five Cambridge Center
Kendall Square
Room NE25-230
Cambridge, MA 02142-1493
Attn: Lori Pressman

AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT

EXHIBIT 10.6

[LMSI LOGO] LEASE MANAGEMENT SERVICES, INC.

EQUIPMENT FINANCING AGREEMENT
(Number 10809)

THIS EQUIPMENT FINANCING AGREEMENT NUMBER 10809 ("Agreement") is dated as of the date set forth at the foot hereof and is between LEASE MANAGEMENT SERVICES, INC., ("Secured Party") and INTUITIVE SURGICAL, INC., ("Debtor").

1. EQUIPMENT; SECURITY INTEREST. The terms and conditions of this Agreement cover each item of machinery, equipment and other property (individually an "Item" or "Item of Equipment" and collectively the "Equipment") described in a schedule now or hereafter executed by the parties hereto and made a part hereof (individually a "Schedule" and collectively the "Schedules"). Debtor hereby grants Secured Party a security interest in and to all Debtor's right, title and interest in and to the Equipment under the Uniform Commercial Code, such grant with respect to an Item of Equipment to be as of Debtor's execution of a related Equipment Financing Commitment referencing this Agreement or, if Debtor then has no interest in such Item, as of such subsequent time as Debtor acquires an interest in the Item. Such security interest is granted by Debtor to secure performance by Debtor of Debtor's obligations to Secured Party hereunder and under any other agreements under which Debtor has or may hereafter have obligations to Secured Party. Debtor will ensure that such security interest will be and remain a sole and valid first lien security interest subject only to the lien of current taxes and assessment not in default but only if such taxes are entitled to priority as a matter of law.

2. DEBTOR'S OBLIGATIONS. The obligations of Debtor under this Agreement respecting an Item of Equipment, except the obligation to pay installment payments with respect thereto which will commence as set forth in Paragraph 3 below, commence upon the grant to Secured Party of a security interest in the Item. Debtor's obligations hereunder with respect to an Item of Equipment and Secured Party's security interest therein will continue until payment of all amounts due, and performance of all terms and conditions required hereunder provided, however, that if this Agreement is in default said obligations and security interest will continue during the continuance of said default. Upon termination of Secured Party's security interest in an Item of Equipment, Secured Party will execute such release of interest with respect thereto as Debtor reasonably requests.

3. INSTALLMENT PAYMENTS AND OTHER PAYMENTS. Debtor will repay advances Secured Party makes on account of the Equipment in installment payments in the amounts and at the times set forth in the Schedules, whether or not Secured Party has rendered an invoice therefor, at the office of Secured Party set forth at the foot hereof, or to such person and/or at such other place as Secured Party may from time to time designate by notice to Debtor. Any other amounts required to be paid Secured Party by Debtor hereunder are due upon Debtor's receipt of Secured Party's invoice therefor and will be payable as directed in the invoice. Payments under this Agreement may be applied to Debtor's then accrued obligations to Secured Party in such order as Secured Party may choose.

4. NET AGREEMENT; NO OFFSET, SURVIVAL. This Agreement is a net agreement, and Debtor will not be entitled to any abatement of installment payments or other payments due hereunder or any reduction thereof under any circumstance or for any reason whatsoever. Debtor hereby waives any and all existing and future claims, as offsets, against any installment payments or other payment due hereunder and agrees to pay the installment payments and other amounts due hereunder as and when due regardless of any offset or claim which may be asserted by Debtor or on its behalf. The obligations and liabilities of Debtor hereunder will survive the termination of the Agreement.

5. FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT. DEBTOR ACKNOWLEDGES THAT THE EQUIPMENT HAS OR WILL HAVE BEEN SELECTED AND ACQUIRED SOLELY BY DEBTOR FOR DEBTOR'S PURPOSES, THAT SECURED PARTY IS NOT AND WILL NOT BE THE VENDOR OF ANY

EQUIPMENT AND THAT SECURED PARTY HAS NOT MADE AND WILL NOT MAKE ANY AGREEMENT, REPRESENTATION OR WARRANTY WITH RESPECT TO THE MERCHANTABILITY, CONDITION, QUALIFICATION OR FITNESS FOR A PARTICULAR PURPOSE OR VALUE OF THE EQUIPMENT OR ANY OTHER MATTER WITH RESPECT THERETO IN ANY RESPECT WHATSOEVER.

6. NO AGENCY. DEBTOR ACKNOWLEDGES THAT NO AGENT OF THE MANUFACTURER OR OTHER SUPPLIER OF AN ITEM OF EQUIPMENT OR OF ANY FINANCIAL INTERMEDIARY IN CONNECTION WITH THIS AGREEMENT IS AN AGENT OF SECURED PARTY. SECURED PARTY IS NOT BOUND BY A REPRESENTATION OF ANY SUCH PARTY AND, AS CONTEMPLATED IN PARAGRAPH 27 BELOW, THE ENTIRE AGREEMENT OF SECURED PARTY AND DEBTOR CONCERNING THE FINANCING OF THE EQUIPMENT IS CONTAINED IN THIS AGREEMENT AS IT MAY BE AMENDED ONLY AS PROVIDED IN THAT PARAGRAPH.

7. ACCEPTANCE. Execution by Debtor and Secured Party of a Schedule covering the Equipment or any Items thereof will conclusively establish that such Equipment has been included under and will be subject to all the terms and conditions of this Agreement. If Debtor has not furnished Secured Party with an executed Schedule by the earlier of fourteen (14) days after receipt thereof or expiration of the commitment period set forth in the applicable Equipment Financing Agreement, Secured Party may terminate its obligation to advance funds as to the applicable Equipment.

8. LOCATION; INSPECTION; USE. Debtor will keep, or in the case of motor vehicles, permanently garage and not remove from the United States, as appropriate, each Item of Equipment in Debtor's possession and control at the Equipment Location designated in the applicable Schedule, or at such other location to which such Item may have been moved with the prior written consent of Secured Party. Whenever requested by Secured Party, Debtor will advise Secured Party as to the exact location of an Item of Equipment. Secured Party will have the right to inspect the Equipment and observe its use during normal business hours, subject to Debtor's security procedures and to enter into and upon the premises where the Equipment may be located for such purpose. The Equipment will at all times be used solely for commercial or business purposes and operated in a careful and proper manner and in compliance with all applicable laws, ordinances, rules and regulations, all conditions and requirements of the policy or policies of insurance required to be carried by Debtor under the terms of this Agreement and all manufacturer's instructions and warranty requirements. Any modifications or additions to the Equipment required by any such governmental edict or insurance policy will be promptly made by Debtor.

9. ALTERATIONS; SECURITY INTEREST COVERAGE. Without the prior written consent of Secured Party, Debtor will not make any alterations, additions or improvements to any Item of Equipment which detract form its economic value or functional utility, except as may be required pursuant to Paragraph 8 above. Secured Party's security interest in the Equipment will include all modifications and additions thereto and replacements and substitutions therefor, in whole or in part. Such reference to replacements and substitutions will not grant Debtor greater rights to replace or substitute than are provided in Paragraph 11 below or as may be allowed upon the prior written consent of Secured Party.

10. MAINTENANCE. Debtor will maintain the Equipment in good repair, condition and working order. Debtor will also cause each Item of Equipment for which a service contract is generally available to be covered by such a contract which provides coverages typical to property of the type involved and is issued by a competent servicing entity.

11. LOSS AND DAMAGE; CASUALTY VALUE. In the event of the loss of, theft of, requisition of, damage to or destruction of an Item of Equipment ("Casualty Occurrence"), Debtor will give Secured Party prompt notice thereof and will thereafter place such Item in good repair,

condition and working order, provided, however, that if such Item is determined by Secured Party to be lost, stolen, destroyed or damaged beyond repair, is requisitioned or suffers a constructive total loss as defined in any applicable insurance policy carried by Debtor in accordance with Paragraph 14 below, Debtor, at Secured Party's option, will (a) replace such Item with like Equipment in good repair, condition and working order whereupon such replacement equipment will be deemed such Item for all purposes hereof or (b) pay Secured Party the "Casualty Value" of such Item which will equal the total of (i) all installment payments and other amounts due from Debtor to Secured Party at the time of such payment and (ii) future installment payments due with respect to such Item with each such payment including any final uneven payment discounted at a rate equal to the discount rate of the Federal Reserve Bank of San Francisco from the date due to the date of such payment.

Upon such replacement or payment, as appropriate, this Agreement and Secured Party's security interest will terminate with, and only with, respect to the Item of Equipment so replaced or as to which such payment is made in accordance with Paragraph 2 above.

12. TITLING; REGISTRATION. Each item of Equipment subject to title registration laws will at all times be titled and/or registered by Debtor as Secured Party's agent and attorney-in-fact with full power and authority to register (but without power to affect title to) the Equipment in such manner and in such jurisdiction or jurisdictions as Secured Party directs. Debtor will promptly notify Secured Party of any necessary or advisable retitling and/or registration of an Item of Equipment in a jurisdiction other than the one in which such Item is then titled and/or registered. Any and all documents of title will be furnished or caused to be furnished Secured Party by Debtor within sixty (60) days of the date any titling or registering or restating or deregistering, as appropriate, is directed by Secured Party.

13. TAXES. Debtor will make all filings as to and pay when due all personal property and other ad valorem taxes and all other taxes, fees, charges and assessments based on the ownership or use of the Equipment and will pay as directed by Secured Party or reimburse Secured Party for all other taxes, including, but not limited to, gross receipt taxes (exclusive of federal and state taxes based on Secured Party's net income, unless such net income taxes are in substitution for or relieve Debtor from any taxes which Debtor would otherwise be obligated to pay under the terms of this Paragraph 13), fees, charges and assessments whatsoever, however designated, whether based on the installment payments or other amounts due hereunder, levied, assessed or imposed upon the Equipment or otherwise related hereto or to the Equipment, now or hereafter levied, assessed or imposed under the authority of a federal, state, or local taxing jurisdiction, regardless of when and by whom payable. Filings with respect to such other amounts will, at Secured Party's option, be made by Secured Party or by Debtor as directed by Secured Party.

14. INSURANCE. Debtor will procure and continuously maintain all risk insurance against loss or damage to the Equipment from any cause whatsoever for not less than the full replacement value thereof naming Secured Party as Loss Payee. Such insurance must be in a form and with companies approved by Secured Party, must provide at least thirty (30) days advance written notice to Secured Party of cancellation, change or modification in any term, condition, or amount of protection provided therein, must provide full breach of warranty protection and must provide that the coverage is "primary coverage" (does not require contribution from any other applicable coverage). Debtor will provide Secured Party with an original policy or certificate evidencing such insurance. In the event of an assignment of this Agreement of which Debtor has notice, Debtor will cause such insurance to provide the same protection to the assignee as its interests may appear. The proceeds of such insurance, at the option of the Secured Party or such assignee, as appropriate, will be applied toward (a) repair or replacement of the appropriate Item or Items of Equipment, (b) payment of the Casualty Value thereof and/or (c) payment of, or as provision for, satisfaction of any other accrued obligations of Debtor hereunder. Debtor hereby appoints Secured Party as Debtor's attorney-in-fact with full power and authority to do all things, including, but not limited to, making claims, receiving payments and endorsing documents, checks or drafts, necessary to secure payments due under any policy contemplated hereby on account of a Casualty

Occurrence. Debtor and Secured Party contemplate that the jurisdictions where the Equipment will be located will not impose any liability upon Secured Party for personal injury and/or property damage resulting out of the possession, use, operation or condition of the Equipment. In the event Secured Party determines that such is not or may not be the case with respect to a given jurisdiction, Debtor will provide Secured Party with public liability and property damage coverage applicable to the Equipment in such amounts and in such form as Secured Party requires.

15. SECURED PARTY'S PAYMENT. If Debtor fails to pay any amounts due hereunder or to perform any of its other obligations under this Agreement, Secured Party may, at its option, but without any obligation to do so, pay such amounts or perform such obligations, and Debtor will reimburse Secured Party the amount of such payment or cost of such performance, plus interest at 1.5% per month.

16. INDEMNITY. Debtor does hereby assume liability for and does agree to indemnify, defend, protect, save and keep harmless Secured Party from and against any and all liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including court costs and legal expenses, of whatever kind and nature, imposed on, incurred by or asserted against Secured Party (whether or not also indemnified against by any other person) in any way relating to or arising out of this Agreement or the manufacture, financing, ownership, delivery, possession, use, operation, condition or disposition of the Equipment by Secured Party or Debtor, including, without limitation, any claim alleging latent and other defects, whether or not discoverable by Secured Party or Debtor, and any other claim arising out of strict liability in tort, whether or not in either instance relating to an event occurring while Debtor remains obligated under this Agreement, and any claim for patent, trademark or copyright infringement. Debtor agrees to give Secured Party and Secured Party agrees to give Debtor notice of any claim or liability hereby indemnified against promptly following learning thereof.

17. DEFAULT. Any of the following will constitute an event of default hereunder: (a) Debtor's failure to pay when due any installment payment or other amount due hereunder, which failure continues for ten (10) days after the due date thereof; (b) Debtor's default in performing any other obligation, term or condition of this Agreement or any other agreement between Debtor and Secured Party or default under any further agreement providing security for the performance by Debtor of its obligations hereunder provided such default has continued for more than twenty (20) days, except as provided in (c) and (d) hereinbelow, or, without limiting the generality of subparagraph (l) hereinbelow, default under any lease or any mortgage or other instrument contemplating the provision of financial accommodation applicable to the real property where an Item of Equipment is located; (c) any writ or order of attachment or execution or other legal process being levied on or charged against any Item of Equipment and not being released or satisfied within ten
(10) days; (d) Debtor's failure to comply with its obligations under Paragraph 14 above or any transfer by Debtor in violation of Paragraph 21 below; (e) a non-appealable judgment for the payment of money in excess of $100,000 being rendered by a court of record against Debtor which Debtor does not discharge or make provision for discharge in accordance with the terms thereof within ninety
(90) days from the date of entry thereof; (f) death or judicial declaration of incompetency of Debtor, if an individual; (g) the filing by Debtor of a petition under the Bankruptcy Code or any amendment thereto or under any other insolvency law or law providing for the relief of debtors, including, without limitation, a petition for reorganization, arrangement or extension, or the commission by Debtor of an act of bankruptcy; (h) the filing against Debtor of any such petition not dismissed or permanently stayed within thirty (30) days of the filing thereof; (i) the voluntary or involuntary making of an assignment of substantial portion of its assets by Debtor for the benefit of creditors, appointment of a receiver or trustee for Debtor or for any of Debtor's assets, institution by or against Debtor or any other type of insolvency proceeding (under the Bankruptcy Code or otherwise) or of any formal or informal proceeding for dissolution, liquidation, settlement of claims against or winding up of the affairs of Debtor, Debtor's cessation of business activities or the making by Debtor of a transfer of all or a material portion of Debtor's assets or inventory not in the ordinary course of business; (j) the occurrence of any event described in parts (e), (f), (g), (h) or (i) hereinabove with respect to any guarantor or

other party liable for payment or performance of this Agreement; (k) any certificate, statement, representation, warranty or audit heretofore or hereafter furnished with respect hereto by or on behalf of Debtor or any guarantor or other party liable for payment or performance of this Agreement proving to have been false in any material respect at the time as of which the facts therein set forth were stated or certified or having omitted any substantial contingent or unliquidated liability or claim against Debtor or any such guarantor or other party; (l) breach by Debtor of any lease or other agreement providing financial accommodation under which Debtor or its property is bound; or (m) a transfer of effective control of Debtor, if an organization.

18. REMEDIES. Upon the occurrence of an event of default, Secured Party will have the rights, options, duties and remedies of a Secured Party, and Debtor will have the rights and duties of a debtor, under the Uniform Commercial Code (regardless of whether such Code or a law similar thereto has been enacted in a jurisdiction wherein the rights or remedies are asserted) and, without limiting the foregoing, Secured Party may exercise any one or more of the following remedies: (a) declare the Casualty Value or such lesser amount as may be set by law immediately due and payable with respect to any or all Items of Equipment without notice or demand to Debtor; (b) sue from time to time for and recover all installment payments and other payments then accrued and which accrue during the pendency of such action with respect to any or all Items of Equipment; (c) take possession of and, if deemed appropriate, render unusable any or all Items of Equipment, without demand or notice, wherever same may be located, without any court order or other process of law and without liability for any damages occasioned by such taking of possession and remove, keep and store the same or use and operate or lease the same until sold; (d) require Debtor to assemble any or all Items of Equipment at the Equipment Location therefor, or at such location to which such Equipment may have been moved with the written consent of Secured Party or such other location in reasonable proximity to either of the foregoing as Secured Party designates; (e) upon ten (10) days notice to Debtor or such other notice as may be required by law, sell or otherwise dispose of any Item of Equipment, whether or not in Secured Party's possession, in a commercially reasonable manner at public or private sale at any place deemed appropriate and apply the new proceeds of such sale, after deducting all costs of such sale, including, but not limited to, costs of transportation, repossession, storage, refurbishing, advertising and brokers' fees, to the obligations of Debtor to Secured Party hereunder or otherwise, with Debtor remaining liable for any deficiency and with any excess being returned to Debtor; (f) upon thirty (30) days notice to Debtor, retain any repossessed or assembled Items of Equipment as Secured Party's own property in full satisfaction of Debtor's liability for the installment payments due hereunder with respect thereto, provided that Debtor will have the right to redeem such Items by payment in full of its obligations to Secured Party hereunder or otherwise or to require Secured Party to sell or otherwise dispose of such Items in the manner set forth in subparagraph (e) hereinabove upon notice to Secured Party within such thirty (30) day period; or (g) utilize any other remedy available to Secured Party under the Uniform Commercial Code or similar provision of law or otherwise at law or in equity.

No right or remedy conferred herein is exclusive of any other right or remedy conferred herein or by law; but all such remedies are cumulative of every other right or remedy conferred hereunder or at law or in equity, by statute or otherwise, and may be exercised concurrently or separately from time to time. Any sale contemplated by subparagraph (e) of this Paragraph 18 may be adjourned from time to time by announcement at the time and place appointed for such sale, or for any such adjourned sale, without further published notice, Secured Party may bid and become the purchaser at any such sale. Any sale of an Item of Equipment, whether under said subparagraph or by virtue of judicial proceedings, will operate to divest all right, title, interest, claim and demand whatsoever; either at law or in equity, of Debtor in and to said item and will be a perpetual bar to any claim against such Item, both at law and in equity, against Debtor and all persons claiming by, through or under Debtor.

19. DISCONTINUANCE OF REMEDIES. If Secured Party proceeds to enforce any right under this Agreement and such proceedings are discontinued or abandoned for any reason or are

determined adversely, then and in every such case Debtor and Secured Party will be restored to their former positions and rights hereunder.

20. SECURED PARTY'S EXPENSES. Debtor will pay Secured Party all costs and expenses, including attorney's fees and court costs and sales costs not offset against sales proceeds under Paragraph 18 above, incurred by Secured Party in exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions or provisions hereof. This obligation includes the payment or reimbursement of all such amounts whether an action is ultimately filed and whether an action is ultimately dismissed.

21. ASSIGNMENT. Without the prior written consent of Secured Party, Debtor will not sell, lease, pledge or hypothecate, except as provided in this Agreement, any Item of Equipment or any interest therein or assign, transfer, pledge, or hypothecate this Agreement or any interest in this Agreement or permit the Equipment to be subject to any lien, charge or encumbrance of any nature except the security interest of Secured Party contemplated hereby. Debtor's interest herein is not assignable and will not be assigned or transferred by operation of law. Consent to any of the foregoing prohibited acts applies only in the given instance and is not a consent to any subsequent like act by Debtor or any other person.

All rights of Secured Party hereunder may be assigned, pledged, mortgaged, transferred or otherwise disposed of, either in whole or in part, without notice to Debtor but always, however, subject to the rights of Debtor under this Agreement. If Debtor is given notice of any such assignment, Debtor will acknowledge receipt thereof in writing. In the event Secured Party assigns this Agreement or the installment payments due or to become due hereunder or any other interest herein, whether as security for any of its indebtedness or otherwise, no breach or default by Secured Party hereunder or pursuant to any other agreement between Secured Party and Debtor, should there be one, will excuse performance by Debtor of any provision hereof, it being understood that in the event of such default or breach by Secured Party that Debtor will pursue any rights on account thereof solely against Secured Party. No such assignee, unless such assignee agrees in writing, will be obligated to perform any duty, covenant or condition required to be performed by Secured Party in connection with this Agreement.

Subject always to the foregoing, this Agreement inures to the benefit of, and is binding upon, the heirs, legatees, personal representative, successors and assigns of the parties hereto.

22. MARKINGS; PERSONAL PROPERTY. If Secured Party supplies Debtor with labels, plates, decals or other markings stating that Secured Party has an interest in the Equipment, Debtor will affix and keep the same prominently displayed on the Equipment or will otherwise mark the Equipment or its then location or locations, as appropriate, at Secured Party's request to indicate Secured Party's security interest in the Equipment. The Equipment is, and at all times will remain, personal property notwithstanding that the Equipment or any Item thereof may now be, or hereafter become, in any manner affixed or attached to, or embedded in, or permanently resting upon real property or any improvement thereof or attached in any manner to what is permanent as by means of cement, plaster, nails, bolts, screws or otherwise. If requested by Secured Party, Debtor will obtain and deliver to Secured Party waivers of interest or liens in recordable form satisfactory to Secured Party from all persons claiming any interest in the real property on which an Item of Equipment is or is to be installed or located.

23. LATE CHARGES. Time is of the essence in this Agreement and if any Installment Payment is not paid within ten (10) days after the due date thereof, Secured Party shall have the right to add and collect, and Debtor agrees to pay:
(a) a late charge on and in addition to, such Installment Payment equal to five percent (5%) of such Installment Payment or a lesser amount if established by any state or federal statute applicable thereto, and (b) interest on such Installment Payment from thirty (30) days after the due date until paid at the highest contract rate enforceable against Debtor under applicable law but never to exceed eighteen percent (18%) per annum.

24. NON-WAIVER. No covenant or condition of this Agreement can be waived except by the written consent of Secured Party. Forbearance or indulgence by Secured Party in regard to any breach hereunder will not constitute a waiver of the related covenant or condition to be performed by Debtor.

25. ADDITIONAL DOCUMENTS. In connection with and in order to perfect and evidence the security interest in the Equipment granted Secured Party hereunder Debtor will execute and deliver to Secured Party such financing statements and similar documents as Secured Party requests. Debtor authorizes Secured Party where permitted by law to make filings of such financing statements without Debtor's signature. Debtor further will furnish Secured Party (a) on a timely basis, Debtor's future financial statements, including Debtor's most recent annual report, balance sheet and income statement, prepared in accordance with generally accepted accounting principles, which reports, Debtor warrants, shall fully and fairly represent the true financial condition of Debtor (b) any other information normally provided by Debtor to the public and (c) such other financial data or information relative to this Agreement and the Equipment, including, without limitation, copies of vendor proposals and purchase orders and agreements, listings of serial numbers or other identification data and confirmations of such information, as Secured Party may from time to time reasonably request. Debtor will procure and/or execute, have executed, acknowledge, have acknowledged, deliver to Secured Party, record and file such other documents and showings as Secured Party deems necessary or desirable to protect its interest in and rights under this Agreement and interest in the Equipment. Debtor will pay as directed by Secured Party or reimburse Secured Party for all filing, search, title report, legal and other fees incurred by Secured Party in connection with any documents to be provided by Debtor pursuant to this Paragraph or Paragraph 22 and any further similar documents Secured Party may procure.

26. DEBTOR'S WARRANTIES. Debtor certifies and warrants that the financial data and other information which Debtor has submitted, or will submit, to Secured Party in connection with this Agreement is, or will be at time of delivery, as appropriate, a true and complete statement of the matters therein contained. Debtor further certifies and warrants: (a) this Agreement has been duly authorized by Debtor and when executed and delivered by the person signing on behalf of Debtor below will constitute the legal, valid and binding obligation, contract and agreement of Debtor enforceable against Debtor in accordance with its respective terms; (b) this Agreement and each and every showing provided by or on behalf of Debtor in connection herewith may be relied upon by Secured Party in accordance with the terms thereof notwithstanding the failure of Debtor or other applicable party to ensure proper attestation thereto, whether by absence of a seal or acknowledgement or otherwise; (c) Debtor has the right, power and authority to grant a security interest in the Equipment to Secured Party for the uses and purposes herein set forth and (d) each Item of Equipment will, at the time such Item becomes subject hereto, be in good repair, condition and working order.

27. ADDITIONAL SECURITY. As additional security to secure the performance of the Debtor's obligations under this Agreement and the Schedules hereto, Debtor grants to the Secured Party a security interest in all of its fixed assets, including, but not limited to, lab, test, computer and office equipment and modifications and additions thereto and replacements and substitutions therefor and the proceeds thereof including insurance proceeds, now owned or hereafter acquired between the date of this Agreement and the later of (a) January 31, 1998 or (b) the expiration of the funding period under the credit approval dated February 14, 1997 (collectively, the "Additional Equipment").

The Debtor shall have all of the obligations with respect to the Additional Equipment as it has with respect to the Equipment as set forth in this Agreement.

28. ENTIRE AGREEMENT. This instrument with exhibits and related documentation constitutes the entire agreement between Secured Party and Debtor and will not be amended, altered or changed except by a written agreement signed by the parties.

29. NOTICES. Notices under this Agreement must be in writing and must be mailed by United States mail, certified mail with return receipt requested, duly addressed, with postage prepaid, to the party involved at its respective address set forth at the foot hereof or at such other address as each party may provide on notice to the other from time to time. Notices will be effective when deposited. Each party will promptly notify the other of any change in that party's address.

30. GENDER, NUMBER: JOINT AND SEVERAL LIABILITY. Whenever the context of this Agreement requires, the neuter gender includes the feminine or masculine and the singular number includes the plural; and whenever the words "Secured Party" are used herein, they include all assignees of Secured Party, it being understood that specific reference to "assignee" in Paragraph 14 above is for further emphasis. If there is more than one Debtor named in this Agreement, the liability of each will be joint and several.

31. TITLES. The titles to the Paragraphs of this Agreement are solely for the convenience of the parties and are not an aid in the interpretation of the instrument.

32. GOVERNING LAW; VENUE. This Agreement will be governed by and construed in accordance with the laws of the State of California. Venue for any action related to the Agreement will be in an appropriate court in San Mateo County, California, to which Debtor consents, or in another court selected by Secured Party which has jurisdiction over the parties. In the event any provision hereof is declared invalid, such provision will be deemed severable from the remaining provisions of this Agreement, which will remain in full force and effect.

33. TIME. Time is of the essence of this Agreement and for each and all of its provisions.

In WITNESS WHEREOF, the undersigned have executed this Agreement as of 4/2, 1997.

DEBTOR:
INTUITIVE SURGICAL, INC.
1340 W. Middlefield Road
Mountain View, CA
94043

By: /s/ W.H. Abbott
    -----------------------
Title:  Consultant

SECURED PARTY:
LEASE MANAGEMENT SERVICES, INC.
2500 Sand Hill Road, Suite 101
Menlo Park, CA 94025

By: /s/ Barbara B. Kaiser
    ------------------------

Title:  EVP/General Manager

ADDENDUM TO EQUIPMENT FINANCING AGREEMENT NUMBER #10809
BETWEEN
INTUITIVE SURGICAL, INC. ("DEBTOR")
AND
LEASE MANAGEMENT SERVICES, INC. ("SECURED PARTY")

The printed form of Equipment Financing Agreement #10809 between the parties dated April 2, 1997 is amended as follows:

1. In Section 1, line 11 before the word "agreement" insert "equipment lease or equipment financing."

2. In Section 4, line 3, before "Debtor" insert "To the extent not prohibited by law."

3. In Section 7, change "fourteen (14) days" to "thirty (30) days" in the second sentence.

4. In Section 8, line 5, after the first occurrence of "Secured Party." insert ", except that Secured Party's consent shall not be required when Debtor's principle place of business is relocated within the continental United States. Debtor shall give Secured Party thirty (30) days advance written notice of Debtor's intent to relocate an Item of Equipment within the continental United States. If Debtor is in default as defined in Section 17 herein, Debtor may not relocate an Item of Equipment without the prior written consent of Secured Party, such consent shall not be unreasonably withheld."

5. In Section 8, line 6, before the second occurrence of "Secured Party." insert "Upon Prior reasonable notice,".

6. In Section 8, line 9, after "commercial" insert ",research and development."

7. In Section 10, line 2, after "also" insert "either."

8. At the end of Section 10, after "entity" insert "or provide comparable maintenance and repair services."

9. In Section 11, line 7, after the word "below" insert "Secured Party shall first consult with Debtor and then.", and in line 13, replace "the Federal Reserve Bank of San Francisco" with nine percent (9%)."

1.

10. Section 14, delete section in its entirety and replace with "14. INSURANCE Debtor will procure and continuously maintain insurance against loss (other than by reason of war, acts of God, riot, earthquake, flood or the like) or damage to the Equipment from any reasonable risk whatsoever for not less than the full replacement value thereof naming Secured Party as Loss Payee as its interest may appear. Such insurance must be in a form and with companies reasonably approved by Secured Party, must provide at least thirty (10) days advance written notice to Secured Party of cancellation, change or modification in any term, condition, or amount of protection provided therein, must provide full breach of warranty protection and must provide that the coverage is "primary coverage" (does not require contribution from any other applicable coverage). Debtor will provide Secured Party with an original policy or certificate evidencing such insurance. In the event of an assignment of this Agreement of which Debtor has notice, Debtor will cause such insurance to provide the same protection to the assignee as its interest may appear. The proceeds of such insurance, at the option of the Secured Party or such assignee (after consultation with Debtor), as appropriate, will be applied toward (a) repair or replacement of the appropriate Item or items of Equipment (b) payment of the Casualty Value thereof and/or (c) payment of, or as provision for, satisfaction of any other accrued obligations of Debtor hereunder. Debtor hereby appoints Secured Party as Debtor's attorney-in-fact will full power and authority, if an Event of Default has occurred and is continuing, to do all things, including, but not limited to, making claims, receiving payments and endorsing documents, checks or drafts, necessary to secure payments due under any policy contemplated hereby on account of a Casualty Occurrence. Debtor and Secured Party contemplate that the jurisdictions where the Equipment will be located will not impose any liability upon Secured Party for personal injury and/or property damage resulting out of the possession, use, operation or condition of the Equipment. In the event Secured Party determines that such is not or may not be the case with respect to a given jurisdiction, Debtor will provide Secured Party with public liability and property damage coverage applicable to the Equipment in such amounts and in such form as Secured Party reasonably requires, PROVIDED, HOWEVER, that public liability insurance with primary limits of $1,000,000 per occurrence with an excess policy of $2,000,000, shall be deemed to satisfy this requirement."

11. Section 15, at the beginning of the section insert "Subject to Section 23 below,".

12. Section 16, line 4, after the phrase "kind and nature" insert, ", except any of the foregoing resulting from Secured Party's gross negligence or willful misconduct,".

13. In Section 17(h), change "thirty (30) days" to "sixty (60) days."

14. In Section 17(i), at the end of the clause insert ", except for the purposes of a change in Debtor's state of incorporation."

15. Section 17(k), at the end of the clause insert "in excess of $50,000 per item or in the aggregate."

2.

16. In Section 17(k), after the words "or having" insert "knowingly."

17. In Section 17(m), insert "subject to Section 21," at the beginning of the clause.

18. Section 17(l), delete the section and replace it with "breach, in excess of $50,000 per item or in the aggregate, by Debtor of any lease or other agreement providing financial accommodation under which Debtor or its property is bound, which breach is not cured or with respect to which no provision has been made to cure within twenty (20) days;".

19. Section 18, line 1, insert the following in front of the beginning of the first sentence of the section: "Except as provided otherwise in this Agreement (as amended by this Addendum)."

20. In Section 18, (e) change "ten (10) days" to "fifteen (15) days."

21. In Section 18, second paragraph, line 4, after "Any" insert "lawful."

22. In Section 19, line 2, delete "or are determined adversely."

23. Section 20, line 1, insert "reasonable" between "all" and "cost."

24. Section 20, line 2, "reasonable" between "including" and "attorney's."

25. Section 20, line 6, after "dismissed" insert ", provided that the cost and expenses were incurred in the good faith exercise of Secured Party's rights and remedies hereunder."

26. Section 21, line 4, after "Agreement" insert "(except in each such case, for purposes of changing Debtor's state of incorporation)."

27. Section 21, line 5, before "Debtor's" insert "Except as provided in the previous sentence."

28. Section 24, line 1, after "condition" insert "to be performed by Debtor."

29. Section 25, line 4, insert "reasonably" before "requests."

30. Section 25, line 17, insert "reasonable" between "report," and "legal" and between "other" and "fees."

31. Section 25(b), after "other" insert "financial."

32. Section 25, line 15, delete "or desirable."

3.

33. Section 25(c), delete the last sentence and replace it with "Debtor will pay as directed by Secured Party or reimburse Secured Party for all Uniform Commercial Code filings by Secured Party against Debtor and all search reports conducted with respect to the debtor."

34. Section 27 append after last sentence to first paragraph "Notwithstanding the foregoing, in no event shall Secured Party have any right or interests in any intellectual property incorporated, associated or related to the Additional Equipment."

35. Section 29, line 5, after "effective" replace "when" with "upon the earlier of receipt or three days after."

36. Section 32, line 4, after "Secured Party" insert", to which Debtor consents."

IN WITNESS WHEREOF, the undersigned have executed this Addendum this 2nd day of April, 1997.

DEBTOR                                  SECURED PARTY:

INTUITIVE SURGICAL, INC.                LEASE MANAGEMENT SERVICES, INC.

By:  /s/ W.H. Abbott                    By: /s/ Barbara B. Kaiser
     --------------------------         -------------------------
Title:  Consultant                      Title:   EVP/GM

4.

[LMSI LOGO] LEASE MANAGEMENT SERVICES, INC.

ADDENDUM TO

EQUIPMENT FINANCING AGREEMENT

NUMBER 10809

BY AND BETWEEN

INTUITIVE SURGICAL, INC., AS DEBTOR

AND

LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY

INTUITIVE SURGICAL, INC., as Debtor, hereby acknowledges its responsibility to pay, and agrees to pay any taxes which may be due to the State of California or where applicable, for the collateral covered under the above referenced agreement.

DEBTOR:
INTUITIVE SURGICAL, INC.

By: /s/ W.H. Abbott

Title: Consultant

Date:  4/2/97

LEASE MANAGEMENT SERVICES, INC.

SCHEDULE 02 TO
EQUIPMENT FINANCING AGREEMENT NUMBER 10809
BETWEEN
INTUITIVE SURGICAL, INC., AS DEBTOR
AND
LEASE MANAGEMENT SERVICES, INC., AS SECURED PARTY

1.  EQUIPMENT DESCRIPTION:                     See attached Exhibit "A"

2.  PROCEEDS AMOUNT:                           $643,873.48

3.  INSTALLMENT PAYMENTS:                      Except as otherwise provided in
                                               the agreement or in this
                                               Schedule, the undersigned Debtor
                                               promises to repay the Advance

Amount, with interest as follows:

$16,857.00 per month due on the first day of each month for Forty-Two (42) consecutive months, beginning on February 1, 1998, followed by a payment of $96,581.00 on August 1, 2001.

4.  EQUIPMENT LOCATION:                     1340 W. Middlefield Road
                                            Mountain View, CA  94043
5.  OTHER PROVISIONS:                       N/A

Dated: 2/6/98
      ----------------------------

DEBTOR:                                     SECURED PARTY:
INTUITIVE SURGICAL, INC.                    LEASE MANAGEMENT SERVICES, INC.


By: /s/ LONNIE M. SMITH                     By: /s/ BARBARA B. KAISER
   --------------------------------             --------------------------------
                                                Barbara B. Kaiser


Title: CFO                                  Title: EVP/General Manager
      -----------------------------                -----------------------------

EXHIBIT 10.7

SECURITY AGREEMENT

THIS SECURITY AGREEMENT ("Agreement") is entered into as of the 20 day of May, 1999, by and between INTUITIVE SURGICAL, INC., a Delaware corporation ("Debtor"), whose business address is 1340 W. Middlefield Rd., Mountain View, CA 94043 and HELLER FINANCIAL LEASING, INC., a Delaware corporation ("Secured Party"), whose address is Commercial Equipment Finance Division, 500 West Monroe Street, Chicago, Illinois 60661.

WITNESSETH:

1. Secure Payment. To secure payment of indebtedness in the principal sum of up to One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) as evidenced by a note or notes executed and delivered by Debtor to Secured Party (the "Notes") and any obligations arising under this Agreement, and also to secure any other indebtedness or liability of Debtor to Secured Party, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising and no matter how acquired by Secured Party, including all future advances or loans which may be made at the option of Secured Party (all the foregoing hereinafter called the "Indebtedness"), Debtor hereby grants and conveys to Secured Party a first priority continuing lien and security interest in the personal property described on any schedule(s) now or hereafter attached to or made a part hereof by reference hereto (the "Schedules"), all products and proceeds (including insurance proceeds) thereof, if any, and all substitutions, replacements, attachments, additions, and accessions thereto (all of the foregoing hereinafter called the "Collateral.") The Schedules may be supplemented from time to time to evidence the Collateral subject to this Agreement.

Debtor shall request in writing each advance of principal under the Notes, which request shall be satisfactory to Secured Party in form and substance. Each advance shall be on and subject to the terms and conditions set forth in this Agreement and shall otherwise be at Secured Party's sole discretion. Amounts advanced and repaid may not be reborrowed.

2. Representations, Warranties and Covenants. Except as otherwise provided, each representation and warranty made by Debtor in this

Agreement shall be true, correct and complete as of the date of this Agreement and as of the date of each advance of funds under a Note. Debtor hereby represents, warrants and covenants as follows:

(a) Perform Obligations. Debtor shall pay as and when due all Indebtedness secured by this Agreement and perform all of the obligations contained in this Agreement according to its terms. Debtor shall use the loan proceeds for business uses and not for personal, family, household, or agricultural uses.

(b) Perfection. This Agreement and all necessary Uniform Commercial Code filings together create a valid, perfected and first priority continuing lien and security interest in the Collateral, securing the payment and performance of the Indebtedness, and all filings and other actions necessary or desirable to create, perfect and protect such security interest have been or will be duly taken.

(c) Collateral Free and Clear. Except as may be set forth on a Schedule, the Collateral is and shall remain free and clear of all liens, claims, charges, encumbrances and other security interests of any kind (other than the security interest granted hereby). Debtor shall defend the title to the Collateral against all persons and against all claims and demands whatsoever.

(d) Possession and Operating Order of the Collateral. Debtor shall retain possession of the Collateral at all times and shall not sell, exchange, assign, loan, deliver, lease, mortgage, or otherwise dispose of the Collateral or any part thereof without the prior written consent of Secured Party. Debtor shall at all times keep the Collateral at the location[s] specified on the Schedules (except for removals thereof in the usual course of business for temporary periods). At Debtor's sole cost and expense, Debtor shall keep the Collateral in good repair and condition and shall not misuse, abuse, waste or otherwise allow it to deteriorate, except for normal wear and tear. Secured Party may verify any Collateral in any reasonable manner which Secured Party may consider appropriate, and Debtor shall furnish all reasonable assistance and information and perform any acts which Secured Party may reasonably request in connection therewith.

(e) Insurance. Debtor shall insure the Collateral against loss by fire (including extended coverage), theft and other hazards, for its full insurable value including replacement costs, with a deductible not to exceed Fifty Thousand and 00/100 Dollars ($50,000.00) per occurrence and without co-insurance. In addition, Debtor shall obtain liability insurance covering liability for bodily injury, including death and property damage, in an

amount of at least Five Million and 00/100 Dollars ($5,000,000.00) per occurrence or such greater amount as may comply with general industry standards, or in such other amounts as Secured Party may otherwise require. All policies of insurance required hereunder shall be in such form, amounts, and with such companies as Secured Party may approve; shall provide for at least thirty (30) days prior written notice to Secured Party prior to any modification or cancellation thereof; shall name Secured Party as loss payee or additional insured, as applicable, and shall be payable to Debtor and Secured Party as their interests may appear; shall waive any claim for premium against Secured Party; and shall provide that no breach of warranty or representation or act or omission of Debtor shall terminate, limit or affect the insurers' liability to Secured Party. Certificates of insurance or policies evidencing the insurance required hereunder along with satisfactory proof of the payment of the premiums therefor shall be delivered to Secured Party. Debtor shall give immediate written notice to Secured Party and to insurers of loss or damage to the Collateral and shall promptly file proofs of loss with insurers. Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact, coupled with an interest, for the purpose of obtaining, adjusting and canceling any such insurance and endorsing settlement drafts. Debtor hereby assigns to Secured Party, as additional security for the Indebtedness, all sums which may become payable under such insurance.

In the event Debtor fails to provide Secured Party with evidence of the insurance coverage required by this Agreement, Secured Party may purchase insurance at Debtor's expense to protect Secured Party's interests in the Collateral. This insurance may, but need not, protect Debtor's interests. The coverage purchased by Secured Party may not pay any claim made by Debtor or any claim that is made against Debtor in connection with the Collateral. Debtor may later cancel any insurance purchased by Secured Party, but only after providing Secured Party with evidence that Debtor has obtained insurance as required by this Agreement. If Secured Party purchases insurance for the Collateral, Debtor will be responsible for the costs of that insurance, including interest and other charges imposed by Secured Party in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to the Indebtedness. The costs of the insurance may be more than the cost of insurance Debtor is able to obtain on its own.

(f) If Collateral Attaches to Real Estate. If the Collateral or any part thereof has been attached to or is to be attached to real estate, an accurate description of the real estate and the name and address of the record owner is set forth on the Schedules. Debtor shall, on demand of Secured Party, furnish Secured Party with a disclaimer or waiver of any interest in any such

Collateral satisfactory to Secured Party and signed by all persons having an interest in the real estate. Notwithstanding the foregoing, the Collateral shall remain personal property and shall not be affixed to realty without the prior written consent of Secured Party.

(g) Financial Statements. Debtor shall furnish to Secured Party, as soon as practicable, and in any event within thirty (30) days after the end of each fiscal month Debtor's unaudited financial statements including in each instance, balance sheets, income statements, and statements of cash flow, on a consolidated and consolidating basis, as appropriate, and separate profit and loss statements as of and for the quarterly period then ended and for the respective person's fiscal year to date, prepared in accordance with generally accepted accounting principles, consistently applied ("GAAP"). Debtor shall also furnish to Secured Party, as soon as practicable, and in any event within one hundred twenty (120) days after the end of each fiscal year, Debtor's annual audited financial statements, including balance sheets, income statements and statements of cash flow for the fiscal year then ended, on a consolidated and consolidating basis, as appropriate, which have been prepared by its independent accountants in accordance with GAAP. Such audited financial statements shall be accompanied by the independent accountant's opinion, which opinion shall be in form generally recognized as "unqualified".

(h) Authorization. Debtor is now, and will at all times remain, duly licensed, qualified to do business and in good standing in every jurisdiction where failure to be so licensed or qualified and in good standing would have a material adverse effect on its business, properties or assets. The execution and delivery of this Agreement, the Notes and any other documents and instruments executed contemporaneously with or delivered pursuant to this Agreement and the Notes, all as amended from time to time (collectively the "Loan Documents"), have been duly authorized by Debtor and constitute the legal, valid, and binding obligations of Debtor, enforceable against Debtor in accordance with their respective terms. Debtor shall preserve and maintain its existence and shall not wind up its affairs or otherwise dissolve. Debtor shall not, without thirty (30) days prior written notice to Secured Party, (1) change its name or so change its structure such that any financing statement or other record notice becomes misleading or (2) change its principal place of business or chief executive or accounting offices from the address stated herein.

(i) Litigation. Except as disclosed by Debtor on a Schedule, there are no judgments outstanding against or affecting Debtor, its officers, directors or affiliates or any part of the Collateral and there are no actions, charges, claims, demands, suits, proceedings, or investigations pending or threatened

against Debtor or otherwise affecting any part of the Collateral ("Litigation"). Debtor shall furnish to Secured Party all information regarding any material Litigation as Secured Party shall reasonably request and in any event shall promptly notify Secured Party in writing of any Litigation against it which if decided against it would materially and adversely affect the finances or operations of Debtor. For the purposes of this subsection 2(i), Five Hundred Thousand and 00/100 Dollars ($500,000.00) shall be deemed material.

(j) No Conflicts. Debtor is not in violation of any material term or provision of its by-laws, or of any material agreement or instrument, decree, order, or any statute, rule, or governmental regulation applicable to it. The execution, delivery, and performance of the Loan Documents do not and will not violate, constitute a default under, or otherwise conflict with any such term or provision or result in the creation of any security interest, lien, charge, or encumbrance upon any of the properties or assets of Debtor, except for the security interest created hereunder.

(k) Compliance with Laws. Debtor shall use and maintain the Collateral in accordance with all applicable laws, regulations, ordinances, and codes and shall otherwise comply in all material respects with all applicable laws, rules, and regulations and duly observe all valid requirements of all governmental authorities, and all statutes, rules and regulations relating to its business as now in effect and which may be imposed in the future.

(l) Taxes. Debtor has timely filed all tax returns (federal, state, local, and foreign) required to be filed by it and has paid or established reserves for all taxes, assessments, fees, and other governmental charges in respect of its properties, assets, income and franchises. Debtor shall promptly file, pay and discharge all taxes, assessments, license fees (related to the Collateral) and other governmental charges prior to the date on which penalties are attached thereto, establish adequate reserves for the payments of such taxes, assessments, and other governmental charges and make all required withholding and other tax deposits, and, upon request, provide Secured Party with receipts or other proof that any or all of such taxes, assessments, license fees or governmental charges have been paid in a timely fashion; provided, however, that nothing contained herein shall require the payment of any tax, assessment, or other governmental charge so long as its validity is being diligently contested in good faith and by appropriate proceedings diligently conducted and Debtor has established cash reserves therefor in accordance with GAAP. Should any stamp, excise, or other tax, including mortgage, conveyance, deed, intangible, or recording taxes become payable in connection with or respect of any of the Loan Documents, Debtor shall pay the same (including interest and penalties, if any) and shall hold Secured Party harmless with respect thereto.

(m) Environmental Laws/Compliance. Except as disclosed by Debtor on a Schedule, Debtor (1) has not received any claim, summons, complaint, order, or other notice that it is not in compliance with, or that any public authority is investigating its compliance with, any federal, state, and local laws, rules, regulations, orders, and decrees relating to pollution, hazardous substances, waste, disposal or the protection of human health or safety, plant life or animal life, natural resources or the environment, all as amended from time to time (collectively, "Environmental Laws"), (2) has no knowledge of any material violation of any Environmental Laws on or about its assets or property, and (3) is not under any current clean up or other remediation program or order. Debtor has obtained all environmental, health and safety permits necessary for the operation of Debtor's business. Debtor is and shall remain in compliance, in all respects, with the terms and conditions of all permits and with all applicable Environmental Laws. Debtor shall provide Secured Party, promptly following receipt, copies of any correspondence, notice, complaint, order, or other document that it receives asserting or alleging a circumstance or condition which requires or may require a cleanup, removal, remedial action or other response by or on the part of Debtor under any Environmental Laws, or which seeks damages or civil, criminal or punitive penalties from Debtor for an alleged violation of any Environmental Laws. Debtor will promptly notify Secured Party of any release, spill or material change in the nature or extent of any hazardous substances or contaminants used, transported or stored by Debtor or any subsidiary of Debtor, and allow no material change in the use thereof or of Debtor's operations that would increase in any material amount the risk of violation of any Environmental Laws without the express prior written approval of Secured Party.

(n) Regulations. No proceeds of the loans or any other financial accommodation hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, as that term is defined in Regulations G, T, U, X of the Board of Governors of the Federal Reserve System.

(o) Books and Records. Debtor shall maintain, at all times, true and complete books and records in accordance with GAAP and consistent with those applied in the preparation of Debtor's financial statements. At all reasonable times, upon reasonable notice, and during normal business hours, Debtor shall permit Secured Party or its agents to audit, examine and make extracts from or copies of any of its books, ledgers, reports, correspondence, and other records relating to the Collateral.

(p) Setoff. Without limiting any other right of Secured Party, whenever Secured Party has the right to declare any Indebtedness to be immediately due and payable (whether or not it has so declared), Secured Party is hereby authorized at any time and from time to time to the fullest extent permitted by law, but shall not be obligated to, set off and apply against any and all Indebtedness, any and all monies then or thereafter owed to Debtor by Secured Party, whether or not the obligation to pay such monies owed by Secured Party is then due. An election by Secured Party to exercise its right of setoff shall be effective immediately upon such election even though any charge therefor is made or entered on Secured Party's records subsequent thereto.

(q) Standard of Care; Notice of Claims. Debtor acknowledges and agrees that Secured Party shall not be liable for any acts or omissions nor for any error of judgment or mistake of fact or law other than as a sole and direct result of Secured Party's gross negligence or willful misconduct. Debtor shall give Secured Party written notice of any action or inaction by Secured Party or any agent or attorney of Secured Party that may give rise to a claim against Secured Party or any agent or attorney of Secured Party or that may be a defense to payment of the Indebtedness or performance hereunder for any reason, including commission of a tort (subject, in any event, to the first sentence of this paragraph) or violation of any contractual duty or duty implied by law. Debtor agrees that unless such notice is fully given as promptly as possible (and in any event within thirty (30) days) after Debtor has knowledge, or with the exercise of reasonable diligence should have had knowledge, of any such action or inaction, Debtor shall not assert, and Debtor shall be deemed to have waived, any claim or defense arising therefrom.

(r) Indemnity. Debtor shall indemnify, defend and hold Secured Party, its parent, affiliates, officers, directors, agents, employees, consultants, persons engaged by Secured Party to evaluate or monitor the Collateral, auditors and attorneys harmless from and against any loss, cost, expense (including reasonable attorneys' fees and costs and any consultants' or other experts' fees and expenses), damage, penalty, fine, claim, lien, suit, judgment or liability of every kind and nature arising directly or indirectly out of (i) any Loan Document, (ii) the ownership, possession, lease, operation, use, condition, sale, return, or other disposition of the Collateral, except to the extent the loss, expense, damage or liability arises solely and directly from Secured Party's gross negligence or willful misconduct, (iii) any Environmental Laws, and (iv) the enforcement by Secured Party of its rights or remedies hereunder. Any payments required to be made hereunder shall be due and payable on demand.

(s) Payments Set Aside. If any payment is made to Secured Party or Secured Party enforces its security interest or exercises its right of set off, and such payment or part, or any proceeds of such enforcement or set off are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such recovery, the Indebtedness or part thereof originally intended to be satisfied, and all liens, security interests, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set off had not occurred.

(t) Expenses and Attorneys' Fees. Debtor shall be liable for all charges, costs, expenses and attorneys' fees incurred by Secured Party (including allocated costs of internal counsel): (i) in perfecting, defending, protecting or terminating its security interest in the Collateral, or any part thereof; (ii) in the negotiation, execution, delivery, administration, amendment or enforcement of the Loan Documents or the collection of any amounts due under any Note or other Loan Document; (iii) in any lawsuit or other legal proceeding in any way connected with any of the Loan Documents, including any contract or tort or other actions, any arbitration or other alternative dispute resolution proceeding, all appeals and judgment enforcement actions and any bankruptcy proceeding (including any relief from stay and/or adequate protection motions, cash collateral disputes, assumption/rejection motions and disputes or objections to any proposed disclosure statement or reorganization plan).

(u) Complete Information. No representation or warranty made by Debtor in any Loan Document and no other document or statement now or hereafter furnished to Secured Party by or on behalf of Debtor contains or will contain any misstatement of a material fact or omit to state any material fact which would make the statements contained therein misleading. Except as expressly set forth in the Schedules, there is no fact known to Debtor that has or could have a materially adverse affect on the business, operation, condition (financial or otherwise), performance, properties or prospects of Debtor or Debtor's ability to timely pay all of the Indebtedness and perform all of its other obligations contained in or secured by this Agreement.

(v) Collateral Documentation. Debtor shall deliver to Secured Party prior to any advance, satisfactory documentation regarding the Collateral to be financed, including such invoices, canceled checks evidencing payments, or other documentation as may be reasonably requested by Secured Party. Additionally, Debtor shall satisfy Secured Party that Debtor's business and

financial information is as has been represented and there has been no material change in Debtor's business, financial condition, or operations.

(w) Year 2000 Compliance. Debtor has made an assessment of the microchip and computer-based systems and the software used in its business and based upon such assessment believes that it will be "Year 2000 Compliant" by January 1, 2000. For purposes of this paragraph, "Year 2000 Compliant" means that all software, embedded microchips and other processing capabilities utilized by, and material to the business operations or financial condition of, Debtor are able to interpret, store, transmit, receive and manipulate data on and involving all calendar dates correctly and without causing any abnormal ending scenarios in relation to dates in and after the Year 2000. From time to time, at the request of Secured Party, Debtor shall provide to Secured Party such updated information as is requested regarding the status of its efforts to become Year 2000 Compliant.

3. Prepayment. Upon forty-five (45) days prior written notice to Secured Party, Debtor may prepay in whole, but not in part, the then entire unpaid principal balance of any Note, together with all accrued and unpaid interest thereon to the date of such prepayment, provided that in addition to such prepayment, Debtor shall pay (i) any and all other sums then due under any of the Loan Documents, and (ii) a prepayment fee as liquidated damages and not as a penalty, in a sum equal to one percent (1%) of the principal balance prepaid for each full or partial twelve (12) month period by which the date of the prepayment precedes the scheduled date of the final installment of principal under the Note. The prepayment fee described in clause (ii) above shall also be due upon the acceleration of the maturity date of any Note following the occurrence of any Event of Default.

4. Events of Default. If any one of the following events (each of which is herein called an "Event of Default") shall occur: (a) Debtor fails to pay any part of the Indebtedness within ten (10) calendar days of its due date, or (b) any warranty or representation of Debtor in any Loan Document is materially untrue, misleading or inaccurate, or (c) Debtor breaches or defaults in the performance of any other agreement or covenant under any Loan Document, or (d) Debtor breaches or defaults in the payment or performance of any debt or other obligation owed by it to Secured Party or any affiliate of Secured Party, and Secured Party has (without being obligated to do so) declared such event, an Event of Default hereunder, or (e) Debtor breaches or defaults in the payment or performance of any debt or other obligation, whether now or hereafter existing, with an outstanding principal balance in excess of One Million and 00/100 Dollars ($1,000,000.00), and the same is subsequently accelerated, or (f) there shall be a change in the beneficial ownership and control, directly or indirectly, of the majority of the

outstanding voting securities or other interests entitled (without regard to the occurrence of any contingency) to elect or appoint members of the board of directors or other managing body of Debtor (a "change of control"), or there is any merger, consolidation, dissolution, liquidation, winding up or sale or other transfer of all or substantially all of the assets of Debtor pursuant to which there is a change of control or cessation of Debtor or the business of Debtor, or (g) any money judgment is entered or filed against Debtor in excess of One Million and 00/100 Dollars ($1,000,000.00), or (h) Debtor shall file a voluntary petition in bankruptcy, shall apply for or permit the appointment by consent or acquiescence of a receiver, conservator, administrator, custodian or trustee for itself or all or a substantial part of its property, shall make an assignment for the benefit of creditors or shall be unable, fail or admit in writing its inability to pay its debts generally as such debts become due, or (i) there shall have been filed against Debtor an involuntary petition in bankruptcy or Debtor shall suffer or permit the involuntary appointment of a receiver, conservator, administrator, custodian or trustee for all or a substantial part of its property or the issuance of a warrant of attachment, diligence, execution or similar process against all or any substantial part of its property; unless, in each case, such petition, appointment or process is fully bonded against, vacated or dismissed within forty-five (45) days from its effective date, but no later than ten (10) days prior to any proposed disposition of any assets pursuant to any such proceeding, or (j) if there is a material adverse change in the business or financial condition or prospects of Debtor or (k) if any of the events or circumstances described on the attached Exhibit A, which is hereby incorporated herein, shall occur or exist, then, and in any such event, Secured Party shall have the right to exercise any one or more of the remedies hereinafter provided.

5. Remedies. Upon the occurrence of an Event of Default, in addition to all rights and remedies of a secured party under the Uniform Commercial Code, Secured Party may, at its option, at any time (a) declare the Indebtedness to be immediately due and payable; (b) without demand or legal process, enter the premises where the Collateral may be found and take possession of and remove the Collateral, all without charge to or liability on the part of Secured Party; or
(c) require Debtor to assemble the Collateral, render it unusable, and crate, pack, ship, and deliver the Collateral to Secured Party in such manner and at such place as Secured Party may require, all at Debtor's sole cost and expense.
DEBTOR HEREBY EXPRESSLY WAIVES ITS RIGHTS, IF ANY, TO (1) PRIOR NOTICE OF REPOSSESSION AND (2) A JUDICIAL OR ADMINISTRATIVE HEARING PRIOR TO SUCH REPOSSESSION. Secured Party may, at its option, ship, store and repair the Collateral so removed and sell any or all of the Collateral at a public or private sale or sales. Unless the Collateral is perishable or threatens to decline speedily in

value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made, it being understood and agreed that Secured Party may be a buyer at any such sale and Debtor may not, either directly or indirectly, be a buyer at any such sale. The requirements, if any, for reasonable notice will be met if such notice is mailed postage prepaid to Debtor at its address shown above, at least five (5) days before the time of sale or disposition. After any such sale or disposition, Debtor shall be liable for any deficiency of the Indebtedness remaining unpaid, with interest thereon at the rate set forth in the related Notes.

6. Cumulative Remedies/Marshaling. All remedies of Secured Party hereunder are cumulative, are in addition to any other remedies provided for by law or in equity, or under any other provision of any of the Loan Documents, or under the provisions of any other document, instrument or other writing executed by Debtor or any third party in favor of Secured Party, all of which may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed an election of such remedy or to preclude the exercise of any other remedy. No failure on the part of Secured Party to exercise, and no delay in exercising any right or remedy, shall operate as a waiver thereof or in any way modify or be deemed to modify the terms of this Agreement or any other Loan Document or the Indebtedness, nor shall any single or partial exercise by Secured Party of any right or remedy preclude any other or further exercise of the same or any other right or remedy. Secured Party shall not be under any obligation to marshal any assets in favor of Debtor or any other person or against or in payment of any or all of the Indebtedness.

7. Assignment. Secured Party may transfer or assign all or any part of the Indebtedness and the Loan Documents without releasing Debtor or the Collateral, and upon such transfer or assignment the assignee or holder shall be entitled to all the rights, powers, privileges and remedies of Secured Party to the extent assigned or transferred. The obligations of Debtor shall not be subject, as against any such assignee or transferee, to any defense, set-off, or counter-claim available to Debtor against Secured Party and any such defense, set-off, or counter-claim may be asserted only against Secured Party.

8. Time is of the Essence. Time and manner of performance by Debtor of its duties and obligations under the Loan Documents is of the essence. If Debtor shall fail to comply with any provision of any of the Loan Documents, Secured Party shall have the right, but shall not be obligated, to take action to address such non-compliance, in whole or in part, and all moneys spent and expenses and obligations incurred or assumed by Secured Party shall be

paid by Debtor upon demand and shall be added to the Indebtedness. Any such action by Secured Party shall not constitute a waiver of Debtor's default.

9. ENFORCEMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT SECURED PARTY'S ELECTION AND WITHOUT LIMITING SECURED PARTY'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION, DEBTOR HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF DEBTOR, WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.

10. Further Assurance; Notice. Debtor shall, at its expense, execute and deliver such documents and do such further acts as Secured Party may from time to time reasonably require to assure and confirm the rights created or intended to be created hereunder, to carry out the intention or facilitate the performance of the terms of the Loan Documents or to assure the validity, perfection, priority or enforceability of any security interest created hereunder. Debtor agrees to execute any instrument or instruments necessary or expedient for filing, recording, perfecting, notifying, foreclosing, and/or liquidating of Secured Party's interest in the Collateral upon request of, and as determined by, Secured Party, and Debtor hereby specifically authorizes Secured Party to prepare and file Uniform Commercial Code financing statements and other documents and to execute same for and on behalf of Debtor as Debtor's attorney-in-fact, irrevocably and coupled with an interest, for such purposes. All notices, required or otherwise given by either party shall be in writing and shall be delivered by hand, by registered or certified first class United States mail, return receipt requested, or by overnight courier to the other party at its address stated herein or at such other address as the other party may from time to time designate by written notice. All notices shall be deemed given when received, when delivery is refused or when returned for failure to be called for. Each provision of this Agreement shall remain in full force and effect until all of the Indebtedness is fully, finally and indefeasibly satisfied and, notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Debtor and Secured Party set forth in Sections 2(p), 2(r),
2(s), 2(t), 9 and 12 shall survive the full, final and indefeasible satisfaction of the Indebtedness.

11. Joint and Several Obligation. If this Agreement is executed by more than one person as Debtor, each such Debtor hereby acknowledges it is jointly and severally liable for and unconditionally guarantees the prompt

and full payment and performance of all obligations of each other Debtor hereunder and under the other Loan Documents.

12. WAIVER OF JURY TRIAL. DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS. DEBTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THE LOAN DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. DEBTOR AND SECURED PARTY FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

13. Complete Agreement. The Loan Documents embody the entire agreement among the parties hereto superseding all prior commitments, agreements, representations, and understandings, whether written or oral relating to the subject matter hereof, and may not be contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. The Loan Documents may not be altered, modified or terminated in any manner except by a writing duly signed by the parties thereto. Debtor and Secured Party intend the Loan Documents to be valid and binding and no provisions hereof and thereof which may be deemed unenforceable shall in any way invalidate any other provisions of the Loan Documents, all of which shall remain in full force and effect. The Loan Documents shall be binding upon the respective successors, legal representatives, and assign, s of the parties. The Schedules are incorporated herein by this reference and made a part hereof.

IN WITNESS WHEREOF, Secured Party and Debtor have each signed this Agreement as of the day and year first above written.

HELLER FINANCIAL LEASING, INC.,           INTUITIVE SURGICAL, INC.
a Delaware corporation                    a Delaware corporation

By:     /s/  Clifford A. Lehman           By:    /s/  Susan Barnes
   --------------------------------          ----------------------------------

Name:   Clifford A. Lehman                Name:  Susan Barnes
     ------------------------------            --------------------------------

Title:  Senior Vice President             Title: CFO & Assistant Secretary
      -----------------------------             -------------------------------

SCHEDULE

DESCRIPTION OF COLLATERAL

Description of Collateral (Full description including make, model and serial number):

SEE SCHEDULE A ATTACHED HERETO AND MADE A PART HEREOF

Place where Collateral is to be kept:

INTUITIVE SURGICAL, INC.
1340 WEST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CA 94043

Other liens, encumbrances or security interests to which Collateral is or may be subject, if any:

NONE.

Other Collateral

NONE.

Other:

If Collateral is attached or to be attached to real estate, set forth:

Address of Real Estate (Including County, block number, lot number, etc.):

N/A

Record Owner of Real Estate (Name and Address):

N/A

If the real estate at which the Collateral is to be kept is leased:

Name and Address of Lessor of Real Estate:

N/A

EXHIBIT A

TO

SECURITY AGREEMENT

(ADDITIONAL EVENTS OF DEFAULT)

The following shall constitute Events of Default under the Security Agreement between Secured Party and Debtor, and upon its occurrence, Secured Party shall have the right to exercise any one or more of the remedies provided in the Security Agreement:

1. At any time (i) Debtor's net income before interest expense, income taxes, depreciation, amortization and extraordinary gains, as determined in accordance with GAAP ("EBITDA") as at the end of the most recent fiscal quarter of Debtor, is less than $2,500,000, and (ii) Debtor's cash and cash equivalents on hand, net of funded debt, is less than $10,000,000, and (iii) within thirty (30) days thereof, Debtor fails to provide Secured Party a cash security deposit (on terms satisfactory to Secured Party in its reasonable discretion) or stand-by letter of credit in form and substance and issued by a financial institution acceptable to Secured Party, in its reasonable discretion. (Secured Party agrees to review (in its sole discretion) any request from Debtor to release any pledged amounts or letter of credit provided by Debtor if Debtor's EBITDA exceeds $2,500,000 in any two consecutive fiscal quarters or Debtor's cash and cash equivalents on hand, net of funded debt, is more than $10,000,000.)

2. At any time Debtor's right to use any intellectual property licensed or otherwise provided to Debtor by International Business Machines, Inc. or Stanford Research Institute, or any successor thereto, shall be amended on material adverse terms or cease, whether by termination, expiration or cancellation or otherwise.

SB

SCHEDULE A

Schedule annexed to and made a part of a certain Security Agreement dated the 20th day of May, 1999, or related documentation by and between the undersigned.

Description of Collateral (Quantity; New/Used; Model; General Description; and if applicable, Engine and/or Serial Number), together with all products and proceeds (including insurance proceeds) thereof, any, and if all increases, substitutions, replacements, attachments, additions, and accessions thereto:

EQUIPMENT LOCATION: 1340 Middlefield Road, Mountain View, CA 94043

    Qty.       General Description                                  Serial Number
-------------  ---------------------------------------------------  -------------------------------
     5         Intuitive Surgical Development Surgical Systems      D1-10298, D2-10391, D3-10393,
                                                                    D4-10453, D5-10457
------------- ---------------------------------------------------   -------------------------------

HELLER FINANCIAL LEASING, INC.,            INTUITIVE SURGICAL, INC.
Secured Party                              Debtor

By:     /s/ Clifford A. Lehman             By:    /s/ Susan Barnes
   ---------------------------------          ---------------------------------

Name:   Clifford A. Lehman                 Name:  Susan Barnes
     -------------------------------            -------------------------------

Title:  Senior Vice President              Title: CFO and Assistant Secretary
      ------------------------------             ------------------------------

Loan No: 1910193

FIRST AMENDMENT
TO
SECURITY AGREEMENT

1. Parties and Date. This First Amendment to Security Agreement (the "Amendment") is entered into effective as of September 23, 1999, by and between INTUITIVE SURGICAL, INC., a Delaware corporation ("Debtor"), and HELLER FINANCIAL LEASING, INC., a Delaware corporation ("Secured Party").

2. Facts. Debtor and Secured Party have entered into a certain Security Agreement dated May 20, 1999 (the "Security Agreement"). Debtor has requested and Secured Party has agreed that the Security Agreement be amended on the terms and conditions set forth in this Amendment. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Security Agreement. Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows.

3. Amendment to Security Agreement. Debtor and Secured Party hereby agree that the Security Agreement shall be and hereby is amended, as follows:

(i) The amount of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) set forth in the second line of the first paragraph of Section 1 of the Security Agreement is hereby deleted and in place thereof is inserted the amount of Two Million Five Hundred Thousand and 00/100 ($2,500,000.00);

(ii) Addition of Collateral. Debtor hereby grants to Secured Party a valid and continuing first priority security interest in the equipment described on the attached Schedule A-2, which is hereby incorporated herein by this reference (the "New Collateral"), and Debtor and Secured Party agree that the New Collateral shall be covered by the Agreement as if the New Collateral were described on Schedule A to the Security Agreement dated May 20, 1999. Debtor shall, at its expense, do, execute and deliver such further acts and documents as Secured Party may from time to time reasonably require to assure and confirm the rights created or intended to be created hereunder and under the Agreement to carry out the intention or facilitate the performance of the terms of this Amendment, the Agreement and the Loan Documents (as defined in the Agreement) or to assure the validity, perfection, priority or enforceability of any title created thereunder. Debtor agrees to execute any instrument or instruments necessary or expedient for filing, recording, perfecting, notifying, foreclosing, and/or liquidating of Secured Party's title the equipment (including the New Collateral) upon request of, and as determined by Secured Party.

6. Acknowledgments, Ratifications and Reaffirmations by Debtor. Debtor hereby acknowledges, ratifies and reaffirms that (i) as of the date hereof no Event of Default has occurred or exists, (ii) Debtor has no defense, offset or counterclaim to any of Debtor's obligations under the Loan Documents, and (iii) the Notes, Security Agreement (as amended by this Amendment) and other Loan Documents are in full force and effect and are fully enforceable against Debtor in accordance with their respective terms.

7. Effectiveness of Loan Documents. Except as expressly amended by this Amendment, the Security Agreement, as well as the Notes and all of the other Loan Documents shall remain in full force and effect.

8. Entire Agreement. The parties acknowledge and agree that there are no other agreements or representations, either oral or written, express or implied, in connection with the Loans, that are not embodied in this Amendment, the Notes, the Security Agreement and the other Loan Documents, which, together represent a complete integration of all prior and contemporaneous agreements and understandings of Debtor and Secured Party in any way related to the Loans. The Security Agreement (as amended by this Amendment) may not be altered, modified or terminated in any manner except by a writing duly executed by Debtor and Secured Party. If any provision of the Security Agreement (as amended by this Amendment) is held to be invalid or unenforceable, the remaining provisions shall remain in effect without impairment.

IN WITNESS WHEREOF, Debtor and Secured Party have each executed this Agreement to be effective as of the day and year first above written.

"DEBTOR"                                     "SECURED PARTY"

INTUITIVE SURGICAL, INC.,                    HELLER FINANCIAL LEASING, INC., a
a Delaware corporation                       Delaware corporation

By:     /s/ Susan Barnes                     By:    /s/ Clifford A. Lehman
   -------------------------------              --------------------------------

Name:                                        Name:  Clifford A. Lehman
     -----------------------------                ------------------------------

Title:                                       Title: Senior Vice President
      ----------------------------                 -----------------------------

SCHEDULE A-2

Schedule annexed to and made a part of a certain First Amendment to Security Agreement, dated the _________ day of September, 1999, to that certain Security Agreement No. 1910193, dated the 20th day of May, 1999, or related documentation by and between the undersigned.

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
                                                                LAB EQUIPMENT:
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Newark Electronics                                              AMP Handtool Kit
-------------------------------------------------------------------------------------------------
X-Ray Connection                505                             Lifepak 6S w/internal paddles
-------------------------------------------------------------------------------------------------
VWR Scientific                  23105581, 23105590, 25524720    Utrasonic Pipette Cleaner
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     17038                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     16140                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     16140                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity                     25889                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
International Light             56582                           Radiometer-4798
-------------------------------------------------------------------------------------------------
Alpha Marketing Services        00983951                        Bookler Laproscopic Holder
-------------------------------------------------------------------------------------------------
Alpha Marketing Services        983918                          Bookler Laproscopic Holder
-------------------------------------------------------------------------------------------------
Genzyme Surgical Products       98055106                        Retractor, 80mm ang
-------------------------------------------------------------------------------------------------
Genzyme Surgical Products       98060953                        Retractor, 80mm ang
-------------------------------------------------------------------------------------------------
Heartport                       IN5519                          Forceps, 25 Degree
-------------------------------------------------------------------------------------------------
Heartport                       IN5519                          Forceps, Str, Dbl Act
-------------------------------------------------------------------------------------------------
McMaster-Carr                   5881613                         Precision Drill Press, Belt Drive
-------------------------------------------------------------------------------------------------
Momentum Data Systems, Inc.     912216                          ADSP-2181x EZ-ICE
-------------------------------------------------------------------------------------------------
Premier Vet Supply              289015                          Vaporizer VIP 3000
-------------------------------------------------------------------------------------------------
Tektronix                       MP417105, MP416556              Current Probe and Calibrator
-------------------------------------------------------------------------------------------------
Premier Vet Supply              288619                          Anesthesia Machine
-------------------------------------------------------------------------------------------------
Digital and Analog Concepts     042299                          7506660 Sentry 50
-------------------------------------------------------------------------------------------------
Momentum Data Systems, Inc.     912269                          In Circuit Emulator
-------------------------------------------------------------------------------------------------
VWR Scientific Products         46015440                        Over, Hafo, Medium
-------------------------------------------------------------------------------------------------
Mountz, Inc.                    INV123064                       M10-Ultra Torq Analyzer 110V
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Mountz, Inc.                    INV127062                       S-320Z Torque Analyzer U.S. vers.
-------------------------------------------------------------------------------------------------
Ceibo                           98013162                        Circuit Emulator Development Sys.
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
                                                                MANUF. EQUIPMENT:
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Steven Engineering              193826-00                       Panduit Pneum Crimper
-------------------------------------------------------------------------------------------------
Servicor                        34353                           Cleanroom Upgrades
-------------------------------------------------------------------------------------------------
Gardner Associates              227138                          MPC Control Digital Dispenser
-------------------------------------------------------------------------------------------------
Danco Machine                   I-44937                         Inverse Clevis Align Swager Assy
-------------------------------------------------------------------------------------------------
Danco Machine                   I-45014                         Dist, Inv Fixture
-------------------------------------------------------------------------------------------------
Computer Modules, Inc.          21183                           Cable Matrox
-------------------------------------------------------------------------------------------------
Test Equity                     23670                           Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Servicor                        34390                           Cleanroom Upgrades
-------------------------------------------------------------------------------------------------
Intermec                        1320059                         Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec                        1320059                         Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec                        1320059                         Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec                        1320059                         Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
ArrK Product Development        6704702-DA                      Part #311092/311884
-------------------------------------------------------------------------------------------------
Bracker Corporation             53310                           Custom Riveting Fixture
-------------------------------------------------------------------------------------------------
Quadravox                       8889                            Power Supply #QV402P
-------------------------------------------------------------------------------------------------
Ronnigen R&D                    060544                          Engineering Change Samples
-------------------------------------------------------------------------------------------------
Van Drielen Machine             81015.1                         Body, 7075 aluminum
-------------------------------------------------------------------------------------------------
Bracker Corporation             52735                           Bracker Radial Riveter
-------------------------------------------------------------------------------------------------
Thermal Technologies            0010131-IN                      Machining Fixture
-------------------------------------------------------------------------------------------------
Nexlogic Technologies           4478                            6 Layers Fabrication-720225-01
-------------------------------------------------------------------------------------------------
Danco Machine                   I-45218                         Base Plate, Cube, Carrier
-------------------------------------------------------------------------------------------------
Almar Manufacturing & Eng       013443                          Base Plate, Bearing Press, SUJ
-------------------------------------------------------------------------------------------------
Westcor c/o Taarcom             128478                          Power Supply-PM1-02-514
-------------------------------------------------------------------------------------------------
Nextlogic Technologies          4513                            6 Layer Fabrication #720255/NRE
-------------------------------------------------------------------------------------------------
Acme Scale Co.                  0987957-IN                      Torque Gauge w/Sensor
-------------------------------------------------------------------------------------------------
Ronnigen R&D                    061838                          Engineering Change
-------------------------------------------------------------------------------------------------
Steven Engineering              283064-00                       Panduit Cimpring Tool
-------------------------------------------------------------------------------------------------
Steven Engineering              193826-00                       Panduit Pneum Crimper
-------------------------------------------------------------------------------------------------
Precision Interconnect          438061                          Eng change for new crimp contacts
-------------------------------------------------------------------------------------------------
National Instruments            517157                          DAQPAD for USB Cable
-------------------------------------------------------------------------------------------------
Danco Machine                   I-44238                         Dance Part 720195
-------------------------------------------------------------------------------------------------
Danco Machine                   I-44238                         720157 Assy
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
White Mountain DSP              3264                            MTN-ICE JTAG EMU & POD
-------------------------------------------------------------------------------------------------
White Mountain DSP              3264                            MTN-ICE JTAG EMU & POD
-------------------------------------------------------------------------------------------------
Ronningen R&D                   060039                          Eng. Change for Chassis
-------------------------------------------------------------------------------------------------
Foam Molders & Specialties      00095600                        Single Cav Mold M1298-502
-------------------------------------------------------------------------------------------------
Acme Scale Co.                  0989844-IN                      Motorized Test Stand
-------------------------------------------------------------------------------------------------
Danco Machine                   1-43305                         Dance Part #720132-720134
-------------------------------------------------------------------------------------------------
Dependable Plastics             DEP09-02                        Cover Tooling
-------------------------------------------------------------------------------------------------
Dependable Plastics             21077                           Cover Tooling
-------------------------------------------------------------------------------------------------
Bay Area Shelving, Inc.         49264                           Rivetier Shelf
-------------------------------------------------------------------------------------------------
Axiom Medical, Inc.             0523911-IN                      Mold Part #330179 & 330183
-------------------------------------------------------------------------------------------------
Ronningen R&D                   62153                           Eng Change part #340000-07
-------------------------------------------------------------------------------------------------
Data I/O                        207024                          Optima S120/S207L
-------------------------------------------------------------------------------------------------
Bracker Corporation             52379/prepayment                Bracker Radial Riveter
-------------------------------------------------------------------------------------------------
General Foundry                 08778                           Cover Base/Top Link ECM
-------------------------------------------------------------------------------------------------
Thermal Technology              0010089-IN                      Production Mold
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc.        0010146, 0010112                Production Mold for part #330000
-------------------------------------------------------------------------------------------------
Dependable Plastics             DEP09-01                        Cover Tooling
-------------------------------------------------------------------------------------------------
General Foundry                 08697                           Footpad, console
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc.        0010170/0010126                 Tooling for part #330122-05
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc.        0010169-IN                      Production Mold for part #330001
-------------------------------------------------------------------------------------------------
Thermal Technology              0010088-IN                      Production Mold
-------------------------------------------------------------------------------------------------
Dependable Plastics             21108                           Cover Tooling
-------------------------------------------------------------------------------------------------
Thermal Technology              0010078-IN                      Production Mold
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc.        0010147-IN                      Production Mold for part #330133
-------------------------------------------------------------------------------------------------
Precision Tool Distributors     204775                          Ram Sprint 200, Z-Axis scale
-------------------------------------------------------------------------------------------------
General Foundry                 08779                           Link Vertical/Base ECM
-------------------------------------------------------------------------------------------------
Freetech Plastics               31293                           Cover HRSV Mold
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
                                                                COMP. EQUIPMENT
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051535                          17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051535                          17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           17" Color Monitor
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48370                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48370                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48370                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48370                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48370                           17" Color Monitor
-------------------------------------------------------------------------------------------------
Octave Systems Inc.                                             Yamaha CDR400T
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            050797                          Laserjet 6PXI 8 PPM
-------------------------------------------------------------------------------------------------
Fry's Electronics                                               HP C3980A Laserjet 6P Printer
                                                                with Cable
-------------------------------------------------------------------------------------------------
Office Max                                                      HP Laserjet 6P Printer with Cable
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051535                          19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051535                          19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            049056                          19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            050797                          19" Color Monitor
-------------------------------------------------------------------------------------------------
The Mac Zone - France                                           Sony Monitor
-------------------------------------------------------------------------------------------------
Global Network Resources        981145                          19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45566                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46420                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46420                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46421                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46422                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46422                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46776, 46820                    Okidata printer w/tractor
-------------------------------------------------------------------------------------------------
Global Network Resources        980430                          Sony 20"Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            049208                          Laserjet 4000N w/Enet
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47351                           Anchorage Pentium MMX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46110                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46569                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            44370                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            44370                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            44370                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            44370                           19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            49399                           ML395 24-pin Printer
-------------------------------------------------------------------------------------------------
Int'l Computing Sys             3354                            Viewsonic GA10 21" Monitor
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47188                           Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47188                           Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47188                           Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Services                                        Total Corporate Services
                                                                Computer Workstation - J. Stern
-------------------------------------------------------------------------------------------------
Dell Catalog Sales                                              Dell DIS, MSCN, CLR, 20, D, D
                                                                2026T-HS, US
-------------------------------------------------------------------------------------------------
Global Source Line                                              Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Global Source Line                                              Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Global Source Line                                              Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48373                           21" Color Monitor
-------------------------------------------------------------------------------------------------
International Computing System                                  Pentium 166MHz Computer System
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46059                           21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45878                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45878                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46466                           20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            44370                           21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            43653                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            37312                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            33010                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            33010                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            33010                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48258                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48258                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48258                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48258                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            34699                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            34699                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            34699                           Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            48257                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
I-O Solutions                   18575                           105SE w/rewind
-------------------------------------------------------------------------------------------------
Int'l Computing Sys             3378                            Pent 166 Computer, 15" Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051531                          Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051531                          Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051531                          Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051531                          Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051543                          Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            060668                          PII 230 SE440BX2 (no monitor)
-------------------------------------------------------------------------------------------------
ComputerWare (Svetcov)                                          Power Mac G3/266
-------------------------------------------------------------------------------------------------
International Computing System                                  International Computing System
                                                                Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            060088                          PII 230 SE440BX2 (no monitor)
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45992                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47014                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45992                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45992                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45992                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46270                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46270                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47014                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47014                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47014                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            47014                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Int'l Computing Sys             3366                            Pent 166 Computer, 17" Monitor
-------------------------------------------------------------------------------------------------
Dell Catalog Sales                                              Dell Dimension XPS 200MHz
                                                                Workstation
-------------------------------------------------------------------------------------------------
Dell Catalog Sales                                              Dell Dimension XPS 200MHz
                                                                Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051475                          Seattle Pentium II SE440BX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46288                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45993                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46288                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            46288                           Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AI51604                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            45387                           Atlanta Pentium II AL440FX
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AN71484                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AO87440                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AK66160                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Office Depot                    7540482                         UPS, Backup, Pro 650, lot of 10
-------------------------------------------------------------------------------------------------
Fry's Electronics, Svetcov      Svetcov                         Video Tape Header/Cleaner
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AC78638                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AF14171, AF40345, AI15157       Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Dell Catalog Sales                                              Dell Dimension XPS H266MHz
                                                                Computer System
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            059932                          Tecra8000 PII266
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Total Corporate Svcs            059353                          Nightshade Dual PII N440BX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            061553                          Laserjet 8100 DN
-------------------------------------------------------------------------------------------------
The Mac Zone - France           FA/CA005624                     Toshiba Tecra 550CDT P266
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            38301                           Toshiba 660CD 20" Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            051766                          550CDT P266MMX System
-------------------------------------------------------------------------------------------------
CDW Computer Centers            9524248                         Toshiba 32MB 4000
-------------------------------------------------------------------------------------------------
Powercom                        9709                            USA & FRANCE Intraport 2
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AC50414                         Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
NetPower                        6617                            Symetra Work Station
-------------------------------------------------------------------------------------------------
CDW Computer Centers            AC30013/AC37457/AC78574         Toshiba 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Dell                            251037610                       Dell Dimension 433MHZ 8MB
-------------------------------------------------------------------------------------------------
Netpower                        6060                            Symetra Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs            6403                            Symetra Workstation
-------------------------------------------------------------------------------------------------
Netpower                        6060                            Symetra Workstation
-------------------------------------------------------------------------------------------------
Netpower                        6060                            Symetra Workstation
-------------------------------------------------------------------------------------------------
Network Appliance               20051                           Dual-Channel SCSI adapter
-------------------------------------------------------------------------------------------------
Dell                            232233817                       Dell Power Edge 4300
-------------------------------------------------------------------------------------------------
Total Corporate Services        31204                           Toshiba Computer System (2 of
                                                                3) 660CDT
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
                                                                OFFICE FURNITURE:
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Smart Interiors, Inc.                                           Anderson Double Pedestal Desk,
                                                                30" x 60"
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc.                                           Anderson Double Pedestal Desk -
                                                                T. Thaure
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc.                                           Anderson Double Pedestal Desk,
                                                                30" x 60"
-------------------------------------------------------------------------------------------------
Clark Sales & Manufacturing     5729                            Eck Adams Task Chair, lot of 4
-------------------------------------------------------------------------------------------------
Levenger                        P21249540101                    Barrister, medium oak w/lock
-------------------------------------------------------------------------------------------------
Office Depot                                                    Safco Five Drawer Flat File -
                                                                lot of 2 @ $664.61 each
-------------------------------------------------------------------------------------------------
Smart Interiors                 81790                           Marketing Area Workspace
-------------------------------------------------------------------------------------------------
CB Technical Sources            2478                            Shelves, lot of 2
-------------------------------------------------------------------------------------------------
Office Depot                                                    United Troubador Chair in AM51
                                                                Blue - lot of 10 @ $162.00 each
-------------------------------------------------------------------------------------------------
Clark Sales & Manufacturing     5636                            Mid Height Chair w/Castors, lot
                                                                of 6
-------------------------------------------------------------------------------------------------
Office Depot                                                    FireKing 4-Drawer Lateral Fire
                                                                Resistant File
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Smart Interiors, Inc.                                           U-Shaped Desk Configuration -
                                                                S. Barnes
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc.                                           U-Shaped Desk Configuration -
                                                                L. Smith
-------------------------------------------------------------------------------------------------
Office Depot                    214179                          Troubabour Chair, lot of 15
-------------------------------------------------------------------------------------------------
Office Depot                                                    United Altura Chairs in AM25
                                                                Wine Color - lot of 8 @ $315.00
                                                                each
-------------------------------------------------------------------------------------------------
Clark Sales & Manufacturing     5642                            Eck Adams Task Chair, lot of 10
-------------------------------------------------------------------------------------------------
Clark Sales & Manufacturing     5704                            Four leg bench w/ESD, lot of 4
-------------------------------------------------------------------------------------------------
Smart Interiors                 81074                           Acoustical Panels for Eng
                                                                Bullpen
-------------------------------------------------------------------------------------------------
Clark Sales & Manufacturing     5629                            Four leg bench w/ESD, lot of 10
-------------------------------------------------------------------------------------------------
Smart Interiors                 80816                           Cubicles, lot of 2
-------------------------------------------------------------------------------------------------
Office Depot                                                    United Altura Chair in AM51
                                                                Blue - lot of 22 @ $315.00 each
-------------------------------------------------------------------------------------------------
Inside Source                   16511                           Bullpen area for 8 people
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
                                                                OFFICE EQUIPMENT:
-------------------------------------------------------------------------------------------------
Office Depot                                                    3M Overhead Projector
-------------------------------------------------------------------------------------------------
Fry's Electronics (Svetcov)                                     Epson Photo PC Color Digital
                                                                Camera
-------------------------------------------------------------------------------------------------
Selectric Signs                 S1176803.003                    Message Sign Board
-------------------------------------------------------------------------------------------------
Anderson's TV & Stereo          2784                            40" Television
-------------------------------------------------------------------------------------------------
Office Depot                                                    Quartet Ovonics Electronic Copy
                                                                Board
-------------------------------------------------------------------------------------------------
A2Z Business Sys                04370A                          Xerox 735 Faxcentre w/Aux tray
-------------------------------------------------------------------------------------------------
Castelle                        144235                          FP 3500 ETH 4L NT NDS
-------------------------------------------------------------------------------------------------
Minnesota Western               408207A                         S-VGA Multimedia Projector
-------------------------------------------------------------------------------------------------
Exhibit Group/Giltspur          A1194                           Marketing booth equipment
-------------------------------------------------------------------------------------------------
Exhibit group                    A1970, A1971                    Trade Show Nat'l
-------------------------------------------------------------------------------------------------
Wiltel                          Prepay                          Telephone Equipment
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
                                                                TEST EQUIPMENT:
-------------------------------------------------------------------------------------------------
Tektronic Inc.                  MP335584                        34 Channel Mass Term. Probe
-------------------------------------------------------------------------------------------------
Tektronic Inc.                  MP335584                        34 Channel Mass Term. Probe
-------------------------------------------------------------------------------------------------
Associated Research             0000434-IN                      AC Hypot 0 to 5000V, S/N:1778
-------------------------------------------------------------------------------------------------
Optimum Design Associates       99-247                          VSD2 Extender Board
-------------------------------------------------------------------------------------------------
Digital and Analog Concepts     042298                          Sentry 50 Tester
-------------------------------------------------------------------------------------------------
Sunin Precision Inc.            12276, 12279                    Part #311401-409
-------------------------------------------------------------------------------------------------
New Wave PDG                    42735                           32-bit PCI Support
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
Western Servo Design            131356                          Offset Tester
-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------
VENDOR                          INVOICE #                       ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------

------------------------------- ------------------------------- ---------------------------------
AMP Packaging                   103855                          Text Fixture
-------------------------------------------------------------------------------------------------
Dynamic Details                 96129                           Part VSD2 Extender
-------------------------------------------------------------------------------------------------
QRS Medical Mktg                99482                           QA-90 Electrical Safety Analyzer
-------------------------------------------------------------------------------------------------
Robert E. MacKay                72998                           ARM TesterPCB Design
-------------------------------------------------------------------------------------------------
QRS Medical Marketing           99369                           QA-90 Electrical Safety Analyzer
-------------------------------------------------------------------------------------------------
Snader                          0135378                         Snell TPG-21 Test Pattern
                                                                Generator
------------------------------- ------------------------------- ---------------------------------

together with all additions, attachments, accessories and accessions thereto, replacements or substitutions therefor and all products and proceeds thereof, if any, including insurance proceeds and any and all accounts, chattel paper, contract rights and general intangibles arising from the sale, lease or other disposition thereof or thereto.

EQUIPMENT LOCATION: 1340 Middlefield Road, Mountain View, CA 94043

HELLER FINANCIAL LEASING, INC.,           INTUITIVE SURGICAL, INC.
Secured Party                             Debtor

By:     /s/ Clifford A. Lehman            By:    /s/ Susan Barnes
   --------------------------------          ----------------------------------

Name:   Clifford A. Lehman                Name:  Susan Barnes
     ------------------------------            --------------------------------

Title:  Senior Vice President             Title: CFO and Assistant Secretary
      -----------------------------             -------------------------------

PROMISSORY NOTE

$1,500,000.00 May 20, 1999

FOR VALUE RECEIVED, INTUITIVE SURGICAL, INC., a Delaware corporation ("Maker"), promises to pay to the order of HELLER FINANCIAL LEASING, INC., a Delaware corporation (together with any holder of this Note, "Payee"), at its office located at 500 West Monroe Street, Chicago, Illinois 60661, or at such other place as Payee may from time to time designate, the principal sum of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), together with interest thereon at a fixed rate equal to Nine and 47/100 percent (9.47%) per annum. Principal and interest shall be payable in thirty-six (36) consecutive monthly installments commencing July 1, 1999, and continuing on the same day of each consecutive calendar month thereafter until this Note is fully paid, each such installment in the amount of Forty-eight Thousand Twenty-eight and 39/100 Dollars ($48,028.39); provided, however, that in any and all events the final installment payment hereunder shall be in the amount of the entire then outstanding principal balance hereunder, plus all accrued and unpaid interest, charges and other amounts owing hereunder or under the Security Agreement (defined below). All payments shall be applied first to interest and then to principal. Interest shall be computed on the basis of a 360 day year comprised of 30-day months. Maker shall make an interest only initial payment on June 1, 1999 of accrued interest from the loan disbursement date through May 31, 1999.

Notwithstanding the foregoing, if at any time implementation of any provision hereof shall cause the interest contracted for or charged herein or collectable hereunder to exceed the applicable lawful maximum rate, then the interest shall be limited to such applicable lawful maximum.

This Note is secured by the collateral described in the Security Agreement dated May 20, 1999, between Maker and Payee (the "Security Agreement;" and together with all related documents and instruments, the "Loan Documents") to which reference is made for a statement of the nature and extent of protection and security afforded, certain rights of Payee and certain rights and obligations of Maker, including Maker's rights, if any, to prepay the principal balance hereof; provided, however, that in addition to any other sum payable hereunder, under the Security Agreement or any of the other Loan Documents, in the event of a prepayment of the principal balance hereunder, whether voluntary, following acceleration or otherwise, Maker shall pay to Payee together with such prepayment a Breakage Fee (defined below), which Breakage Fee, together with the amounts payable under Section 3(ii) of the Security Agreement, if any, represents liquidated damages to Payee for the loss of its bargain and not a penalty. As used herein, the term "Breakage Fee" shall mean the amount, if any, by which (A) the present value, in the aggregate, of the then remaining installments of principal and interest due hereunder, absent the prepayment, using a discount rate equal to (i) the yield to maturity as of the date two (2) days prior to the date of the prepayment on United States Treasury securities with a final maturity approximately equal to the remaining term hereof, absent the prepayment, as published in The Wall Street Journal, plus (ii) three percent (3.00%), exceeds (B) the then outstanding principal balance hereunder, absent the prepayment.

Time is of the essence hereof. If payment of any installment or any other sum due under this Note or the Loan Documents is not paid when due, Maker agrees to pay a late charge equal to the lesser of (i) five cents (5 cents) per dollar on, and in addition to, the amount of each such payment, or (ii) the maximum amount Payee is permitted to charge by law. In the event of the occurrence of an Event of Default (as defined in the Security Agreement), then the entire unpaid principal balance hereof with accrued and unpaid interest thereon, together with all other sums payable under this Note or the Loan Documents, shall, at the option of Payee and without notice or demand, become

immediately due and payable, such accelerated balance bearing interest until paid at the rate of three percent (3%) per annum above the fixed rate set forth in the first paragraph of this Note.

Maker and all endorsers, guarantors or any others who may at any time become liable for the payment hereof hereby consent to any and all extensions of time, renewals, waivers and modifications of, and substitutions or release of security or of any party primarily or secondarily liable on, or with respect to, this Note or any of the Loan Documents or any of the terms and provisions thereof that may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee, without joinder of the others as parties thereto, and that Payee shall not be required to first foreclose, proceed against, or exhaust any security herefor, in order to enforce payment of this Note by any one or more of them. Maker and all endorsers, guarantors or any others who may at any time become liable for the payment hereof hereby severally waive presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection with this Note, filing of suit and diligence in collecting this Note or enforcing any of the security herefor, and, without limiting any provision of any of the Loan Documents, agree to pay, if permitted by law, all expenses incurred in collection, including reasonable attorneys' fees, and hereby waive all benefits of valuation, appraisement and exemption laws.

If there be more than one Maker, all the obligations, promises, agreements and covenants of Maker under this Note are joint and several.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT PAYEE'S ELECTION AND WITHOUT LIMITING PAYEE'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION, MAKER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF MAKER, WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.

MAKER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THIS WAIVER IS INFORMED AND FREELY MADE. MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED ON THE WAIVER IN MAKING THE LOAN EVIDENCED BY THIS NOTE, AND THAT PAYEE WILL CONTINUE TO RELY ON THE WAIVER IN ITS RELATED FUTURE DEALINGS. MAKER FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

Witness/Attest: INTUITIVE SURGICAL, INC.

   /s/                                  By:    /s/ Susan Barnes
----------------------                     ------------------------------------

                                        Name:  Susan Barnes
                                             ----------------------------------

                                        Title: CFO and Assistant Secretary
                                              ---------------------------------

PROMISSORY NOTE

$500,000.00 September 23, 1999

FOR VALUE RECEIVED, INTUITIVE SURGICAL, INC., a Delaware corporation ("Maker"), promises to pay to the order of HELLER FINANCIAL LEASING, INC., a Delaware corporation (together with any holder of this Note, "Payee"), at its office located at 500 West Monroe Street, Chicago, Illinois 60661, or at such other place as Payee may from time to time designate, the principal sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00), together with interest thereon at a fixed rate equal to Nine and 78/100 percent (9.78%) per annum. Principal and interest shall be payable in thirty-six (36) consecutive monthly installments commencing November 1, 1999, and continuing on the same day of each consecutive calendar month thereafter until this Note is fully paid, each such installment in the amount of Sixteen Thousand Eighty-two and 00/100 Dollars ($16,082.00); provided, however, that in any and all events the final installment payment hereunder shall be in the amount of the entire then outstanding principal balance hereunder, plus all accrued and unpaid interest, charges and other amounts owing hereunder or under the Security Agreement (defined below). All payments shall be applied first to interest and then to principal. Interest shall be computed on the basis of a 360 day year comprised of 30-day months. Maker shall make an interest only initial payment on October 1, 1999 of accrued interest from the loan disbursement date through September 30, 1999.

Notwithstanding the foregoing, if at any time implementation of any provision hereof shall cause the interest contracted for or charged herein or collectable hereunder to exceed the applicable lawful maximum rate, then the interest shall be limited to such applicable lawful maximum.

This Note is secured by the collateral described in the Security Agreement dated May 20, 1999, between Maker and Payee (the "Security Agreement;" and together with all related documents and instruments, the "Loan Documents") to which reference is made for a statement of the nature and extent of protection and security afforded, certain rights of Payee and certain rights and obligations of Maker, including Maker's rights, if any, to prepay the principal balance hereof; provided, however, that in addition to any other sum payable hereunder, under the Security Agreement or any of the other Loan Documents, in the event of a prepayment of the principal balance hereunder, whether voluntary, following acceleration or otherwise, Maker shall pay to Payee together with such prepayment a Breakage Fee (defined below), which Breakage Fee, together with the amounts payable under Section 3(ii) of the Security Agreement, if any, represents liquidated damages to Payee for the loss of its bargain and not a penalty. As used herein, the term "Breakage Fee" shall mean the amount, if any, by which (A) the present value, in the aggregate, of the then remaining installments of principal and interest due hereunder, absent the prepayment, using a discount rate equal to (i) the yield to maturity as of the date two (2) days prior to the date of the prepayment on United States Treasury securities with a final maturity approximately equal to the remaining term hereof, absent the prepayment, as published in The Wall Street Journal, plus (ii) three percent (3.00%), exceeds (B) the then outstanding principal balance hereunder, absent the prepayment.

Time is of the essence hereof. If payment of any installment or any other sum due under this Note or the Loan Documents is not paid when due, Maker agrees to pay a late charge equal to the lesser of (i) five cents (5 cents) per dollar on, and in addition to, the amount of each such payment, or (ii) the maximum amount Payee is permitted to charge by law. In the event of the occurrence of an Event of Default (as defined in the Security Agreement), then the entire unpaid principal balance hereof with accrued and unpaid interest thereon, together with all other sums payable under this Note or the Loan Documents, shall, at the option of Payee and without notice or demand, become

immediately due and payable, such accelerated balance bearing interest until paid at the rate of three percent (3%) per annum above the fixed rate set forth in the first paragraph of this Note.

Maker and all endorsers, guarantors or any others who may at any time become liable for the payment hereof hereby consent to any and all extensions of time, renewals, waivers and modifications of, and substitutions or release of security or of any party primarily or secondarily liable on, or with respect to, this Note or any of the Loan Documents or any of the terms and provisions thereof that may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee, without joinder of the others as parties thereto, and that Payee shall not be required to first foreclose, proceed against, or exhaust any security herefor, in order to enforce payment of this Note by any one or more of them. Maker and all endorsers, guarantors or any others who may at any time become liable for the payment hereof hereby severally waive presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection with this Note, filing of suit and diligence in collecting this Note or enforcing any of the security herefor, and, without limiting any provision of any of the Loan Documents, agree to pay, if permitted by law, all expenses incurred in collection, including reasonable attorneys' fees, and hereby waive all benefits of valuation, appraisement and exemption laws.

If there be more than one Maker, all the obligations, promises, agreements and covenants of Maker under this Note are joint and several.

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT PAYEE'S ELECTION AND WITHOUT LIMITING PAYEE'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION, MAKER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF MAKER, WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.

MAKER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THIS WAIVER IS INFORMED AND FREELY MADE. MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED ON THE WAIVER IN MAKING THE LOAN EVIDENCED BY THIS NOTE, AND THAT PAYEE WILL CONTINUE TO RELY ON THE WAIVER IN ITS RELATED FUTURE DEALINGS. MAKER FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

Witness/Attest: INTUITIVE SURGICAL, INC.

   /s/                                  By:    /s/ Susan Barnes
----------------------                     ------------------------------------

                                        Name:  Susan Barnes
                                             ----------------------------------

                                        Title: CFO and Assistant Secretary
                                              ---------------------------------

Loan No: 1910193

SECOND AMENDMENT
TO
SECURITY AGREEMENT

1. Parties and Date. This First Amendment to Security Agreement (the "Amendment") is entered into effective as of March 2, 2000, by and between INTUITIVE SURGICAL INC., a Delaware corporation ("Debtor"), and HELLER FINANCIAL LEASING, INC., a Delaware corporation ("Secured Party").

2. Facts. Debtor and Secured Party have entered into a certain Security Agreement dated May 20, 1999 (the "Security Agreement"). Debtor has requested and Secured Party has agreed that the Security Agreement be amended on the terms and conditions set forth in this Amendment. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Security Agreement. Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows.

3. Amendment to Security Agreement. Debtor and Secured Party hereby agree that the Security Agreement shall be and hereby is amended, as follows:

(i) Item 1(ii) of Exhibit A to the Security Agreement shall be restated to read: "(ii) Debtor's cash and cash equivalents plus short-term investments on hand, net of funded debt, is less than $10,000,000, and";

(ii) The final sentence Item 1 of Exhibit A to the Security Agreement shall be restated to read: "(Secured Party agrees to review (in its sole discretion) any request from Debtor to release any pledged amounts or letter of credit provided by Debtor if Debtor's EBITDA exceeds $2,500,000 in any two consecutive fiscal quarters or Debtor's cash and cash equivalents plus short-term investments on hand, net of funded debt, is more than $10,000,000.)"

4. Acknowledgments, Ratifications and Reaffirmations by Debtor. Debtor hereby acknowledges, ratifies and reaffirms that (i) as of the date hereof no Event of Default has occurred or exists, (ii) Debtor has no defense, offset or counterclaim to any of Debtor's obligations under the Loan Documents, and (iii) the Notes, Security Agreement (as amended by this Amendment) and other Loan Documents are in full force and effect and are fully enforceable against Debtor in accordance with their respective terms.

5. Effectiveness of Loan Documents. Except as expressly amended by this Amendment, the Security Agreement, as well as the Notes and all of the other Loan Documents shall remain in full force and effect.

6. Entire Agreement. The parties acknowledge and agree that there are no other agreements or representations, either oral or written, express or implied, in connection with the Loans, that are not embodied in this Amendment, the Notes, the Security Agreement and the other Loan Documents, which, together represent a complete integration of all prior and contemporaneous agreements and understandings of Debtor and Secured Party in any way related to the Loans. The Security Agreement (as amended by this Amendment) may not be altered, modified or terminated in any manner except by a writing duly executed by Debtor and Secured Party. If any provision of the Security Agreement (as amended by this Amendment) is held to be invalid or unenforceable, the remaining provisions shall remain in effect without impairment.

IN WITNESS WHEREOF, Debtor and Secured Party have each executed this Agreement to be effective as of the day and year first above written.

"DEBTOR"                                "SECURED PARTY"

INTUITIVE SURGICAL, INC.,               HELLER FINANCIAL LEASING, INC., a
a Delaware corporation                  Delaware corporation

By: /s/ SUSAN BARNES                    By: /s/ Richard Petrucci
   -----------------------------           ------------------------------------
Name: Susan Barnes                      Name:  Richard Petrucci
     ---------------------------             ----------------------------------

Title:  CFO                             Title: AVP
      --------------------------              ---------------------------------

EXHIBIT 10.8

LICENSE AGREEMENT

THIS LICENSE AGREEMENT dated as of December 20, 1995 (the "Agreement"), is entered into between SRI INTERNATIONAL, a California nonprofit public benefit corporation ("SRI"), having a place of business located at 333 Ravenswood Avenue, Menlo Park, California 94025-3493, and INTUITIVE SURGICAL DEVICES, INC., a Delaware corporation ("ISD"), having a place of business located at Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California 94306-2155.

W I T N E S S E T H :

WHEREAS, SRI owns or has rights in certain patent rights and know-how regarding Telepresence Surgical Technology (defined below), as described in the SRI disclosures listed in Exhibit A hereto.

WHEREAS, SRI and John G. Freund, M.D. ("Dr. Freund"), entered into an Option Agreement dated September 12, 1995 (the "Option Agreement"), pursuant to which SRI granted to Dr. Freund an option to obtain a certain license under SRI's rights in such patent rights and know-how.

WHEREAS, by exercising the option granted under the Option Agreement, Dr. Freund desires that SRI convey to ISD a license under SRI's rights in such patent rights and know-how to develop, make use and sell products for use in performing surgery on humans and animals, on the terms and subject to the conditions of the Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, the parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

For purposes of the Agreement, the terms defined in this article shall have the respective meanings set forth below:

1.1 "AFFILIATE" shall mean, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with, such Person. A Person shall be regarded as in control of another Person if it owns, or directly or indirectly controls, at least fifty percent (50%) of

the voting stock or other ownership interest of the other Person, or if it directly or indirectly possesses the power to direct or cause the direction of the management and policies of the other Person by any means whatsoever.

1.2 "FIELD" shall mean the manipulation of tissues and medical devices for animal and human medicine (including but not limited to surgery, laparoscopic surgery and microsurgery).

1.3 "ISD KNOW-HOW" shall mean all inventions, discoveries, processes, methods, compositions, formulae, procedures, protocols, techniques, results of experimentation and testing, information and data, which have not been published and otherwise are not generally known, which are necessary or useful to the development, manufacture, use or sale of products utilizing or incorporating the Telepresence Surgical Technology, or otherwise relate to or arise from the Telepresence Surgical Technology, and which are first conceived or reduced to practice solely or jointly by employees or other Persons on behalf of ISD prior to September 12, 1997; all to the extent and only to the extent that ISD has the right to grant licenses, immunities or other rights thereunder.

1.4 "ISD PATENT RIGHTS" shall mean (a) all patent applications, heretofore or hereafter filed or having legal force in any country which claim a discovery or invention which is (i) necessary or useful to the development, manufacture, use or sale of products utilizing or incorporating the Telepresence Surgical Technology or (ii) otherwise relates to or arises from the Telepresence Surgical Technology, and which is first conceived or reduced to practice solely or jointly by employees or other Persons on behalf of ISD prior to September 12, 1997, (b) all valid and enforceable patents that have issued or in the future issue from the patent applications described in clause (a) above, including utility, model and design patents and certificates of invention, and (c) all divisionals, continuations, continuations-in-part, reissues, renewals, extensions, registrations, confirmations, re-examinations or additions to any such patent applications and patents; all to the extent and only to the extent that ISD has the right to grant licenses, immunities or other rights thereunder.

1.5 "MILESTONE" shall mean the good faith filing by ISD, its Affiliate or sublicensee of a Pre-Market Approval application or 510K application with the Food and Drug Administration in the United States (or the equivalent application with the governing health authority of any country in Europe), supported by the information that in ISD's best judgment would give the greatest likelihood of approval by the FDA (or the governing health authority of the applicable country in Europe).

1.6 "PERSON" shall mean an individual, corporation, partnership, trust, business trust, association, joint stock company, joint venture, pool, syndicate, sole proprietorship,

unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

1.7 "PRODUCT" shall mean any product for use in the Field which if made, used or sold would infringe one or more valid claims of the SRI Patent Rights if in an issued patent but for the license granted by the Agreement, or which otherwise uses, incorporates or was conceived, developed or reduced to practice using the SRI Patent Rights or SRI Know-How.

1.8 "SRI FUTURE TECHNOLOGY RIGHTS" shall mean all intellectual property rights of SRI in all inventions, discoveries, processes, methods, compositions, formulae, procedures, protocols, techniques, results of experimentation and testing, information and data regarding Telepresence Surgical Technology, which are first conceived or reduced to practice solely or jointly by employees or other Persons on behalf of SRI on or after September 12, 1997 and prior to September 12, 1999; all to the extent and only to the extent that SRI has the right to grant licenses, immunities or other rights thereunder.

1.9 "SRI KNOW-HOW" shall mean all inventions, discoveries, processes, methods, compositions, formulae, procedures, protocols, techniques, results of experimentation and testing, information and data, which have not been published and otherwise are not generally known, regarding Telepresence Surgical Technology in which SRI has an ownership or other interest as of the date of the Agreement or which are first conceived or reduced to practice solely or jointly by employees or other Persons on behalf of SRI prior to September 12, 1997; all to the extent and only to the extent that SRI has the right to grant licenses or other rights thereunder.

1.10 "SRI PATENT RIGHTS" shall mean (a) all patent applications, heretofore or hereafter filed or having legal force in any country, regarding Telepresence Surgical Technology, which claim a discovery or invention in which SRI has an ownership or other interest as of the date of the Agreement or which is first conceived or reduced to practice solely or jointly by employees or other Persons on behalf of SRI prior to September 12, 1997, (b) all valid and enforceable patents that have issued or in the future issue from the patent applications described in clause (a) above, including utility, model and design patents and certificates of invention, and (c) all divisionals, continuations, continuations-in-part, reissues, renewals, extensions or additions to any such patent applications and patents; all to the extent and only to the extent that SRI has the right to grant licenses, immunities or other rights thereunder. A list of the SRI Patent Rights as of the date of the Agreement is attached hereto as Exhibit B.

1.11 "STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement dated the date hereof, among ISD, SRI and the other signatories thereto.

1.12 "TELEPRESENCE SURGICAL TECHNOLOGY" shall mean hardware, firmware and software technology pertaining to the manipulation of tissues or medical devices for human and animal medicine (including but not limited to surgery, laparoscopic surgery and microsurgery) as described or contemplated in Exhibits A and B to the Agreement and developed by SRI's Medical Technology Laboratory or any successor SRI organization having the development of medical hardware, firmware and software technology as its primary mission.

1.13 "THIRD PARTY" shall mean any Person other than SRI, ISD and their respective Affiliates.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

Each party hereby represents and warrants to the other party as follows:

2.1 CORPORATE EXISTENCE AND POWER. Such party (a) is a corporation duly organized, validly existing and in good standing under the laws of the state in which it is incorporated; (b) has the corporate power and authority and the legal right to own and operate its property and assets, to enter into the Agreement and to perform its obligations hereunder, and to carry on its business as it is now being conducted and (c) is in compliance with all requirements of applicable law, except to the extent that any noncompliance would not have a material adverse effect on the properties, business, financial or other condition of it and would not materially adversely affect its ability to perform its obligations under the Agreement.

2.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such party has taken all necessary corporate action on its part to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder. The Agreement has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

2.3 NO CONSENTS. All necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by such party in connection with the Agreement have been obtained.

2.4 NO CONFLICT. The execution and delivery of the Agreement and the performance of such party's obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations, and (b) do not conflict with, or constitute a default under, any contractual obligation of it.

2.5 SRI REPRESENTATIONS AND WARRANTIES. SRI hereby represents and warrants to ISD that:

2.5.1 Except as otherwise specifically disclosed under the Agreement, it has not granted any right to any Third Party under the SRI Patent Rights or and SRI Technology.

2.5.2 It owns or controls under valid licenses with right of sublicense all of the rights, title and interest in and to the patents and patent applications set forth on Exhibit B attached hereto and the SRI Know-How, except as otherwise provided herein.

2.5.3 It has disclosed to ISD all SRI invention disclosures regarding the Telepresence Surgical Technology as of the date of the Agreement.

ARTICLE 3

LICENSE GRANTS

3.1 LICENSE GRANT TO ISD. Subject to the provisions of Section 5.3 below, SRI hereby grants to ISD an exclusive, worldwide, royalty-free license (including the right to grant sublicenses) under the SRI Patent Rights and SRI Know-How (a) to conduct research and development with respect to Products for use in the Field, and (b) to make, have made, use, market, distribute, import, offer for sale and sell Products for use in the Field. Upon execution of the Agreement and frequently thereafter until September 12, 1998, at mutually convenient times, SRI shall disclose and make available to ISD all information available to SRI, including without limitation SRI invention disclosures and SRI Know-How, as is reasonably necessary for ISD's employees and consultants to understand and practice the SRI Patent Rights and SRI Know-How in the Field, as such information becomes available to SRI. ISD shall have the right, during normal business hours upon reasonable notice, to review and make copies of those portions of SRI employees' laboratory notebooks containing such information as is reasonably necessary for ISD's employees and consultants to understand and practice the SRI Patent Rights and SRI Know-How in the Field.

3.2 SUBLICENSES. Each sublicense by ISD under the Agreement shall be consistent with the terms and conditions of the license granted to ISD by SRI and nothing in such sublicense shall eliminate or reduce ISD's obligations to SRI under the Agreement. Each sublicense by SRI under the Agreement shall be consistent with the terms and conditions of the license granted to SRI by ISD and nothing in such sublicense shall eliminate or reduce SRI's obligations to ISD under the Agreement.

3.3 RESERVATION OF CERTAIN RIGHTS. Notwithstanding the foregoing, the license granted to ISD by the Agreement is subject

to the reservation of (a) the right of SRI to practice processes and methods, and to make, use and sell products, which are covered by the SRI Patent Rights or which are disclosed in or otherwise pertain to SRI Know-How, (i) for all commercial and research purposes outside the Field and (ii) for SRI's internal and collaborative non-commercial research purposes (including United States Government sponsored research) in the Field; (b) certain rights held by or in favor of the United States Government by applicable law or regulation; and (c) the non-exclusive, worldwide, royalty-free right to use the SRI Patent Rights and SRI Know-How for medical training and simulations, so long as products created pursuant to such right are not used to perform medical procedures. To the extent required by applicable United States laws or regulations, if at all, ISD, its Affiliates and sublicensees shall manufacture the Products in the United States or its territories.

3.4 DISCLAIMER OF WARRANTIES. NOTHING IN THE AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY SRI THAT ANY PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION INCLUDED IN THE SRI PATENT RIGHTS, THAT ANY PATENT INCLUDED IN THE SRI PATENT RIGHTS WHICH ISSUES WILL BE VALID, OR THAT THE USE OF ANY SRI PATENT RIGHTS OR SRI KNOW-HOW WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY OTHER PERSON. EXCEPT AS OTHERWISE SET FORTH IN SECTION
2.5 ABOVE, SRI MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SRI PATENT RIGHTS OR SRI KNOW-HOW, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

3.5 LICENSE GRANT TO SRI. ISD hereby grants to SRI a non-exclusive, worldwide, royalty-free license (including the right to grant sublicenses) to practice methods and processes, and to make, use and sell products, which are covered by the ISD Patent Rights or which are disclosed in or otherwise pertain to ISD Know-How (a) for all commercial and research purposes outside the Field and (b) for SRI's internal and collaborative non-commercial research purposes (including United States Government sponsored research) in the Field. At least quarterly prior to September 12, 1998, at mutually convenient times, ISD shall disclose and make available to SRI information available to ISD regarding the use of the ISD Patent Rights and ISD Know-How outside the Field, as such information becomes available to ISD.

3.6 TECHNICAL ASSISTANCE. Prior to September 12, 1997, upon reasonable notice and during normal business hours, SRI (a) shall provide such technical assistance regarding the SRI Patent Rights and SRI Know-How as ISD reasonably requests to conduct its activities contemplated by the Agreement, and (b) shall make available to ISD such technical personnel of SRI as reasonably necessary to provide the foregoing technical assistance. Except for services reasonably required for the technology transfer as set forth in Section 3.1 above, ISD shall reimburse SRI for its standard research or consulting costs for any such technical

assistance, determined in accordance with SRI's normal business practice applied on a consistent basis, together with all reasonable out-of-pocket travel and other expenses incurred by SRI in providing such technical assistance. At the request of ISD, SRI shall provide ISD with estimates of the anticipated costs of any requested technical assistance prior to undertaking such technical assistance.

3.7 ACCESS. During the term of the Agreement prior to September 12, 1997, subject to the limitations of this Section 3.7, ISD shall have the right to visit SRI's facilities to inspect and use SRI Telepresence Surgical Technology demonstration or prototype equipment. ISD's access to SRI facilities and use of equipment shall be subject to the following conditions:

(a) ISD shall provide reasonable prior notice;

(b) ISD's use of SRI facilities and equipment shall be during normal business hours at times mutually convenient to SRI and ISD, which do not conflict with SRI's normal business activities;

(c) ISD shall repair or replace any SRI equipment damaged by ISD; and

(d) ISD's access to SRI facilities shall be subject to the execution by ISD of an agreement with standard SRI terms and conditions regarding access to SRI facilities by contractors and other non-employee Third Parties.

3.8 RIGHT OF FIRST NEGOTIATION. SRI shall not sell, assign, license or otherwise transfer the SRI Future Technology Rights for use in the Field to any Third Party unless SRI first (a) gives to ISD written notice of SRI's desire to do so,
(b) provides ISD with information available to SRI regarding the use of the SRI Future Technology Rights in the Field, sufficient to permit ISD to evaluate and understand such SRI Future Technology Rights, subject to the confidentiality provisions of Article 6 below, solely to evaluate its interest in negotiating a license under such rights, and (c) offers to ISD the opportunity to negotiate with SRI to obtain a license under the SRI Future Technology Rights for use in the Field. IF ISD fails to give written notice to SRI of its desire to negotiate a license under such rights within 60 days after receipt of the written notice from SRI under clause (a) above, or if the parties are unable after good faith negotiations to reach a mutually acceptable agreement, thereafter SRI shall have the right in its sole discretion to sell, assign, license or otherwise transfer the SRI Future Technology Rights for use in the Field to any one or more Third Parties.

ARTICLE 4

CONSIDERATION TO SRI

4.1 ISSUANCE OF ISD SHARES. In consideration for the license granted to ISD hereunder, concurrent with the execution of the Agreement, ISD shall issue to SRI or SRI's designees five hundred eighty five thousand (585,000) shares of ISD Common Stock on the terms and subject to the conditions of the Stock Purchase Agreement.

4.2 REIMBURSEMENT OF CERTAIN SRI COSTS. Within five (5) business days following the execution of the Agreement, ISD shall reimburse SRI for (a) all reasonable, direct, out-of-pocket costs (not to exceed $116,000 in the aggregate) incurred by SRI on or before the date of the Option Agreement in connection with the preparation, filing, prosecution and maintenance of the patent applications and patents included in the SRI Patent Rights; (b) all reasonable, direct, out-of-pocket costs incurred by SRI after the date of the Option Agreement and on or before the date of the Agreement in connection with the preparation, filing, prosecution and maintenance of the patent applications and patents included in the SRI Patent Rights, which are approved by ISD or Dr. Freund prior to being incurred; and (c) all reasonable, outside counsel attorneys' fees and costs (not to exceed $10,000 in the aggregate) incurred by SRI in connection with the negotiation, drafting and execution of the Option Agreement, the Agreement and the Stock Purchase Agreement; PROVIDED, HOWEVER, that no fees or costs resulting from work performed by SRI in-house counsel shall be reimbursed under this Section 4.2.

4.3 PAYMENT METHOD. All payments by ISD to SRI under the Agreement shall be paid in United States dollars by bank wire transfer in immediately available funds to such account as SRI shall designate before such payment is due.

ARTICLE 5

DILIGENCE OBLIGATIONS

5.1 RESEARCH AND DEVELOPMENT EFFORTS. ISD shall use its commercially reasonable and diligent efforts (a) to conduct such research, development and preclinical and human clinical trials as necessary or desirable (in ISD's reasonable discretion) to obtain regulatory approvals to manufacture and market Products for use in the Field, and (b) to commence marketing and market each such Product for use in the Field in such countries as ISD determines are commercially desirable. ISD's obligation to commence marketing a Product in a country shall not commence until all regulatory approvals necessary to market such Product in such country have been obtained by ISD. ISD, at its sole expense and in its sole discretion, shall fund the costs of all research, development, preclinical and clinical trials, regulatory approval

activities and commercialization of the Products, and SRI shall have no obligation to fund any such activities.

5.2 REPORTS. Within ninety (90) days following the end of each calendar year during the term of the Agreement, ISD shall prepare and deliver to SRI a summary written report which shall summarize the status of the research, development and testing of Products, and the status of obtaining the necessary approvals to market Products.

5.3 FAILURE TO MEET THE MILESTONE. If ISD fails to achieve the Milestone on or before September 12, 2002, then at SRI's election in its sole discretion, (a) the license granted by SRI to ISD shall become non-exclusive, and (b) the right to file and prosecute patent applications, to maintain and enforce any resulting patents, included within the SRI Patent Rights under Article 7 below shall revert to SRI, without any further action by ISD.

ARTICLE 6

CONFIDENTIALITY

6.1 CONFIDENTIAL INFORMATION. During the term of the Agreement, and for a period of five (5) years following the expiration or earlier termination hereof, each party shall exercise reasonable care to maintain in confidence all information of the other party (including samples) disclosed by the other party and identified as, or acknowledged to be, confidential (the "Confidential Information"), and shall not use, disclose or grant the use of the Confidential Information except on a need-to-know basis to those directors, officers, employees, agents, permitted sublicensees and permitted assignees, to the extent such disclosure is reasonably necessary in connection with such party's activities as expressly authorized by the Agreement. To the extent that disclosure is authorized by the Agreement, prior to disclosure, each party hereto shall obtain the written agreement of any such Person, who is not otherwise bound by fiduciary obligations to such party, to hold in confidence and not make use of the Confidential Information for any purpose other than those permitted by the Agreement. Each party shall notify the other promptly upon discovery of any unauthorized use or disclosure of the other party's Confidential Information.

6.2 PERMITTED DISCLOSURES. The nonuse and nondisclosure obligations contained in this article shall not apply to the extent that (a) any receiving party (the "Recipient") is required (i) to disclose information by law, order or regulation of a governmental agency or a court of competent jurisdiction, or (ii) to disclose information to any governmental agency for purposes of obtaining approval to test or market a product, provided in either case that the Recipient shall provide written notice thereof to the other party and sufficient opportunity to object, time

permitting, to any such disclosure or to request confidential treatment thereof; or (b) the Recipient can demonstrate that (i) the information was public knowledge at the time of such disclosure by the Recipient, or thereafter became public knowledge, other than as a result of acts attributable to the Recipient in violation hereof; (ii) the information was rightfully known by the Recipient (as shown by its written records) prior to the date of disclosure to the Recipient by the other party hereunder; (iii) the information was disclosed to the Recipient on an unrestricted basis from a Third Party not under a duty of confidentiality to the other party; or (iv) the information was independently developed by employees or agents of the Recipient without access to the Confidential Information of the other party.

6.3 PUBLICATION. ISD acknowledges SRI's interest in publishing the results of its research to obtain recognition within the scientific community and to advance the state of scientific knowledge. SRI and ISD each recognize their mutual interest in obtaining valid patent protection and protecting their respective business interests. Consequently, if SRI, its employees or consultants desire to make a publication (including any oral disclosure made without obligation of confidentiality) relating to any discovery or invention regarding the technology which is the subject of the Agreement (except (a) such technology as described in Section 3.8 above which is not licensed to ISD, and
(b) such technology as is conceived or invented by ISD), SRI shall give ISD a copy of the proposed written publication at least 30 days prior to submission for publication, or an outline of such oral disclosure at least 30 days prior to presentation. ISD shall have the right to request a reasonable delay in publication or presentation, not to exceed 90 days, in order to protect patentable information. If ISD requests such a delay, SRI shall delay submission or presentation of the publication for a period of 90 days to enable ISD to file the applicable patent applications protecting each parties' rights in such discoveries or inventions to be filed in accordance with Article 7 below. Upon the expiration of 30 days in the case of proposed written publications, or 30 days in the case of proposed oral presentations, from delivery to ISD, SRI shall be free to proceed with the written publication or presentation, respectively, unless ISD has requested the delay described above.

6.4 TERMS OF THE AGREEMENT. Except as otherwise provided in this article or as otherwise required by applicable law, regulation or order of a governmental agency or court of competent jurisdiction, neither party shall disclose any terms or conditions of the Agreement to any Third Party without the prior consent of the other party; PROVIDED, HOWEVER, that ISD may, at its election, disclose terms or conditions of the Agreement to an investor in ISD or a bona fide potential investor in ISD, without the prior consent of SRI.

6.5 NO USE OF NAME. Except as otherwise required by applicable law, regulation or order of a governmental agency or

court of competent jurisdiction, neither party shall use the name of the other party or the other party's directors, officers or employees in any advertising, news release or other publication, without the prior express written consent of the other party; PROVIDED, HOWEVER, that ISD may, at its election, identify SRI as the licensor of the Telepresence Surgical Technology (whether under that name or under some other designation) and/or of certain technology on which the Products are in part based.

6.6 DESCRIPTION OF TELEPRESENCE SURGICAL TECHNOLOGY. Notwithstanding the provisions of Section 6.1, ISD may, at its election and in its sold discretion, disclose a description of the Telepresence Surgical Technology (whether under that name or some other designation) in financing documents, in marketing literature and in such other publications as ISD reasonably deems necessary to meet ISD's diligence obligations under Article 5 above; PROVIDED, HOWEVER, that ISD may not disclose SRI Know-How without the prior express written consent of SRI.

ARTICLE 7

INVENTIONS AND PATENTS

7.1 OWNERSHIP OF INVENTIONS. The entire right and title in all inventions, discoveries, processes, methods, compositions, formulae, techniques, information and data regarding Telepresence Surgical Technology, whether or not patentable (collectively, the "Inventions"), and any patent applications or patents based thereon, conceived in the performance of the parties' activities during the term of the Agreement (a) by employees or other Persons acting solely on behalf of SRI, shall be owned solely by SRI ("SRI Inventions"), (b) by employees or other Persons acting solely on behalf of ISD shall be owned solely by ISD ("ISD Inventions"), and (c) jointly by employees or other Persons acting on behalf of SRI and by employees or other Persons acting on behalf of ISD, shall be owned jointly by SRI and ISD (the "Joint Inventions"). SRI and ISD each hereby represents that all employees and other Persons acting on its behalf in performing its obligations under the Agreement shall be obligated to assign to it, or as it shall direct, all Inventions conceived by such employees or other Persons.

7.2 SRI PATENT RIGHTS.

7.2.1 FILING, PROSECUTION, AND MAINTENANCE. ISD shall file and prosecute patent applications included in the SRI Patent Rights in the United States, Japan, the European Patent Office (designating the United Kingdom, France, Germany and Italy) and such other countries as ISD may select in its sole discretion, and shall maintain any resulting patents. At ISD's election in its sole discretion, such foreign filing may be initiated through the Patent Cooperation Treaty designating such countries. In so doing, ISD shall endeavor to obtain the strongest commercially

desirable patent protection (under the circumstances) regarding the Telepresence Surgical Technology with respect to the Products and shall consider in good faith the interests of SRI. ISD (a) shall supply SRI with a copy of each such patent application as filed, together with notice of its filing date and serial number; (b) shall consult with SRI regarding the prosecution and maintenance of the SRI Patent Rights, and shall implement reasonable requests of SRI with respect thereto; (c) shall provide SRI with copies of all filings, submissions, correspondence, office actions and responses thereto with the applicable patent authorities regarding the SRI Patent Rights; and (d) shall inform SRI promptly of the allowance and issuance of each patent included in the SRI Patent Rights, together with the date and patent number thereof, and shall provide SRI with a copy of such patent as issued. SRI shall cooperate with ISD, execute all lawful papers and instruments and make all rightful oaths and declarations and and instruments and make all rightful oaths and declarations as may be necessary in the preparation, prosecution and maintenance of all such patents and patent applications, ISD shall reimburse SRI for its standard costs for any such assistance, determined in accordance with SRI's normal business practice applied on a consistent basis, together with all reasonable out-of-pocket travel and other expenses incurred by SRI in providing such assistance; PROVIDED, HOWEVER, that ISD shall not be obligated to reimburse SRI for any consultation with SRI which ISD is obligated to undertake pursuant to this Article 7. At the request of ISD, SRI shall provide ISD with estimates of the anticipated costs of any requested assistance prior to undertaking such assistance.

7.2.2 FUTURE PATENT COSTS. Except as otherwise set forth in this section, ISD shall pay all costs incurred after the date of the Agreement in connection with the preparation, filing, prosecution and maintenance of the patent applications and patents included in the SRI Patent Rights. If, during the term of the Agreement, SRI grants a license to any one or more Third Parties under the SRI Patent Rights for use outside the Field, SRI shall pay or cause each such Third party to reimburse ISD for such Third Party's PRO RATA share of the actual out-of-pocket costs paid by ISD (or reimbursed by ISD to SRI) in connection with the preparation, filing, prosecution and maintenance of the patent applications and patents included in the SRI Patent Rights; PROVIDED, HOWEVER, that SRI shall have no obligation to reimburse ISD for any such Third Party's share of such out-of-pocket costs paid through the effective date of the license agreement with such Third Party in excess of the total consideration received by SRI from such Third Party for the license agreement with such Third Party. Patent costs incurred after the date(s) of such Third Party license agreement(s) shall be shared on a PRO RATA basis by ISD and each such Third Party; PROVIDED, HOWEVER, that ISD may, at is election, seek reimbursement directly from each such Third Party, and SRI shall cause each such Third Party to make reimbursement directly to ISD, for such Third Party's PRO RATA share of those patent costs incurred after the date of such Third Party license agreement. Notwithstanding anything to the contrary in this Section 7.2, if ISD desires to abandon or materially

narrow any claim of the SRI Patent Rights which has application outside the Field, then SRI shall have the right, in its sole discretion and at its sole expense, to assume control of the prosecution, maintenance and enforcement of such claim, provided that the respective rights of each party under the Agreement with respect to such claim shall not otherwise be affected solely by virtue of ISD abandoning and SRI assuming control thereof.

7.2.3 ENFORCEMENT. Each party promptly shall notify the other party of any infringement known to such party of the SRI Patent Rights and shall provide the other party with the available evidence, if any, of such infringement. ISD, at its sole expense, shall have the right (but not the obligation) to determine the appropriate course of action to enforce the SRI Patent Rights in the Field or otherwise abate the infringement thereof in the Field, to take (or refrain from taking) appropriate action to enforce the SRI Patent Rights in the Field, to control any litigation or other enforcement action in the Field and to enter into, or permit, the settlement of any such litigation or other enforcement action with respect to the SRI Patent Rights in the Field, and shall consider, in good faith, the interests of SRI in so doing. If, within one hundred twenty
(120) days of receipt of notice from SRI, ISD does not abate the infringement in the Field or file suit to enforce the SRI Patent Rights against at least one infringing party in the Field, SRI shall have the right to take whatever action it deems appropriate to enforce the SRI Patent Rights in the Field. The party controlling any such enforcement action shall not settle the action or otherwise consent to an adverse judgment in such action that adversely affects the rights or interests of the non-controlling party or imposes additional obligations on the non-controlling party, without the prior written consent of the non-controlling party. All monies recovered upon the final judgment or settlement of any such suit by ISD to enforce the SRI Patent Rights in the Field shall be retained by ISD. All monies recovered upon the final judgment or settlement of any such suit by SRI to enforce the SRI Patent Rights in the Field shall be retained by SRI. Notwithstanding the foregoing, SRI and ISD shall fully cooperate with each other in the planning and execution of any action to enforce the SRI Patent Rights in the Field.

7.3 ISD PATENT RIGHTS.

7.3.1 FILING, PROSECUTION, AND MAINTENANCE. ISD, at its sole expense, shall have the right to file and prosecute patent applications included in the ISD Patent Rights in the United States, Japan, the European Patent Office (designating the United Kingdom, France, Germany and Italy) and such other countries as ISD may select in its sole discretion, and to maintain any resulting patents. At ISD's election in its sole discretion, such foreign filing may be initiated through the Patent Cooperation Treaty designating such countries. ISD shall provide SRI with copies of each such patent application as filed,

together with notice of its filing date and serial number, and copies of all office actions and responses thereto.

7.3.2 ENFORCEMENT. ISD, at its sole expense, shall have the right (but not the obligation) to determine the appropriate course of action to enforce the ISD Patent Rights or otherwise abate the infringement thereof, to take (or refrain from taking) appropriate action to enforce the ISD Patent Rights, to control any litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation or other enforcement action with respect to the ISD Patent Rights, and shall consider, in good faith, the interests of SRI in so doing. All monies recovered upon the final judgment or settlement of any such suit to enforce the ISD Patent Rights shall be retained by ISD.

7.4 PATENT MARKINGS. With respect to each Product which would infringe a valid claim of an issued patent of the SRI Patent Rights but for the license granted to ISD hereunder, ISD, its Affiliates and sublicensees shall mark each such Product sold or otherwise disposed of by any of them with the appropriate marking, giving notice to the public that such Product is patented, by fixing thereon either the word "patent" or the abbreviation "pat", together the number of such issued patent of the SRI Patent Rights.

ARTICLE 8

TERM AND TERMINATION

8.1 EXPIRATION. Subject to the provisions of this article, the Agreement shall expire on the later of (a) the expiration of the last to expire of the SRI Patent Rights, or (b) the date seventeen (17) years after the date of the Agreement.

8.2 TERMINATION BY SRI. SRI may terminate the Agreement, in its sole discretion, upon thirty (30) days prior written notice to ISD, (a) if ISD fails to timely reimburse SRI for the costs described in Section 4.2 above, and if ISD has not cured such breach within thirty (30) days after written notice thereof by SRI; or (b) except as otherwise provided in the article below regarding force majeure, upon or after the material breach of its obligations under the Stock Purchase Agreement or under Section 6.1, 6.2, 6.3, 6.4, 7.2, 7.3, 9.1, 9.2 or 9.3 of the Agreement, if ISD has not cured such breach within ninety (90) days after written notice thereof by SRI.

8.3 TERMINATION BY ISD. Except as otherwise provided in the article below regarding force majeure, if SRI materially breaches its obligations under
Section 3.1, 3.6 or 3.7 of the Agreement, and SRI has not cured such breach within sixty (60) days after written notice thereof by ISD, then (a) ISD may terminate the Agreement upon thirty (30) days prior written notice to SRI, and

for the periods(s) specified in Section 2(a) of the Stock Purchase Agreement, repurchase that portion of the shares of ISD Common Stock issued to SRI specified in Section 2(a) of the Stock Purchase Agreement at the price and on the terms and conditions set forth in the Stock Purchase Agreement, and (b) SRI shall grant to ISD an exclusive, worldwide, royalty-free license with the right to sublicense, under the SRI Patent Rights and SRI Know-How, to make, have made, use, market, distribute, import, offer for sale and sell Products for use in the Field.

8.4 CONVERSION TO NONEXCLUSIVE BY SRI. SRI may convert the license granted by SRI to ISD to a nonexclusive license, in its sole discretion, upon thirty (30) days prior written notice to ISD, (a) upon or after the material breach of ISD's obligations under Section 5.1 of the Agreement, if ISD has not cured such breach within sixty (60) days after written notice thereof by SRI; or (b) if ISD voluntarily commences any action or seeks any relief regarding its liquidation, reorganization, dissolution or similar act or under any bankruptcy, insolvency or similar law; or (c) if a proceeding is commenced or an order, judgment or decree is entered seeking the liquidation, reorganization, dissolution or similar act or any other relief under any bankruptcy, insolvency or similar law against ISD, without its consent, which continues undismissed or unstayed for a period of sixty (60) days; PROVIDED, HOWEVER, that SRI shall not have the right to terminate the Agreement solely by reason of the occurrence of any one or more of the events described in this Section 8.4.

8.5 FAILURE TO ISSUE ISD SHARES. In the event that ISD fails to duly authorize, validly issue and deliver to SRI or its designees the shares referenced in
Section 4.2 above concurrent with the execution of the Agreement, the Agreement automatically shall terminate without further action by SRI.

8.6 EFFECT OF EXPIRATION OR TERMINATION. Expiration or termination of the Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination, and the provisions of Articles 6 and 9 shall survive the expiration or termination of the Agreement. Upon expiration of the Agreement under Section 8.1 above, ISD shall have an exclusive, worldwide, royalty-free license under the SRI Know-How in the Field, and SRI shall have a non-exclusive, worldwide, royalty-free license under the ISD Patent Rights and ISD Know-How for use outside the Field.

8.7 ISD DATA. Notwithstanding anything to the contrary in the Agreement, (a) if the Agreement is terminated pursuant to the provisions of Section 8.2 above, upon SRI's request not more than ninety (90) days after such termination, within thirty (30) days after such request, ISD shall provide provide SRI with copies of all regulatory submissions and approvals, if any, regarding actual or potential Products, (b) SRI shall have the right of reference to all data and information in such regulatory submissions, and (c) ISD shall execute all such documents and instruments reasonably necessary to enable SRI to reference all such data, information

and submissions. ISD makes no representations and warranties whatsoever, express or implied, regarding such data, information and submissions, and any such use and reference of such data, information and submissions shall be at SRI's own risk.

ARTICLE 9

INDEMNIFICATION AND INSURANCE

9.1 INDEMNIFICATION. ISD shall indemnify, defend and hold harmless SRI, its directors, officers, employees and agents from all losses, liabilities, damages and expenses (including reasonable attorneys' fees and costs) that they may suffer as a result of any claims, demands, actions or other proceedings made or instituted by any Third Party or Affiliate against any of them and arising out of or relating to (a) any use by ISD, its Affiliate or sublicensee of any SRI Patent Rights or SRI Know-How, including any claim of patent infringement, or
(b) any personal injury to or death of any person or damage to any property in connection with any act or omission (without regard to culpable conduct) by or on behalf of ISD, its Affiliate or sublicensee in the performance of its activities contemplated by the Agreement (including without limitation the manufacture, use and sale of Products), other than those certain losses, liabilities, damages and expenses arising solely out of the gross negligence or willful misconduct of SRI. Notwithstanding the foregoing, ISD shall have no obligation to indemnify, defend or hold harmless SRI from any losses, liabilities, damages and expenses (including reasonable attorneys' fees and costs) that it may suffer as a result of any claims, demands, actions or other proceedings made or instituted by any current or former employee, consultant, licensee or optionee of SRI.

9.2 INDEMNIFICATION PROCEDURE. SRI promptly shall notify ISD of any loss, liability, damage or expense, or any claim, demand, action or other proceeding with respect to which SRI intends to claim such indemnification. ISD's indemnity obligations under this article shall not apply to amounts paid in any settlement if effected without the consent of ISD, which consent shall not be unreasonably withheld or delayed. ISD shall not settle or consent to an adverse judgment in any such claim, demand, action or other proceeding that adversely affects the rights or interests of SRI, its employees or agents or imposes additional obligations on SRI, its employees or agents, without the prior express written consent of SRI. SRI, its employees and agents, shall cooperate fully with ISD and its legal representatives in the investigation of any action, claim or liability covered by this indemnification.

9.3 INSURANCE. Concurrent with the commencement of the first human clinical trial of any Product, ISD shall procure and maintain such liability insurance, including contractual and product liability insurance, against claims for bodily injury,

including death, or property damage arising from its activities contemplated by the Agreement, in amounts not less than $2,000,000 per occurrence and $5,000,000 in the aggregate. ISD shall maintain such insurance for so long thereafter as it continues to conduct its activities contemplated by the Agreement; PROVIDED, HOWEVER, that in the event such insurance becomes unavailable to ISD or in the event of extreme market conditions or other unforeseen events, the parties agree to discuss such changed circumstances and appropriate mechanisms to address them. Upon request, ISD shall provide SRI with certificates of insurance evidencing ISD's compliance with the insurance requirements of this section. SRI assumes no liability and disclaims any responsibility for the product specifications, clinical trials, manufacture, use, marketing, sale or other disposition, application, or delivery of any and all Products. No warranties made by ISD in connection with Product shall expressly or implicitly obligate SRI in any manner whatsoever.

9.4 LIMITED LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THE AGREEMENT OR WITH RESPECT TO ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING RELATING TO THE AGREEMENT HOWEVER CAUSED, AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL SRI'S LIABILITY OWING TO ISD WITH RESPECT TO ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING RELATING TO THE AGREEMENT EXCEED THE VALUE OF THE CONSIDERATION ACTUALLY RECEIVED BY SRI UNDER THE AGREEMENT OR THE STOCK PURCHASE AGREEMENT.

ARTICLE 10

FORCE MAJEURE

Neither party shall be held liable or responsible to the other party nor be deemed to have defaulted under or breached the Agreement for failure or delay in fulfilling or performing any term of the Agreement to the extent, and for so long as, such failure or delay is caused by or results from causes beyond the reasonable control of the affected party including but not limited to fires, earthquakes, floods, embargoes, wars, acts of war (whether war is declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or other party.

ARTICLE 11

ARBITRATION

Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, or any failure to agree where

agreement of the parties is necessary pursuant hereto, including the determination of the scope of this agreement to arbitrate, shall be resolved by the following procedures:

11.1 ATTEMPT TO RESOLVE DISPUTE. The parties shall use all reasonable efforts to amicably resolve the dispute through direct discussions. The senior management of each party commits itself to respond promptly to any such dispute. Either party may send written notice to the other party identifying the matter in dispute and invoking the procedures of this article. Within ten (10) days after such written notice is received, unless a delay is agreed to by both parties or the parties agree to confer by telephone, one or more principals of each party shall meet in Menlo Park, California to attempt to amicably resolve the dispute by written agreement. If said dispute cannot be settled through direct discussions within twenty (20) days after such written notice is received, the parties agree to first endeavor to settle the dispute in an amicable manner by mediation in San Francisco and administered by the American Arbitration Association ("AAA"), 417 Montgomery Street, San Francisco, California 94104-1113, pursuant to the Commercial Mediation Rules of AAA at the time of submission prior to resorting to binding arbitration.

11.2 APPLICATION TO BINDING ARBITRATION. If after sixty (60) days from the first written notice of dispute, the parties fail to resolve the dispute by written agreement or mediation, either party may submit the dispute to final and binding arbitration administered by the AAA, pursuant to the Commercial Arbitration Rules of the AAA at the time of submission. California Arbitration Law shall govern. The arbitration shall be held in Menlo Park, California before a single neutral, independent, and impartial arbitrator (the "Arbitrator"). The language of the arbitration shall be English, provided however that an interpreter may be provided for any witness that desires an interpreter; the costs of such interpretation shall be borne by the party requesting the interpreter, subject to being awarded by the Arbitrator as a cost of arbitration.

11.3 BINDING ARBITRATION PROCEDURE. Unless the parties have agreed upon the selection of the Arbitrator before then, the AAA shall appoint the Arbitrator as soon as practicable, but in any event within thirty (30) days after the submission to AAA for binding arbitration. The arbitration hearings shall commence within forty-five (45) days after the selection of the Arbitrator. Unless the Arbitrator otherwise directs, each party shall be limited to two pre-hearing depositions each lasting no longer than 6 hours. The parties shall exchange documents to be used at the hearing no later than ten (10) days prior to the hearing date. Unless the Arbitrator otherwise directs, each party shall have no longer than ten (10) hours to present its position, the entire proceedings before the Arbitrator shall be on no more than three (3) hearing days within a two week period. At the close of evidence, each side shall submit a proposed award to the Arbitrator, one of which shall be selected by the Arbitrator. The

award shall be made no more than thirty (30) days following the close of the proceeding. Under no circumstance should any time limit on the arbitration hearings be applied so as to render any award subject to vacation under California Code of Civil Procedure Section 1286.2. Accordingly, the Arbitrator shall have authority to alter any time period believed necessary to avoid vacatur under Section 1286.2. The Arbitrator's award shall be a final and binding determination of the dispute and shall be fully enforceable as an arbitration award by the California courts in accordance with the California Arbitration Law. The prevailing party shall be entitled to recover its reasonable attorneys' fees and expenses, including arbitration administration fees, incurred in connection with such proceeding. Except as otherwise required by applicable law, regulation or order of a governmental agency or court of competent jurisdiction, neither party nor the Arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties.

11.4 FEDERAL CLAIM. Any controversy or claim arising out of or relating to the provisions of Article 7 of the Agreement for which the United States District Court or other federal court would have subject matter jurisdiction in the absence of the arbitration provisions set forth in this Article 11 shall be exempt from such arbitration provisions and the United States District Court for the Northern District of California shall have exclusive jurisdiction over such controversy or claim.

ARTICLE 12

MISCELLANEOUS

12.1 NOTICES. Any consent, notice or report required or permitted to be given or made under the Agreement by one party to the other party shall be in writing, delivered personally or by facsimile (and promptly confirmed by personal delivery, U.S. first class mail, courier or nationally-recognized delivery service), U.S. first class mail postage prepaid, courier or nationally-recognized delivery service, and addressed to the other party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor. Except as otherwise provided in the Agreement, such consent, notice or report shall be effective upon receipt by the addressee.

If to SRI, for technical matters: SRI International 333 Ravenswood Avenue Menlo Park, California 94025-3493 Attention: Ajit Shah If to SRI, for all other matters: SRI International 333 Ravenswood Avenue Menlo Park, California 94025-3493 Attention: Technology Licensing

If to ISD, for technical matters: Intuitive Surgical Devices, Inc. c/o Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, California 94306-2155 Attention: John G. Freund, M.D.

If to ISD, for all other matters: Intuitive Surgical Devices, Inc. c/o Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El Camino Real Palo Alto, California 94306-2155 Attention: John G. Freund, M.D.

12.2 SOLICITATION OF SRI EMPLOYEES. ISD acknowledges that, during the term of the Agreement, ISD will have access to SRI's business and employees, including certain valuable proprietary information of SRI. ISD recognizes that misuse of such proprietary information, including interference with the employment relationship between SRI and its employees, would cause substantial loss and irreparable harm to SRI. Therefore, as part of the consideration for the Agreement, ISD shall not, prior to the expiration of twelve (12) months after the effective date of the Agreement, either directly or indirectly, by any means or device whatsoever, solicit any more than two of SRI's scientific or laboratory personnel involved with or working on any project relating to Telepresence Surgical Technology or otherwise induce or attempt to induce such personnel to terminate their employment with SRI.

12.3 GOVERNING LAW. The Agreement, including the decision to arbitrate and any decision by an arbitrator pursuant to Article 11, shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law principles thereof (except to the extent United States law preempts California law), and shall not be governed by the United Nations Convention on Contracts for the International Sale of Goods.

12.4 U.S. EXPORT LAWS AND REGULATIONS. Each party hereby acknowledges that the rights and obligations of the Agreement are subject to the laws and regulations of the United States relating to the export of products and technical information. Without

limitation, each party shall comply with all such laws and regulations.

12.5 NO OTHER RIGHTS. The Agreement shall not be construed to grant any license or other rights to ISD in any patent rights, know-how or other technology of SRI, except as expressly provided in the Agreement.

12.6 ASSIGNMENT. ISD shall not assign its rights or obligations under the Agreement, in whole or in part, by operation of law or otherwise, wihtout the prior written consent of SRI, which consent shall not be unreasonably withheld; PROVIDED, HOWEVER, that ISD may, without such consent, assign the Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business or divisions or subdivisions related to Telepresence Surgical Technology, or in the event of its merger, consolidation, change in control, spin-off, recapitalization or similar transaction. Any permitted assignee shall assume all obligations of its assignor under the Agreement. Any purported assignment in violation of this section shall be null and void.

12.7 WAIVERS AND AMENDMENTS. No change, modification, extension, termination or waiver of the Agreement, or any of the provisions herein contained, shall be valid unless made in writing and signed by duly authorized representatives of the parties hereto.

12.8 ENTIRE AGREEMENT. The Agreement embodies the entire understanding between the parties and supersedes any prior understanding and agreements between and among them respecting the subject matter hereof. There are no representations, agreements, arrangements or understandings, oral or written, between the parties hereto relating to the subject matter of the Agreement which are not fully expressed herein. The Agreement supersedes the Option Agreement, and upon execution of the Agreement by the parties, the Option Agreement is hereby terminated.

12.9 SEVERABILITY. Any of the provisions of the Agreement which are determined to bei nvalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability in such jurisdiction, without rendering invalid or unenforceable the remaining provisions hereof and without affecting the validity or enforceability of any of the terms of the Agreement in any other jurisdiction.

12.10 WAIVER. The waiver by either party hereto of any right hereunder or the failure to perform or of a breach by the other party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise.

12.11 COUNTERPARTS. The 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 and the same instrument.

IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first set forth above.

SRI INTERNATIONAL INTUITIVE SURGICAL DEVICES, INC.

By:     /s/ Harold E. Kruth           By:     /s/ John G. Freund
        -------------------                   ------------------
Title:  SR VP & G C                    Title:
        -----------                    ------

Agreed to, for purposes of the third sentence of Section 12.8 only, as of this December 19, 1995

/s/ John G. Freund

John G. Freund, M.D.

EXHIBIT "A"
SRI International Invention Disclosures

#3026
Teleoperator System and Method with Telepresence Green (corresponds to #48)

P #3079
Steerable and Stereoscopic Laparoscope Green

P #3278
Remote Center Positioner
Jenses (corresponds to #29)

P #3308
Articulated Surgical Grasper
Hill

P #3311
Telepresence Surgery Demo System
Hill, Green, Jensen, Gorfa, Shah

P #3318
Sterilizable Inner Manipulator
Hill

P #3319
Method for Telemanipulation with Telepresence Green (corresponds to #33)

P #3336
Articulated Manipulator
Green, Hill, Jensen

P #3421
Method and Apparatus for Axial and Rotational Positioning Shaft with Application to Laparoscopic Medical Instruments Green

P #3435
Combined Remote-Center Positioner and Abdominal Wall Lift Device Green

P #3441
Manipulator with Twist-Lock Tool Insertion Jensen, Hill (corresponds to #42)

P #3457
Quick-Change Surgical Instrument
Hill (corresponds to #44)

EXHIBIT "B"
SRI International Patent Rights

#48
Basic teleoperator system for providing operator tactile feedback and control and a real or virtual image of the workspace (filed January 21, 1992). (SN:
07/8231932) (also filed in Europe, Japan and Canada)

#48-1
Divisional of -48, directed to tactile sensors and broader claim language re the basic telepresence concept (filed August 21, 1995). (SN: 08/S17,052)

#29
Remote center positioner (RCP) - four bar linkage that constrains movement of an endoscopic instrument about a remote point (i.e., a percutaneous penetration in the patient) (filed May 14, 1993). (SN: 08/062,404) (also filed in Europe and Japan)

#29-4
Divisional of RCP application-directed to method claims (filed July 20, 1995).
(SN:08/504,301)

#29-5
Divisional of RCP application-directed to flexible drive element (filed July 20, 1995). (SN: 08/504,620)

#29-6
Divisional of RCP application-directed to channel shaped linkage (filed July 20, 1995). (SN: 08/504,619)

#33
System and method for transforming view able real-time image into perspective image simulating the view of an operator at the remote workspace (filed May 5, 1994). (SN: 08/239,086)

#33-1
Directed to the dynamic calibration system (filed April 20, 1995). (SN:
06/239,086)

#42, -44
Surgical instrument manipulator - receives signals from servomechanism and manipulates instrument, provides at least four degrees of freedom and quick attachment and release of different surgical instruments (filed June 7, 1995).
(42: 08/485,597, 44: 08/487,020)

EXHIBIT 10.9

AGREEMENT ("Agreement") with an Effective Date of December 22, 1997, between INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation (hereinafter called IBM), and INTUITIVE SURGICAL, INC. a Delaware corporation (hereinafter called INTUITIVE).

IBM has the right to license others under certain patents and patent applications relating to systems and methods for the augmentation of surgery. INTUITIVE desires to acquire an exclusive license under those patents and patent applications.

In consideration of the premises and mutual covenants herein contained, IBM and INTUITIVE agree as follows:

SECTION 1. DEFINITIONS

1.1 "ASSOCIATED MATERIALS" shall mean copies of all inventor notebooks (or the relevant portions thereof), files, data, information, results of testing, drawings and schematics and all models, robots and prototypes which are owned by IBM and are in IBM's possession on the Effective Date and which relate to the LARS Patents.

1.2 "BIOPSY" shall mean the removal and microscopic examination of tissue taken from a living body and performed to establish an exact diagnosis.

1.3 "CORPORATE PARTNERS" shall mean those parties who are essential to the success of gaining regulatory approval for the sale of INTUITIVE Licensed Products and Services in a given country and/or in making significant sales of INTUITIVE Licensed Products and Services in a given country.

1.4 "ENDOSCOPE" shall mean any optical imaging device adapted to be inserted through a small incision, puncture wound, or orifice into a natural or artificial lumen or cavity of a human body.

1.5 "FIELD" shall mean Surgery performed in the practice of animal and human medicine, with or without an Endoscope, provided, however, the medical fields of neurology, ophthalmology and orthopedics, and all Surgery practiced in those medical fields, and Biopsy procedures are excluded from the Field.

1.6 "INTUITIVE LICENSED PRODUCTS AND SERVICES" shall mean any product and/or service the manufacture, use or sale of which is covered by a claim contained in the LARS and/or ROBODOC Patents.

1.7 "INFORMATION HANDLING SYSTEM" OR "IHS" shall mean any instrumentality or aggregate of instrumentalities primarily

1.

designed to compute, classify, process, transmit, receive, retrieve, originate, switch, store, display, manifest, measure, detect, record, reproduce, handle or utilize any form of information, intelligence or data for business, scientific, control or other purposes.

1.8 "LARS PATENTS" shall have the meaning set forth in Exhibit I to this Agreement.

1.9 "ROBODOC PATENTS" shall mean United States Patents 5,299,288; 5,408,409 and 5,086,401 and Japanese Patent 2132963 and all patents which are continuations, continuations-in-part, divisions, reissues, renewals, extensions or additions thereof (or which otherwise claim priority from the foregoing) and their corresponding patents.

1.10 "SUBSIDIARY" shall mean a corporation, company or other entity:

1.10.1  more than fifty percent (50%) of whose outstanding shares or securities
        (representing the right to vote for the election of directors or other
        managing authority) are, now or hereafter, owned or controlled, directly
        or indirectly, by a party hereto; or

1.10.2  which does not have outstanding shares or securities, as may be the case
        in a partnership, joint venture or unincorporated association, but more
        than fifty percent (50%) of whose ownership interest representing the
        right to make the decisions for such corporation, company or other
        entity is now or hereafter, owned or controlled, directly or indirectly,
        by a party hereto, but such corporation, company or other entity shall
        be deemed to be a Subsidiary only so long as such ownership or control
        exists.

1.11    "SURGERY" shall mean operation on or manipulation of tissue for the
        treatment of disease, injury or deformity.

SECTION 2. GRANT OF RIGHTS

2.1 After the Effective Date and upon receipt of the payment of Section 4.1, IBM agrees to grant and hereby grants to INTUITIVE an exclusive (subject to Sections 2.3 and 2.4), revocable (upon termination per Section 9), worldwide right (with the right to grant sublicenses thereunder) under the LARS Patents to make, have made for INTUITIVE, use, import, offer for sale, sell and/or otherwise transfer INTUITIVE Licensed Products and Services in the Field.

2.2 After the Effective Date and upon receipt of the payment of Section 4.1, IBM agrees to grant and hereby grants to INTUITIVE a nonexclusive revocable (upon termination per Section 9), worldwide right (without the right to grant sublicenses

2.

thereunder except as provided in Section 3) under the LARS Patents to make, have made for INTUITIVE, use, import, offer for sale, sell and/or otherwise transfer INTUITIVE Licensed Products and Services outside the Field.

2.3 The license of Section 2.1 is subject to a reserved right in IBM and its Subsidiaries to practice the LARS Patents in its and their own facilities for research, development, testing and engineering for any purpose and for the manufacture and sale of IBM products and the provision of IBM services, other than for IBM products and services within the Field.

2.4 INTUITIVE acknowledges that IBM has previously licensed the right to practice the inventions claimed in the LARS Patents to the entities identified in the letter dated December 18, 1997, from A. M. Torressen (IBM) to K. I. McAusland (INTUITIVE) for use in "Information Handling Systems", but otherwise without restriction as to field, and accepts the license of Section 2.1 above subject to these identified prior licenses. IBM shall exclude the LARS Patents from all patent licenses IBM enters into with third parties after the Effective Date except for specific licenses which may be granted by IBM outside the Field. INTUITIVE further acknowledges that IBM is negotiating the grant of license rights under the LARS Patents outside the Field with Integrated Surgical Systems.

2.5 After the Effective Date and upon receipt of the payment of Section 4.1, IBM agrees to grant and hereby grants to INTUITIVE an exclusive (subject to Sections 2.7 and 2.8), revocable (upon termination per Section 9), worldwide right (with the right to grant sublicenses thereunder) under the ROBODOC Patents to make, have made for INTUITIVE, use, import, offer for sale, sell and/or otherwise transfer INTUITIVE Licensed Products and Services in the Field.

2.6 After the Effective Date and upon receipt of the payment of Section 4.1, IBM agrees to grant and hereby grants to INTUITIVE a nonexclusive revocable (upon termination per Section 9), worldwide right (without the right to grant sublicenses thereunder except as provided in Section 3) under the ROBODOC Patents to make, have made for UNINTUITIVE, use, import, offer for sale, sell and/or otherwise transfer INTUITIVE Licensed Products and Services outside the Field.

2.7 The license of Section 2.5 is subject to a reserved right in IBM and its Subsidiaries to practice the ROBODOC Patents in its and their own facilities for research, development, testing and engineering for any purpose and for the manufacture and sale of IBM products and the provisions of IBM services, other than for IBM products and services within the Field. The license of

3.

Section 2.5 is also subject to a reserved right in the University of California to practice the ROBODOC Patents for educational and research purposes.

2.8 INTUITIVE acknowledges that IBM has previously licensed the right to practice the inventions claimed in the ROBODOC Patents to the entities identified in the letter dated December 18, 1997, from A. M. Torressen (IBM) to K. I. McAusland (INTUITIVE) for use in "Information Handling Systems", but otherwise without restriction as to field, and accepts the license of Section 2.5 above subject to those identified prior licenses. IBM shall exclude the ROBODOC Patents from all patent licenses IBM enters into with third parties after the Effective Date except for specific licenses which may be granted by IBM outside the Field. INTUITIVE further acknowledges that IBM has granted to Integrated Surgical Systems, its Subsidiaries, and its and their customers, an immunity from suit under the ROBODOC Patents, and accepts the license of Section 2.5 subject thereto, and that IBM is also negotiating the grant of license rights under the ROBODOC Patents outside the Field with Integrated Surgical Systems.

2.9 As soon as practicable after the payment of Section 4.1, IBM shall provide INTUITIVE with all Associated Materials.

SECTION 3. SUBLICENSES

3.1 The right to grant sublicenses granted in Section 2.2 and 2.6 shall extend only to INTUITIVE's Subsidiaries and Corporate Partners and only to the extent necessary for INTUITIVE to Partners and only to the extent necessary for INTUITIVE to develop, manufacture, market, sell and/or otherwise transfer INTUITIVE Licensed Products and Services.

3.2 INTUITIVE shall be responsible to IBM for the adherence of all such Subsidiaries and Corporate Partners to the terms and conditions of this Agreement as such terms and conditions are applicable to such Subsidiaries and Corporate Partners. Any sublicenses to any such Subsidiaries or Corporate Partners shall terminate on the date such Subsidiary or Corporate Partner ceases to be a Subsidiary or Corporate Partner.

4.1     In consideration for the rights and licenses granted in Sections 2.1 and
        2.2:

4.1.1   INTUITIVE shall pay IBM a non-refundable payment of nine hundred sixteen
        thousand, six hundred seventy dollars ($916,670) upon the Effective
        Date.

4.1.2   INTUITIVE shall also pay IBM four million, five hundred eighty three
        thousand, three hundred thirty dollars ($4,583,330) within ten (10) days
        after the closing of the first underwritten public offering registered
        under the Securities Act of 1933, as amended, but in any event not

4.

        later than September 1, 1998, which date may be extended until October
        1, 1998 upon a showing of good cause by INTUITIVE.

4.2     In consideration for the rights and licenses granted in Sections 2.5 and
        2.6:

4.2.1   INTUITIVE shall pay IBM a non-refundable payment of eighty three
        thousand, three hundred thirty dollars ($83,330) upon the Effective
        Date.

4.2.2   INTUITIVE shall also pay IBM four hundred sixteen thousand, six hundred
        seventy dollars ($416,670) within ten (10) days after the closing of the
        first underwritten public offering registered under the Securities Act
        of 1993, as amended, but in any event not later than September 1, 1998,
        which date may be extended until October 1, 1998 upon a showing of good
        cause by INTUITIVE.

4.3 INTUITIVE shall also pay IBM one million dollars ($1,000,000) within ninety days (90) after the end of the fiscal year in which the cumulative total of all sales of products and services (including INTUITIVE Licensed Products and Services, if any) in that year by INTUITIVE (or any entity or person acting for or on behalf of INTUITIVE which leases, sells and/or otherwise transfers INTUITIVE products and/or services) first equals or exceeds twenty five million dollars ($25,000,000) ("Due Date"). Such payments shall accrue on the date upon which the above-noted total sales are attained ("Accrual Date").

4.4 INTUITIVE shall also pay IBM an additional one million dollars ($1,000,000) within ninety days (90) after the end of the fiscal year in which the cumulative total of all sales of products and services (including INTUITIVE Licensed Products and Services, if any) in that year by INTUITIVE (or any entity or person acting for or on behalf of INTUITIVE which leases, sells or otherwise transfers INTUITIVE products and/or services) first equals or exceeds fifty million dollars ($50,000,000) ("Due Date"). Such payments shall accrue on the date upon which the above-noted total sales are attained ("Accrual Date"). INTUITIVE understands that, depending upon the total sales attained, the payments of both Sections 43.3 and 4.4 may be due at the same time.

SECTION 5. PATENT ENFORCEMENT AND PROSECUTION

5.1 INTUITIVE shall have the right but not the obligation to enforce the LARS Patents and the ROBODOC Patents in the Field, at INTUITIVE's expense. IBM agrees to cooperate with such enforcement efforts as necessary. INTUITIVE agrees to reimburse IBM for its reasonable expenses incurred in connection with such cooperation. If IBM becomes aware of infringement of the LARS Patents or the ROBODOC Patents inside the Field and believes that

5.

enforcement of the patents is required in order to protect the value of the patents in the face of the infringement, then IBM shall submit a written request for enforcement of the patents to INTUITIVE. INTUITIVE shall respond to IBM within sixty (60) days indicating whether INTUITIVE will enforce the patents against the alleged infringer. In the event that INTUITIVE declines to enforce the patents, and IBM disagrees with that position, INTUITIVE's CEO shall meet, upon IBM's request, the IBM's Vice President of Intellectual Property and Licensing to further discuss the necessity and advisability of enforcement against the alleged infringer.

5.2 Outside the Field, INTUITIVE shall have no right to bring suit against any third party under or in connection with this Agreement including, but not limited to, alleged infringers of the LARS Patents or the ROBODOC Patents or any one of them. If INTUITIVE becomes aware of infringement of the LARS Patents or the ROBODOC Patents outside the Field and believes that enforcement of the patents is required in order to protect the value of the patents in the face of infringement, then INTUITIVE shall submit a written request for the enforcement of the patents to IBM. IBM shall respond to INTUITIVE within sixty (60) days indicating whether IBM will enforce the patents against the alleged infringer. In the event that IBM declines to enforce the patents and INTUITIVE disagrees with that position, IBM's Vice President of Intellectual Property and Licensing shall meet, upon INTUITIVE's request, with INTUITIVE's CEO to further discuss the necessity and advisability of enforcement against the alleged infringer.

5.3 If either Party is threatened with suit, intends to file suit or is sued, it shall promptly advise the other Party in writing. Neither IBM nor INTUITIVE shall enter any settlement or other agreement which negatively affects the validity or enforceability of the LARS Patents or the ROBODOC Patents or any issued claim thereof without the advice and prior written consent of the other party, which consent shall not be unreasonably withheld.

5.4 INTUITIVE shall have the right but not the obligation, at its expense, to participate in the prosecution (including the filing of foreign counterparts) of the LARS Patents. At INTUITIVE's request IBM will provide INTUITIVE with copies of patent office actions and filings in the United States and foreign countries in sufficient time to permit INTUITIVE to comment on and advise IBM with respect to such actions or filings prior to submission of IBM's response. INTUITIVE shall have the right to suggest additional claims under the LARS Patents for prosecution by IBM, at IBM's expense. If IBM elects not to prosecute such claims, INTUITIVE may, at its election and its

6.

expense, prosecute such claims. IBM agrees to cooperate with such prosecution and execute such papers as may be required for INTUITIVE to pursue such prosecution. Any patent issuing therefrom shall be included in the LARS Patents and will be subject to the licenses granted under Sections 2.1 and 2.2. However, IBM shall continue the prosecution and maintenance of the LARS Patents at its expense. However, if IBM elects to abandon prosecution or maintenance of any of the LARS Patents, INTUITIVE may, at its election, assume such prosecution or maintenance, and IBM will assign such patent or patent application to INTUITIVE subject to a worldwide, non-exclusive, paid-up right outside the Field to make, have made, practice, have practiced, use, import, offer for sale, sell and/or otherwise transfer under such patents or patents issuing on such applications, including the right to extend such license to IBM's IHS licensees.

SECTION 6. WARRANTY

6.1 IBM represents and warrants that as of the Effective Date:

(A) it has the full right and power to grant the licenses set forth in
Section 2.1, 2.2, 2.5 and 2.6;

(B) to the best of its knowledge, there are no outstanding agreements, licenses, assignments, or encumbrances inconsistent with the provisions of said licenses or with any other provision of this Agreement, other than those set forth in Sections 2.4 and 2.8;

(C) to the best of its knowledge none of the licenses to the licensees listed in the letter referred to in Sections 2.4 and 2.8 grant the licensees the right to sublicense or assign their rights under such license except to a Subsidiary (as that term is defined herein) of such licensee (or of sublicensed Subsidiaries to sublicense other Subsidiaries).

IBM makes no representation or warranty, express or implied, as to the validity or scope of any of the LARS Patents or the ROBODOC Patents. IBM shall have no liability in respect of any infringement of patents, copyrights or other rights of third parties due to INTUITIVE's operating under the rights and license herein granted.

SECTION 7. RECORDS

7.1 INTUITIVE shall keep records in accordance with generally accepted accounting principles and in sufficient detail to permit the determination of the amounts due to IBM under Sections 4.3 and 4.4. Such records shall be kept until the payment of Section 4.4 is made.

7.2 Prior to the payment of Section 4.4, upon written notice for an audit, INTUITIVE shall permit auditors designated by IBM, and reasonably acceptable to INTUITIVE, together with such legal and

7.

technical support as IBM deems necessary, to examine, during ordinary business hours, books, records, materials, and manufacturing processes of INTUITIVE for the purpose of verifying compliance with Sections 4.2, 4.3 and 4.4. Each party shall pay the costs that it incurs in the course of the audit. No more than one audit may be conducted in any one fiscal year.

8.1.1                 For IBM:

                      Direct of Licensing
                      International Business Machines Corporation
                      500 Columbus Avenue
                      Thornwood, New York 10594
                      United States of America

8.1.2                 For facsimile transmission to IBM:

                      (914) 742-6737

8.1.3                 For INTUITIVE:

                      Chief Patent Counsel
                      INTUITIVE Surgical, Inc.
                      1340 W. Middlefield Road
                      Mountain View, CA  94043

8.1.4                 For facsimile transmission to INTUITIVE:

                      (650) 526-2060

8.2     Payment by INTUITIVE to IBM shall be made by electronic funds transfer

to:

8.

SECTION 9. TERM AND TERMINATION

9.1 This Agreement shall expire upon the expiration of the last to expire of the LARS or the ROBODOC Patents.

9.2 This agreement may be terminated by IBM upon 30 days written notice in the event that INTUITIVE fails to make the payments of Sections 4.1 and 4.2 and, if applicable, those of Sections 4.3 and 4.4, or fails to comply with the conditions of Section 9.3 or 9.4, and fails to cure any such failure within the aforementioned notice period.

9.3 In the event that fifty percent (50%) or more of the outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) of INTUITIVE are or become owned or controlled, directly or indirectly, by a third (acquiring) party, INTUITIVE shall promptly give written notice of such acquisition to IBM. If INTUITIVE does not have outstanding shares or securities, such acquisition shall be deemed to occur if more than fifty percent (50%) of its ownership interest representing the right to make decisions for INTUITIVE is to be acquired by said third party. If such event occurs before the date upon which the payment of Section 4.2 is made, IBM may terminate this Agreement under this Section 9 unless the acquiring party settles, to IBM's satisfaction, any outstanding disputes which it may have with IBM or any of IBM's Subsidiaries, and agrees in writing with IBM to accept assignment of this Agreement subject to all the rights, conditions, duties and obligations thereof. If such event occurs after the date on which the payments of Sections 4.3 and 4.4 are made, IBM may terminate this Agreement unless the acquiring party agrees to in writing with IBM to accept assignment of this Agreement subject to all the rights, conditions, duties and obligations thereof, and makes the unpaid payments of Sections 4.3 and/or 4.4 to IBM prior to closing such acquisition.

9.4 In the event that INTUITIVE is a party to a merger, consolidation, amalgamation or other combination with another entity (whether preceded by an acquisition or not) such that INTUITIVE will cease to exist as a legal entity following such event, INTUITIVE shall promptly give written notice of such event

9.

to IBM. If such event occurs before the date on which the payment of Section 4.2 is made, IBM may terminate this Agreement unless the entity which survives or results from such event settles, to IBM's satisfaction, any outstanding disputes which it may have with IBM, or any of IBM's Subsidiaries, and agrees in writing with IBM to accept assignment of this Agreement subject to all the rights, conditions, duties and obligations thereof. If such event occurs after the date on which the payment of Section 4.2 is made, but before one or both of the payments of Sections 4.3 and 4.2 are made, IBM may terminate this Agreement unless the acquiring party agrees in writing with IBM to accept assignment of this Agreement subject to all the rights, conditions, duties and obligations thereof, and makes the unpaid payments of Sections 4.3 and/or 4.4 to IBM prior to closing such merger, consolidation, amalgamation or other combination.

9.5 No termination or this Agreement or the licenses granted hereunder shall relieve INTUITIVE of any obligation or liability accrued hereunder prior to such termination. If this Agreement is terminated by IBM prior to the payment of
Section 4.2, the payments of Sections 4.2, 4.3 and 4.4 shall not be due IBM. If this Agreement is terminated by IBM prior the Accrual Date of either or both
Section 4.3 and 4.4, the payment or payments of Section 4.3 and/or Section 4.4 shall not be due IBM.

SECTION 10. MISCELLANEOUS

10.1 Each party (the first party) shall, at its expense, defend, indemnify and hold the other party (the second party), its Subsidiaries and each of them and their officers, directors, agents, representatives and employees, harmless against all claims, representatives and employees, harmless against all claims, demands, damages, liabilities, penalties and expenses (including, but not limited to, legal fees and expenses, including reasonable attorneys fees) including those for infringement, property damage and personal injury or death, whether arising in contract, tort (including negligence of any degree) or otherwise, wherever and by whomever brought (including third parties) arising out of, connected with or resulting from such first party's activities under or in furtherance of this Agreement or the first party's use (including sublicensing in the case of INTUITIVE) of the LARS Patents and/or ROBODOC Patents licensed hereunder, including the use, sale or other transfers of products of the first party covered, in whole or in part, by any claim of the LARS Patents and/or ROBODOC Patents or made, in whole or in part, with any process or apparatus covered by any claim of the LARS Patents or the ROBODOC Patents.

10.2 Except as provided in Sections 9.3 or 9.4, INTUITIVE shall not assign this Agreement, nor any of its rights or privileges, nor delegate any of its duties or obligations, thereunder, under any circumstances, without the prior written consent of IBM. Any

10.

attempt to do so shall be void. However, notwithstanding the foregoing, INTUITIVE may grant sublicenses under the LARS Patents as provide din Sections 2.1, 2.2, 2.5 and 2.6 without the prior written consent of IBM.

10.3 This Agreement shall not be binding upon the parties and shall not obligate either of the parties until it has been signed hereinbelow by both parties, in which event it shall be effective as of the Effective Date.

10.4 Nothing contained in this Agreement shall be construed as conferring any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto (including any contraction, abbreviation or simulation of any of the foregoing). Each party hereto agrees not to use or refer to this Agreement or any provision thereof in any publicity without the express written approval of the other party, which approval shall not be unreasonably withheld. Notwithstanding the foregoing, the parties may disclose without approval of the other party the existence and terms of this Agreement to the extent (a) required by law (including securities laws); (b) the disclosure is made under a binder of confidentiality to any person or entity who may be interested in investing in or acquiring all or substantially all of the assets or securities of such party, or
(c) the disclosure is made to its financial advisors provided that such advisors have signed a binder of confidentiality.

10.5 Nothing contained in this Agreement shall be construed as conferring on either party any license or other right to copy the exterior design of the products of the other party.

10.6 Nothing contained in this Agreement shall be construed as limiting the rights which the parties have outside the scope of the licenses granted hereunder, or restricting the right of either party or any of its Subsidiaries to make, have made, use, lease, sell or otherwise dispose of any particular product or products not herein licensed.

10.7 Except as expressly set forth in this Agreement nothing contained in this Agreement shall be construed as conferring either directly or by implication, estoppel or otherwise upon either party or any third party any license or other right with respect to any patents, patent applications copyrights or mask works or similar rights of other party.

INTUITIVE understands that its customers may need licenses or other rights from third parties and/or International Business Machines Corporation for the use of products acquired from INTUITIVE. However, provided that this Agreement is not

11.

terminated by IBM for breach, customers of INTUITIVE who were customers of INTUITIVE prior to any such termination shall not need additional licenses from IBM for INTUITIVE Licensed Products and Services and Subsidiaries and Corporate Partners who were Subsidiaries and Corporate Partners prior to any such termination shall not need additional licenses from IBM for INTUITIVE Licensed Products and Services outside the Field but within the scope of Section 3.1.

10.8 Each party shall pay all taxes (including, without limitation, sales and value added taxes), exclusive of taxes based on the other party's net income, imposed by the national government, including any political subdivision thereof, of any country in which said party is doing business, as the result of said party's furnishing consideration hereunder. In the event such a tax becomes payable as a result of a party furnishing consideration in respect of a sublicense granted pursuant to Section 3 said sublicensing party shall be reasonable for determining the amount of and paying, or causing said sublicensed Subsidiary to pay, said tax.

10.9 The headings of the several Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning of interpretation of this Agreement.

10.10 If any Section of this Agreement is founded by competent authority to be invalid, illegal or unenforceable in any respect for any reason, the validity, legality and unenforceability of such Section in every other respect and the remainder of this Agreement shall continue in effect so long as the Agreement still expresses the intent of the parties. If the intent of the parties cannot be preserved, then the parties shall attempt to renegotiate this Agreement.

10.11 This Agreement shall be construed, and the legal relations between the parties hereto shall be determined, in accordance with the law of the State of New York, United States of America, without regard to its principles of conflicts of law, as such law applies to contracts signed and fully performed in the State of New York. Each of the parties waives its right to a jury trial.

10.12 Nothing in this Agreement shall be construed as creating any agency, joint venture, partnership or other type of relationship between the parties.

10.13 No amendment or modification hereof shall be valid or binding upon the parties unless made in writing and signed by both parties.

12.

10.14 This Agreement and its Exhibit embodies the entire understanding of the parties with respect to the subject matter hereof and mergers all prior communications (whether oral or written) between them, and neither of the parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect thereto other than as expressly provided in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly signed.

INTERNATIONAL BUSINESS
MACHINES CORPORATION

Date           12/30/97                     By     /s/ M. C. Phelps, Jr.
    -------------------------                  --------------------------------
                                                   M. C. Phelps, Jr.
                                                   Vice President

INTUITIVE SURGICAL, INC.

Date           12/30/97                     By     /s/ Lonnie M. Smith
    -------------------------                  --------------------------------
                                                   Lonnie M. Smith
                                                   President and CEO

13.

EXHIBIT 1

This is an Exhibit to the Agreement with an Effective Date of December 22, 1997 between IBM and INTUTIVE SURGICAL, INC.

"LARS Patents" shall mean the following patents, patents issuing from the following applications, and all patents which are continuations, continuations-in-part, divisions, reissues, renewals, extensions, or additional of or otherwise claim priority from the following patents and patent applications and their corresponding patents:

             APPLICATION         APPLICATION     DATE
COUNTRY      FILED               NUMBER          ISSUED              PATENT NO.      DATE EXPIRES
----------   -----------------   -------------   -----------------   -------------   -----------------
US           July 27, 1992       0000919450      January 19, 1994    0005299309      June 13, 2011
US           October 11, 1994    0000321320      May 20, 1997        0005630431      May 20, 2014
US           April 6, 1994       0000223862      August 29, 1995     0005445166      August 29, 2012
US           April 28, 1994      0000234825      April 4, 1995       0005402801      April 4, 2012

AU           May 13, 1993        93107816.6                                          May 13, 2013
BE           May 13, 1993        93107816.6                                          May 13, 2013
FR           May 13, 1993        93107816.6                                          May 13, 2013
GE           May 13, 1993        93107816.6                                          May 13, 2013
IT           May 13, 1993        93107816.6                                          May 13, 2013
JA           April 19, 1993      0005-90989      October 24, 1996    0002575586      April 19, 2013
NE           May 13, 1993        93107816.6                                          May 13, 2013
SP           May 13, 1993        93107816.6                                          May 13, 2013
SW           May 13, 1993        93107816.6                                          May 13, 2013
SZ           May 13, 1993        93107816.6                                          May 13, 2013
UK           May 13, 1993        93107816.6                                          May 13, 2013

US           May 27, 1992        0000889215      May 23, 1995        0005417210      May 27, 2012

US           January 26, 1995    0000378433      November 12, 1996   0005572999      November 12, 2013

AU           October 27, 1993    93117400.7      April 23, 1997      000E152026      October 27, 2013
BE           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
FR           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
GE           October 27, 1993    93117400.7      April 23, 1997      69310085.0      October 27, 2013
IT           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
JA           October 4, 1993     005-248114      May 2, 1997         0002642047      October 4, 2013
NE           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
SP           October 27, 1993    93117400.7      April 23, 1997      0002102577      October 27, 2013
SW           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
SZ           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
UK           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
US           October 30, 1992    0000968715      March 14, 1995      0005397323      October 20, 2012

JA           June 24, 1994       006-142841      March 11, 1997      0002620518      June 24, 2014
US           August 17, 1993     0000108027      August 30, 1994     0005343395      August 17, 2013

US           April 28, 1994      Y0991-080-G                                         **
US           November 2, 1993    Y0991-080XA                                         **
US           January 24, 1995    0000000000*                                         **
US           January 26, 1995    Y0992-080C                                          **
US           April 6, 1994       0000223969                          0005695500      **
US           July 17, 1997       Y0995-081X                                          **

LICENSE REFERENCE NO: L973288

This is amendment number 1 ("Amendment") to the patent license agreement in respect of systems and methods for the augmentation of surgery ("Agreement") having an Effective Date of December 22, 1997 between International Business Machines Corporation ("IBM") and Intuitive Surgical, Inc. ("INTUITIVE").

INTUITIVE has asked IBM for an extension of time in which to make certain payments specified in the Agreement. IBM is willing to grant the requested extension of time on an interest-free basis.

In consideration of the premises and mutual covenants herein contained, IBM and INTUITIVE agree as follows:

The Agreement is hereby amended as follows:

1. In Section 4.1.2, delete "September 1, 1998" and insert therefor - - November 2, 1998 - -.

2. In Section 4.2.2, delete "September 1, 1998" and insert therefor - - November 2, 1998 - -.

This Amendment embodies the entire understanding of the parties with respect to its subject matter and supersedes and merges all prior communications, representations and understandings (whether written or oral) between them relating to the subject matter hereof.

This Amendment shall be effective as of the date of the last signature below.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their authorized representatives.

INTERNATIONAL BUSINESS INTUITIVE SURGICAL, INC.
MACHINES CORPORATION

By:        /s/ M.C. Phelps, Jr.               By:     /s/ Lonnie M. Smith
   ------------------------------------          ---------------------------
           M.C. Phelps, Jr.                           Lonnie M. Smith
           Vice President                             President and CEO

Date:      10/16/98                           Date:   Oct. 15, 1998

1.

EXHIBIT 10.10

VER. EQ.7/9/98 LAST MODIFIED:_______________

TLO:________________

MASSACHUSETTS INSTITUTE OF TECHNOLOGY

EXCLUSIVE PATENT LICENSE AGREEMENT

R E C I T A L S....................................................................1

1.  Definitions....................................................................2

2.  Grant of Rights................................................................4

3.  COMPANY Diligence Obligations..................................................5

4.  Royalties and Payment Terms....................................................5

5.  Reports and Record keeping.....................................................7

6.  Patent Prosecution.............................................................8

7.  Infringement...................................................................8

8.  Indemnification and Insurance..................................................10

9.  No Representations or Warranties...............................................11

10.  Assignment....................................................................12

11.  General Compliance with Laws..................................................12

12.  Termination...................................................................13

13.  Dispute Resolution............................................................14

14.  Miscellaneous.................................................................16

APPENDIX A.........................................................................18

APPENDIX B.........................................................................19

APPENDIX C.........................................................................20

APPENDIX D.........................................................................22

APPENDIX E.........................................................................23

APPENDIX F.........................................................................24

APPENDIX G.........................................................................25

VER. EQ.7/9/98

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
EXCLUSIVE PATENT LICENSE AGREEMENT

This Agreement, effective as of the date set forth above the signatures of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts Institute of Technology ("M.I.T."), a Massachusetts corporation, with a principal place of business at 77 Massachusetts Avenue, Cambridge, MA 02139-4307 and Intuitive Surgical, Inc. ("COMPANY"), a Delaware corporation, with a principal place of business at 1340 W. Middlefield Road, Mountain View, CA 94043.

R E C I T A L S

WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined herein) relating to M.I.T. Case No. 7830, PCT/US 98/19508 "Robotic Apparatus " by Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr. and has the right to grant licenses under said PATENT RIGHTS, subject only to a royalty-free, nonexclusive non-transferable license to practice the PATENT RIGHTS granted to the United States Government for government purposes;

WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and commercialized to benefit the public and is willing to grant a license thereunder;

WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter into this Agreement, that COMPANY has committed itself to a thorough, vigorous and diligent program of exploiting the PATENT RIGHTS so that public utilization shall result therefrom; and

WHEREAS, J. Kenneth Salisbury, a current employee of M.I.T., and also an M.I.T. inventor of the PATENT RIGHTS now holds an equity position in COMPANY, the Conflict Avoidance Statement of J. Kenneth Salisbury is attached hereto as Appendix C; and

WHEREAS, Akhil Madhani an inventor of the PATENT RIGHTS holds equity in COMPANY, his waiver of participation in M.I.T.'s institutional equity share is attached hereto as Appendix E; and

WHEREAS, Gunter Niemeyer an inventor of the PATENT RIGHTS holds equity in COMPANY, his waiver of participation in M.I.T.'s institutional equity share is attached hereto as Appendix F; and

WHEREAS, J, Kenneth Salisbury an inventor of the PATENT RIGHTS holds equity in COMPANY, his waiver of participation in M.I.T.'s institutional equity share is attached hereto as Appendix G; and

WHEREAS, M.I.T. is also accepting equity in consideration for the license granted hereunder, M.I.T.'s Vice President for Research has granted approval;

WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, M.I.T. and COMPANY hereby agree as follows:

1. DEFINITIONS.

1.1 "AFFILIATE" shall mean any legal entity (such as a corporation, partnership, or limited liability company) that is controlled by COMPANY. For the purposes of this definition, the term "control" means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities.

1.2 "EXCLUSIVE PERIOD" shall mean the period of time set forth in
Section 2.2.

1.3 "FIELD" shall mean Medical Devices.

1.4 "LICENSED PRODUCT" shall mean any product that cannot be manufactured, used, leased, or sold, in whole or in part, without infringing one or more claims under the PATENT RIGHTS.

1.5 "LICENSED PROCESS" shall mean any process that cannot be performed, in whole or in part, without using at least one process that infringes one or more claims under the PATENT RIGHTS or which uses a LICENSED PRODUCT.

1.6 "PATENT RIGHTS" shall mean:

(a) the United States and international patents listed on Appendix A;

(b) the United States and international patent applications and/or provisional applications listed on Appendix A and the resulting patents;

(c) any patent applications resulting from the provisional applications listed on Appendix A, and any divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix A and of such patent applications that result from the provisional applications listed on Appendix A, to the extent the claims are directed to subject matter specifically described in the patent applications listed on Appendix A, and the resulting patents;

(d) any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (a), (b), and (c) above; and

(e) international (non-United States) patent applications and provisional applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisionals, continuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter specifically described in the patents or patent applications referred to in (a), (b), (c), and (d) above, and the resulting patents.

1.7 "REPORTING PERIOD" shall begin on the first day of each calendar quarter and end on the last day of such calendar quarter.

1.8 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the rights granted COMPANY under Section 2.1.

1.9 "TERM" shall mean the term of this Agreement, which shall commence on the EFFECTIVE DATE and shall remain in effect until the expiration or abandonment of all issued patents and filed patent applications within the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement.

1.10 "TERRITORY" shall mean world-wide.

2. GRANT OF RIGHTS.

2.1 License Grants. Subject to the terms of this Agreement, M.I.T. hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license under the PATENT RIGHTS to develop, make, have made, use, sell, lease, and import LICENSED PRODUCTS in the FIELD in the TERRITORY and to develop and perform LICENSED PROCESSES in the FIELD in the TERRITORY.

2.2 Exclusivity. In order to establish an exclusive period for COMPANY, its AFFILIATES and SUBLICENSEES, M.I.T. agrees that it shall not grant any other license to make, have made, use, sell, lease and import LICENSED PRODUCTS in the FIELD in the TERRITORY or to perform LICENSED PROCESSES in the FIELD in the TERRITORY during the period of time commencing on the EFFECTIVE DATE and terminating with the last to expire of the PATENT RIGHTS.

2.3 Sublicenses. COMPANY shall have the right to grant sublicenses of its rights under Section 2.1. COMPANY shall incorporate terms and conditions into its sublicense agreements sufficient to enable COMPANY to comply with this Agreement. Upon termination of this Agreement for any reason, any SUBLICENSEE not then in default shall have the right to seek a license from M.I.T. M.I.T. agrees to negotiate such licenses in good faith under reasonable terms and conditions.

2.4 U.S. Manufacturing. LICENSEE agrees that any LICENSED PRODUCTS used, leased, or sold in the United States will be manufactured substantially in the United States.

2.5 Retained Rights.

(a) M.I.T. M.I.T. retains the right to practice under the PATENT RIGHTS for research, teaching, and educational purposes.

(b) Federal Government. COMPANY acknowledges that the U.S. federal government retains a royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes or regulations.

2.6 No Additional Rights. Nothing in this Agreement shall be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology or patent rights of M.I.T. or any other entity other than the PATENT RIGHTS, regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS.

3. COMPANY DILIGENCE OBLIGATIONS.

3.1 Diligence Requirements. COMPANY shall use diligent efforts, or shall cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES reasonably available to the public. Specifically, COMPANY or AFFILIATE or SUBLICENSEE shall fulfill the following obligations:

3.2 COMPANY shall fund, or shall cause its AFFILIATES or SUBLICENSEES to fund, no less than Five Hundred Thousand Dollars ($500,000) of research toward the development of LICENSED PRODUCTS and/or LICENSED PROCESSES in each calendar year (pro-rated for partial years) beginning in 1999 and ending with the first commercial sale of a LICENSED PRODUCT or a first commercial performance of a LICENSED PROCESS.

3.3 In the event that M.I.T. determines that) has failed to fulfill its obligations under this Section 3.2, then M.I.T. may treat such failure as a material breach in accordance with Section 12.3(b).

4. Royalties and Payment Terms.

4.1 Consideration for Grant of Rights.

(a) License Issue Fee and Patent Cost Reimbursement. COMPANY shall pay to M.I.T. on the EFFECTIVE DATE a license issue fee of Twelve Thousand Dollars ($12,000), and, in accordance with Section 6.3, shall reimburse M.I.T. for its actual expenses incurred as of the EFFECTIVE DATE in connection with obtaining the PATENT RIGHTS. These payments are nonrefundable.

(b) Equity.

(i) Grant. COMPANY shall issue a total of Thirty Five Thousand Eight Hundred Thirty Four (35,834) shares of Common Stock of COMPANY, (the "Shares") in the name of M.I.T and shall mail to M.I.T. a stock certificate for such number of shares on or before June 1, 1999

(ii) Investor Rights. COMPANY further agrees that within ninety (90) days from the Effective Date, and in any event prior to such time as the COMPANY files a registration statement with the Securities and Exchange Commission for the initial public offering of any of the COMPANY's securities, COMPANY will cause that certain Amended and Restated Investor Rights Agreement (Attached hereto as Appendix H) dated July 31, 1998 by and between the COMPANY and certain holders of the COMPANY's capital stock to be amended to make M.I.T. a party thereto, with respect to of Thirty Five Thousand Eight Hundred Thirty Four (35,834) shares of Common Stock to be issued by COMPANY to MIT in consideration of the grant of the license hereunder.

4.2 Payments.

(a) Method of Payment. All payments under this Agreement should be made payable to "Massachusetts Institute of Technology" and sent to the address identified in Section 14.1. Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies.

(b) Payments in U.S. Dollars. All payments due under this Agreement shall be payable in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the Wall Street Journal) on the last working day of the calendar quarter of the applicable REPORTING PERIOD. Such payments shall be without deduction of exchange, collection, or other charges, and, specifically, without deduction of withholding or similar taxes or other government imposed fees or taxes.

(c) Late Payments. Any payments by COMPANY that are not paid on or before the date such payments are due under this Agreement shall bear interest, to the extent permitted by law, at two percentage points above the Prime Rate of interest as reported in the Wall Street Journal on the date payment is due.

5. REPORTS AND RECORD KEEPING.

5.1 Frequency of Reports.

(a) Before First Commercial Sale. Prior to the first commercial sale of any LICENSED PRODUCT or first commercial performance of any LICENSED PROCESS, COMPANY shall deliver reports to M.I.T., annually, within sixty (60) days of the end of each calendar year, containing information concerning the funds spent toward the commercialization of LICENSED PRODUCTS and LICENSED PROCESSES, and shall also deliver to M.I.T. the same reports delivered to other common shareholders, and with the same frequency.

(b) Upon First Commercial Sale of a LICENSED PRODUCT or Commercial Performance of a LICENSED PROCESS. COMPANY shall report to M.I.T. the date of first commercial sale of a LICENSED PRODUCT or first commercial use of a LICENSED PROCESS.

(c) After First Commercial Sale. After the first commercial sale of a LICENSED PRODUCT or first commercial performance of a LICENSED PROCESS, LICENSEE shall deliver to M.I.T the same reports delivered to other common shareholders, and with the same frequency.

5.2 Names and Addresses of SUBLICENSEES and AFFILIATES. COMPANY shall inform M.I.T. of the names and addresses of its AFFILIATES and SUBLICENSEES.

5.3 Financial Statements. On or before the ninetieth (90th) day following the close of COMPANY's fiscal year, COMPANY shall provide M.I.T. with COMPANY's financial statements for the preceding fiscal year including, at a minimum, a balance sheet and an income statement, certified by COMPANY's treasurer or chief financial officer or by an independent auditor.

5.4 Record keeping. COMPANY shall maintain, and shall cause its AFFILIATES and SUBLICENSEES to maintain, complete and accurate records relating to the rights and obligations under this, which records shall contain sufficient information to permit M.I.T. to confirm the accuracy of any reports delivered to M.I.T. and compliance in other respects with this Agreement. The relevant party shall retain such records for at least five (5) years following the end of the calendar year to which they pertain, during which time M.I.T., or M.I.T.'s appointed agents, shall have the right, at M.I.T.'s expense, to inspect such records during normal business hours to verify any reports and payments made or compliance in other respects under

this Agreement. In the event that any audit performed under this Section noncompliance with the terms of this Agreement, COMPANY shall bear the full cost of such audit, and shall remit any amounts due to M.I.T. within thirty (30) days of receiving notice thereof from M.I.T.

6. PATENT PROSECUTION.

6.1 Responsibility for PATENT RIGHTS. M.I.T. hereby appoints COMPANY its agent to apply for, seek prompt issuance of, and maintain the PATENT RIGHTS during the term of this Agreement, provided that COMPANY uses commercially reasonable efforts to obtain broad and strong patent protection in the best interest of M.I.T. and COMPANY, and further provided that COMPANY agrees to copy M.I.T. on all patent prosecution documents, and to give M.I.T. reasonable opportunities to advise COMPANY on patent prosecution related decisions. M.I.T. agrees to cooperate with COMPANY in such filing, prosecution and maintenance. If COMPANY elects not to initiate or to discontinue patent prosecution of a particular patent application, COMPANY agrees to give M.I.T. sufficient notice of its decision so that M.I.T. may elect, at its sole discretion, to continue prosecuting such patent application at its sole expense.

6.2 International (non-United States) Filings. Appendix B is a list of countries in which patent applications corresponding to the United States patent applications listed in Appendix A shall be filed, prosecuted, and maintained. Appendix B may be amended by mutual agreement of COMPANY and M.I.T.

6.3 Payment of Expenses. Payment of all fees and costs, including attorneys fees, relating to the filing, prosecution and maintenance of the PATENT RIGHTS shall be the responsibility of COMPANY, whether such amounts were incurred before or after the EFFECTIVE DATE. As of March 29, 1999, M.I.T. has incurred approximately $33,731.17 for such patent-related fees and costs. COMPANY shall reimburse all amounts due pursuant to this Section within thirty
(30) days of invoicing; late payments shall accrue interest pursuant to Section
4.2(c). In all instances, M.I.T. shall pay the fees prescribed for large entities to the United States Patent and Trademark Office.

7. INFRINGEMENT.

7.1 Notification of Infringement. Each party agrees to provide written notice to the other party promptly after becoming aware of any infringement of the PATENT RIGHTS.

7.2 Right to Prosecute Infringements.

(a) COMPANY Right to Prosecute. So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY, to the extent permitted by law, shall have the right, under its own control and at its own expense, to prosecute any third party infringement of the PATENT RIGHTS in the FIELD in the TERRITORY, subject to Section 7.4. If required by law, M.I.T. shall permit any action under this Section to be brought in its name, including being joined as a party-plaintiff, provided that COMPANY shall hold M.I.T. harmless from, and indemnify M.I.T. against, any costs, expenses, or liability that M.I.T. incurs in connection with such action.

Prior to commencing any such action, COMPANY shall consult with M.I.T. and shall consider the views of M.I.T. regarding the advisability of the proposed action and its effect on the public interest. COMPANY shall not enter into any settlement, consent judgment, or other voluntary final disposition of any infringement action under this Section without the prior written consent of M.I.T.

(b) M.I.T. Right to Prosecute. In the event that COMPANY is unsuccessful in persuading the alleged infringer to desist or fails to have initiated an infringement action within a reasonable time after COMPANY first becomes aware of the basis for such action, M.I.T. shall have the right, at its sole discretion, to prosecute such infringement under its sole control and at its sole expense, and any recovery obtained shall belong to M.I.T.

7.3 Declaratory Judgment Actions. In the event that a declaratory judgment action is brought against M.I.T. or COMPANY by a third party alleging invalidity, unenforceability, or non-infringement of the PATENT RIGHTS, M.I.T., at its option, shall have the right within twenty (20) days after commencement of such action to take over the sole defense of the action at its own expense. If M.I.T. does not exercise this right, COMPANY may take over the sole defense of the action at COMPANY's sole expense, subject to Section 7.4.

7.4 Recovery. Any recovery obtained in an action brought by COMPANY under Sections 7.2 or 7.3 shall be distributed as follows: (i) each party shall be reimbursed for any expenses incurred in the action (including the amount of any royalty or other payments withheld from M.I.T. as described below), (ii) as to ordinary damages, COMPANY shall receive an amount equal to its lost profits or a reasonable royalty on the infringing sales, or whichever measure of damages the court shall have applied, and COMPANY shall pay to M.I.T. based upon such amount a reasonable approximation of the royalties and other amounts that COMPANY would have paid to M.I.T. if COMPANY had sold the infringing products, processes and services rather than the infringer, and (iii) as to special or punitive damages, the parties shall share equally in any award.

7.5 Cooperation. Each party agrees to cooperate in any action under this Article which is controlled by the other party, provided that the controlling party reimburses the cooperating party promptly for any costs and expenses incurred by the cooperating party in connection with providing such assistance.

7.6 Right to Sublicense. So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY shall have the sole right to sublicense any alleged infringer in the FIELD in the TERRITORY for future use of the PATENT RIGHTS in accordance with the terms and conditions of this Agreement relating to sublicenses. Any upfront fees as part of such sublicense shall be shared equally between COMPANY and M.I.T.; other revenues to COMPANY pursuant to such sublicense shall be treated as set forth in Article 4.

8. INDEMNIFICATION AND INSURANCE

8.1 Indemnification.

(a) Indemnity. COMPANY shall indemnify, defend, and hold harmless M.I.T. and its trustees, officers, faculty, students, employees, and agents and their respective successors, heirs and assigns (the "Indemnitees"), against any liability, damage, loss, or expense (including reasonable attorneys fees and expenses) incurred by or imposed upon any of the Indemnitees in connection with any claims, suits, actions, demands or judgments arising out of any theory of liability (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any factual basis) concerning any product, process, or service that is made, used, sold, imported, or performed pursuant to any right or license granted under this Agreement.

(b) Procedures. The Indemnitees agree to provide COMPANY with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under this Agreement. COMPANY agrees, at its own expense, to provide attorneys reasonably acceptable to M.I.T. to defend against any such claim. The Indemnitees shall cooperate fully with COMPANY in such defense and will permit COMPANY to conduct and control such defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided, however, that any Indemnitee shall have the right to retain its own counsel, at the expense of COMPANY, if representation of such Indemnitee by the counsel retained by COMPANY would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other party represented by such

counsel. COMPANY agrees to keep M.I.T. informed of the progress in the defense and disposition of such claim and to consult with M.I.T. with regard to any proposed settlement.

8.2 Insurance. COMPANY shall obtain and carry in full force and effect commercial general liability insurance, including product liability and errors and omissions insurance which shall protect COMPANY and Indemnitees with respect to events covered by Section 8.1(a) above. Such insurance (i) shall be issued by an insurer licensed to practice in the Commonwealth of Massachusetts or an insurer pre-approved by M.I.T., such approval not to be unreasonably withheld,
(ii) shall list M.I.T. as an additional named insured thereunder, (iii) shall be endorsed to include product liability coverage, and (iv) shall require thirty
(30) days written notice to be given to M.I.T. prior to any cancellation or material change thereof. The limits of such insurance shall not be less than One Million Dollars ($1,000,000) per occurrence with an aggregate of Three Million Dollars ($3,000,000) for bodily injury including death; One Million Dollars ($1,000,000) per occurrence with an aggregate of Three Million Dollars ($3,000,000) for property damage; and One Million Dollars ($1,000,000) per occurrence with an aggregate of Three Million Dollars ($3,000,000) for errors and omissions. In the alternative, COMPANY may self-insure subject to prior approval of M.I.T. COMPANY shall provide M.I.T. with Certificates of Insurance evidencing compliance with this Section. COMPANY shall continue to maintain such insurance or self-insurance after the expiration or termination of this Agreement during any period in which COMPANY or any AFFILIATE or SUBLICENSEE continues (i) to make, use, or sell a product that was a LICENSED PRODUCT under this Agreement or (ii) to perform a service that was a LICENSED PROCESS under this Agreement, and thereafter for a period of five (5) years.

9. NO REPRESENTATIONS OR WARRANTIES

EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T. MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the foregoing, M.I.T. makes no warranty or representation (i) regarding the validity or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents or other intellectual property rights of M.I.T. or of a third party.

IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

10. ASSIGNMENT.

This Agreement is assignable with M.I.T.'s written consent, which shall not unreasonably be withheld provided that the assignee agrees in writing to be bound by all the terms and conditions of this Agreement.

11. GENERAL COMPLIANCE WITH LAWS

11.1 Compliance with Laws. COMPANY shall use reasonably commercial efforts to comply with all commercially material local, state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of LICENSED PRODUCTS and LICENSED PROCESSES.

11.2 Export Control. COMPANY and its AFFILIATES and SUBLICENSEES shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce. Among other things, these laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries. COMPANY hereby gives written assurance that it will comply with, and will cause its AFFILIATES and SUBLICENSEES to comply with, all United States export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself or its AFFILIATES or SUBLICENSEES, and that it will indemnify, defend, and hold M.I.T. harmless (in accordance with Section 8.1) for the consequences of any such violation.

11.3 Non-Use of M.I.T. Name. COMPANY and its AFFILIATES and SUBLICENSEES shall not use the name of "Massachusetts Institute of Technology," "Lincoln Laboratory" or any variation, adaptation, or abbreviation thereof, or of any of its trustees, officers, faculty, students, employees, or agents, or any trademark owned by M.I.T., or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of M.I.T. The foregoing notwithstanding, without the consent

of M.I.T., COMPANY may state that it is licensed by M.I.T. under one or more of the patents and/or patent applications comprising the PATENT RIGHTS.

11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible and consistent with prevailing business practices, COMPANY shall mark, and shall cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are manufactured or sold under this Agreement with the number of each issued patent under the PATENT RIGHTS that applies to such LICENSED PRODUCT.

12. TERMINATION.

12.1 Voluntary Termination by COMPANY. COMPANY shall have the right to terminate this Agreement, for any reason, (i) upon at least six (6) months prior written notice to M.I.T., such notice to state the date at least six (6) months in the future upon which termination is to be effective, and (ii) upon payment of all amounts due to M.I.T. through such termination effective date.

12.2 Cessation of Business. If COMPANY ceases to carry on its business related to this Agreement, M.I.T. shall have the right to terminate this Agreement immediately upon written notice to COMPANY.

(a) Nonpayment. In the event COMPANY fails to pay any amounts due and payable to M.I.T. hereunder, and fails to make such payments within thirty
(30) days after receiving written notice of such failure, M.I.T. may terminate this Agreement immediately upon written notice to COMPANY.

(b) Material Breach. In the event COMPANY commits a material breach of its obligations under this Agreement, except for breach as described in Section 12.3(a), and fails to cure that breach within sixty (60) days after receiving written notice thereof, M.I.T. may terminate this Agreement immediately upon written notice to COMPANY.

12.4 Effect of Termination.

(a) Survival. The following provisions shall survive the expiration or termination of this Agreement: Articles 1, 8, 9, 13 and 14, and Sections 4.1(b), 5.4, 11.1, 11.2 and 12.4.

(b) Inventory. Upon the early termination of this Agreement, COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any work-in-progress and inventory of LICENSED PRODUCTS that exist as of the effective date of termination, provided that (i) COMPANY pays M.I.T. the applicable running royalty or other amounts due on such sales of LICENSED PRODUCTS in accordance with the terms and conditions of this Agreement, and (ii) COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all work-in-progress and inventory of LICENSED PRODUCTS within six (6) months after the effective date of termination.

(c) Pre-termination Obligations. In no event shall termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from the obligation to pay any amounts that became due on or before the effective date of termination.

13. DISPUTE RESOLUTION.

13.1 Mandatory Procedures. The parties agree that any dispute arising out of or relating to this Agreement shall be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement. If either party fails to observe the procedures of this Article, as may be modified by their written agreement, the other party may bring an action for specific performance of these procedures in any court of competent jurisdiction.

13.2 Equitable Remedies. Although the procedures specified in this Article are the sole and exclusive procedures for the resolution of disputes arising out of or relating to this Agreement, either party may seek a preliminary injunction or other provisional equitable relief if, in its reasonable judgment, such action is necessary to avoid irreparable harm to itself or to preserve its rights under this Agreement.

13.3 Dispute Resolution Procedures.

(a) Mediation. In the event any dispute arising out of or relating to this Agreement remains unresolved within sixty (60) days from the date the affected party notified the other party of such dispute, either party may initiate mediation upon written notice to the other party ("Notice Date"), whereupon both parties shall be obligated to engage in a mediation proceeding under the then current Center for Public Resources ("CPR") Model Procedure for Mediation of Business Disputes (http://www.cpradr.org/medmodel.htm), except that specific provisions of this Article shall override inconsistent provisions of the CPR Model Procedure. The mediator will be selected from the CPR Panels of Neutrals. If the parties cannot agree upon the selection of a mediator within fifteen (15) business days after the Notice Date, then upon the request of either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute through mediation until the first of the following occurs:
(i) the parties reach a written settlement; (ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a settlement within sixty (60) days after the Notice Date.

(b) Trial Without Jury. If the parties fail to resolve the dispute through mediation, or if neither party elects to initiate mediation, each party shall have the right to pursue any other remedies legally available to resolve the dispute, provided, however, that the parties expressly waive any right to a jury trial in any legal proceeding under this Article.

13.4 Performance to Continue. Each party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a party may suspend performance of its undisputed obligations during any period in which the other party fails or refuses to perform its undisputed obligations. Nothing in this Article is intended to relieve LICENSEE from its obligation to make undisputed payments pursuant to Articles 4 and 6 of this Agreement.

13.5 Statute of Limitations. The parties agree that all applicable statutes of limitation and time-based defenses (such as estoppel and laches) shall be tolled while the procedures set forth in Sections 13.3(a) are pending. The parties shall cooperate in taking any actions necessary to achieve this result.

14. MISCELLANEOUS.

14.1 Notice. Any notices required or permitted under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized national overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile numbers of the parties:

If to M.I.T.:    Technology Licensing Office, Room NE25-230
                 Massachusetts Institute of Technology
                 77 Massachusetts Avenue
                 Cambridge, MA  02139-4307
                 Attention:  Director
                 Tel:   617-253-6966
                 Fax:   617-258-6790

If to COMPANY:   Intuitive Surgical Corporation
                 1340 W. Middlefield Road,  Mountain View, CA 94043.
                 Attention: Lonnie M. Smith
                 President and Chief Executive Officer

Tel: (650) 237-7000 Fax: (650 526-2060

All notices under this Agreement shall be deemed effective upon receipt. A party may change its contact information immediately upon written notice to the other party in the manner provided in this Section.

14.2 Governing Law. This Agreement and all disputes arising out of or related to this Agreement, or the performance, enforcement, breach or termination hereof, and any remedies relating thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted.

14.3 Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, including without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

14.4 Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by both parties. Any waiver of

any rights or failure to act in a specific instance shall relate only to such instance and shall not be construed as an agreement to waive any rights or fail to act in any other instance, whether or not similar.

14.5 Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent. If the parties fail to reach a modified agreement within thirty (30) days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Article 13. While the dispute is pending resolution, this Agreement shall be construed as if such provision were deleted by agreement of the parties.

14.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns.

14.7 Headings. All headings are for convenience only and shall not affect the meaning of any provision of this Agreement.

14.8 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

M.I.T.'s offer to Intuitive Surgical Corporation to execute this license shall extend to April 5, 1999.

THE EFFECTIVE DATE OF THIS AGREEMENT IS APRIL 1, 1999

MASSACHUSETTS INSTITUTE OF INTUITIVE SURGICAL CORPORATION
TECHNOLOGY

By:     /s/ J. David Litster                 By:     /s/ Lonnie M. Smith
   ------------------------------------          -------------------------------
Name:   J. David Litster                     Name:   Lonnie M. Smith
     ----------------------------------            -----------------------------
Title:  Vice President for Research          Title:  President & CEO
      ---------------------------------             ----------------------------

APPENDIX A

List of Patent Applications and Patents

I. United States Patents and Applications

MIT Case 7830
"Robotic Apparatus"
by Akhil Madhani, Gunter Niemeyer, and J. Kenneth Salisbury PCT/US98/19508 designating the United States

II. International (non-U.S.) Patents and Applications

MIT Case 7830
"Robotic Apparatus"
by Akhil Madhani, Gunter Niemeyer, and J. Kenneth Salisbury PCT/US98/19508 designating the EPO, Canada, and Japan

APPENDIX B

List of Countries (excluding United States) for which PATENT RIGHTS Applications Will Be Filed, Prosecuted and Maintained

Please advise

Name:            J. Kenneth Salisbury
Dept. or Lab.:   Mechanical Engineering
Company:         Intuitive Surgical Corporation
Address:         1340 W. Middlefield Road,
                 Mountain View, CA 94043.

Licensed Technology:

MIT Case 7830
"Robotic Apparatus"
by Akhil Madhani, Gunter Niemeyer, and
J. Kenneth Salisbury

Because of the M.I.T. license granted to the above company and my equity* position and continuing relationship with this company, I acknowledge the potential for a possible conflict of interest between the performance of research at M.I.T. and my contractual or other obligations to this company. Therefore, I will not:

1) use students at M.I.T. for research and development projects for the company;

2) restrict or delay access to information from my M.I.T. research;

3) take direct or indirect research support from the company in order to support my activities at M.I.T.; or

4) employ students at the company, except in accordance with
Section 2.12.2, "Relations of Faculty and Students," in the Policies and Procedures Guide.

In addition, in order to avoid the appearance of a conflict, I will attempt to differentiate clearly between the intellectual directions of my M.I.T. research and my contributions to the company. To that end, I will expressly inform my department head/laboratory director annually of the general nature of my activities on behalf of the company.

Signed:  /s/ J. Kenneth Salisbury, Jr.
       -----------------------------------

Date:    3/31/99
      --------------

Approved by:   Illegible
            -----------------------
Name (print):
             ----------------------
(Dept. Head or Lab Dir)

                                                         Conf Avoid Stmnt 941017

* "Equity" includes stock, options, warrants or other financial instruments convertible into Equity, which are directly or indirectly controlled by the inventor.

APPENDIX

WAIVER

For good and valuable consideration, including the grant of a license to Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

M.I.T. Case No. 7830
7830, PCT/US 98/19508 "Robotic Apparatus " by Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

a company in which I hold equity, I hereby release all rights, title and interest I and my heirs and assigns may have as an inventor/author under M.I.T.'s Guide to the Ownership, Distribution and Commercial Development of M.I.T. Technology, as that policy may be amended from time to time, to receive my inventor's share of M.I.T.'s institutional equity. pursuant to this License Agreement.

Witness:   Illegible                    Signed:   /s/ Akhil Madhani
        -----------------                      ------------------------------
                                        Name:     Akhil Madhani
                                             --------------------------------
                                        Date:     3/31/99
                                               ------------------------------

APPENDIX

WAIVER

For good and valuable consideration, including the grant of a license to Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

M.I.T. Case No. 7830
7830, PCT/US 98/19508 "Robotic Apparatus " by Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

a company in which I hold equity, I hereby release all rights, title and interest I and my heirs and assigns may have as an inventor/author under M.I.T.'s Guide to the Ownership, Distribution and Commercial Development of M.I.T. Technology, as that policy may be amended from time to time, to receive my inventor's share of M.I.T.'s institutional equity. pursuant to this License Agreement.

Witness:    /s/ Gary Guthart                Signed:  /s/ G. Niemeyer
        ------------------------                   --------------------------
                                            Name:    Gunter D. Niemeyer
                                                 ----------------------------
                                            Date:    3/31/99
                                                 ----------------------------

APPENDIX

WAIVER

For good and valuable consideration, including the grant of a license to Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

M.I.T. Case No. 7830
7830, PCT/US 98/19508 "Robotic Apparatus " by Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

a company in which I hold equity, I hereby release all rights, title and interest I and my heirs and assigns may have as an inventor/author under M.I.T.'s Guide to the Ownership, Distribution and Commercial Development of M.I.T. Technology, as that policy may be amended from time to time, to receive my inventor's share of M.I.T.'s institutional equity. pursuant to this License Agreement.

Witness:    /s/ Gary Guthart            Signed:  /s/ J. Kenneth Salisbury, Jr.
        ------------------------               --------------------------------
                                        Name:    J.Kenneth Salisbury
                                             ----------------------------------
                                        Date:    3/31/99
                                               --------------------------------

MASSACHUSETTS INSTITUTE OF TECHNOLOGY
EXCLUSIVE PATENT LICENSE AGREEMENT WITH
INTUITIVE SURGICAL, INC.
APRIL, 1, 1999

ADDENDUM

WHEREAS, Intuitive Surgical, Inc. ("Intuitive") has represented in good faith that its present efforts to acquire regulatory approval for, and commercialize, its da Vinci(TM) Surgical System in both Europe and the United States require its complete and undivided attention;

WHEREAS, Intuitive believes in good faith that its future depends upon its undivided commitment to making its da Vinci(TM) Surgical System widely available to the public, and that the public will benefit from having access to its technology; and

WHEREAS, Intuitive has asked MIT for a clarification of certain obligations under the Parties April 1, 1999 License Agreement in order for Intuitive to devote its resources solely to successfully introducing its technology into the world's markets;

NOW:

MIT hereby clarifies and agrees that Intuitive's present efforts to commercialize its da Vinci(TM) Surgical System in the United States and abroad satisfy the spirit of section 3.1 and 3.2 of the Parties April 1, 1999 License Agreement, and thus that Intuitive's obligations under section 3.1 and 3.2 of that Agreement shall be deemed satisfied.

Read, Understood, Executed and Agreed to:

/s/ Lonnie M. Smith                      /s/ Lita Nelsen
------------------------------           ---------------------------------------
Lonnie Smith                             Lita Nelsen
President & CEO                          Director
Intuitive Surgical, Inc.                 Technology Licensing Office, NE25-230
1340 W. Middlefield Road                 Massachusetts Institute of Technology
Mountain View, CA 94043                  77 Massachusetts Avenue
                                         Cambridge, MA 02139-4307

Feb. 24, 2000                            Feb. 29, 2000
------------------------------           ---------------------------------------
Date                                     Date

1.

                  This LEASE, executed in duplicate at Palo Alto, California,
PARTIES           this 9th day of September, 1996, by and between

                  Zappettini Investment Co.

                  and

                  Intuitive Surgical

                  hereinafter called respectively Lessor and Lessee, without
                  regard to number or gender,

PREMISES          1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee
                  hires from Lessor, those certain premises, hereinafter in this
                  lease designated as "the Premises", with the appurtenances,
                  situated in the City of Mountain View, County of Santa Clara,
                  State of California, and more particularly described as
                  follows, to-wit:

                  Approximate 25,000 square feet of R & D buildings commonly
                  referred to as 1340 Middlefield Road, Mountain View,
                  California together with landscaped areas and parking lot and
                  further described in Exhibit A attached hereto.

USE               2. The Premises shall be used and occupied by Lessee for the
                  development of technology in the field of minimum evasive
                  surgery and for no other purpose without the prior written
                  consent of Lessor.

TERM              3. The term shall be for five (5) years, commencing on the 1st
                  day of January, 1997, and ending on the 31st day of December
                  2001.

RENTAL            4. Rent shall be payable to the Lessor without deduction or
                  offset at such place or places as may be designated from time
                  to time by the Lessor as follows:

                  Thirty-Eight Thousand and Seven Hundred Fifty Dollars
                  ($38,750.00) shall be due upon the execution of this Lease
                  representing rental due January 1, 1997. $38,750.00 shall be
                  due on February 1, 1997 and on the 1st day of each and every
                  succeeding month through December 2001.

SECURITY
DEPOSIT 5. Lessee has deposited with Lessor $38,750.00 as security for the full and faithful performance of each and every term, provision, covenant and condition of this Lease.In the event Lessee defaults in respect of any of the terms, provisions, covenants or conditions of this Lease, including, but not limited to the payment of rent, Lessor may use, apply or retain the whole or any part of such security for the payment of any rent in default or for any other sum which Lessor may spend or be required to spend by reason of Lessee's default.Should Lessee faithfully and fully comply with all of the terms, provisions, covenants and conditions of this Lease, the security of any balance thereof shall be returned to Lessee or, at the option of Lessor, to the last assignee of Lessee's interest in this Lease at the expiration of the term hereof.Lessee shall not be entitled to any interest on said security deposit.

POSSESSION        6. If Lessor, for any reason whatsoever, cannot deliver
                  possession of the Premises to Lessee at the commencement of
                  the said term, as hereinbefore specified, this Lease shall not
                  be void or voidable, nor shall Lessor, or Lessor's agents, be
                  liable to Lessee for any loss or damage resulting therefrom;
                  but in that event the commencement and termination dates of
                  the Lease and all other dates affected thereby shall be
                  revised to conform to the date of Lessor's delivery of
                  possession. The above is, however, subject to the provision
                  that the period of delay of delivery of the Premises shall not
                  exceed 30 (thirty) days from the commencement date herein. If
                  the period of delay of delivery exceeds the foregoing, Lessee,
                  at his or its option, may declare this Lease null and void. If
                  such a delay occurs, and Lessee agrees to extend possession
                  date, rent will commence on tenant occupancy.

ACCEPTANCE          7.  By entry hereunder, the Lessee accepts and Lessor
OF                warrants the Premises as being in good and satisfactory
PREMISES          working condition, including all HVAC, electrical and
AND               mechanical systems unless within fifteen (15) days after such
CONSENT TO        entry Lessee shall give Lessor written notice specifying in
SURRENDER         reasonable detail the respects in which the Premises were not
                  in satisfactory condition. The Lessee agrees on the last day
                  of the term hereof, or on sooner termination of this Lease, to
                  surrender the premises, together with all alterations,
                  additions, and improvements which may have been made in, to,
                  or on the Premises by Lessor or Lessee, including all HVAC,
                  electrical and mechanical systems unto Lessor in the same good
                  condition as at Lessee's entry into the Premises excepting for
                  such wear and tear as would be normal for the period of the
                  Lessee's occupancy. The Lessee, on or before the end of the
                  term or sooner termination of this Lease, shall remove all
                  Lessee's personal property and trade fixtures from the
                  premises and all property not so removed shall be deemed to be
                  abandoned by the Lessee. If the Premises be not surrendered at
                  the end of the term or sooner termination of this Lease, the
                  Lessee shall indemnify the Lessor against loss or liability
                  resulting from delay by the Lessee in so surrendering the
                  Premises including, without limitation, any claims made by any
                  succeeding tenant founded on such delay.

USES                8.  Lessee shall not commit, or suffer to be committed, any
PROHIBITED        waste upon the Premises, or any nuisance, or other act or
                  thing which may disturb the quiet enjoyment of any other
                  tenant in or around the buildings in which the Premises may be
                  located, or allow any sale by auction upon the Premises, or
                  allow the Premises to be used for any improper, immoral,
                  unlawful or objectionable purpose, or place any loads upon the
                  floor, walls, or roof which endanger the structure, or place
                  any harmful liquids in the drainage system of the building. No
                  waste materials or refuse shall be dumped upon or permitted to
                  remain upon any part of the Premises outside of the building
                  proper. No materials, supplies, equipment, finished products
                  or semi-finished products, raw materials or articles of any
                  nature shall be stored upon or permitted to remain on any

                  portion of the Premises outside of the buildings proper,
                  unless they are in approved enclosures.

ALTERATIONS         9.  The Lessee shall make no alterations, additions or
AND               improvements in excess of $10,000.00 to the Premises or any
ADDITIONS         part thereof without first obtaining the prior written consent
                  of the Lessor. The Lessor may impose as a condition to the
                  aforesaid consent such requirements as Lessor may deem
                  necessary in Lessor's sole discretion, including without
                  limitation thereto, the manner in which the work is done, a
                  right of approval of the contractor by whom the work is to be
                  performed, the times during which it is to be accomplished,
                  and the requirement that upon written request of Lessor prior
                  to the expiration or earlier termination of the Lease, Lessee
                  will remove any or all improvements or additions to the
                  Premises installed at Lessee's expense. All such alterations,
                  additions or improvements not specified to be removed shall at
                  the expiration of earlier termination of the lease become the
                  property of the Lessor and remain upon and be surrendered with
                  the Premises. All movable furniture, business and trade
                  fixtures, and machinery, equipment and all special electrical,
                  mechanical or HVAC systems installed by Lessee and used solely
                  for the purpose of Lessee's manufacturing process shall remain
                  the property of the Lessee and may be removed by the Lessee at
                  any time during the Lease term when Lessee is not in default
                  hereunder. Items which are not to be deemed as movable
                  furniture, business and trade fixtures, or machinery and
                  equipment shall include heating, lighting, electrical systems,
                  air conditioning, partitioning, carpeting, or any other
                  installation which has become an integral part of the
                  Premises. The Lessee will at all times permit notices of
                  non-responsibility to be posted and to remain posted until the
                  completion of alterations or additions which have been
                  approved by the Lessor.

MAINTE-             10.  Lessee shall, at Lessee's sole cost, keep and maintain
NANCE OF          the Premises and appurtenances and every part thereof,
PREMISES          including but not limited to, glazing, sidewalks, parking
                  areas, including resealing when necessary except for initial
                  resealing to be performed by Lessor prior to January 1, 1997,
                  plumbing, electrical systems, heating and air conditioning
                  installations, any store front, roof covering--unless it is
                  not feasible to repair the existing roof covering and a new
                  roof covering is required, and the interior of the Premises in
                  good order, condition, and repair. Lessor at Lessor's sole
                  cost and expense shall maintain the exterior of the walls, and
                  structural portions of the roof, foundations, walls, and
                  floors except for any repairs caused by the wrongful act of
                  the Lessee and Lessee's agents. The Lessor will replace the
                  roof covering if repairs to said covering are no longer
                  economically feasible in the judgment of roofing experts, and
                  provided that said replacement is not made necessary by acts
                  of the Lessee and Lessee's agents. The Lessee shall water,
                  maintain and replace, when necessary, any shrubbery and
                  landscaping provided by the Lessor on the Premises. The Lessee
                  expressly waives the benefits of any statute now or hereafter
                  in effect which would otherwise afford the Lessee the right to
                  make repairs at Lessor's expense or to terminate this lease
                  because of Lessor's failure to keep the Premises in good
                  order, conditions or repair.

FIRE AND            11.
EXTENDED
COVERAGE
INSURANCE
AND
SUBROGATION

                  REVISED INSURANCE CLAUSE

                  This Lease Clause replaces the Insurance Clause (11.) in the
                  Renault & Handley Net Lease Form.

                  11. Lessee shall not use, or permit the Premises, or any part
                  thereof, to be used, for any purposes other than that for
                  which the Premises are hereby leased; and no use shall be made
                  or permitted to be made on the Premises, nor acts done, which
                  will cause a cancellation of any insurance policy covering
                  said building, or any part thereof, nor shall Lessee sell or
                  permit to be kept, used or sold, in or about the Premises, any
                  article which may be prohibited by the standard form of fire
                  insurance policies. Lessee shall, at his sole cost and
                  expense, comply with any and all requirements, pertaining to
                  the Lessee's use and occupancy of the Premises, of any
                  insurance organization or company, necessary for the
                  maintenance of reasonable fire and public liability insurance,
                  covering said building and appurtenances.

                  11.1 Lessee shall, at its expense, obtain and keep in force
                  during the term of this Lease a policy of comprehensive public
                  liability insurance insuring Lessee, Lessor, agents, invitees,
                  and contractors, including Lessor's lender, against any
                  liability arising out of the Lessee's use, occupancy or
                  maintenance of the Premises. Such insurance policy shall have
                  a combined single limit for both bodily injury and property
                  damage in an amount not less than One Million Dollars
                  ($1,000,000.00). The limits of said insurance shall not limit
                  the liability of Lessee hereunder.

INSURANCE         11.2 Lessee shall, at its expense, keep in force during the
                  term of this Lease, a policy of fire and property damage
                  insurance in an "all risk" form with a sprinkler leakage
                  endorsement, insuring Lessee's inventory, fixtures, equipment
                  and personal property within the Premises for the full
                  replacement value thereof.

                  11.3 Lessor shall maintain a policy or policies of fire and
                  property damage insurance in an "all risk" form, with
                  sprinkler and, at the option of the Lessor, earthquake
                  endorsements, covering loss or damage to the building,
                  including Lessee's leasehold improvements installed with the
                  written consent of the Lessor, in such amounts and with such
                  coverage as Lessor deems advisable.

                    11.4 Lessee shall pay to Lessor as additional rent, during
                  the term hereof within 10 days after receipt of an invoice
                  therefore, 100 percent of the premiums for any insurance
                  obtained by Lessor pursuant to 11.3 above. Lessor may obtain
                  such insurance for the Building separately, or together with
                  other buildings and improvements which Lessor elects to insure
                  together under blanket policies of insurance. In such case
                  Lessee shall be liable for only such portion of the premiums
                  for such blanket policies as are allocable to the Premises. It
                  is understood and agreed that Lessee's obligation under this
                  paragraph shall be prorated to reflect the Commencement Date
                  and Expiration Date of the Lease.

                    11.5 Lessee and Lessor each hereby waives any and all rights
                  of recovery against the other, or against the officers,
                  directors, employees, partners, agents and representatives of
                  the other, for loss of or damage to the property of the
                  waiving party or the property of others under its control, to
                  the extent such loss or damage is insured against under any
                  insurance policy carried by Lessor or Lessee hereunder. Each
                  party shall notify their respective insurance carriers of this
                  waiver and obtain from the respective insurer, a waiver by
                  such insurer of all rights of subrogation or assignment of
                  claims in connection with a claim against Lessor or Lessee, as
                  the case may be, covered by such insurance.

SEE REVISED INSURANCE CLAUSE ATTACHED

ABANDONMENT         12. Lessee shall not vacate or abandon the Premises at
                  any time during the term; and if Lessee shall abandon, vacate
                  or surrender the premises, or be dispossessed by process of
                  law, or otherwise, any personal property belonging to Lessee
                  and left on the Premises shall be deemed to be abandoned, at
                  the option of Lessor, except such property as may be mortgaged
                  to Lessor. Abandonment shall be defined as outlined in section
                  1951.3 of the California Civil Code.

FREE FROM           13. Lessee shall keep the Premises and the property in
LIENS             which the Premises are situated, free from any liens arising
                  out of any work performed, materials furnished, or obligations
                  incurred by Lessee.

COMPLIANCE          14. Lessee shall, at his sole cost and expense, comply
WITH              with all of the requirements of all Municipal, State and
GOVERN-           Federal authorities now in force, or which may hereafter be
MENTAL            in force, pertaining to the Lessee's specific use, and shall
REGULATIONS       faithfully observe in the use of the Premises all Municipal
                  ordinances and State and Federal statutes now in force or
                  which may hereafter be in force. The judgment of any court of
                  competent jurisdiction, or the admission of Lessee in any
                  action or proceeding against Lessee, whether Lessor be a party
                  thereto or not, that Lessee has violated any such ordinance or
                  statute in the use of the Premises, shall be conclusive of
                  that fact as between Lessor and Lessee.

INDEMNI-            15. The Lessee, as a material part of the consideration
FICATION OF       to be rendered to the Lessor, hereby waives all claims
LESSOR AND        against the Lessor for damages to goods, wares and
LESSEE'S          merchandise, and all other personal property in, upon, or
LIABILITY         about the Premises and for injuries to persons in or about
INSURANCE         the Premises, from any cause arising at any time, excepting
                  claims arising from the Lessor's negligence, and the Lessee
                  will hold the Lessor exempt and harmless from any damage or
                  injury to any person, or to the goods, wares and merchandise
                  and all other personal property of any person, arising from
                  the use of the Premises by the Lessee, or from the failure of
                  the Lessee to keep the Premises in good condition and repair,
                  as herein provided.

SEE REVISED INSURANCE CLAUSE ATTACHED

ADVERTISE-          16. Lessee will not place or permit to be placed, in,
MENTS AND         upon or about the Premises any unusual or extraordinary
SIGNS             signs, or any signs not approved by the city or other
                  governing authority. The Lessee will not place, or permit to
                  be placed, upon the Premises, any signs, advertisements or
                  notices without the written consent of the Lessor first had
                  and obtained. Any sign so placed on the Premises shall be so
                  placed upon the understanding and agreement that Lessee will
                  remove same at the termination of the tenancy herein created
                  and repair any damage or injury to the Premises caused
                  thereby, and if not so removed by Lessee then Lessor may have
                  same so removed at Lessee's expense.

UTILITIES         17. Lessee shall pay for all water, gas, heat, light, power,
                  telephone service and all other service supplied to the
                  Premises. If the premises are not served by a separate water
                  meter, the Lessee shall pay to the Lessor 100 percent of the
                  water bill for the entire property covered by said bill and of
                  which the Premises are a part.

ATTORNEY'S          18. In case suit should be brought for the possession of
FEES              the Premises, for the recovery of any sum due hereunder, or
                  because of the breach of any other covenant herein, the losing
                  party shall pay to the prevailing party a reasonable

                  attorney's fee, which shall be deemed to have accrued on the
                  commencement of such action and shall be enforceable whether
                  or not such action is prosecuted to judgment.

DEFAULT             19. In the event of any breach of this Lease by the
                  Lessee, or an abandonment of the Premises by the Lessee, the
                  Lessor has the option of 1) removing all persons and property
                  from the Premises and repossessing the Premises in which case
                  any of the Lessee's property which the Lessor removes from the
                  Premises may be stored in a public warehouse or elsewhere at
                  the cost of, and for the account of Lessee, or 2) allowing the
                  Lessee to remain in full possession and control of the
                  Premises. If the Lessor chooses to repossess the Premises, the
                  Lease will automatically terminate in accordance with
                  provisions of the California Civil Code, Section 1951.2. In
                  the event of such termination of the Lease, the Lessor may
                  recover from the Lessee: 1) the worth at the time of award of
                  the unpaid rent which had been earned at the time of
                  termination including interest at 7% per annum; 2) the worth
                  at the time of award of the amount by which the unpaid rent
                  which would have been earned after termination until the time
                  of award exceeds the amount of such rental loss that the
                  Lessee proves could have been reasonably avoided including
                  interest at 7% per annum; 3) the worth at the time of award of
                  the amount by which the unpaid rent for the balance of the
                  term after the time of award exceeds the amount of such rental
                  loss that the Lessee proves could be reasonably avoided; and
                  4) any other amount necessary to compensate the Lessor for all
                  the detriment proximately caused by the Lessee's failure to
                  perform his obligations under the Lease or which in the
                  ordinary course of things would be likely to result therefrom.
                  If the Lessor chooses not to repossess the premises, but
                  allows the Lessee to remain in full possession and control of
                  the Premises, then in accordance with provisions of the
                  California Civil Code, Section 1951.4, the Lessor may treat
                  the Lease as being in full force and effect, and may collect
                  from the Lessee all rents as they become due through the
                  termination date of the lease as specified in the lease. For
                  the purposes of this paragraph, the following do not
                  constitute a termination of Lessee's right to possession:

                  a) Acts of maintenance or preservation or efforts to relet the
                  property.

                  b) The appointment of a receiver on the initiative of the
                  Lessor to protect his interest under this Lease.

LATE                20. Lessee hereby acknowledges that late payment by
CHARGES           Lessee to Lessor of rent and other sums due hereunder will
                  cause Lessor to incur costs not contemplated by this lease,
                  the exact amount of which will be extremely difficult to
                  ascertain. Such costs include, but are not limited to,
                  processing and accounting charges, and late charges which may
                  be imposed on Lessor by the terms of any mortgage or trust
                  deed covering the Premises. Accordingly, if any installment of
                  rent or any other sum due from Lessee shall not be received by
                  Lessor or Lessor's designee within ten (10) days after such
                  amount shall be due, Lessee shall pay to Lessor a late charge
                  equal to ten percent (10%) of such overdue amount. The parties
                  hereby agree that such late charge represents a fair and
                  reasonable estimate of the costs Lessor will incur by reason
                  of late payment by Lessee. Acceptance of such late charge by
                  Lessor shall in no event constitute a waiver of

                  Lessee's default with respect to such overdue amount, nor
                  prevent Lessor from exercising any of the other rights and
                  remedies granted hereunder.

SURRENDER
OF LEASE            21. The voluntary or other surrender of this Lease by
                  Lessee, or a mutual cancellation thereof, shall not work a
                  merger, and shall, at the option of Lessor, terminate all or
                  any existing subleases or subtenancies, or may, at the option
                  of Lessor, operate as an assignment to him of any or all such
                  subleases or subtenancies.

TAXES               22. The Lessee shall be liable for all taxes levied against
                  personal property and trade or business fixtures. The Lessee
                  also agrees to pay, as additional rental, during the term of
                  this Lease and any extensions thereof, all real estate taxes
                  plus the yearly installments of any special assessments which
                  are of record or which may become of record during the term of
                  this lease. If said taxes and assessments are assessed against
                  the entire building and building site, and this Lease does not
                  cover the entire building or building site, the taxes and
                  assessment installments allocated to the Premises shall be
                  pro-rated on a square footage or other equitable basis, as
                  calculated by the Lessor. It is understood and agreed that the
                  Lessee's obligation under this paragraph will be pro-rated to
                  reflect the commencement and termination dates of this Lease.

NOTICES           23. All notices to be given to Lessee may be given in writing
                  personally or by depositing the same in the United States
                  mail, postage prepaid, and addressed to Lessee at the said
                  Premises, whether or not Lessee has departed from, abandoned
                  or vacated the Premises.

ENTRY BY            24. Lessee shall permit Lessor and his agents to enter into
LESSOR            and upon and with prior notice the Premises at all reasonable
                  times for the purpose of inspecting the same or for the
                  purpose of maintaining the building in which the Premises are
                  situated, or for the purpose of making repairs, alterations or
                  additions to any other portion of said building, including the
                  erection and maintenance of such scaffolding, canopies, fences
                  and props as may be required without any rebate of rent and
                  without any liability to Lessee for any loss of occupation or
                  quiet enjoyment of the Premises thereby occasioned; and shall
                  permit Lessor and his agents, at any time within ninety days
                  prior to the expiration of this Lease, to place upon the
                  Premises any usual or ordinary "For Sale" or "To Lease" signs
                  and exhibit the Premises to prospective tenants at reasonable
                  hours.

DESTRUCTION OF      25. In the event of a partial destruction of the Premises
PREMISES          during the said term from any cause, Lessor shall forthwith
                  repair the same, provided such repairs can be made within
                  ninety (90) days from date of destruction under the laws and
                  regulations of State, Federal, County or Municipal
                  authorities, but such partial destruction shall in no way
                  annul or void this Lease, except that Lessee shall be entitled
                  to a proportionate reduction of rent while such repairs are
                  being made, such proportionate reduction to be based upon the
                  extent to which the making of such repairs shall interfere
                  with the business carried on by Lessee in the Premises. If
                  such repairs cannot be made in ninety (90) days from date of
                  destruction Lessor may, at his option, make same within a
                  reasonable time, this Lease continuing in full force and
                  effect and the rent to be proportionately reduced as aforesaid
                  in this paragraph provided. In the event that Lessor does not
                  so elect to make such repairs which cannot be made in ninety
                  (90) days, or such repairs cannot be made under such laws and
                  regulations, this Lease may be terminated at the option of
                  either party. In respect to any partial destruction which
                  Lessor is obligated to repair or may

                  elect to repair under the terms of this paragraph, the
                  provision of Section 1932, Subdivision 2, and of Section 1933,
                  Subdivision 4, of the Civil Code of the State of California
                  are waived by Lessee. In the event that the building in which
                  the Premises may be situated be destroyed to the extent of not
                  less than 33 1/3% of the replacement cost thereof, Lessor may
                  elect to terminate this Lease, whether the Premises be injured
                  or not. A total destruction of the building in which the
                  Premises may be situated shall terminate this Lease. In the
                  event of any dispute between Lessor and Lessee relative to the
                  provisions of this paragraph, they shall each select an
                  arbitrator, the two arbitrators so selected shall select a
                  third arbitrator and the three arbitrators so selected shall
                  hear and determine the controversy and their decision thereon
                  shall be final and binding upon both Lessor and Lessee, who
                  shall bear the cost of such arbitration equally between them.

ASSIGNMENT AND      26. The Lessee shall not assign, transfer, or hypothecate
SUBLETTING        the leasehold estate under this Lease, or any interest
                  therein, and shall not sublet the Premises, or any part
                  thereof, or any right or privilege appurtenant thereto, or
                  suffer any other person or entity to occupy or use the
                  Premises, or any portion thereof, without, in each case, the
                  prior written consent of the Lessor. Lessor agrees not to
                  unreasonably withhold consent to sublet or assign. As a
                  condition for granting its consent to any subletting the
                  Lessor may require the Lessee to agree to pay to the Lessor,
                  as additional rental, all rents received by the Lessee from
                  its Sublessee which are in excess of the amount payable by the
                  Lessee to the Lessor hereunder. The Lessee shall, by sixty
                  (60) days written notice, advise the Lessor of its intent to
                  sublet the Premises or any portion thereof for any part of the
                  term hereof. Within thirty (30) days after receipt of Lessee's
                  notice, Lessor shall either give approval to Lessee to
                  sublease the portion of the Premises described in Lessee's
                  notice, or Lessor shall terminate this Lease as to the portion
                  of the Premises described in Lessee's notice on the date
                  specified in Lessee's notice. If Lessee intends to sublet the
                  entire Premises and Lessor elects to terminate this Lease,
                  this Lease shall be terminated on the date specified in
                  Lessee's notice. If, however, this Lease shall terminate
                  pursuant to the foregoing with respect to less than all the
                  Premises, the rent, as defined and reserved herein above shall
                  be adjusted on a prorata basis to the number of square feet
                  retained by Lessee, and this Lease as so amended shall
                  continue in full force and effect. If the Lessor approves a
                  subletting, the Lessee may sublet immediately after receipt of
                  the Lessor's written approval. In the event Lessee is allowed
                  to assign, transfer or sublet the whole or any part of the
                  Premises, with the prior written consent of Lessor, no
                  assignee, transferee or sublessee shall assign or transfer
                  this Lease, either in whole or in part, or sublet the whole or
                  any part of the Premises, without also having obtained the
                  prior written consent of the Lessor. A consent of Lessor to
                  one assignment, transfer, hypothecation, subletting,
                  occupation or use by any other person shall not release Lessee
                  from any of Lessee's obligations hereunder or be deemed to be
                  a consent to any subsequent similar or dissimilar assignment,
                  transfer, hypothecation, subletting, occupation or use by any
                  other person. Any such assignment, transfer, hypothecation,
                  subletting, occupation or use without such consent shall be
                  void and shall constitute a breach of this Lease by Lessee and
                  shall, at the option of Lessor exercised by written notice to
                  Lessee, terminate this Lease. The

                  leasehold estate under this Lease shall not, nor shall any
                  interest therein, be assignable for any purpose by operation
                  of law without the written consent of Lessor. As a condition
                  to its consent, Lessor may require Lessee to pay all expense
                  in connection with the assignment, and Lessor may require
                  Lessee's assignee or transferee (or other assignees or
                  transferees) to assume in writing all of the obligations under
                  this Lease.

CONDEMNATION        27. If any part of the premises shall be taken for any
                  public or quasi-public use, under any statute or by right of
                  eminent domain or private purchase in lieu thereof, and a part
                  thereof remains which is susceptible of occupation hereunder,
                  this Lease shall, as to the part so taken, terminate as of the
                  date title shall vest in the condemnor or purchaser, and the
                  rent payable hereunder shall be adjusted so that the Lessee
                  shall be required to pay for the remainder of the term only
                  such portion of such rent as the value of the part remaining
                  after such taking bears to the value of the entire

                  premises prior to such taking, but in such event Lessor shall
                  have the option to terminate this Lease as of the date when
                  title to the part so taken vests in the condemnor or
                  purchaser. If all of the premises, or such part thereof be
                  taken so that there does not remain a portion susceptible for
                  occupation hereunder, this Lease shall thereupon terminate. If
                  a part or all of the Premises be taken, all compensation
                  awarded upon such taking shall go to the Lessor and the Lessee
                  shall have no claim thereto.

EFFECT OF           28. The term "Lessor" as used in this Lease, means only the
CONVEYANCE        owner for the time being of the land and building containing
                  the Premises, so that, in the event of any sale of said land
                  or building, or in the event of a lease of said building, the
                  Lessor shall be and hereby is entirely freed and relieved of
                  all covenants and obligations of the Lessor hereunder, and it
                  shall be deemed and construed, without further agreement
                  between the parties and the purchaser at any such sale, or the
                  Lessee of the building, that the purchaser or lessee of the
                  building has assumed and agreed to carry out any and all
                  covenants and obligations of the Lessor hereunder. If any
                  security be given by the Lessee to secure the faithful
                  performance of all or any of the covenants of this Lease on
                  the part of the Lessee, the Lessor may transfer and deliver
                  the security, as such, to the purchaser at any such sale or
                  the lessee of the building, and thereupon the Lessor shall be
                  discharged from any further liability in reference thereto.

SUBORDINATION       29. Lessee agrees that this Lease may, at the option of
                  Lessor, be subject and subordinate to any mortgage, deed of
                  trust or other instrument of security which has been or shall
                  be placed on the land and building or land or building of
                  which the Premises form a part, and this subordination is
                  hereby made effective without any further act of Lessee. The
                  Lessee shall, at any time hereinafter, on demand, execute any
                  instruments, releases, or other documents that may be required
                  by any mortgagee, mortgagor, or trustor or beneficiary under
                  any deed of trust for the purpose of subjecting and
                  subordinating this Lease to the lien of any such mortgage,
                  deed of trust or other instrument of security, and

WAIVER              30. The waiver by Lessor of any breach of any term, covenant
                  or condition, herein contained shall not be deemed to be a
                  waiver of such term, covenant or condition or any subsequent
                  breach of the same or any other term, covenant or condition
                  therein contained. The subsequent acceptance of rent hereunder
                  by Lessor shall not be deemed to be a waiver of any preceding
                  breach by Lessee of any term, covenant or condition of this
                  Lease, other than the failure of Lessee to pay the particular
                  rental so accepted, regardless of Lessor's knowledge of such
                  preceding breach at the time of acceptance of such rent.

HOLDING OVER        31. Any holding over after the expiration of the said term,
                  with the consent of Lessor, shall be construed to be a tenancy
                  from month to month, at a rental to be negotiated by Lessor
                  and Lessee prior to the expiration of said term, and shall
                  otherwise be on the terms and conditions herein specified, so
                  far as applicable.

SUCCESSORS          32. The covenants and conditions herein contained shall,
AND               subject to the provisions as to assignment, apply to and bind
ASSIGNS           the heirs, successors, executors, administrators and assigns
                  of all of the parties hereto; and all of the parties hereto
                  shall be jointly and severally liable hereunder.

TIME                33. Time is of the essence of this Lease.

MARGINAL            34. The marginal headings or titles to the paragraphs
CAPTIONS          of this Lease are not a part of this Lease and shall have no
                  effect upon the construction or interpretation of any part
                  thereof. This instrument contains all of the agreements and
                  conditions made between the parties hereto and may not be
                  modified orally or in any other manner than by an agreement in
                  writing signed by all of the parties hereto or their
                  respective successors in interest.

                  PARAGRAPHS 35, 36 & 37 ATTACHED HERETO ARE HEREBY MADE A PART
                  OF THIS LEASE THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO
                  YOUR ATTORNEY WHO WILL REVIEW THE DOCUMENT AND ASSIST YOU TO
                  DETERMINE WHETHER YOUR LEGAL RIGHTS ARE ADEQUATELY PROTECTED.
                  RENAULT & HANDLEY IS NOT AUTHORIZED TO GIVE LEGAL AND TAX
                  ADVICE. NO REPRESENTATION OR RECOMMENDATION IS MADE BY RENAULT
                  & HANDLEY OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
                  SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT
                  OR ANY TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR
                  YOUR ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS
                  DOCUMENT.

                  IN WITNESS WHEREOF, Lessor and Lessee have executed these
                  presents, the day and year first above written.

                       LESSOR                              LESSEE

                  ZAPPETTINI INVESTMENT Co.          INTUITIVE SURGICAL

                  /s/ George O. McKee                /s/ Frederic H. Moll
                  -------------------                --------------------

                                                     Subject to Board approval

                                                     V.P., Medical Director

ADDITIONAL PARAGRAPHS

The following additional paragraphs are hereby made a part of that certain Lease dated September 9, 1996, by and between Zappettini Investment Co., Lessor, and Intuitive Surgical, Lessee, covering the Premises located at 1340 Middlefield, Mountain View, California.

35. Lessor will indemnify Lessee from and against all costs of response, corrective action, remedial action, claims, demands, losses and liabilities arising from any pre-existing environmental contamination which may have occurred prior to the Lessee taking possession of the Premises.

Lessee will only be responsible for contamination of the Premises or the soils or ground water thereon or thereunder in violation of Hazardous Materials Laws, that is caused by Lessee or Lessee's agents or contractors during the term as may be extended. All hazardous materials and toxic wastes that Lessee brings on the Premises shall be stored according to Hazardous Materials' Laws.

All hazardous materials and toxic wastes that Lessee brings on the site shall be stored according to all local, state and national governmental regulations. Hazardous Materials shall be defined as those substances that are recognized as posing a risk of injury to health or safety by the Santa Clara Fire Department, the Santa Clara County Health Department, the Regional Water Quality Control Board, the State of California or the Federal Government.

For purposes of this Lease, "Hazardous Materials' Laws" shall mean all local, state and federal laws, statutes, ordinances, rules, regulations, judgements injunctions, stipulations, decrees, orders, permits, approvals, treaties or protocols now or hereafter enacted, issued or promulgated by any governmental authority which relate to any Hazardous Material or the use, handling, transportation, production, disposal, discharge, release, emission, sale or storage of, or the exposure of any person to, a Hazardous Material.

36. Quite Enjoyment. Landlord covenants and agrees that Tenant, so long as it shall not be in default hereunder, shall and may, at all times during the term of this Lease and any extension and renewal hereof, peacefully and quietly have, hold, occupy, and enjoy the Premises without any hindrance or molestation whatever.

37. Option. Lessor hereby grants to Lessee the option to renew this Lease for 1
(one) additional 3 (three) year term commencing on the termination date of the Lease. Said option shall be exercised by letter and no later than 60 (sixty) days and no earlier than 120 (one hundred twenty) days prior to the termination date of this Lease. All the terms and conditions contained in the original Lease shall govern the extension period excepting the monthly rental shall be 95% of the then fair market value for similar buildings within a one mile radius from the above location.

           This LEASE, executed in duplicate at Palo Alto, California, this 5th
PARTIES    day of February, by and between

           Zappettini Investment Co.

           and

           Intuitive Surgical

           hereinafter called respectively Lessor and Lessee, without regard
           to number or gender,

PREMISES   1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee hires
           from Lessor, those certain premises, hereinafter in this lease
           designated as "the Premises", with the appurtenances, situated in the
           City of Mountain View, County of Santa Clara, State of California,
           and more particularly described as follows, to-wit:

           An approximate 25,000 square foot industrial building commonly
           referred to as 1330 W. Middlefield Road, Mountain View, California,
           together with landscaped areas and parking lot and further described
           in Exhibit A attached hereto.

USE        2. The Premises shall be used and occupied by Lessee for the
           development and technology in the field of minimum evasive surgery
           and for no other purpose without the prior written consent of Lessor.

TERM       3. The term shall be for five (5) years, commencing on 1st day of
           April, 1997, and ending on the 28th day of February 2002.

RENTAL     4. Rent shall be payable to the Lessor without deduction or offset at
           such place or places as may be designated from time to time by the
           Lessor as follows:

           Seventeen Thousand Five Hundred and No/100ths Dollars ($17,500.00)
           shall be due upon the execution of this Lease representing rental due
           April 1, 1997. $17,750.00 shall be due on the 1st day of May 1997 and
           on the 1st day of each and every month including September
          1997. Twenty Two Thousand Five Hundred and No/100ths Dollars
           ($22,500.00) shall be due on October 1, 1997 and on the 1st day of
           each and every month including March 1, 1998. Thirty Two Thousand
           Five Hundred and No/100ths Dollars ($32,500.00) shall be due on April
           1, 1998 and on the 1st day of each and every succeeding month
           including February 1, 2002.

SECURITY       5.   Lessee has deposited with Lessor $ - as security
DEPOSIT        for the full and faithful performance of each and every term,
               provision, covenant and condition of this Lease. In the event Lessee
               defaults in respect of any of the terms, provisions, covenants or
               conditions of this Lease, including, but not limited to the payment of
               rent, Lessor may use, apply or retain the whole or any part of such
               security for the payment of any rent in default or for any other sum
               which Lessor may spend or be required to spend by reason of Lessee's
               default. Should Lessee faithfully and fully comply with all of the
               terms, provisions, covenants and conditions of this Lease, the
               security of any balance thereof shall be returned to Lessee or, at the
               option of Lessor, to the last assignee of Lessee's interest in this
               Lease at the expiration of the term hereof. Lessee shall not be
               entitled to any interest on said security deposit.

POSSESSION     6.  If Lessor, for any reason whatsoever, cannot deliver
               possession of the Premises to Lessee at the commencement of the
               said term, as hereinbefore specified, this Lease shall not be void
               or voidable, nor shall Lessor, or Lessor's agents, be liable to
               Lessee for any loss or damage resulting therefrom; but in that
               event the commencement and termination dates of the Lease and all
               other dates affected thereby shall be revised to conform to the
               date of Lessor's delivery of possession.  The above is, however,
               subject to the provision that the period of delay of delivery of
               the Premises shall not exceed-  days from the commencement date herein.
               If the period of delay of delivery exceeds the foregoing, Lessee,
               at his or its option, may declare this Lease null and void.

ACCEPTANCE     7.  By entry hereunder, the Lessee accepts and Lessor warrants OF the
OF             Premises as being in good and satisfactory working condition, unless
PREMISES       within fifteen (15) days after such entry Lessee shall give Lessor
AND CONSENT    written notice specifying in reasonable detail the respects in which the
TO             Premises were not in satisfactory condition. The Lessee agrees on the last
SURRENDER      day of the term hereof, or on sooner termination of this Lease, to
               surrender the premises, together with all alterations, additions, and
               improvements which may have been made in, to, or on the
               Premises by Lessor or Lessee including all HVAC, electrical
               and mechanical systems, unto Lessor in the same good condition
               as at Lessee's entry into the Premises excepting for such wear
               and tear as would be normal for the period of the Lessee's
               occupancy. The Lessee, on or before the end of the term or
               sooner termination of this Lease, shall remove all Lessee's
               personal property and trade fixtures from the premises and all
               property not so removed shall be deemed to be abandoned by the
               Lessee. If the Premises be not surrendered at the end of the
               term or sooner termination of this Lease, the Lessee shall
               indemnify the Lessor against loss or liability resulting from
               delay by the Lessee in so surrendering the Premises including,
               without limitation, any claims made by any succeeding tenant
               founded on such delay.

               8. Lessee shall not commit, or suffer to be committed, any
               USES PROHIBITED waste upon the Premises, or any nuisance, or other
               act or thing which may disturb the quiet enjoyment of any other
               tenant in oraround the buildings in which the Premises may be
               located, or allow any sale by auction upon the Premises, or
               allow the Premises to be used for any improper, immoral,
               unlawful or objectionable purpose, or place any loads upon the
               floor, walls, or roof which endanger the structure, or place
               any harmful liquids in the drainage system of the building. No
               waste materials or refuse shall be dumped upon or permitted to
               remain upon any part of the Premises outside of the building
               proper. No materials, supplies, equipment, finished products
               or semi-finished products, raw materials or articles of any
               nature shall be stored upon or permitted to remain on any
               portion of the Premises outside of the buildings proper.
               unless they are in approved enclosures.

ALTERATIONS    9. The lessee shall make no alterations, additions or
AND            improvements in excess of $10,000 to the Premises or any part thereof
ADDITIONS      without first obtaining the prior written consent of the
               Lessor. The Lessor may impose as a condition to the aforesaid
               consent such requirements as Lessor may deem necessary in
               Lessor's sole discretion, including without limitation thereto,
               the manner in which the work is done, a right of approval of the
               contractor by whom the work is to be performed, the times during
               which it is to be accomplished, and the requirements that upon
               written request of Lessor prior to the expiration or earlier
               termination of the Lease, Lessee will remove any or all
               improvements or additions to the Premises installed at Lessee's
               expense. All such alterations, additions or improvements not
               specified to be removed shall at the expiration of earlier
               termination of the lease become the property of the Lessor and
               remain upon and be surrendered with the Premises. All movable
               furniture, business and trade fixtures, and machinery equipment
               and all special electrical, mechanical or HVAC systems installed
               by Lessee and used solely for the purpose of Lessee's
               manufacturing process, shall remain the property of the Lessee
               and may be removed by the Lessee at any time during the Lease
               term when Lessee is not in default hereunder. Items which are not
               to be deemed as movable furniture, business and trade fixtures,
               or machinery and equipment shall include heating, lighting,
               electrical systems, air conditioning, partitioning, carpeting, or
               any other installation which as become an integral part of the
               Premises. The Lessee will at all times permit notices of
               non-responsibility to be posted and to remain posted until the
               completion of alterations or additions which have been approved
               by the Lessor.

MAINTE-        10. Lessee shall, at Lessee's sole cost, keep and maintain the
NANCE OF       Premises and appurtenances and every part thereof, including but not
PREMISES       limited to, glazing, sidewalks, parking areas including resealing
               when necessary, plumbing, electrical systems, heating and air
               conditioning installations, any store front, roof covering-unless it
               is not feasible to repair the existing roof covering and a new roof
               covering is required, and the interior of the Premises in good order,
               condition, and repair. Lessor at Lessor's sole cost and expense
               shall maintain the exterior of the walls, and structural portions of
               the roof, foundations, walls, and floors except for any repairs
               caused by the wrongful act of the Lessee and Lessee's agents. The
               Lessor will replace the roof covering if repairs to said covering are
               no longer economically feasible in the judgment of roofing experts,
               and provided that said replacement is not made necessary by acts of
               the Lessee and Lessee's agents. The Lessee shall water, maintain and
               replace, when necessary, any shrubbery and landscaping provided by
               the Lessor on the Premises. The Lessee expressly waives the benefits
               of any statute now or hereafter in effect which would otherwise
               afford the Lessee the right to make repairs at Lessor's expense or to
               terminate this lease because of Lessor's failure to keep the Premises
               in good order, conditions or repair.

SEE REVISED INSURANCE CLAUSE ATTACHED

ABANDON-       12.   Lessee shall not vacate or abandon the Premises at
MENT           any time during the term; and if Lessee shall abandon, vacate
               or surrender the premises, or be dispossessed by process of law,
               or otherwise, any personal property belonging to Lessee and left
               on the Premises shall be deemed to be abandoned, at the option
               of Lessor, except such property as may be mortgaged to Lessor.
               Abandonment shall be defined as outlined in Section 1951.3 of
               the California Civil Code.

FREE FROM      13.   Lessee shall keep the Premises and the property in
LIENS          which the Premises are situated, free from any liens arising
               out of any work performed, materials furnished, or
               obligations incurred by Lessee.

COMPLIANCE     14.   Lessee shall, at his sole cost and expense, comply
WITH           with all of the requirements of all Municipal, State and
GOVERN-        Federal authorities now in force, or which may hereafter be
MENTAL         in force, pertaining to Lessee's specific use the Premises,
REGULATIONS    and shall faithfully observe in the use of the Premises all
               Municipal ordinances and State and Federal statutes now in force
               or which may hereafter be in force. The judgment of any court of
               competent jurisdiction, or the admission of Lessee in any action
               or proceeding against Lessee, whether Lessor be a party thereto
               or not, that Lessee has violated any such ordinance or statute in
               the use of the Premises, shall be conclusive of that fact as
               between Lessor and Lessee.

INDEMNI-       15.   The Lessee, as a material part of the consideration to be
FICATION OF    rendered to the Lessor, hereby waives all claims against the
LESSOR AND     Lessor for damages to goods, wares and merchandise, and all other
LESSEE'S       personal property in, upon, or about the Premises and for
LIABILITY      injuries to persons in or about the Premises, from any cause
INSURANCE      arising at any time, excepting claims arising from the Lessor's
               negligence, and the Lessee will hold the Lessor exempt and
               harmless from any damage or injury to any person, or to the
               goods, wares and merchandise and all other personal property of
               any person, arising from the use of the Premises by the Lessee,
               or from the failure of the Lessee to keep the Premises in good
               condition and repair, as herein provided.

                      SEE REVISED INSURANCE CLAUSE ATTACHED

ADVERTISE-     16.   Lessee will not place or permit to be placed, in, upon or
MENTS AND      about the Premises any unusual or extraordinary signs, or any
SIGNS          signs not approved by the city or other governing authority. The
               Lessee will not   place, or permit to be placed, upon the
               Premises, any signs, advertisements or notices without the
               written consent of the Lessor first had and obtained. Any sign so
               placed upon the Premises shall be so placed upon the
               understanding and agreement that Lessee will remove same at the
               termination of the tenancy herein created and repair any damage
               or injury to the Premises caused thereby, and if not so removed
               by Lessee then Lessor may have same so removed at Lessee's
               expense.

UTILITIES      17. Lessee shall pay for all water, gas, heat, light, power,
               telephone service and all other service supplied to the Premises.
               If the premises are not served by a separate water meter, the
               Lessee shall pay to the Lessor 100 percent of the water bill for
               the entire property covered by said bill and of which the
               Premises are a part.

ATTORNEY'S     18.   In case suit should be brought for the possession of the
FEES           Premises, for the recovery of any sum due hereunder, or because
               of the breach of any other covenant herein, the losing party
               shall pay to the prevailing party a reasonable

                  attorney's fee, which shall be deemed to have accrued on the
                  commencement of such action and shall be enforceable whether
                  or not such action is prosecuted to judgment.

DEFAULT           19.   In the event of any breach of this Lease by the
                  Lessee, or an abandonment of the Premises by the Lessee, the
                  Lessor has the option of 1) removing all persons and property
                  from the Premises and repossessing the Premises in which case
                  any of the Lessee's property which the Lessor removes from the
                  Premises may be stored in a public warehouse or elsewhere at
                  the cost of, and for the account of Lessee, or 2) allowing the
                  Lessee to remain in full possession and control of the
                  Premises. If the Lessor chooses to repossess the Premises, the
                  Lease will automatically terminate in accordance with
                  provisions of the California Civil Code, Section 1951.2. In
                  the event of such termination of the Lease, the Lessor may
                  recover from the Lessee: 1) the worth at the time of award of
                  the unpaid rent which had been earned at the time of
                  termination including interest at 7% per annum; 2) the worth
                  at the time of award of the amount by which the unpaid rent
                  which would have been earned after termination until the time
                  of award exceeds the amount of such rental loss that the
                  Lessee proves could have been reasonably avoided including
                  interest at 7% per annum; 3) the worth at the time of award of
                  the amount by which the unpaid rent for the balance
                  of the term after the time of award exceeds the amount of such
                  rental loss that the Lessee proves could be reasonably
                  avoided; and 4) any other amount necessary to compensate the
                  Lessor for all the detriment proximately caused by the
                  Lessee's failure to perform his obligations under the Lease or
                  which in the ordinary course of things would be likely to
                  result therefrom. If the Lessor chooses not to repossess the
                  premises, but allows the Lessee to remain in full possession
                  and control of the Premises, then in accordance with
                  provisions of the California Civil Code, Section 1951.4, the
                  Lessor may treat the Lease as being in full force and effect,
                  and may collect from the Lessee all rents as they become due
                  through the termination date of the lease as specified in the
                  lease. For the purposes of this paragraph, the following do
                  not constitute a termination of Lessee's right to possession:
                  a) Acts of maintenance or preservation or efforts to relet the
                  property.
                  b) The appointment of a receiver on the initiative of the
                  Lessor to protect his interest under this Lease.

LATE              20.   Lessee hereby acknowledges that late payment by
CHARGES           Lessee to Lessor of rent and other sums due hereunder will
                  cause Lessor to incur costs not contemplated by this lease,
                  the exact amount of which will be extremely difficult to
                  ascertain. Such costs include, but are not limited to,
                  processing and accounting charges, and late charges which may
                  be imposed on Lessor by the terms of any mortgage or trust
                  deed covering the Premises. Accordingly, if any installment of
                  rent or any other sum due from Lessee shall not be received by
                  Lessor or Lessor's designee within ten (10) days after such
                  amount shall be due, Lessee shall pay to Lessor a late charge
                  equal to ten percent (10%) of such overdue amount. The parties
                  hereby agree that such late charge represents a fair and
                  reasonable estimate of the costs Lessor will incur by reason
                  of late payment by Lessee. Acceptance of such late charge by
                  Lessor shall in no event constitute a waiver of

                        This Lease Clause replaces the Insurance clause (11.) in the
                                     Renault & Handley Net Lease Form.

                  11. Lessee shall not use, or permit the Premises, or any part
                  thereof, to be used, for any purposes other than that for
                  which the Premises are hereby leased; and no use shall be made
                  or permitted to be made on the Premises, nor acts done, which
                  will cause a cancellation of any insurance policy covering
                  said building, or any part thereof, nor shall Lessee sell or
                  permit to be kept, used or sold, in or about the premises, any
                  article which may be prohibited by the standard form of fire
                  insurance policies. Lessee shall, at his sole cost and
                  expense, comply with any and all requirements, pertaining to
                  the Lessee's use and occupancy of the Premises, of any
                  insurance organization or company, necessary for the
                  maintenance of reasonable fire and public liability insurance,
                  covering said building and appurtenances.

                  11.1 Lessee shall, at its expense, obtain and keep in force
                  during the term of this Lease a policy of comprehensive public
                  liability insurance insuring Lessee, Lessor agents, invitees
                  and contractors including, Lessor's lender, against any
                  liability arising out of the Lessee's use, occupancy or
                  maintenance of the Premises. Such insurance policy shall have
                  a combined single limit for both bodily injury and property
                  damage in an amount not less than ONE MILLION Dollars
                  ($1,000,000.00). The limits of said insurance shall not limit
                  the liability of Lessee hereunder.

INSURANCE         11.2 Lessee shall, at its expense, keep in force during the
                  term of this Lease, a policy of fire and property damage
                  insurance in an "all risk" form with a sprinkler leakage
                  endorsement, insuring Lessee's inventory, fixtures, equipment
                  and personal property within the Premises for the full
                  replacement value thereof.

                  11.3 Lessor shall maintain a policy or policies of fire and
                  property damage insurance in an "all risk" form, with
                  sprinkler and, at the option of the Lessor, earthquake
                  endorsements, covering loss or damage to the building,
                  including Lessee's leasehold improvements installed with the
                  written consent of the Lessor, in such amounts and with such
                  coverage as Lessor deems advisable.

                  11.4 Lessee shall pay to Lessor as additional rent, during the
                  term hereof within 10 days after receipt of an invoice
                  therefore, 100 percent of the premiums for any insurance
                  obtained by Lessor pursuant to 11.3 above. Lessor may obtain
                  such insurance for the Building separately, or together with
                  other buildings and improvements which Lessor elects to insure
                  together under blanket policies of insurance. In such case
                  Lessee shall be liable for only such portion of the premiums
                  for such blanket policies as are allocable to the Premises. It
                  is understood and agreed that Lessee's obligation under this
                  paragraph shall be prorated to reflect the Commencement Date
                  and Expiration Date of the Lease.

                  11.5 Lessee and Lessor each hereby waives any and all rights
                  of recovery against the other, or against the officers,
                  directors, employees, partners, agents and representatives of
                  the other, for loss of or damage to the property of the
                  waiving party or the property of others under its control, to
                  the extent such loss or damage is insured against under any
                  insurance policy carried by Lessor or Lessee hereunder. Each
                  party shall notify their respective insurance carriers of this
                  waiver, and obtain from the respective insurer a waiver by
                  such insurer of all rights of subrogation or assignment of
                  claims in connection with a claim against Lessor or Lessee, as
                  the case may be, covered by such insurance.

                   Lessee's default with respect to such overdue amount, nor
                   prevent Lessor from exercising any of the other rights and
                   remedies granted hereunder.

SURRENDER OF       21. The voluntary or other surrender of this Lease by
LEASE              Lessee, or a mutual cancellation thereof, shall not work a
                   merger, and shall, at the option of Lessor, terminate all or
                   any existing subleases or subtenancies, or may, at the option
                   of Lessor, operate as an assignment to him of any or all such
                   subleases or subtenancies.

TAXES              22. The Lessee shall be liable for all taxes levied
                   against personal property and trade or business fixtures.
                   The Lessee also agrees to pay, as additional rental,
                   during the term of this Lease and any extensions thereof,
                   all real estate taxes plus the yearly installments of any
                   special assessments which are of record or which may
                   become of record during the term of this lease. If said
                   taxes and assessments are assessed against the entire
                   building and building site, and this Lease does not cover
                   the entire building or building site, the taxes and
                   assessment installments allocated to the Premises shall be
                   prorated on a square footage or other equitable basis, as
                   calculated by the Lessor. It is understood and agreed
                   that the Lessee's obligation under this paragraph will be
                   pro-rated to reflect the commencement and termination
                   dates of this Lease.

NOTICES            23. All notices to be given to Lessee may be given in writing
                   personally or by depositing the same in the United States
                   mail, postage prepaid, and addressed to Lessee at the said
                   Premises, whether or not Lessee has departed from, abandoned
                   or vacated the Premises.

ENTRY BY           24. Lessee shall permit Lessor and his agents to enter
LESSOR             into and upon and with prior written notice the Premises
                   at all reasonable times for the purpose of inspecting the
                   same or for the purpose of maintaining the building in which
                   the Premises are situated, or for the purpose of making
                   repairs, alterations or additions to any other portion of
                   said building, including the erection and maintenance of such
                   scaffolding, canopies, fences and props as may be required
                   without any rebate of rent and without any liability to
                   Lessee for any loss of occupation or quiet enjoyment of the
                   Premises thereby occasioned; and shall permit Lessor and his
                   agents, at any time within ninety days prior to the
                   expiration of this Lease, to place upon the Premises any
                   usual or ordinary "For Sale" or "To Lease" signs and exhibit
                   the Premises to prospective tenants at reasonable hours.

DESTRUCTION        25. In the event of a partial destruction of the Premises
OF                 during the said term from any cause, Lessor shall forthwith
PREMISES           repair the same, provided such repairs can be made within
                   ninety (90) days from date of destruction under the laws and
                   regulations of State, Federal, County or Municipal
                   authorities, but such partial destruction shall in no way
                   annul or void this Lease, except that Lessee shall be
                   entitled to a proportionate reduction of rent while such
                   repairs are being made, such proportionate reduction to be
                   based upon the extent to which the making of such repairs
                   shall interfere with the business carried on by Lessee in the
                   Premises. If such repairs cannot be made in ninety (90) days
                   from date of destruction Lessor may, at his option, make same
                   within a reasonable time, this Lease continuing in full force
                   and effect and the rent to be proportionately reduced as
                   aforesaid in this paragraph provided. In the event that
                   Lessor does not so elect to make such repairs which cannot be
                   made in ninety (90) days, or such repairs cannot be made
                   under such laws and

                   regulations, this Lease may be terminated at the option of
                   either party. In respect to any partial destruction which
                   Lessor is obligated to repair or may elect to repair under
                   the terms of this paragraph, the provision of Section 1932,
                   Subdivision 2, and of Section 1933, Subdivision 4, of the
                   Civil Code of the State of California are waived by Lessee.
                   In the event that the building in which the Premises may be
                   situated be destroyed to the extent of not less than 33-1/3%
                   of the replacement cost thereof, Lessor may elect to
                   terminate this Lease, whether the Premises be injured or not.
                   A total destruction of the building in which the Premises may
                   be situated shall terminate this Lease. In the event of any
                   dispute between Lessor and Lessee relative to the provisions
                   of this paragraph, they shall each select an arbitrator, the
                   two arbitrators so selected shall select a third arbitrator
                   and the three arbitrators so selected shall hear and
                   determine the controversy and their decision thereon shall be
                   final and binding upon both Lessor and Lessee, who shall bear
                   the cost of such arbitration equally between them.

ASSIGNMENT         26. The Lessee shall not assign, transfer, or
AND SUBLET-        hypothecate the leasehold estate under this Lease, or any
TING               interest therein, and shall not sublet the Premises, or
                   any part thereof, or any right or privilege appurtenant
                   thereto, or suffer any other person or entity to occupy or
                   use the Premises, or any portion thereof, without, in each
                   case, the prior written consent of the Lessor. Lessor agrees
                   not to unreasonably withhold consent to sublet or assign. As
                   a condition for granting its consent to any subletting the
                   Lessor may require the Lessee to agree to pay to the Lessor,
                   as additional rental, all rents received by the Lessee from
                   its Sublessee which are in excess of the amount payable by
                   the Lessee to the Lessor hereunder. The Lessee shall, by
                   sixty (60) days written notice, advise the Lessor of its
                   intent to sublet the Premises or any portion thereof for any
                   part of the term hereof. Within thirty (30) days after
                   receipt of Lessee's notice, Lessor shall either give approval
                   to Lessee to sublease the portion of the Premises described
                   in Lessee's notice, or Lessor shall terminate this Lease as
                   to the portion of the Premises described in Lessee's notice
                   on the date specified in Lessee's notice. If Lessee intends
                   to sublet the entire Premises and Lessor elects to terminate
                   this Lease, this Lease shall be terminated on the date
                   specified in Lessee's notice. If, however, this Lease shall
                   terminate pursuant to the foregoing with respect to less than
                   all the Premises, the rent, as defined and reserved
                   hereinabove shall be adjusted on a prorata basis to the
                   number of square feet retained by Lessee, and this Lease as
                   so amended shall continue in full force and effect. If the
                   Lessor approves a subletting, the Lessee may sublet
                   immediately after receipt of the Lessor's written approval.
                   In the event Lessee is allowed to assign, transfer or sublet
                   the whole or any part of the Premises, with the prior written
                   consent of Lessor, no assignee, transferee or sublessee shall
                   assign or transfer this Lease, either in whole or in part, or
                   sublet the whole or any part of the Premises, without also
                   having obtained the prior written consent of the Lessor. A
                   consent of Lessor to one assignment, transfer, hypothecation,
                   subletting, occupation or use by any other person shall not
                   release Lessee from any of Lessee's obligations hereunder or
                   be deemed to be a consent to any subsequent similar or
                   dissimilar assignment, transfer, hypothecation, subletting,
                   occupation or use by any other person. Any such assignment,
                   transfer, hypothecation, subletting, occupation or use
                   without such consent shall be void and

                   shall constitute a breach of this Lease by Lessee and shall,
                   at the option of Lessor exercised by written notice to
                   Lessee, terminate this Lease. The leasehold estate under this
                   Lease shall not, nor shall any interest therein, be
                   assignable for any purpose by operation of law without the
                   written consent of Lessor. As a condition to its consent,
                   Lessor may require Lessee to pay all expense in connection
                   with the assignment, and Lessor may require Lessee's assignee
                   or transferee (or other assignees or transferees) to assume
                   in writing all of the obligations under this Lease.

CONDEM-            27. If any part of the premises shall be taken for any
NATION             public or quasi-public use, under any statute or by right
                   of eminent domain or private purchase in lieu thereof, and a
                   part thereof remains which is susceptible of occupation
                   hereunder, this Lease shall, as to the part so taken,
                   terminate as of the date title shall vest in the condemnor or
                   purchaser, and the rent payable hereunder shall be adjusted
                   so that the Lessee shall be required to pay for the remainder
                   of the term only such portion of such rent as the value of
                   the part remaining after such taking bears to the value of
                   the entire

                  Premises prior to such taking; but in such event Lessor shall
                  have the option to terminate this Lease as of the date when
                  title to the part so taken vests in the condemnor or
                  purchaser. If all of the premises, or such part thereof be
                  taken so that there does not remain a portion susceptible for
                  occupation hereunder, this Lease shall thereupon terminate. If
                  a part or all of the Premises be taken, all compensation
                  awarded upon such taking shall go to the Lessor and the Lessee
                  shall have no claim thereto.

EFFECT OF         28.  The term "Lessor" as used in this Lease, means only the
CONVEYANCE        owner for the time being of the land and building containing the
                  Premises, so that, in the event of any sale of said land or
                  building, or in the event of a lease of said building, the
                  Lessor shall be and hereby is entirely freed and relieved of
                  all covenants and obligations of the Lessor hereunder, and it
                  shall be deemed and construed, without further agreement
                  between the parties and the purchaser at any such sale, or the
                  Lessee of the building, that the purchaser or lessee of the
                  building has assumed and agreed to carry out any and all
                  covenants and obligations of the Lessor hereunder. If any
                  security be given by the Lessee to secure the faithful
                  performance of all or any of the covenants of this Lease on
                  the part of the Lessee, the Lessor may transfer and deliver
                  the security, as such, to the purchaser at any such sale or
                  the lessee of the building, and thereupon the Lessor shall be
                  discharged from any further liability in reference thereto.

SUBORDI-          29.   Lessee agrees that this Lease may, at the option of
NATION            Lessor, be subject and subordinate to any mortgage, deed of trust
                  or other instrument of security which has been or shall be
                  placed on the land and building or land or building of which
                  the Premises form a part, and this subordination is hereby
                  made effective without any further act of Lessee. The Lessee
                  shall, at any time hereinafter, on demand, execute any
                  instruments, releases, or other documents that may be required
                  by any mortgagee, mortgagor, or trustor or beneficiary under
                  any deed of trust for the purpose of subjecting and
                  subordinating this Lease to the lien of any such mortgage,
                  deed of trust or other instrument of security.

WAIVER            30.   The waiver by Lessor of any breach of any term, covenant
                  or condition, herein contained shall not be deemed to be a
                  waiver of such term, covenant or condition or any subsequent
                  breach of the same or any other term, covenant or condition
                  therein contained. The subsequent acceptance of rent hereunder
                  by Lessor shall not be deemed to be a waiver of any preceding
                  breach by Lessee of any term, covenant or condition of this
                  Lease, other than the failure of Lessee to pay the particular
                  rental so accepted, regardless of Lessor's knowledge of such
                  preceding breach at the time of acceptance of such rent.

HOLDING           31.   Any holding over after the expiration of the said term,
OVER              with the consent of Lessor, shall be construed to be a tenancy
                  from month to month, at a rental to be negotiated by Lessor
                  and Lessee prior to the expiration of said term, and shall
                  otherwise be on the terms and conditions herein specified, so
                  far as applicable.

SUCCESSORS        32.   The covenants and conditions herein contained shall,
AND               subject to the provisions as to assignment, apply to and bind the
ASSIGNS           heirs, successors, executors, administrators and assigns of all of
                  the parties hereto; and all of the parties hereto shall be jointly
                  and severally liable hereunder.

TIME              33.   Time is of the essence of this Lease.

MARGINAL          34.  The marginal headings or titles to the paragraphs of this
CAPTIONS          Lease are not a part of this Lease and shall have no effect upon
                  the construction or interpretation of any part thereof. This
                  instrument contains all of the agreements and conditions made
                  between the parties hereto and may not be modified orally or
                  in any other manner than by an agreement in writing signed by
                  all of the parties hereto or their respective successors in
                  interest.

PARAGRAPHS #35, 36 AND 37 ATTACHED HERETO ARE HEREBY MADE A PART OF
THIS LEASE.

THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY WHO WILL REVIEW THE DOCUMENT AND ASSIST YOU TO DETERMINE WHETHER YOUR LEGAL RIGHTS ARE ADEQUATELY PROTECTED. RENAULT & HANDLEY IS NOT AUTHORIZED TO GIVE LEGAL AND TAX ADVICE. NO REPRESENTATION OR RECOMMENDATION IS MADE BY RENAULT & HANDLEY OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR YOUR ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT.

IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the day and year first above written.

        LESSOR                             LESSEE

ZAPPETTINI INVESTMENT CO.           INTUITIVE SURGICAL

   /s/ G. O. McKee                    /s/ Lonnie M. Smith
   ---------------                    -------------------

  3/4/97                              3/4/97

ADDITIONAL PARAGRAPHS

The following additional paragraphs are hereby made a part of that certain Lease dated February 5, 1997, by and between Zappettini Investment Co., Lessor, and Intuitive Surgical, Lessee, covering the Premises located at 1330 W. Middlefield, Mountain View, California.

35. Lessor will indemnify Lessee from and against all costs of response, corrective action, remedial action, claims, demands, losses and liabilities arising from any pre-existing environmental contamination which may have occurred prior to the Lessee taking possession of the Premises.

Lessee will only be responsible for contamination of the Premises or the soils or ground water thereon or thereunder in violation of Hazardous Materials Laws, that is caused by Lessee or Lessee's agents or contractors during the term as may be extended. All hazardous materials and toxic wastes that Lessee brings on the Premises shall be stored according to Hazardous Materials' Laws.

All hazardous materials and toxic wastes that Lessee brings on the site shall be stored according to all local, state and national government regulations. Hazardous Materials shall be defined as those substances that are recognized as posing a risk of injury to health or safety by the Santa Clara Fire Department, the Santa Clara County Health Department, the Regional Water Quality Control Board, the State of California or the Federal Government.

For purposes of this Lease, "Hazardous Materials' Laws" shall mean all local, state and federal laws, statutes, ordinances, rules, regulations, judgements, injunctions, stipulations, decrees, orders, permits, approvals, treaties or protocols now or hereafter enacted, issued or promulgated by any governmental authority which relate to any Hazardous Material or the use, handling, transportation, production, disposal, discharge, release, emission, sale or storage of, or the exposure of any person to, a Hazardous Material.

36. Quiet Enjoyment. Landlord covenants and agrees that Tenant, so long as it shall not be in default hereunder, shall and may, at all times during the term of this Lease and any extension and renewal hereof, peacefully and quietly have, hold, occupy, and enjoy the Premises without any hindrance or molestation whatever.

37. Option. Lessor hereby grants to Lessee the option to renew this Lease for 1 (one) additional 3 (three) year term commencing on the termination date of the Lease. Said option shall be exercised by letter and no later than 60 (sixty) days and no earlier than 120 (one hundred twenty) days prior to the termination date of this Lease. All the terms and conditions contained in the original Lease shall govern the extension period excepting the monthly rental shall be 95% of the then fair market value for similar buildings within a one mile radius from the above location.

38. Lessor recognizes that Lessee intends to sublease some or all of the Premises in one or more portions prior to use of the Premises by Lessee for research development and manufacturing in connection with minimally invasive surgical instrument systems. Lessor therefore agrees not to unreasonably withhold consent for Lessee to sublease the Premises in one or more portions. Notwithstanding paragraph 26 of this lease, in the event that Lessor withholds consent to sublease a portion of the Premises, Lessor shall not terminate the lease with respect to the portion of the Premises specified in Lessee's notice without the prior written consent of Lessee.

Lessor recognizes that Sublessees of Lessee will use the Premises for purposes other than research and development of minimally invasive surgery systems. Lessor therefore agrees not to unreasonably withhold consent for use of the Premises for purposes other than research, development and manufacturing minimally invasive surgical instrument systems. Lessee recognizes that use of the Premises may be reasonably limited to office space, research, development, storage and light manufacturing as is typical in similar buildings in the immediate vicinity.

EXHIBIT 10.13

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 28th day of Feb, 1997 ("Effective Date"), by and between INTUITIVE SURGICAL DEVICES, INC., a Delaware corporation (the "Company") and LONNIE SMITH ("Executive").

RECITALS

A. The Company desires assurance of the association and services of Executive in order to retain Executive's experience, skills, abilities, background and knowledge, and is willing to engage Executive's services on the terms and conditions set forth in this Agreement.

B. Executive desires to be in the employ of the Company, and is willing to accept such employment on the terms and conditions set forth in this Agreement.

C. In consideration of the foregoing promises and the mutual covenants and agreements contained herein, and for other good and valuable consideration the adequacy of which is hereby acknowledged, the parties hereby agree as follows:

AGREEMENT

1. EMPLOYMENT.

(a) The Company hereby agrees to employ Executive and Executive hereby agrees to accept employment by the Company, upon the terms and conditions set forth in this Agreement.

(b) The Company and Executive each agree and acknowledge that Executive is employed by the Company as an "at-will" employee and that either Executive or the Company has the right at any time to terminate Executive's employment with the Company, with or without cause or advance notice, for any reason or for no reason. The Company and Executive wish to set forth the compensation and benefits which Executive shall be entitled to receive in the event that Executive's employment with the Company terminates under the circumstances described herein.

2. POSITION AND DUTIES.

(a) Executive shall be the Chief Executive Officer of the Company, reporting directly to the Board of Directors, and shall serve in such other capacity or capacities as the Board of Directors of the Company may from time to time prescribe.

(b) Executive shall serve as a director of the Company during his employment by the Company, and shall serve in such capacity for such compensation, if any, as is provided to other employee directors.

(c) Executive shall do and perform all services, acts or things necessary or advisable to manage and conduct the business of the Company, provided however, that at all times during his employment Executive shall be subject to the direction and policies from time to time established by the Board of Directors of the Company. Executive's duties shall include, but not be limited to providing strong leadership for the Company's operations, and playing a major role in the development of new products, technology, external collaborations and corporate alliances. The Company particularly expects Executive to serve as a role model for staff development and scientific excellence.

(d) Executive shall devote his full time and attention during normal business hours to the business affairs of the Company except for reasonable vacations and except for illness or incapacity, but nothing in this Agreement shall preclude Executive from devoting reasonable time required for serving as a director or a member of a committee of any organization involving no conflict of interest with the interest of the Company, from engaging in charitable and community activities, and from managing his personal affairs, provided that such activities do not materially interfere with the regular performance of his duties and responsibilities under this Agreement.

3. COMPENSATION AND BENEFITS.

(a) SALARY AND BENEFITS. During the period of Executive's employment hereunder, the Company shall pay to Executive an annual salary in an amount of three hundred thousand dollars ($300,000), less standard deductions and withholdings, payable in installments in accordance with Company policy. Executive also shall be entitled to all rights and benefits for which he meets applicable eligibility conditions under such group insurance and other Company benefit programs, including sick and vacation leave and the 1996 Equity Incentive Plan, (Exhibit D) which may be in force from time to time and provided to Executive or for the Company's employees generally. The Company reserves the right to modify Executive's compensation and benefits from time to time as it deems necessary.

(b) BONUS. To the extent determined by the Compensation Committee of the Board, Executive shall be eligible to participate in such management bonus programs as may be adopted by the Company from time to time, if any.

(c) STOCK OPTIONS. The Company intends and agrees that Executive will be granted an option to purchase capital stock of the Company. Upon the commencement of Executive's employment, the Company agrees to grant Executive an option to purchase seven hundred thousand (700,000) shares of the Company's common stock under the Company's 1996 Equity Incentive Plan. The exercise price per share of the option shall be equal to one hundred percent (100%) of the fair market value of the Company's common stock as determined under

the 1996 Equity Incentive Plan on the date of grant. The option shall vest as to one sixtieth (1/60th) of the shares subject to the option for each full month of completed service, beginning on the date of the grant. If the Company enters into an Acquisition, then the option shall vest as to all the shares subject to the option immediately prior to the closing of such Acquisition. For purposes of this Agreement, "Acquisition" shall mean any consolidation or merger of the Corporation with or into any other corporation or other entity or person, or any other corporate reorganization in which the shareholders of the Corporation prior to such consolidation, merger or reorganization or any transaction or series of related transactions shall own less than fifty percent (50%) of the voting stock of the continuing or surviving entity of such consolidation, merger or reorganization, or any transaction of series of related transactions in which in excess of fifty percent (50%) of the Corporation's voting power is transferred. The Company intends and agrees that Executive will be allowed to purchase five hundred thousand dollars ($500,000) worth of the Series C Preferred Stock of the Company, at the same price and on the same terms and conditions as the institutional investors, when the Company closes the sale of its Series C Preferred Stock. Notwithstanding the foregoing, Executive acknowledges and agrees that there are no further commitments or obligations on the part of the Company to grant to Executive any additional options.

(d) EXPENSES. Executive shall be entitled to receive reimbursement of all actual and reasonable expenses incurred by Executive in performing Company services, including expenses related to travel and expenses while away from home on business. Such expenses shall be accounted for under the policies and procedures established by the Company.

(e) RELOCATION EXPENSES. In connection with Executive's relocation, Executive shall be entitled to receive reimbursement of the closing costs associated with selling Executive's principal residence, the cost of moving Executive's furnishings and family, and expenses for temporary local housing. Such reimbursement shall not exceed one hundred thousand ($100,000) dollars.

4. TERMINATION BY THE COMPANY. Executive's employment with the Company may be terminated by the Company in the following circumstances.

(a) DEATH. Upon Executive's death, the termination date shall be the last day of the month in which Executive's death occurs.

(b) DISABILITY. If Executive becomes incapacitated due to physical or mental illness, injury, or if Executive is absent from his full-time duties for twelve (12) consecutive weeks on account of physical or mental illness, the Company shall continue to pay to Executive an amount which, when combined with disability or income-continuance benefits pursuant to a Company plan or provided under state law and received by Executive, shall equal but not exceed Executive's base salary, less standard deductions and withholdings. However, Executive must submit claims for any and all such disability benefits to which he may be entitled. For any waiting period during which Executive receives no benefits under any disability plan, the Company shall pay his entire base salary, less standard deductions and withholdings. The

Company shall continue to integrate such salary payments with benefits until such time as Executive returns to work or Executive's employment is terminated but in no event for longer than twelve (12) weeks.

(c) FOR CAUSE. If the Company terminates Executive's employment for Cause, Executive shall not be entitled to receive any payments or benefits under the provisions of this Agreement, except as otherwise specifically set forth herein, and the Company shall cease paying compensation or providing benefits to Executive as of Executive's termination date. For purposes of this Agreement, Cause shall mean misconduct, including: (i) conviction of any felony or any crime involving moral turpitude or dishonesty; (ii) participation in a fraud or act of dishonesty against the Company; (iii) wilful breach of the Company's policies; (iv) intentional damage to the Company's property; or (v) material breach of this Agreement or Executive's Proprietary Information and Inventions Agreement attached hereto as Exhibit B. Physical or mental disability shall not constitute Cause.

(d) WITHOUT CAUSE. The Company shall have the right to terminate Executive's employment at any time, without Cause, effective on the date determined by the Company. If the Company terminates Executive's employment without Cause, then Executive shall be paid the following:

(i) SEVERANCE PAYMENTS. The Company shall continue to pay Executive his base salary in effect at the time of such termination for twelve months following the date of termination ("Severance Payments"). The Severance Payments shall be made on the Company's normal payroll dates and will be subject to standard deductions and withholdings. Notwithstanding the foregoing, pursuant to Sections 6(b) and 10 of this Agreement (relating to a termination of benefits in the event Executive competes with the Company or solicits on behalf of another person or entity), the Severance Payments shall cease as of the date Executive enters into an activity in competition with the Company or solicits the Company's employees, consultants or independent contractors, as determined solely by the Company, and Executive shall have no further rights to such benefits.

(ii) HEALTH INSURANCE. To the extent permitted by law and by the Company's group health insurance plans, Executive will be eligible, after the date of termination, to continue his health insurance benefits under the federal COBRA law, at his own expense for up to eighteen (18) months and, later, to convert to an individual policy if he wishes. Executive will be provided with a separate notice of his COBRA rights. If Executive elects COBRA continuation, the Company agrees to pay Executive's health insurance continuation premiums for twelve (12) months following the termination date ("Benefit Period"). The Company's obligation to make such payments shall cease immediately if, during the Benefit Period, (A) Executive becomes eligible for other health insurance benefits at the expense of a new employer; or (B) in accordance with Section 6(b) of this Agreement, Executive competes with the Company or solicits on behalf of another person or entity. Executive agrees to notify a duly authorized officer of the Company, in writing, at least ten (10) business days prior to his

acceptance of any employment which provides health insurance benefits, or his engagement in prohibited activity defined in
Section 6(b).

(iii) STOCK OPTIONS. Vesting under Executive's stock option will cease immediately. Executive's rights with respect to vested shares will be as set forth in the stock option.

5. TERMINATION BY EXECUTIVE. Executive may terminate his employment with the Company (1) for Good Reason within sixty (60) consecutive days following the occurrence of an event or events constituting such Good Reasons; or (2) for the convenience of Executive.

(a) GOOD REASON. If Executive voluntarily terminates his employment with Good Reason, Executive shall receive the Severance Payments and other benefits set forth in Section 4(d) above. For the purposes of this Agreement, Good Reason means (i) substantial reduction of Executive's rate of compensation as in effect immediately prior to the Effective Date of this Agreement; (ii) failure to provide a package of welfare benefit plans which, taken as a whole, provide substantially similar benefits to those in which the Executive is entitled to participate (except that employee contributions may be raised to the extent of any cost increases imposed by third parties) or any action by the Company which would adversely affect Executive's participation or substantially reduce Executive's benefits under any of such plans;
(iii) change in Executive's responsibilities, authority, title or office resulting in diminution of position, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith which is remedied by the Company promptly after notice thereof is given by Executive; (iv) request that Executive relocate his current residence, unless Executive accepts such relocation request;
(v) material reduction in Executive's duties; (vi) failure or refusal of a successor to the Company to assume the Company's obligations under this Agreement; or (vii) material breach by the Company or any successor to the Company of any of the material provisions of this Agreement.

(b) CONVENIENCE. If Executive voluntarily resigns his employment without Good Reason as defined below, the Company shall pay Executive his base salary, less standard deductions and withholdings, through the date of termination at the rate in effect at the time of the notice of termination. Thereafter, the Company shall have no further obligations to Executive under this Agreement.

6. LIMITATIONS AND CONDITIONS ON BENEFITS; AMENDMENT OF AGREEMENT

(a) REDUCTION IN PAYMENTS AND BENEFITS. The benefits provided under this Agreement are in lieu of any other benefit provided under any group severance plan of the Company in effect at the time of termination.

(b) EARLY CESSATION OF PAYMENTS AND OTHER BENEFITS. In the event that Executive, at any time during his employment with the Company, or while receiving Severance Payments, (i) performs work for any business entity, or engages in any other work activity

which is in competition, or is preparing to compete, with the Company; or (ii) either directly or through others, solicits or attempts to solicit any employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor to or for any other person or entity, then, except as otherwise specifically provided herein, the Company's obligations to pay Executive any amounts, including but not limited to Severance Payments, health insurance premiums, or provide any benefits under the terms of this Agreement shall all cease immediately. For purposes of this Agreement, the holding of less than one percent (1%) of the outstanding voting securities of any firm or business organization in competition with the Company shall not constitute activities or services precluded by this Agreement. Executive agrees to notify the Company, in writing, at least ten (10) business days prior to (i) engaging in any work for any business purpose other than work for the Company; or (ii) soliciting or attempting to solicit any employee, consultant, or independent contractor of the Company to terminate his other relationship with the Company on behalf of another person or entity. The Company shall not seek to recover any amounts paid or benefits provided to Executive prior to his engagement in such competitive or solicitation activities.

(c) RELEASE AND WAIVER OF CLAIMS. Prior to the receipt of any Severance Payments and other benefits provided under this Agreement following termination of Executive's Employment, and prior to the beginning of the Consulting Period, Executive shall, as of the date of termination, execute a Release and Waiver of Claims in the form attached hereto as Exhibit A ("Release"). In the event Executive does not execute the Release within the specified period set forth in the Release, no further amounts shall be payable and no further benefits shall be provided under this Agreement, and this Agreement shall be null and void.

(d) CERTAIN REDUCTIONS IN PAYMENTS OR BENEFITS.

(i) In the event that any payments or other benefits received or to be received by Executive pursuant to this Agreement ("Payments") would (A) constitute a "parachute payment" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and (B) but for this subsection (d), be subject to the excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then, in accordance with this subsection
6(d), such Payments shall be reduced to the maximum amount that would result in no portion of the Payments being subject to the Excise Tax. For such purpose, the maximum amount of Payments that may be paid without incurring the Excise Tax shall be determined by Ernst & Young, LLP or any other nationally recognized accounting firm which is the Company's outside auditor at the time of such determination (the "Accounting Firm") and shall be the largest amount for which there is substantial authority (within the meaning of Section 6662(d)(2)(B) of the Code) for no portion of the Payments being treated as subject to the Excise Tax. Any such determination shall be conclusive and binding on Executive and the Company. For purposes of making the calculations required by this subsection 6(d)(i), the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. All fees and expenses of the Accounting Firm shall be borne solely by the

Company. If the Internal Revenue Service (the "IRS") determines that a Payment is subject to the Excise Tax, then subsection 6(d)(ii) hereof shall apply.

(ii) If, notwithstanding any reduction described in subsection 6(d)(i) hereof (or in the absence of any such reduction), the IRS determines that Executive is liable for the Excise Tax as a result of the receipt of Payments, then Executive shall be obligated to pay back to the Company, within 30 days after final IRS determination, an amount of the Payments sufficient that none of the Payments retained by Executive constitute a "parachute payment" within the meaning of Code Section 280G that is subject to the Excise Tax.

(e) CERTAIN DEFERRAL OF PAYMENTS. Notwithstanding the other provisions of this Agreement, to the extent that any amounts payable hereunder would not be deductible by the Company for federal income tax purposes on account of the limitations of Section 162(m) of the Code, the Company may defer payment of such amounts to the earliest one or more subsequent calendar years in which the payment of such amounts would be deductible by the Company.

(f) AMENDMENT OR TERMINATION OF THIS AGREEMENT. This Agreement may be changed or terminated only upon the mutual written consent of the Company and Executive. The written consent of the Company to a change or termination of this Agreement must be signed by an appropriate officer of the Company other than Executive, which may be the Company's Chief Financial Officer, Vice President of Human Resources or other officer authorized by the Compensation Committee of the Board, after such change or termination has been approved by the Compensation Committee of the Board.

7. CONFIDENTIAL INFORMATION; EXECUTIVE'S DUTIES UPON TERMINATION. Executive recognizes that his employment with the Company will involve contact with information of substantial value to the Company, which is not old and generally known in the trade, and which gives the Company an advantage over its competitors who do not know or use it, including but not limited to, techniques, designs, drawings, processes, inventions, developments, equipments, prototypes, sales and customer information, and business and financial information relating to the business, products, practices and techniques of the Company, (hereinafter referred to as "Confidential Information"). Executive will at all times regard and preserve as confidential such Confidential Information obtained by Executive from whatever source and will not, either during his employment with the Company or thereafter, publish or disclose any part of such Confidential Information in any manner at any time, or use the same except on behalf of the Company, without the prior written consent of the Company. As a condition of this Agreement, Executive will sign and return a copy of the Company's "Proprietary Information and Inventions Agreement," attached as Exhibit B.

8. NONEXCLUSIVITY. Nothing in the Agreement shall prevent or limit Executive's continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices provided by the Company and for which Executive may otherwise qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any

stock option or other agreements with the Company; provided, however, that any benefits provided hereunder shall be in lieu of any other severance payments to which Executive may otherwise be entitled, including without limitation, under any employment contract or severance plan. Except as otherwise expressly provided herein, amounts which are vested benefits or which Executive is otherwise entitled to receive under any plan, policy, practice or program of the Company at or subsequent to the date of termination shall be payable in accordance with such plan, policy, practice or program.

9. CONFIDENTIALITY. The parties mutually agree not to disclose publicly the terms of this Agreement except to the extent that disclosure is mandated by applicable law.

10. NONSOLICITATION. Executive agrees that for two (2) years after his employment with the Company is terminated he will not, either directly or through others, solicit or attempt to solicit any employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company in order to become an employee, consultant or independent contractor to or for any other person or entity.

11. NOTICES. Any notices called for under this Agreement shall be given as follows or to such other addresses as either party may furnish the other from time to time:

IF TO EXECUTIVE:        Lonnie Smith
                        76 Crosstie Lane
                        Batesville, Indiana 47006

IF TO THE COMPANY:      Intuitive Surgical Devices, Inc.
                        Frederic H. Moll
                        Director
                        900 Hansen Way
                        Palo Alto, CA 94304

12. CONFIDENTIAL ARBITRATION. To ensure rapid and economical resolution of any and all disputes which may arise under this Agreement, the Company and Executive each agree that any and all disputes or controversies, whether of law or fact of any nature whatsoever (including, but not limited to, all state and federal statutory and common law discrimination claims), with the sole exception of those disputes which may arise from Executive's Proprietary Information Agreement, arising from or regarding the interpretation, performance, enforcement or breach of this Agreement, or any other disputes or claims arising from or related to Executive's employment or the termination of his employment, shall be resolved by final and binding confidential arbitration under the procedures set forth in Exhibit C to this Agreement and the then existing Judicial Arbitration and Mediation Services Rules of Practice and Procedure (except insofar as they are inconsistent with the procedures set forth in Exhibit C).

13. SEVERABILITY. If a court of competent jurisdiction determines that any term or provision of this Agreement is invalid or unenforceable, in whole or in part, then the remaining

terms and provisions hereof shall be unimpaired. Such court will have the authority to modify or replace the invalid or unenforceable term or provision with a valid and enforceable term or provision that most accurately represents the parties' intention with respect to the invalid or unenforceable term or provision.

14. WAIVER. If either party should waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

15. ENTIRE AGREEMENT. This Agreement, including Exhibits A, B and C, constitutes the complete, final and exclusive embodiment of the entire agreement between Executive and the Company with regard to the subject matter hereof and supersedes any and all prior agreements relating to such subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein. It may not be modified except in a writing signed by Executive and a duly authorized officer of the Company. Each party has carefully read this Agreement, has been afforded the opportunity to be advised of its meaning and consequences by his or its respective attorneys, and signed the same of his or its own free will.

16. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the written consent of the Company, which consent shall not be withheld unreasonably.

17. ATTORNEY FEES. If either party hereto brings any action to enforce his or its rights hereunder, each party in any such action shall be responsible for his or its costs and attorneys fees incurred in connection with such action.

18. COUNTERPARTS. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall constitute one and the same instrument.

19. HEADINGS. The headings of the Sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

IN WITNESS WHEREOF, the parties have duly authorized and caused this Agreement to be executed as follows:

LONNIE SMITH,                         INTUITIVE SURGICAL DEVICES, INC.,
an individual                         a corporation

/s/  Lonnie Smith                     By: /s/ A. Grant Heidrich
---------------------------              -----------------------------------
Lonnie Smith                          Title:  Director

Date: 2/28, 1997                      Date: 10/2, 1996

EXHIBIT A

RELEASE AND WAIVER OF CLAIMS

In exchange for the Severance Payments and other benefits to which I would not otherwise be entitled, I hereby furnish Intuitive Surgical Devices, Inc. (the "Company") with the following release and waiver.

I hereby release, and forever discharge the Company, its officers, directors, agents, employees, stockholders, attorneys, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising at any time prior to and including my employment termination date with respect to any claims relating to my employment and the termination of my employment, including but not limited to, claims pursuant to any federal, state or local law relating to employment, including, but not limited to, discrimination claims, claims under the California Fair Employment and Housing Act, and the Federal Age Discrimination in Employment Act of 1967, as amended ("ADEA"), or claims for wrongful termination, breach of the covenant of good faith, contract claims, tort claims, and wage or benefit claims, including but not limited to, claims for salary, bonuses, commissions, stock, stock options, vacation pay, fringe benefits, severance pay or any form of compensation.

I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR." I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this waiver and release is knowing and voluntary, and that the consideration given for this waiver and release is in addition to anything of value to which I was already entitled as an employee of the Company. I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the waiver and release granted herein does not relate to claims which may arise after this agreement is executed; (b) I have the right to consult with an attorney prior to executing this agreement
(although I may choose voluntarily not to do so); (c) I have twenty-one (21)
days from the date I receive this agreement, in which to consider this agreement (although I may choose voluntarily to execute this agreement earlier); (d) I have seven (7) days following the execution of this agreement to revoke my consent to the agreement; and (e) this agreement shall not be effective until the seven (7) day revocation period has expired.

Date: By:

EXHIBIT B

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

INTUITIVE SURGICAL DEVICES, INC.

EMPLOYEE PROPRIETY INFORMATION
AND INVENTIONS AGREEMENT

In consideration of my employment or continued employment by INTUITIVE SURGICAL DEVICES, INC. (the "COMPANY"), and the compensation now and hereafter paid to me, I hereby agree as follows:

1. NONDISCLOSURE

1.1 RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company's Proprietary Information (defined below), except as such disclosure, use or publication may be required in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. I will obtain Company's written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to my work at Company and/or incorporates any Proprietary Information. I hereby assign to the Company any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information shall be the sole property of the Company and its assigns.

1.2 PROPRIETARY INFORMATION. The term "PROPRIETARY INFORMATION" shall mean any and all confidential and/or proprietary knowledge, data or information of the Company. By way of illustration but not limitation, "PROPRIETARY INFORMATION" includes (a) information relating to products, processes, know-how, designs, drawings, clinical data, test data, formulas, methods, samples, media and/or cell lines, developmental or experimental work, improvements, discoveries, plans for research, new products, manufacturing, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers, and information regarding the skills and compensation of other employees of the Company (hereinafter collectively referred to as "INVENTIONS"); (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and
(c) information regarding the skills and compensation of other employees of the Company. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry, which is not gained as a result of a breach of this Agreement, and my own, skill, knowledge, know-how and experience to whatever extent and in whichever way I wish.

1.3 THIRD PARTY INFORMATION. I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information ("THIRD PARTY INFORMATION") subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an officer of the Company in writing.

1.4 NO IMPROPER USE OF INFORMATION OF PRIOR EMPLOYERS AND OTHERS. During my employment by the Company I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person. I will use in the performance of my duties only information which is generally known and used by persons with training and experience comparable to my own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.

2. ASSIGNMENT OF INVENTIONS.

2.1 PROPRIETARY RIGHTS. The term "PROPRIETARY RIGHTS" shall mean all trade secret, patent, copyright, mask work and other intellectual property rights throughout the world.

2.2 PRIOR INVENTIONS. Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement. To preclude any possible uncertainty, I have set forth on EXHIBIT B (Previous Inventions) attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (collectively referred to as "PRIOR INVENTIONS"). If disclosure of any such Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I am not to list such Prior Inventions in EXHIBIT B but am only to disclose a cursory name for each such invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. A space is provided on EXHIBIT B for such purpose. If no such disclosure is attached, I represent that there are no Prior Inventions. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company's prior written consent.

2.3 ASSIGNMENT OF INVENTIONS. Subject to Sections 2.4, and 2.6, I hereby assign and agree to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company. Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section 2, are hereinafter referred to as "COMPANY INVENTIONS."

2.4 NONASSIGNABLE INVENTIONS. This Agreement does not apply to an Invention which qualifies fully as a nonassignable Invention under Section 2870 of the California Labor Code (hereinafter "SECTION 2870"). I have reviewed the notification on EXHIBIT A (Limited Exclusion Notification) and agree that my signature acknowledges receipt of the notification.

2.5 OBLIGATION TO KEEP COMPANY INFORMED. During the period of my employment and for six (6) months after termination of my employment with the Company, I will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by me, either alone or jointly with others. In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf within a year after termination of employment. At the time of each such disclosure, I will advise the Company in writing of any Inventions that I believe fully qualify for protection under Section 2870; and I will at that time provide to the Company in writing all evidence necessary to substantiate that belief. The Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the provisions of
Section 2870. I will preserve the confidentiality of any Invention that does not fully qualify for protection under Section 2870.

2.6 GOVERNMENT OR THIRD PARTY. I also agree to assign all my right, title and interest in and to any particular Invention to a third party, including without limitation the United States, as directed by the Company.

2.7 WORKS FOR HIRE. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are "works made for hire," pursuant to United States Copyright Act (17 U.S.C., Section 101).

2.8 ENFORCEMENT OF PROPRIETARY RIGHTS. During and after my employment with the Company, I will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee. My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of my employment, but the Company shall compensate me at a reasonable rate after my termination for the time actually spent by me at the Company's request on such assistance.

In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified

in the preceding paragraph. I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me. I hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

3. RECORDS. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Inventions made by me during the period of my employment at the Company, which records shall be available to and remain the sole property of the Company at all times.

4. ADDITIONAL ACTIVITIES. I agree that during the period of my employment by the Company I will not, without the Company's express written consent, engage in any employment or business activity which is competitive with, or would otherwise conflict with, my employment by the Company.

5. NON-SOLICITATION. I agree that, during the term of my employment with the Company, and for a period of one (1) year following the date of my termination of employment with the Company, I will not form a business relationship with, offer to employ, or arrange employment of, anyone who is at that time employed by the Company or has been employed by the Company for any period of time during the previous six (6) months, nor shall I induce any employee of the Company to leave the employ of the Company.

6. NO CONFLICTING OBLIGATION. I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company. I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.

7. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I will deliver to the Company any and all drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of the Company. I further agree that any property situated on the Company's premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. Prior to leaving, I will cooperate with the Company in completing and signing the Company's termination statement.

8. LEGAL AND EQUITABLE REMEDIES. Because my services are personal and unique and because I may have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

9. NOTICES. Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon personal delivery to the appropriate address or if sent by certified or registered mail, three (3) days after the date of mailing.

10. NOTIFICATION OF NEW EMPLOYER. In the event that I leave the employ of the Company, I hereby consent to the notification of my new employer of my rights and obligations under this Agreement.

11. GENERAL PROVISIONS.

11.1 GOVERNING LAW; CONSENT TO PERSONAL JURISDICTION. This Agreement will be governed by and construed according to the laws of the State of California, as such laws are applied to agreements entered into and to be performed entirely within California between California residents. I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Santa Clara County, California for any lawsuit filed there against me by Company arising from or related to this Agreement.

11.2 SEVERABILITY. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and

reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

11.3 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

11.4 SURVIVAL. The provisions of this Agreement shall survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

11.5 AT-WILL EMPLOYMENT. I agree and understand that nothing in this Agreement shall confer any right with respect to continuation of employment by the Company, nor shall it interfere in any way with my right or the Company's right to terminate my employment at any time, for any reason, with or without cause, and with or without notice.

11.6 WAIVER. No waiver by the Company of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall be construed as a waiver of any other right. The Company shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

11.7 ENTIRE AGREEMENT. The obligations pursuant to Sections 1 and 2 of this Agreement shall apply to any time during which I was previously employed, or am in the future employed, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

This Agreement shall be effective as of the first day of my employment with the Company, namely: 4/1/97.

I HAVE READ THIS AGREEMENT CAREFULLY AND ACCEPTED AND AGREED TO: UNDERSTAND ITS TERMS. I HAVE COMPLETELY FILLED OUT EXHIBIT B TO THIS AGREEMENT.

INTUITIVE SURGICAL DEVICES, INC.

Dated: 2/28/97                                  By:


/s/ Lonnie M. Smith
----------------------------------              Title:
Signature

Lonnie M. Smith
----------------------------------              Address:  900 Hansen Way
(Printed Name)                                            Palo Alto, CA 94304

76 Crosstie Lane

(Address)

Batesville, In 47006

EXHIBIT A

LIMITED EXCLUSION NOTIFICATION

THIS IS TO NOTIFY you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and the Company does not require you to assign or offer to assign to the Company any invention that you developed entirely on your own time without using the Company's equipment, supplies, facilities or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the Company's business, or actual or demonstrably anticipated research or development of the Company;

(2) Result from any work performed by you for the Company.

To the extent a provision in the foregoing Agreement purports to require you to assign an invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.

This limited exclusion does not apply to any patent or invention covered by a contract between the Company and the United States or any of its agencies requiring full title to such patent or invention to be in the United States.

I ACKNOWLEDGE RECEIPT of a copy of this notification.

By: /s/ Lonnie Smith
    -------------------------
    Lonnie Smith

    Date: 2/28/97

WITNESSED BY:

(Printed Name of Representative)

Dated:

A-1.

EXHIBIT B

TO:        Intuitive Surgical Devices, Inc.

FROM:      Lonnie Smith  (/s/ Lonnie Smith)

                               signature

DATE:     2/28/97

SUBJECT:   Previous Inventions

1. Except as listed in Section 2 below, the following is a complete list of all inventions or improvements relevant to the subject matter of my employment by
[Company] (the "COMPANY") that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

[x] No inventions or improvements.

[ ] See below:

[ ] Additional sheets attached.

2. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies):

INVENTION OR IMPROVEMENT                PARTY(IES)       RELATIONSHIP

1.  ---------------------------   --------------------  -----------------------

2.  ---------------------------   --------------------  -----------------------

3.  ---------------------------   --------------------  -----------------------

[ ] Additional sheets attached.

B-1.

EXHIBIT C

ARBITRATION PROCEDURE

1. The parties agree that any dispute that arises in connection with this Agreement or the termination of this Agreement shall be resolved by binding arbitration in the manner described below.

2. A party intending to seek resolution of any dispute under the Agreement by arbitration shall provide a written demand for arbitration to the other party, which demand shall contain a brief statement of the issues to be resolved.

3. The arbitration shall be conducted in San Jose, California by a mutually acceptable retired judge from the panel of Judicial Arbitration and Mediation Services, Inc. ("JAMS"). At the request of either party, arbitration proceedings will be conducted in the utmost secrecy and, in such case, all documents, testimony and records shall be received, heard and maintained by the arbitrator in secrecy under seal, available for inspection only by the parties to the arbitration, their respective attorneys, and their respective expert consultants or witnesses who shall agree, in advance and in writing, to receive all such information confidentially and to maintain such information in secrecy, and make no use of such information except for the purposes of the arbitration, unless compelled by legal process.

4. The arbitrator is required to disclose any circumstances that might preclude the arbitrator from rendering an objective and impartial determination. In the event the parties cannot mutually agree upon the selection of a JAMS arbitrator, the President and Vice-President of JAMS shall designate the arbitrator.

The party demanding arbitration shall promptly request that JAMS conduct a scheduling conference within fifteen (15) days of the date of that party's written demand for arbitration or on the first available date thereafter on the arbitrator's calendar. The arbitration hearing shall be held within thirty (30) days after the scheduling conference or on the first available date thereafter on the arbitrator's calendar. Nothing in this paragraph shall prevent a party from at any time seeking temporary equitable relief, from JAMS or any court of competent jurisdiction, to prevent irreparable harm pending the resolution of the arbitration.

5. Discovery shall be conducted as follows: (a) prior to the arbitration any party may make a written demand for lists of the witnesses to be called and the documents to be introduced at the hearing; (b) the lists must be served within fifteen days of the date of receipt of the demand, or one day prior to the arbitration, whichever is earlier; and (c) each party may take no more than two depositions (pursuant to the procedures set forth in the California Code of Civil Procedure) with a maximum of five hours of examination time per deposition, and no other form of pre-arbitration discovery shall be permitted.

6. It is the intent of the parties that the Federal Arbitration Act ("FAA") shall apply to the enforcement of this provision unless it is held inapplicable by a court with jurisdiction over the dispute, in which event the California Arbitration Act ("CAA") shall apply.

7. The arbitrator shall apply California law, including the California Evidence Code, and shall be able to decree any and all relief of an equitable nature, including but not limited to such relief as a temporary restraining order, a preliminary injunction, a permanent injunction, or replevin of Company property. The arbitrator shall also be able to award actual, general or consequential damages, but shall not award any other form of damage (e.g., punitive damages).

8. Each party shall pay its pro rata share of the arbitrator's fees and expenses, in addition to other expenses of the arbitration approved by the arbitrator, pending the resolution of the arbitration. The arbitrator shall have authority to award the payment of such fees and expenses to the prevailing party, as appropriate in the discretion of the arbitrator. Each party shall pay its own attorneys fees, witness fees and other expenses incurred for its own benefit.

9. The arbitrator shall render a written award setting forth the reasons for his or her decision. The decree or judgment of an award rendered by the arbitrator may be entered and enforced in any court having jurisdiction over the parties. The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the FAA, or if the FAA is not applicable, as permitted by the CAA.