
<PAGE>

                               INTUITIVE SURGICAL, INC.


                   AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT


                                 NOVEMBER 14, 1997












































                                      1
<PAGE>
                                          
                                 TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 PAGE
                                                                                 ----
<S>                                                                              <C>

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
</TABLE>
                                       1
<PAGE>
                                          
                   AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT


     
     This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement") is 
entered into as of the 14th day of November 1997, 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 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 D Preferred
Stock pursuant to that certain Series D Preferred Stock Purchase Agreement dated
as of the date hereof (the "Purchase Agreement"); 

     WHEREAS, as a condition of entering into the Purchase Agreement, the
purchaser of Series D Preferred Stock under the Purchase 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 and Series C
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 and the 29th day of January 1997 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 and Series C
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 D Preferred Stock pursuant to the
Series D 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 and Series C 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:

<PAGE>

          "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; and (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.  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 and Series D Preferred Stock.


     2.   REGISTRATION; RESTRICTIONS ON TRANSFER

                                       2
<PAGE>

         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, 


                                      3
<PAGE>

     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 


                                      4
<PAGE>

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 


                                      5
<PAGE>

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 


                                      6
<PAGE>

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:



                                      7
<PAGE>

                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 

                                      8
<PAGE>

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 


                                      9
<PAGE>

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



                                      10

<PAGE>

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


                                       11

<PAGE>
 
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 


                                       12

<PAGE>

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), or (iii) two hundred thousand (200,000) shares of Series D 
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.


                                       13

<PAGE>

          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; (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.


                                       14

<PAGE>

          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 


                                       15

<PAGE>

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 


                                       16

<PAGE>

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


                                       17


<PAGE>

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.


                                       18

<PAGE>

         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.


                                       19

<PAGE>

     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           
                                       -----------------------------------------
                                    Its:                               
                                        ----------------------------------------
FOUNDERS:

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


/s/ Frederic H. Moll              
--------------------------------
                                    By:/s/ George A. Pavlov            
                                       -----------------------------------------
                                    Its:                               
                                        ----------------------------------------
ROBERT G. YOUNGE

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

JOHN G. FREUND

                                    By:/s/ Petri T. Vainio             
                                       -----------------------------------------
                                           Petri T. Vainio, General Partner
/s/ John G. Freund                 
--------------------------------

                                    ALLAN G. LOZIER



                                    /s/ Allan G. Lozier                
                                    --------------------------------------------


                                       20

<PAGE>

                                   GC&H INVESTMENTS



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



                                   ALLAN JOHNSTON



                                   /s/ Allan Johnston                           
                                   ---------------------------------------------

                                   GUIDANT CORPORATION



                                   By:/s/ Jay Watkins                           
                                      ------------------------------------------
                                          Jay Watkins, Vice President


                                   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
                                   ---------------------------------------------


                                       21

<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
  
  
  
                                   /s/ Peter Dickstein
                                   ---------------------------------------------
  
                                   WILLIAM JENKINS
  
  
  
                                   /s/ William Jenkins
                                   ---------------------------------------------


                                       22

<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 Halsted
                                      ------------------------------------------
                                   Its: 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 Halsted
                                      ------------------------------------------
                                   Its: General Partner
                                       -----------------------------------------


                                       23

<PAGE>

                                   PATMARK COMPANY, INC.
  
  
  
                                   By:/s/ James D. Van De Velde
                                      ------------------------------------------
                                   Its: President
                                       -----------------------------------------
  
  
                                    HUNTERSVILLE ROAD INVESTORS L.P.
  
  
  
                                   By: /s/ W. August Hillenbrand
                                      ------------------------------------------
                                   Its:
                                       -----------------------------------------
  
  
                                   WESTWOOD ASSOCIATES, L.P.
  
  
  
                                   By:
                                      ------------------------------------------
                                   Its:
                                       -----------------------------------------


                                       24

<PAGE>

                                   PRICE BROTHERS INVESTMENT PARTNERSHIP

                                   By:   Price Brothers Investment Corp.,
                                         its General Partner
  
  
                                   By:/s/ John Price
                                      ------------------------------------------
                                   Its: Vice President
                                       -----------------------------------------


                                       25

<PAGE>

                                   ROSE REVOCABLE TRUST
  
  
  
                                   By:/s/ G. Lynn Rose
                                      ------------------------------------------
                                   Its: Trustee
                                       -----------------------------------------


                                       26

<PAGE>

                                   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


                                       27

<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
                                        ---------------------------------------

                                       28

<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. Levnsohn
                                            -----------------------------------
                                              Pascal N. Levensohn
                                              Managing Member

                                       29
<PAGE>

                                        TRIAXIS TRUST AG



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

                                       30
<PAGE>

                                        BANK JULIUS BAER & CO. LTD.



                                        By: /s/ M. Jukotic        /s/ S. Newson
                                            -----------------------------------
                                        Its: Dep. Member          Vice President
                                             ----------------------------------

                                       31
<PAGE>

                                        CBG COMPAGNIE BANCAIRE GENEVE



                                        By: /s/ Michele Streuli /s/ Thierry Mory
                                            ------------------------------------
                                        Its: Vice President      Mandatory
                                            ------------------------------------

                                       32
<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.



                                        /s/ George F. Hamel, Jr.
                                        ---------------------------------------

                                        MARC T. SCHOLVINCK



                                        /s/ Marc T. Scholvinck
                                        ---------------------------------------

                                        R. CRAIG LIND



                                        /s/ R. Craig Lind
                                        ---------------------------------------

                                       33
<PAGE>

                                        INSURANCE COMPANY SUPPORTED
                                        ORGANIZATIONS PENSION PLAN



                                        By:
                                            -----------------------------------
                                        Its:
                                            -----------------------------------

                                       34
<PAGE>

                                        BK CAPITAL PARTNERS, IV, L.P.

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


                                        By: /s/ Marc T. Scholvinck
                                            -----------------------------------
                                        Its: Managing Director
                                             ----------------------------------

                                       35
<PAGE>

                                        PRISM PARTNERS I, L.P.



         
                                        By: /s/ Jerald M. Weintrab
                                            -----------------------------------
                                        Its: Managing General Partner
                                             ----------------------------------

                                       36
<PAGE>

                                        RICHARD C. BLUM & ASSOCIATES, L.P.



         
                                        By: /s/ Marc T. Scholvinck
                                            -----------------------------------
                                        Its: Managing Director
                                             ----------------------------------

                                       37
<PAGE>

                                        TIMOTHY H. UBBEN



                                        /s/ Timothy H. Ubben
                                        ---------------------------------------

                                       38
<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                 <C>                    <C>

 Mayfield VIII                                           2,565,000           ---               912,000                337,630
 2800 Sand Hill Road
 Menlo Park, CA 94025
 Attn: A. Grant Heidrich, III
 Attn: Russell C. Hirsch

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

 Sierra Ventures V, L.P.                                 2,300,000           ---               600,000                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

</TABLE>
                                       39

<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                <C>                     <C>

 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                  ---
 One Maritime Plaza, 20th Floor
 San Francisco, CA 94111

 Joseph M. Mandato and Elizabeth R. Mandato                20,000            ---                10,000                  ---
 TTEES of the Mandato Family Trust
 82 Monte Vista Avenue
 Atherton, CA 94027

 Harry S. Robbins & Susan K. Robbins                       20,000            ---                 ---                    ---
 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: Jay Watkins

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

 RWI Group, L.P.                                            ---              ---               100,000                  ---
 72o University Avenue, Suite 103
 Palo Alto, CA 94301
 Attn: Donald A. Lucas

</TABLE>
                                       40

<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                <C>                     <C>

 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

 Morgan Stanley Venture                                     ---              ---             1,368,600                  ---
  Partners III, L.P.
 3000 Sand Hill Road
 Building 4, Suite 250
 Menlo Park, CA 94025
 Attn: John F. Ryan

 Morgan Stanley Venture                                     ---              ---               131,400                  ---
  Investors III, L.P.
 3000 Sand Hill Road
 Building 4, Suite 250
 Menlo Park, CA 94025
 Attn: John F. Ryan

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

</TABLE>
                                       41

<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                 <C>                    <C>

 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                  ---
 c/o Hillenbrand Industries, Inc.
 700 State Route, 46 East
 Batesville, IN 47006
 Attn: Thomas E. Brewer

 Price Brothers Investment Partnership                      ---              ---                12,000                  ---
 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

 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
 c/o Levensohn Capital Management
 44 Montgomery Street
 Suite 2000
 San Francisco, CA 94104
 Attn:  Pascal N. Levensohn

 Triaxis Trust AG                                           ---              ---                 ---                  212,500
 Buerglistrasse 6
 8027 Zuerich
 Attn: Hans-Peter John

</TABLE>
                                       42

<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                 <C>                    <C>

 Bank Julius Baer & Co. Ltd.                                ---              ---                 ---                  162,500
 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

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

 BK Capital Partners IV, L.P.                               ---              ---                 ---                  187,500
 c/o Richard C. Blum & Associates, L.P.
 909 Montgomery Street, Suite 400
 San Francisco, CA  94133

 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.                         ---              ---                 ---                  120,625
 c/o Richard C. Blum & Associates, L.P.
 909 Montgomery Street, Suite 400
 San Francisco, CA  94133

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

</TABLE>
                                       43

<PAGE>


                             SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>

                                                          Series A         Series B            Series C               Series D
 Name and Address                                        Preferred        Preferred           Preferred              Preferred

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>                 <C>                    <C>

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

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

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

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

 George F. Hamel, Jr.                                       ---              ---                 ---                      625
 c/o Richard C. Blum & Associates, L.P.
 909 Montgomery Street, Suite 400
 San Francisco, CA  94133

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

</TABLE>
                                       44

<PAGE>

<TABLE>

<S>                                                      <C>               <C>                <C>                    <C>

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


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

</TABLE>

                                       45


