
<PAGE>

                                                                  EXHIBIT 10.11

                               LICENSE AGREEMENT

     THIS LICENSE AGREEMENT dated as of December 20, 1995 (the "Agreement"), 
is entered into between SRI INTERNATIONAL, a California nonprofit public 
benefit corporation ("SRI"), having a place of business located at 333 
Ravenswood Avenue, Menlo Park, California 94025-3493, and INTUITIVE SURGICAL 
DEVICES, INC., a Delaware corporation ("ISD"), having a place of business 
located at Five Palo Alto Square, 3000 El Camino Real, Palo Alto, California 
94306-2155.

                              W I T N E S S E T H :

     WHEREAS, SRI owns or has rights in certain patent rights and know-how 
regarding Telepresence Surgical Technology (defined below), as described in 
the SRI disclosures listed in Exhibit A hereto.

     WHEREAS, SRI and John G. Freund, M.D. ("Dr. Freund"), entered into an 
Option Agreement dated September 12, 1995 (the "Option Agreement"), pursuant 
to which SRI granted to Dr. Freund an option to obtain a certain license 
under SRI's rights in such patent rights and know-how.

     WHEREAS, by exercising the option granted under the Option Agreement, 
Dr. Freund desires that SRI convey to ISD a license under SRI's rights in 
such patent rights and know-how to develop, make use and sell products for 
use in performing surgery on humans and animals, on the terms and subject to 
the conditions of the Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the 
mutual covenants herein contained, the parties hereby agree as follows:


                                  ARTICLE 1

                                 DEFINITIONS

     For purposes of the Agreement, the terms defined in this article shall 
have the respective meanings set forth below:

     1.1  "AFFILIATE" shall mean, with respect to any Person, any other 
Person which directly or indirectly controls, is controlled by, or is under 
common control with, such Person. A Person shall be regarded as in control of 
another Person if it owns, or directly or indirectly controls, at least 
fifty percent (50%) of

<PAGE>

the voting stock or other ownership interest of the other Person, or if it 
directly or indirectly possesses the power to direct or cause the direction 
of the management and policies of the other Person by any means whatsoever.

     1.2  "FIELD" shall mean the manipulation of tissues and medical devices 
for animal and human medicine (including but not limited to surgery, 
laparoscopic surgery and microsurgery).

     1.3  "ISD KNOW-HOW" shall mean all inventions, discoveries, processes, 
methods, compositions, formulae, procedures, protocols, techniques, results 
of experimentation and testing, information and data, which have not been 
published and otherwise are not generally known, which are necessary or 
useful to the development, manufacture, use or sale of products utilizing or 
incorporating the Telepresence Surgical Technology, or otherwise relate to or 
arise from the Telepresence Surgical Technology, and which are first 
conceived or reduced to practice solely or jointly by employees or other 
Persons on behalf of ISD prior to September 12, 1997; all to the extent and 
only to the extent that ISD has the right to grant licenses, immunities or 
other rights thereunder. 

     1.4  "ISD PATENT RIGHTS" shall mean (a) all patent applications, 
heretofore or hereafter filed or having legal force in any country which 
claim a discovery or invention which is (i) necessary or useful to the 
development, manufacture, use or sale of products utilizing or incorporating 
the Telepresence Surgical Technology or (ii) otherwise relates to or arises 
from the Telepresence Surgical Technology, and which is first conceived or 
reduced to practice solely or jointly by employees or other Persons on behalf 
of ISD prior to September 12, 1997, (b) all valid and enforceable patents 
that have issued or in the future issue from the patent applications 
described in clause (a) above, including utility, model and design patents 
and certificates of invention, and (c) all divisionals, continuations, 
continuations-in-part, reissues, renewals, extensions, registrations, 
confirmations, re-examinations or additions to any such patent applications 
and patents; all to the extent and only to the extent that ISD has the right 
to grant licenses, immunities or other rights thereunder.

     1.5  "MILESTONE" shall mean the good faith filing by ISD, its Affiliate 
or sublicensee of a Pre-Market Approval application or 510K application with 
the Food and Drug Administration in the United States (or the equivalent 
application with the governing health authority of any country in Europe), 
supported by the information that in ISD's best judgment would give the 
greatest likelihood of approval by the FDA (or the governing health authority 
of the applicable country in Europe).

     1.6  "PERSON" shall mean an individual, corporation, partnership, trust, 
business trust, association, joint stock company, joint venture, pool, 
syndicate, sole proprietorship, 

                                      -2-

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unincorporated organization, governmental authority or any other form of 
entity not specifically listed herein.

     1.7  "PRODUCT" shall mean any product for use in the Field which if 
made, used or sold would infringe one or more valid claims of the SRI Patent 
Rights if in an issued patent but for the license granted by the Agreement, 
or which otherwise uses, incorporates or was conceived, developed or reduced 
to practice using the SRI Patent Rights or SRI Know-How.

     1.8  "SRI FUTURE TECHNOLOGY RIGHTS" shall mean all intellectual property 
rights of SRI in all inventions, discoveries, processes, methods, 
compositions, formulae, procedures, protocols, techniques, results of 
experimentation and testing, information and data regarding Telepresence 
Surgical Technology, which are first conceived or reduced to practice solely 
or jointly by employees or other Persons on behalf of SRI on or after 
September 12, 1997 and prior to September 12, 1999; all to the extent and 
only to the extent that SRI has the right to grant licenses, immunities or 
other rights thereunder.

     1.9  "SRI KNOW-HOW" shall mean all inventions, discoveries, processes, 
methods, compositions, formulae, procedures, protocols, techniques, results 
of experimentation and testing, information and data, which have not been 
published and otherwise are not generally known, regarding Telepresence 
Surgical Technology in which SRI has an ownership or other interest as of the 
date of the Agreement or which are first conceived or reduced to practice 
solely or jointly by employees or other Persons on behalf of SRI prior to 
September 12, 1997; all to the extent and only to the extent that SRI has the 
right to grant licenses or other rights thereunder.

     1.10 "SRI PATENT RIGHTS" shall mean (a) all patent applications, 
heretofore or hereafter filed or having legal force in any country, regarding 
Telepresence Surgical Technology, which claim a discovery or invention in 
which SRI has an ownership or other interest as of the date of the Agreement 
or which is first conceived or reduced to practice solely or jointly by 
employees or other Persons on behalf of SRI prior to September 12, 1997, (b) 
all valid and enforceable patents that have issued or in the future issue 
from the patent applications described in clause (a) above, including 
utility, model and design patents and certificates of invention, and (c) all 
divisionals, continuations, continuations-in-part, reissues, renewals, 
extensions or additions to any such patent applications and patents; all to 
the extent and only to the extent that SRI has the right to grant licenses, 
immunities or other rights thereunder. A list of the SRI Patent Rights as of 
the date of the Agreement is attached hereto as Exhibit B.

     1.11 "STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement 
dated the date hereof, among ISD, SRI and the other signatories thereto.

                                      -3-
<PAGE>

     1.12 "TELEPRESENCE SURGICAL TECHNOLOGY" shall mean hardware, firmware 
and software technology pertaining to the manipulation of tissues or medical 
devices for human and animal medicine (including but not limited to surgery, 
laparoscopic surgery and microsurgery) as described or contemplated in 
Exhibits A and B to the Agreement and developed by SRI's Medical Technology 
Laboratory or any successor SRI organization having the development of 
medical hardware, firmware and software technology as its primary mission.

     1.13 "THIRD PARTY" shall mean any Person other than SRI, ISD and their 
respective Affiliates.


                                   ARTICLE 2

                          REPRESENTATIONS AND WARRANTIES

     Each party hereby represents and warrants to the other party as follows:

     2.1  CORPORATE EXISTENCE AND POWER. Such party (a) is a corporation duly 
organized, validly existing and in good standing under the laws of the state 
in which it is incorporated; (b) has the corporate power and authority and 
the legal right to own and operate its property and assets, to enter into the 
Agreement and to perform its obligations hereunder, and to carry on its 
business as it is now being conducted and (c) is in compliance with all 
requirements of applicable law, except to the extent that any noncompliance 
would not have a material adverse effect on the properties, business, 
financial or other condition of it and would not materially adversely affect 
its ability to perform its obligations under the Agreement.

     2.2  AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such party has taken 
all necessary corporate action on its part to authorize the execution and 
delivery of the Agreement and the performance of its obligations hereunder. 
The Agreement has been duly executed and delivered on behalf of such 
party, and constitutes a legal, valid, binding obligation, enforceable 
against such party in accordance with its terms.

     2.3  NO CONSENTS. All necessary consents, approvals and authorizations of 
all governmental authorities and other Persons required to be obtained by 
such party in connection with the Agreement have been obtained.

     2.4  NO CONFLICT. The execution and delivery of the Agreement and the 
performance of such party's obligations hereunder (a) do not conflict with or 
violate any requirement of applicable laws or regulations, and (b) do not 
conflict with, or constitute a default under, any contractual obligation of 
it.

                                      -4-

<PAGE>

     2.5  SRI REPRESENTATIONS AND WARRANTIES. SRI hereby represents and 
warrants to ISD that: 

          2.5.1  Except as otherwise specifically disclosed under the 
Agreement, it has not granted any right to any Third Party under the SRI 
Patent Rights or and SRI Technology.

          2.5.2  It owns or controls under valid licenses with right of 
sublicense all of the rights, title and interest in and to the patents and 
patent applications set forth on Exhibit B attached hereto and the SRI 
Know-How, except as otherwise provided herein.

          2.5.3  It has disclosed to ISD all SRI invention disclosures 
regarding the Telepresence Surgical Technology as of the date of the 
Agreement.


                                  ARTICLE 3

                               LICENSE GRANTS

     3.1  LICENSE GRANT TO ISD.  Subject to the provisions of Section 5.3 
below, SRI hereby grants to ISD an exclusive, worldwide, royalty-free license 
(including the right to grant sublicenses) under the SRI Patent Rights and 
SRI Know-How (a) to conduct research and development with respect to Products 
for use in the Field, and (b) to make, have made, use, market, distribute, 
import, offer for sale and sell Products for use in the Field. Upon execution 
of the Agreement and frequently thereafter until September 12, 1998, at 
mutually convenient times, SRI shall disclose and make available to ISD all 
information available to SRI, including without limitation SRI invention 
disclosures and SRI Know-How, as is reasonably necessary for ISD's employees 
and consultants to understand and practice the SRI Patent Rights and SRI 
Know-How in the Field, as such information becomes available to SRI. ISD 
shall have the right, during normal business hours upon reasonable notice, 
to review and make copies of those portions of SRI employees' laboratory 
notebooks containing such information as is reasonably necessary for ISD's 
employees and consultants to understand and practice the SRI Patent Rights 
and SRI Know-How in the Field.

     3.2  SUBLICENSES.  Each sublicense by ISD under the Agreement shall be 
consistent with the terms and conditions of the license granted to ISD by SRI 
and nothing in such sublicense shall eliminate or reduce ISD's obligations to 
SRI under the Agreement. Each sublicense by SRI under the Agreement shall be 
consistent with the terms and conditions of the license granted to SRI by ISD 
and nothing in such sublicense shall eliminate or reduce SRI's obligations to 
ISD under the Agreement.

     3.3  RESERVATION OF CERTAIN RIGHTS.  Notwithstanding the foregoing, the 
license granted to ISD by the Agreement is subject

                                     -5-

<PAGE>

to the reservation of (a) the right of SRI to practice processes and methods, 
and to make, use and sell products, which are covered by the SRI Patent 
Rights or which are disclosed in or otherwise pertain to SRI Know-How, (i) 
for all commercial and research purposes outside the Field and (ii) for SRI's 
internal and collaborative non-commercial research purposes (including United 
States Government sponsored research) in the Field; (b) certain rights held 
by or in favor of the United States Government by applicable law or 
regulation; and (c) the non-exclusive, worldwide, royalty-free right to use 
the SRI Patent Rights and SRI Know-How for medical training and simulations, 
so long as products created pursuant to such right are not used to perform 
medical procedures. To the extent required by applicable United States laws 
or regulations, if at all, ISD, its Affiliates and sublicensees shall 
manufacture the Products in the United States or its territories.

     3.4  DISCLAIMER OF WARRANTIES.  NOTHING IN THE AGREEMENT SHALL BE 
CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY SRI THAT ANY PATENT 
WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION INCLUDED IN THE SRI 
PATENT RIGHTS, THAT ANY PATENT INCLUDED IN THE SRI PATENT RIGHTS WHICH ISSUES 
WILL BE VALID, OR THAT THE USE OF ANY SRI PATENT RIGHTS OR SRI KNOW-HOW WILL 
NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY OTHER PERSON. EXCEPT AS 
OTHERWISE SET FORTH IN SECTION 2.5 ABOVE, SRI MAKES NO REPRESENTATIONS OR 
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SRI PATENT RIGHTS OR SRI 
KNOW-HOW, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR 
FITNESS FOR A PARTICULAR PURPOSE.

     3.5  LICENSE GRANT TO SRI.  ISD hereby grants to SRI a non-exclusive, 
worldwide, royalty-free license (including the right to grant sublicenses) to 
practice methods and processes, and to make, use and sell products, which are 
covered by the ISD Patent Rights or which are disclosed in or otherwise 
pertain to ISD Know-How (a) for all commercial and research purposes outside 
the Field and (b) for SRI's internal and collaborative non-commercial 
research purposes (including United States Government sponsored research) in 
the Field. At least quarterly prior to September 12, 1998, at mutually 
convenient times, ISD shall disclose and make available to SRI information 
available to ISD regarding the use of the ISD Patent Rights and ISD Know-How 
outside the Field, as such information becomes available to ISD.

     3.6  TECHNICAL ASSISTANCE.  Prior to September 12, 1997, upon reasonable 
notice and during normal business hours, SRI (a) shall provide such technical 
assistance regarding the SRI Patent Rights and SRI Know-How as ISD reasonably 
requests to conduct its activities contemplated by the Agreement, and (b) 
shall make available to ISD such technical personnel of SRI as reasonably 
necessary to provide the foregoing technical assistance. Except for services 
reasonably required for the technology transfer as set forth in Section 3.1 
above, ISD shall reimburse SRI for its standard research or consulting costs 
for any such technical

                                      -6-

<PAGE>

assistance, determined in accordance with SRI's normal business practice 
applied on a consistent basis, together with all reasonable out-of-pocket 
travel and other expenses incurred by SRI in providing such technical 
assistance. At the request of ISD, SRI shall provide ISD with estimates of 
the anticipated costs of any requested technical assistance prior to 
undertaking such technical assistance.

     3.7  ACCESS.  During the term of the Agreement prior to September 12, 
1997, subject to the limitations of this Section 3.7, ISD shall have the 
right to visit SRI's facilities to inspect and use SRI Telepresence Surgical 
Technology demonstration or prototype equipment. ISD's access to SRI 
facilities and use of equipment shall be subject to the following conditions:

          (a)  ISD shall provide reasonable prior notice;

          (b)  ISD's use of SRI facilities and equipment shall be during 
normal business hours at times mutually convenient to SRI and ISD, which do 
not conflict with SRI's normal business activities;

          (c)  ISD shall repair or replace any SRI equipment damaged by ISD; 
and 

          (d)  ISD's access to SRI facilities shall be subject to the 
execution by ISD of an agreement with standard SRI terms and conditions 
regarding access to SRI facilities by contractors and other non-employee 
Third Parties.

     3.8  RIGHT OF FIRST NEGOTIATION.  SRI shall not sell, assign, license or 
otherwise transfer the SRI Future Technology Rights for use in the Field to 
any Third Party unless SRI first (a) gives to ISD written notice of SRI's 
desire to do so, (b) provides ISD with information available to SRI regarding 
the use of the SRI Future Technology Rights in the Field, sufficient to 
permit ISD to evaluate and understand such SRI Future Technology Rights, 
subject to the confidentiality provisions of Article 6 below, solely to 
evaluate its interest in negotiating a license under such rights, and (c) 
offers to ISD the opportunity to negotiate with SRI to obtain a license under 
the SRI Future Technology Rights for use in the Field. IF ISD fails to give 
written notice to SRI of its desire to negotiate a license under such rights 
within 60 days after receipt of the written notice from SRI under clause (a) 
above, or if the parties are unable after good faith negotiations to reach a 
mutually acceptable agreement, thereafter SRI shall have the right in its 
sole discretion to sell, assign, license or otherwise transfer the SRI Future 
Technology Rights for use in the Field to any one or more Third Parties.

                                      -7-

<PAGE>

                                  ARTICLE 4

                             CONSIDERATION TO SRI

     4.1  ISSUANCE OF ISD SHARES.  In consideration for the license granted 
to ISD hereunder, concurrent with the execution of the Agreement, ISD shall 
issue to SRI or SRI's designees five hundred eighty five thousand (585,000) 
shares of ISD Common Stock on the terms and subject to the conditions of the 
Stock Purchase Agreement.

     4.2  REIMBURSEMENT OF CERTAIN SRI COSTS.  Within five (5) business days 
following the execution of the Agreement, ISD shall reimburse SRI for (a) all 
reasonable, direct, out-of-pocket costs (not to exceed $116,000 in the 
aggregate) incurred by SRI on or before the date of the Option Agreement in 
connection with the preparation, filing, prosecution and maintenance of the 
patent applications and patents included in the SRI Patent Rights; (b) all 
reasonable, direct, out-of-pocket costs incurred by SRI after the date of the 
Option Agreement and on or before the date of the Agreement in connection 
with the preparation, filing, prosecution and maintenance of the patent 
applications and patents included in the SRI Patent Rights, which are 
approved by ISD or Dr. Freund prior to being incurred; and (c) all 
reasonable, outside counsel attorneys' fees and costs (not to exceed $10,000 
in the aggregate) incurred by SRI in connection with the negotiation, 
drafting and execution of the Option Agreement, the Agreement and the Stock 
Purchase Agreement; PROVIDED, HOWEVER, that no fees or costs resulting from 
work performed by SRI in-house counsel shall be reimbursed under this Section 
4.2.

     4.3  PAYMENT METHOD.  All payments by ISD to SRI under the Agreement 
shall be paid in United States dollars by bank wire transfer in immediately 
available funds to such account as SRI shall designate before such payment is 
due.

                                  ARTICLE 5

                            DILIGENCE OBLIGATIONS

     5.1  RESEARCH AND DEVELOPMENT EFFORTS.  ISD shall use its commercially 
reasonable and diligent efforts (a) to conduct such research, development and 
preclinical and human clinical trials as necessary or desirable (in ISD's 
reasonable discretion) to obtain regulatory approvals to manufacture and 
market Products for use in the Field, and (b) to commence marketing and 
market each such Product for use in the Field in such countries as ISD 
determines are commercially desirable. ISD's obligation to commence marketing 
a Product in a country shall not commence until all regulatory approvals 
necessary to market such Product in such country have been obtained by ISD. 
ISD, at its sole expense and in its sole discretion, shall fund the costs of 
all research, development, preclinical and clinical trials, regulatory 
approval

                                      -8-

<PAGE>

activities and commercialization of the Products, and SRI shall have no 
obligation to fund any such activities. 

     5.2  REPORTS.  Within ninety (90) days following the end of each 
calendar year during the term of the Agreement, ISD shall prepare and deliver 
to SRI a summary written report which shall summarize the status of the 
research, development and testing of Products, and the status of obtaining 
the necessary approvals to market Products. 

     5.3  FAILURE TO MEET THE MILESTONE.  If ISD fails to achieve the 
Milestone on or before September 12, 2002, then at SRI's election in its sole 
discretion, (a) the license granted by SRI to ISD shall become non-exclusive, 
and (b) the right to file and prosecute patent applications, to maintain and 
enforce any resulting patents, included within the SRI Patent Rights under 
Article 7 below shall revert to SRI, without any further action by ISD.


                                   ARTICLE 6

                                CONFIDENTIALITY

     6.1  CONFIDENTIAL INFORMATION.  During the term of the Agreement, and 
for a period of five (5) years following the expiration or earlier 
termination hereof, each party shall exercise reasonable care to maintain in 
confidence all information of the other party (including samples) disclosed 
by the other party and identified as, or acknowledged to be, confidential 
(the "Confidential Information"), and shall not use, disclose or grant the 
use of the Confidential Information except on a need-to-know basis to those 
directors, officers, employees, agents, permitted sublicensees and permitted 
assignees, to the extent such disclosure is reasonably necessary in 
connection with such party's activities as expressly authorized by the 
Agreement. To the extent that disclosure is authorized by the Agreement, 
prior to disclosure, each party hereto shall obtain the written agreement of 
any such Person, who is not otherwise bound by fiduciary obligations to such 
party, to hold in confidence and not make use of the Confidential Information 
for any purpose other than those permitted by the Agreement. Each party shall 
notify the other promptly upon discovery of any unauthorized use or disclosure 
of the other party's Confidential Information. 

     6.2  PERMITTED DISCLOSURES.  The nonuse and nondisclosure obligations 
contained in this article shall not apply to the extent that (a) any 
receiving party (the "Recipient") is required (i) to disclose information by 
law, order or regulation of a governmental agency or a court of competent 
jurisdiction, or (ii) to disclose information to any governmental agency for 
purposes of obtaining approval to test or market a product, provided in 
either case that the Recipient shall provide written notice thereof to the 
other party and sufficient opportunity to object, time 

                                     -9-

<PAGE>

permitting, to any such disclosure or to request confidential treatment 
thereof; or (b) the Recipient can demonstrate that (i) the information was 
public knowledge at the time of such disclosure by the Recipient, or 
thereafter became public knowledge, other than as a result of acts 
attributable to the Recipient in violation hereof; (ii) the information was 
rightfully known by the Recipient (as shown by its written records) prior to 
the date of disclosure to the Recipient by the other party hereunder; (iii) 
the information was disclosed to the Recipient on an unrestricted basis from 
a Third Party not under a duty of confidentiality to the other party; or (iv) 
the information was independently developed by employees or agents of the 
Recipient without access to the Confidential Information of the other party. 

     6.3  PUBLICATION.  ISD acknowledges SRI's interest in publishing the 
results of its research to obtain recognition within the scientific community 
and to advance the state of scientific knowledge. SRI and ISD each recognize 
their mutual interest in obtaining valid patent protection and protecting 
their respective business interests. Consequently, if SRI, its employees or 
consultants desire to make a publication (including any oral disclosure made 
without obligation of confidentiality) relating to any discovery or invention 
regarding the technology which is the subject of the Agreement (except (a) 
such technology as described in Section 3.8 above which is not licensed to 
ISD, and (b) such technology as is conceived or invented by ISD), SRI shall 
give ISD a copy of the proposed written publication at least 30 days prior to 
submission for publication, or an outline of such oral disclosure at least 30 
days prior to presentation. ISD shall have the right to request a reasonable 
delay in publication or presentation, not to exceed 90 days, in order to 
protect patentable information. If ISD requests such a delay, SRI shall delay 
submission or presentation of the publication for a period of 90 days to 
enable ISD to file the applicable patent applications protecting each 
parties' rights in such discoveries or inventions to be filed in accordance 
with Article 7 below. Upon the expiration of 30 days in the case of proposed 
written publications, or 30 days in the case of proposed oral presentations, 
from delivery to ISD, SRI shall be free to proceed with the written 
publication or presentation, respectively, unless ISD has requested the delay 
described above. 

     6.4  TERMS OF THE AGREEMENT.  Except as otherwise provided in this 
article or as otherwise required by applicable law, regulation or order of a 
governmental agency or court of competent jurisdiction, neither party shall 
disclose any terms or conditions of the Agreement to any Third Party without 
the prior consent of the other party; PROVIDED, HOWEVER, that ISD may, at its 
election, disclose terms or conditions of the Agreement to an investor in ISD 
or a bona fide potential investor in ISD, without the prior consent of SRI.

     6.5  NO USE OF NAME.  Except as otherwise required by applicable law, 
regulation or order of a governmental agency or 

                                     -10-

<PAGE>

court of competent jurisdiction, neither party shall use the name of the 
other party or the other party's directors, officers or employees in any 
advertising, news release or other publication, without the prior express 
written consent of the other party; PROVIDED, HOWEVER, that ISD may, at its 
election, identify SRI as the licensor of the Telepresence Surgical 
Technology (whether under that name or under some other designation) and/or 
of certain technology on which the Products are in part based.

     6.6  DESCRIPTION OF TELEPRESENCE SURGICAL TECHNOLOGY. Notwithstanding 
the provisions of Section 6.1, ISD may, at its election and in its sold 
discretion, disclose a description of the Telepresence Surgical Technology 
(whether under that name or some other designation) in financing documents, 
in marketing literature and in such other publications as ISD reasonably 
deems necessary to meet ISD's diligence obligations under Article 5 above; 
PROVIDED, HOWEVER, that ISD may not disclose SRI Know-How without the prior 
express written consent of SRI.

                                   ARTICLE 7

                            INVENTIONS AND PATENTS

     7.1  OWNERSHIP OF INVENTIONS. The entire right and title in all 
inventions, discoveries, processes, methods, compositions, formulae, 
techniques, information and data regarding Telepresence Surgical Technology, 
whether or not patentable (collectively, the "Inventions"), and any patent 
applications or patents based thereon, conceived in the performance of the 
parties' activities during the term of the Agreement (a) by employees or 
other Persons acting solely on behalf of SRI, shall be owned solely by SRI 
("SRI Inventions"), (b) by employees or other Persons acting solely on behalf 
of ISD shall be owned solely by ISD ("ISD Inventions"), and (c) jointly by 
employees or other Persons acting on behalf of SRI and by employees or other 
Persons acting on behalf of ISD, shall be owned jointly by SRI and ISD (the 
"Joint Inventions"). SRI and ISD each hereby represents that all employees 
and other Persons acting on its behalf in performing its obligations under 
the Agreement shall be obligated to assign to it, or as it shall direct, all 
Inventions conceived by such employees or other Persons.

     7.2  SRI PATENT RIGHTS.

          7.2.1  FILING, PROSECUTION, AND MAINTENANCE. ISD shall file and 
prosecute patent applications included in the SRI Patent Rights in the United 
States, Japan, the European Patent Office (designating the United Kingdom, 
France, Germany and Italy) and such other countries as ISD may select in its 
sole discretion, and shall maintain any resulting patents. At ISD's election 
in its sole discretion, such foreign filing may be initiated through the 
Patent Cooperation Treaty designating such countries. In so doing, ISD shall 
endeavor to obtain the strongest commercially

                                      -11-

<PAGE>

desirable patent protection (under the circumstances) regarding the 
Telepresence Surgical Technology with respect to the Products and shall 
consider in good faith the interests of SRI. ISD (a) shall supply SRI with a 
copy of each such patent application as filed, together with notice of its 
filing date and serial number; (b) shall consult with SRI regarding the 
prosecution and maintenance of the SRI Patent Rights, and shall implement 
reasonable requests of SRI with respect thereto; (c) shall provide SRI with 
copies of all filings, submissions, correspondence, office actions and 
responses thereto with the applicable patent authorities regarding the SRI 
Patent Rights; and (d) shall inform SRI promptly of the allowance and 
issuance of each patent included in the SRI Patent Rights, together with the 
date and patent number thereof, and shall provide SRI with a copy of such 
patent as issued. SRI shall cooperate with ISD, execute all lawful papers and 
instruments and make all rightful oaths and declarations and and instruments 
and make all rightful oaths and declarations as may be necessary in the 
preparation, prosecution and maintenance of all such patents and patent 
applications, ISD shall reimburse SRI for its standard costs for any such 
assistance, determined in accordance with SRI's normal business practice 
applied on a consistent basis, together with all reasonable out-of-pocket 
travel and other expenses incurred by SRI in providing such assistance; 
PROVIDED, HOWEVER, that ISD shall not be obligated to reimburse SRI for any 
consultation with SRI which ISD is obligated to undertake pursuant to this 
Article 7. At the request of ISD, SRI shall provide ISD with estimates of the 
anticipated costs of any requested assistance prior to undertaking such 
assistance.

          7.2.2  FUTURE PATENT COSTS.  Except as otherwise set forth in this 
section, ISD shall pay all costs incurred after the date of the Agreement in 
connection with the preparation, filing, prosecution and maintenance of the 
patent applications and patents included in the SRI Patent Rights. If, during 
the term of the Agreement, SRI grants a license to any one or more Third 
Parties under the SRI Patent Rights for use outside the Field, SRI shall pay 
or cause each such Third party to reimburse ISD for such Third Party's PRO 
RATA share of the actual out-of-pocket costs paid by ISD (or reimbursed by 
ISD to SRI) in connection with the preparation, filing, prosecution and 
maintenance of the patent applications and patents included in the SRI Patent 
Rights; PROVIDED, HOWEVER, that SRI shall have no obligation to reimburse ISD 
for any such Third Party's share of such out-of-pocket costs paid through the 
effective date of the license agreement with such Third Party in excess of 
the total consideration received by SRI from such Third Party for the license 
agreement with such Third Party. Patent costs incurred after the date(s) of 
such Third Party license agreement(s) shall be shared on a PRO RATA basis by 
ISD and each such Third Party; PROVIDED, HOWEVER, that ISD may, at is 
election, seek reimbursement directly from each such Third Party, and SRI 
shall cause each such Third Party to make reimbursement directly to ISD, for 
such Third Party's PRO RATA share of those patent costs incurred after the 
date of such Third Party license agreement. Notwithstanding anything to the 
contrary in this Section 7.2, if ISD desires to abandon or materially

                                      -12-

<PAGE>

narrow any claim of the SRI Patent Rights which has application outside the 
Field, then SRI shall have the right, in its sole discretion and at its sole 
expense, to assume control of the prosecution, maintenance and enforcement of 
such claim, provided that the respective rights of each party under the 
Agreement with respect to such claim shall not otherwise be affected solely 
by virtue of ISD abandoning and SRI assuming control thereof.

           7.2.3  ENFORCEMENT.  Each party promptly shall notify the other 
party of any infringement known to such party of the SRI Patent Rights and 
shall provide the other party with the available evidence, if any, of such 
infringement. ISD, at its sole expense, shall have the right (but not the 
obligation) to determine the appropriate course of action to enforce the SRI 
Patent Rights in the Field or otherwise abate the infringement thereof in the 
Field, to take (or refrain from taking) appropriate action to enforce the SRI 
Patent Rights in the Field, to control any litigation or other enforcement 
action in the Field and to enter into, or permit, the settlement of any such 
litigation or other enforcement action with respect to the SRI Patent Rights 
in the Field, and shall consider, in good faith, the interests of SRI in so 
doing. If, within one hundred twenty (120) days of receipt of notice from 
SRI, ISD does not abate the infringement in the Field or file suit to enforce 
the SRI Patent Rights against at least one infringing party in the Field, SRI 
shall have the right to take whatever action it deems appropriate to enforce 
the SRI Patent Rights in the Field. The party controlling any such 
enforcement action shall not settle the action or otherwise consent to an 
adverse judgment in such action that adversely affects the rights or 
interests of the non-controlling party or imposes additional obligations on 
the non-controlling party, without the prior written consent of the 
non-controlling party. All monies recovered upon the final judgment or 
settlement of any such suit by ISD to enforce the SRI Patent Rights in the 
Field shall be retained by ISD. All monies recovered upon the final judgment 
or settlement of any such suit by SRI to enforce the SRI Patent Rights in the 
Field shall be retained by SRI. Notwithstanding the foregoing, SRI and ISD 
shall fully cooperate with each other in the planning and execution of any 
action to enforce the SRI Patent Rights in the Field.

     7.3  ISD PATENT RIGHTS.

          7.3.1  FILING, PROSECUTION, AND MAINTENANCE.  ISD, at its sole 
expense, shall have the right to file and prosecute patent applications 
included in the ISD Patent Rights in the United States, Japan, the European 
Patent Office (designating the United Kingdom, France, Germany and Italy) and 
such other countries as ISD may select in its sole discretion, and to 
maintain any resulting patents. At ISD's election in its sole discretion, 
such foreign filing may be initiated through the Patent Cooperation Treaty 
designating such countries. ISD shall provide SRI with copies of each such 
patent application as filed,

                                      -13-

<PAGE>

together with notice of its filing date and serial number, and copies of all 
office actions and responses thereto.

           7.3.2  ENFORCEMENT.  ISD, at its sole expense, shall have the 
right (but not the obligation) to determine the appropriate course of action 
to enforce the ISD Patent Rights or otherwise abate the infringement thereof, 
to take (or refrain from taking) appropriate action to enforce the ISD Patent 
Rights, to control any litigation or other enforcement action and to enter 
into, or permit, the settlement of any such litigation or other enforcement 
action with respect to the ISD Patent Rights, and shall consider, in good 
faith, the interests of SRI in so doing. All monies recovered upon the final 
judgment or settlement of any such suit to enforce the ISD Patent Rights 
shall be retained by ISD.

     7.4  PATENT MARKINGS.  With respect to each Product which would infringe 
a valid claim of an issued patent of the SRI Patent Rights but for the license 
granted to ISD hereunder, ISD, its Affiliates and sublicensees shall mark 
each such Product sold or otherwise disposed of by any of them with the 
appropriate marking, giving notice to the public that such Product is 
patented, by fixing thereon either the word "patent" or the abbreviation 
"pat", together the number of such issued patent of the SRI Patent Rights.

                                  ARTICLE 8

                            TERM AND TERMINATION

     8.1  EXPIRATION.  Subject to the provisions of this article, the 
Agreement shall expire on the later of (a) the expiration of the last to 
expire of the SRI Patent Rights, or (b) the date seventeen (17) years after 
the date of the Agreement.

     8.2  TERMINATION BY SRI.  SRI may terminate the Agreement, in its sole 
discretion, upon thirty (30) days prior written notice to ISD, (a) if ISD 
fails to timely reimburse SRI for the costs described in Section 4.2 above, 
and if ISD has not cured such breach within thirty (30) days after written 
notice thereof by SRI; or (b) except as otherwise provided in the article 
below regarding force majeure, upon or after the material breach of its 
obligations under the Stock Purchase Agreement or under Section 6.1, 6.2, 
6.3, 6.4, 7.2, 7.3, 9.1, 9.2 or 9.3 of the Agreement, if ISD has not cured 
such breach within ninety (90) days after written notice thereof by SRI.

     8.3  TERMINATION BY ISD.  Except as otherwise provided in the article 
below regarding force majeure, if SRI materially breaches its obligations 
under Section 3.1, 3.6 or 3.7 of the Agreement, and SRI has not cured such 
breach within sixty (60) days after written notice thereof by ISD, then (a) 
ISD may terminate the Agreement upon thirty (30) days prior written notice to 
SRI, and

                                      -14-

<PAGE>

for the periods(s) specified in Section 2(a) of the Stock Purchase Agreement, 
repurchase that portion of the shares of ISD Common Stock issued to SRI 
specified in Section 2(a) of the Stock Purchase Agreement at the price and on 
the terms and conditions set forth in the Stock Purchase Agreement, and (b) 
SRI shall grant to ISD an exclusive, worldwide, royalty-free license with the 
right to sublicense, under the SRI Patent Rights and SRI Know-How, to make, 
have made, use, market, distribute, import, offer for sale and sell Products 
for use in the Field.

     8.4  CONVERSION TO NONEXCLUSIVE BY SRI. SRI may convert the license 
granted by SRI to ISD to a nonexclusive license, in its sole discretion, upon 
thirty (30) days prior written notice to ISD, (a) upon or after the material 
breach of ISD's obligations under Section 5.1 of the Agreement, if ISD has 
not cured such breach within sixty (60) days after written notice thereof by 
SRI; or (b) if ISD voluntarily commences any action or seeks any relief 
regarding its liquidation, reorganization, dissolution or similar act or 
under any bankruptcy, insolvency or similar law; or (c) if a proceeding is 
commenced or an order, judgment or decree is entered seeking the liquidation, 
reorganization, dissolution or similar act or any other relief under any 
bankruptcy, insolvency or similar law against ISD, without its consent, which 
continues undismissed or unstayed for a period of sixty (60) days; PROVIDED, 
HOWEVER, that SRI shall not have the right to terminate the Agreement solely 
by reason of the occurrence of any one or more of the events described in 
this Section 8.4.

     8.5  FAILURE TO ISSUE ISD SHARES. In the event that ISD fails to duly 
authorize, validly issue and deliver to SRI or its designees the shares 
referenced in Section 4.2 above concurrent with the execution of the 
Agreement, the Agreement automatically shall terminate without further action 
by SRI.

     8.6  EFFECT OF EXPIRATION OR TERMINATION. Expiration or termination of 
the Agreement shall not relieve the parties of any obligation accruing prior 
to such expiration or termination, and the provisions of Articles 6 and 9 
shall survive the expiration or termination of the Agreement. Upon expiration 
of the Agreement under Section 8.1 above, ISD shall have an exclusive, 
worldwide, royalty-free license under the SRI Know-How in the Field, and SRI 
shall have a non-exclusive, worldwide, royalty-free license under the ISD 
Patent Rights and ISD Know-How for use outside the Field.

     8.7  ISD DATA. Notwithstanding anything to the contrary in the 
Agreement, (a) if the Agreement is terminated pursuant to the provisions of 
Section 8.2 above, upon SRI's request not more than ninety (90) days after 
such termination, within thirty (30) days after such request, ISD shall 
provide provide SRI with copies of all regulatory submissions and approvals, 
if any, regarding actual or potential Products, (b) SRI shall have the right 
of reference to all data and information in such regulatory submissions, and 
(c) ISD shall execute all such documents and instruments reasonably necessary 
to enable SRI to reference all such data, information

                                       -15-
<PAGE>

and submissions. ISD makes no representations and warranties whatsoever, 
express or implied, regarding such data, information and submissions, and any 
such use and reference of such data, information and submissions shall be at 
SRI's own risk.

                                       ARTICLE 9

                               INDEMNIFICATION AND INSURANCE 

     9.1  INDEMNIFICATION. ISD shall indemnify, defend and hold harmless SRI, 
its directors, officers, employees and agents from all losses, liabilities, 
damages and expenses (including reasonable attorneys' fees and costs) that 
they may suffer as a result of any claims, demands, actions or other 
proceedings made or instituted by any Third Party or Affiliate against any of 
them and arising out of or relating to (a) any use by ISD, its Affiliate or 
sublicensee of any SRI Patent Rights or SRI Know-How, including any claim of 
patent infringement, or (b) any personal injury to or death of any person or 
damage to any property in connection with any act or omission (without regard 
to culpable conduct) by or on behalf of ISD, its Affiliate or sublicensee in 
the performance of its activities contemplated by the Agreement (including 
without limitation the manufacture, use and sale of Products), other than 
those certain losses, liabilities, damages and expenses arising solely out of 
the gross negligence or willful misconduct of SRI. Notwithstanding the 
foregoing, ISD shall have no obligation to indemnify, defend or hold harmless 
SRI from any losses, liabilities, damages and expenses (including reasonable 
attorneys' fees and costs) that it may suffer as a result of any claims, 
demands, actions or other proceedings made or instituted by any current or 
former employee, consultant, licensee or optionee of SRI.

     9.2  INDEMNIFICATION PROCEDURE. SRI promptly shall notify ISD of any 
loss, liability, damage or expense, or any claim, demand, action or other 
proceeding with respect to which SRI intends to claim such indemnification. 
ISD's indemnity obligations under this article shall not apply to amounts 
paid in any settlement if effected without the consent of ISD, which consent 
shall not be unreasonably withheld or delayed. ISD shall not settle or 
consent to an adverse judgment in any such claim, demand, action or other 
proceeding that adversely affects the rights or interests of SRI, its 
employees or agents or imposes additional obligations on SRI, its employees 
or agents, without the prior express written consent of SRI. SRI, its 
employees and agents, shall cooperate fully with ISD and its legal 
representatives in the investigation of any action, claim or liability 
covered by this indemnification.

     9.3  INSURANCE. Concurrent with the commencement of the first human 
clinical trial of any Product, ISD shall procure and maintain such liability 
insurance, including contractual and product liability insurance, against 
claims for bodily injury,

                                       -16-

<PAGE>

including death, or property damage arising from its activities contemplated 
by the Agreement, in amounts not less than $2,000,000 per occurrence and 
$5,000,000 in the aggregate. ISD shall maintain such insurance for so long 
thereafter as it continues to conduct its activities contemplated by the 
Agreement; PROVIDED, HOWEVER, that in the event such insurance becomes 
unavailable to ISD or in the event of extreme market conditions or other 
unforeseen events, the parties agree to discuss such changed circumstances 
and appropriate mechanisms to address them. Upon request, ISD shall provide 
SRI with certificates of insurance evidencing ISD's compliance with the 
insurance requirements of this section. SRI assumes no liability and 
disclaims any responsibility for the product specifications, clinical trials, 
manufacture, use, marketing, sale or other disposition, application, or 
delivery of any and all Products. No warranties made by ISD in connection 
with Product shall expressly or implicitly obligate SRI in any manner 
whatsoever.

     9.4  LIMITED LIABILITY.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE 
OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT 
OF OR RELATED TO THE AGREEMENT OR WITH RESPECT TO ANY CLAIM, DEMAND, ACTION 
OR OTHER PROCEEDING RELATING TO THE AGREEMENT HOWEVER CAUSED, AND ON ANY 
THEORY OF LIABILITY (INCLUDING NEGLIGENCE) AND WHETHER OR NOT SUCH PARTY HAS 
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL SRI'S 
LIABILITY OWING TO ISD WITH RESPECT TO ANY CLAIM, DEMAND, ACTION OR OTHER 
PROCEEDING RELATING TO THE AGREEMENT EXCEED THE VALUE OF THE CONSIDERATION 
ACTUALLY RECEIVED BY SRI UNDER THE AGREEMENT OR THE STOCK PURCHASE AGREEMENT.


                                 ARTICLE 10

                               FORCE MAJEURE

     Neither party shall be held liable or responsible to the other party nor 
be deemed to have defaulted under or breached the Agreement for failure or 
delay in fulfilling or performing any term of the Agreement to the extent, 
and for so long as, such failure or delay is caused by or results from causes 
beyond the reasonable control of the affected party including but not limited 
to fires, earthquakes, floods, embargoes, wars, acts of war (whether war is 
declared or not), insurrections, riots, civil commotions, strikes, lockouts 
or other labor disturbances, acts of God or acts, omissions or delays in 
acting by any governmental authority or other party.


                                 ARTICLE 11

                                ARBITRATION

     Any controversy or claim arising out of or relating to the Agreement, or 
the breach thereof, or any failure to agree where

                                      -17-

<PAGE>

agreement of the parties is necessary pursuant hereto, including the 
determination of the scope of this agreement to arbitrate, shall be resolved 
by the following procedures:

     11.1  ATTEMPT TO RESOLVE DISPUTE.  The parties shall use all reasonable 
efforts to amicably resolve the dispute through direct discussions. The 
senior management of each party commits itself to respond promptly to any 
such dispute. Either party may send written notice to the other party 
identifying the matter in dispute and invoking the procedures of this 
article. Within ten (10) days after such written notice is received, unless a 
delay is agreed to by both parties or the parties agree to confer by 
telephone, one or more principals of each party shall meet in Menlo Park, 
California to attempt to amicably resolve the dispute by written agreement. 
If said dispute cannot be settled through direct discussions within twenty 
(20) days after such written notice is received, the parties agree to first 
endeavor to settle the dispute in an amicable manner by mediation in San 
Francisco and administered by the American Arbitration Association ("AAA"), 
417 Montgomery Street, San Francisco, California 94104-1113, pursuant to the 
Commercial Mediation Rules of AAA at the time of submission prior to 
resorting to binding arbitration.

     11.2  APPLICATION TO BINDING ARBITRATION. If after sixty (60) days from 
the first written notice of dispute, the parties fail to resolve the dispute 
by written agreement or mediation, either party may submit the dispute to 
final and binding arbitration administered by the AAA, pursuant to the 
Commercial Arbitration Rules of the AAA at the time of submission. California 
Arbitration Law shall govern. The arbitration shall be held in Menlo Park, 
California before a single neutral, independent, and impartial arbitrator 
(the "Arbitrator"). The language of the arbitration shall be English, 
provided however that an interpreter may be provided for any witness that 
desires an interpreter; the costs of such interpretation shall be borne by 
the party requesting the interpreter, subject to being awarded by the 
Arbitrator as a cost of arbitration.

     11.3  BINDING ARBITRATION PROCEDURE. Unless the parties have agreed upon 
the selection of the Arbitrator before then, the AAA shall appoint the 
Arbitrator as soon as practicable, but in any event within thirty (30) days 
after the submission to AAA for binding arbitration. The arbitration hearings 
shall commence within forty-five (45) days after the selection of the 
Arbitrator. Unless the Arbitrator otherwise directs, each party shall be 
limited to two pre-hearing depositions each lasting no longer than 6 hours. 
The parties shall exchange documents to be used at the hearing no later than 
ten (10) days prior to the hearing date. Unless the Arbitrator otherwise 
directs, each party shall have no longer than ten (10) hours to present its 
position, the entire proceedings before the Arbitrator shall be on no more 
than three (3) hearing days within a two week period. At the close of 
evidence, each side shall submit a proposed award to the Arbitrator, one of 
which shall be selected by the Arbitrator. The

                                      -18-

<PAGE>

award shall be made no more than thirty (30) days following the close of the 
proceeding. Under no circumstance should any time limit on the arbitration 
hearings be applied so as to render any award subject to vacation under 
California Code of Civil Procedure Section 1286.2. Accordingly, the 
Arbitrator shall have authority to alter any time period believed necessary 
to avoid vacatur under Section 1286.2. The Arbitrator's award shall be a 
final and binding determination of the dispute and shall be fully enforceable 
as an arbitration award by the California courts in accordance with the 
California Arbitration Law. The prevailing party shall be entitled to recover 
its reasonable attorneys' fees and expenses, including arbitration 
administration fees, incurred in connection with such proceeding. Except as 
otherwise required by applicable law, regulation or order of a governmental 
agency or court of competent jurisdiction, neither party nor the Arbitrator 
may disclose the existence, content, or results of any arbitration hereunder 
without the prior written consent of both parties. 

     11.4  FEDERAL CLAIM.  Any controversy or claim arising out of or 
relating to the provisions of Article 7 of the Agreement for which the United 
States District Court or other federal court would have subject matter 
jurisdiction in the absence of the arbitration provisions set forth in this 
Article 11 shall be exempt from such arbitration provisions and the United 
States District Court for the Northern District of California shall have 
exclusive jurisdiction over such controversy or claim. 


                                  ARTICLE 12

                                 MISCELLANEOUS

     12.1  NOTICES.  Any consent, notice or report required or permitted to 
be given or made under the Agreement by one party to the other party shall be 
in writing, delivered personally or by facsimile (and promptly confirmed by 
personal delivery, U.S. first class mail, courier or nationally-recognized 
delivery service), U.S. first class mail postage prepaid, courier or 
nationally-recognized delivery service, and addressed to the other party at 
its address indicated below, or to such other address as the addressee shall 
have last furnished in writing to the addressor. Except as otherwise provided 
in the Agreement, such consent, notice or report shall be effective upon 
receipt by the addressee. 

     If to SRI, for 
     technical matters:   SRI International
                          333 Ravenswood Avenue
                          Menlo Park, California 94025-3493
                          Attention: Ajit Shah

                                     -19-

<PAGE>

     If to SRI, for 
     all other matters:   SRI International 
                          333 Ravenswood Avenue
                          Menlo Park, California 94025-3493
                          Attention: Technology Licensing

     If to ISD, for 
     technical matters:   Intuitive Surgical Devices, Inc. 
                          c/o Cooley Godward Castro Huddleson & Tatum
                          Five Palo Alto Square
                          3000 El Camino Real
                          Palo Alto, California 94306-2155
                          Attention: John G. Freund, M.D.

     If to ISD, for 
     all other matters:   Intuitive Surgical Devices, Inc. 
                          c/o Cooley Godward Castro Huddleson & Tatum
                          Five Palo Alto Square
                          3000 El Camino Real
                          Palo Alto, California 94306-2155
                          Attention: John G. Freund, M.D.

     12.2  SOLICITATION OF SRI EMPLOYEES.  ISD acknowledges that, during the 
term of the Agreement, ISD will have access to SRI's business and employees, 
including certain valuable proprietary information of SRI. ISD recognizes 
that misuse of such proprietary information, including interference with the 
employment relationship between SRI and its employees, would cause 
substantial loss and irreparable harm to SRI. Therefore, as part of the 
consideration for the Agreement, ISD shall not, prior to the expiration of 
twelve (12) months after the effective date of the Agreement, either directly 
or indirectly, by any means or device whatsoever, solicit any more than two 
of SRI's scientific or laboratory personnel involved with or working on any 
project relating to Telepresence Surgical Technology or otherwise induce or 
attempt to induce such personnel to terminate their employment with SRI. 

     12.3  GOVERNING LAW.  The Agreement, including the decision to arbitrate 
and any decision by an arbitrator pursuant to Article 11, shall be governed 
by and construed in accordance with the laws of the State of California, 
without regard to the conflicts of law principles thereof (except to the 
extent United States law preempts California law), and shall not be governed 
by the United Nations Convention on Contracts for the International Sale of 
Goods. 

     12.4  U.S. EXPORT LAWS AND REGULATIONS.  Each party hereby acknowledges 
that the rights and obligations of the Agreement are subject to the laws and 
regulations of the United States relating to the export of products and 
technical information. Without

                                     -20-

<PAGE>

limitation, each party shall comply with all such laws and regulations.

     12.5  NO OTHER RIGHTS.  The Agreement shall not be construed to grant 
any license or other rights to ISD in any patent rights, know-how or other 
technology of SRI, except as expressly provided in the Agreement.

     12.6  ASSIGNMENT.  ISD shall not assign its rights or obligations under 
the Agreement, in whole or in part, by operation of law or otherwise, wihtout 
the prior written consent of SRI, which consent shall not be unreasonably 
withheld; PROVIDED, HOWEVER, that ISD may, without such consent, assign the 
Agreement and its rights and obligations hereunder in connection with the 
transfer or sale of all or substantially all of its business or divisions or 
subdivisions related to Telepresence Surgical Technology, or in the event of 
its merger, consolidation, change in control, spin-off, recapitalization or 
similar transaction. Any permitted assignee shall assume all obligations of 
its assignor under the Agreement. Any purported assignment in violation of 
this section shall be null and void.

      12.7  WAIVERS AND AMENDMENTS.  No change, modification, extension, 
termination or waiver of the Agreement, or any of ythe provisions herein 
contained, sahll be valid unless made in writing and signed by duly 
authorized representatives of the parties hereto.

      12.8  ENTIRE AGREEMENT.  The Agreement embodies the entire 
understanding between the parties and supersedes any prior understanding and 
agreements between and among them respecting the subject matter hereof. There 
are no representations, agreements, arrangements or understandings, oral or 
written, between the parties hereto relating to the subject matter of the 
Agreement which are not fully expressed herein. The Agreement supersedes the 
Option Agreement, and upon execution of the Agreement by the parties, the 
Option Agreement is hereby terminated.

      12.9  SEVERABILITY.  Any of the provisions of the Agreement which are 
determined to bei nvalid or unenforceable in any jurisdiction shall be 
ineffective to the extent of such invalidity or unenforceability in such 
jurisdiction, without rendering invalid or unenforceable the remaining 
provisions hereof and without affeting the validity or enforceability of any 
of the terms of the Agreement in any other jurisdiction.

      12.10  WAIVER.  The waiver by either party hereto of any right 
hereunder or the fialure to perform or of a breach by the other party shall 
not be deemed a waiver of any other right hereunder or of any other breach or 
failure by said other party whether of a similar nature or otherwise.

      12.11  COUNTERPARTS.  The Agreement may be executed in two or more 
counterparts, each of which shall be deemd an original, but

                                      -21-

<PAGE>

all of which together shall constitute one and the same instrument.

      IN WITNESS WHEREOF, the parties have executed the Agreement as of the 
date first set forth above.


SRI INTERNATIONAL                     INTUITIVE SURGICAL DEVICES, INC.



By:     /s/ Harold E. Kruth           By:     /s/ John G. Freund 
    ---------------------------           ----------------------------
Title:  SR VP & G C                    Title:
        -----------------------              -------------------------




Agreed to, for purposes of the 
third sentence of Section 12.8
only, as of this December 19, 1995


      /s/ John G. Freund
-----------------------------------
John G. Freund, M.D.

                                      -22-

<PAGE>

                               EXHIBIT "A"
                SRI International Invention Disclosures


#3026
Teleoperator System and Method with Telepresence
Green (corresponds to #48)

P #3079
Steerable and Stereoscopic Laparoscope
Green

P #3278
Remote Center Positioner
Jenses (corresponds to #29)

P #3308
Articulated Surgical Grasper
Hill

P #3311
Telepresence Surgery Demo System
Hill, Green, Jensen, Gorfa, Shah

P #3318
Sterilizable Inner Manipulator
Hill

P #3319
Method for Telemanipulation with Telepresence
Green (corresponds to #33)

P #3336
Articulated Manipulator
Green, Hill, Jensen

P #3421
Method and Apparatus for Axial and Rotational Positioning Shaft with 
Application to Laparoscopic Medical Instruments
Green

P #3435
Combined Remote-Center Positioner and Abdominal Wall Lift Device
Green

P #3441
Manipulator with Twist-Lock Tool Insertion
Jensen, Hill (corresponds to #42)

P #3457
Quick-Change Surgical Instrument
Hill (corresponds to #44)

                                      -23-

<PAGE>

                                   EXHIBIT "B"
                         SRI International Patent Rights

#48
Basic teleoperator system for providing operator tactile feedback and control 
and a real or virtual image of the workspace (filed January 21, 1992). 
(SN: 07/8231932) (also filed in Europe, Japan and Canada)

#48-1
Divisional of -48, directed to tactile sensors and broader claim language re 
the basic telepresence concept (filed August 21, 1995). (SN: 08/S17,052)

#29
Remote center positioner (RCP) - four bar linkage that constrains movement of 
an endoscopic instrument about a remote point (i.e., a percutaneous penetration 
in the patient) (filed May 14, 1993). (SN: 08/062,404) (also filed in Europe 
and Japan)

#29-4
Divisional of RCP application-directed to method claims (filed July 20, 1995).
(SN:08/504,301)

#29-5
Divisional of RCP application-directed to flexible drive element (filed 
July 20, 1995). (SN: 08/504,620)

#29-6
Divisional of RCP application-directed to channel shaped linkage (filed 
July 20, 1995). (SN: 08/504,619)

#33
System and method for transforming view able real-time image into perspective 
image simulating the view of an operator at the remote workspace (filed 
May 5, 1994). (SN: 08/239,086)

#33-1
Directed to the dynamic calibration system (filed April 20, 1995). (SN: 
06/239,086)

#42, -44
Surgical instrument manipulator - receives signals from servomechanism and 
manipulates instrument, provides at least four degrees of freedom and quick 
attachment and release of different surgical instruments (filed June 7, 
1995). (42: 08/485,597, 44: 08/487,020)

                                       -24-
