<PAGE>
                                                                    Exhibit 99.2


                          CERTIFICATE OF DESIGNATIONS

                     SETTING FORTH THE PREFERENCES, RIGHTS

                  AND LIMITATIONS OF THE SERIES D CONVERTIBLE

                    PREFERRED STOCK OF COMPUTER MOTION, INC.

      The undersigned officers of COMPUTER MOTION, INC. (the "Corporation"), a
Delaware corporation, DO HEREBY CERTIFY that, pursuant to the provisions of
Sections 151 of the General Corporation Law of the State of Delaware:

      1.    The name of the Corporation is Computer Motion, Inc. and the
Corporation is validly existing and incorporated.

      2.    On March 5, 2003, pursuant to authority vested in the Board of
Directors by Article IV of the Corporation's Second Amended and Restated
Certificate of Incorporation, the Board of Directors established a series of up
to an aggregate of 8,965 shares of Series D-1 Convertible Preferred Stock of the
Corporation, par value $0.001 per share (the "Series D-1 Convertible Preferred
Stock"), and up to an aggregate of 1,785 shares of Series D-2 Convertible
Preferred Stock of the Corporation, par value $0.001 per share (the "Series D-2
Convertible Preferred Stock" and together with the Series D-1 Convertible
Preferred Stock, the "Series D Convertible Preferred Stock") and adopted the
following with respect to the Certificate of Designations of the Series D
Convertible Preferred Stock:

            WHEREAS, the Corporation desires to create a new series of its
      Preferred Stock to be designated as "Series D Convertible Preferred
      Stock";

            NOW, THEREFORE, it is hereby

            RESOLVED, that a new series of the class of authorized preferred
      stock of the Corporation, designated "Series D-1 Convertible Preferred
      Stock" and "Series D-2 Convertible Preferred Stock" be hereby created, and
      that the designation and amount thereof and the voting powers, preferences
      and relative, participating, optional and other special rights of the
      shares of such series, and the qualifications, limitations and
      restrictions thereof shall be as set forth below:

      SECTION 1. DESIGNATION AND AMOUNT; PAR VALUE.

      The shares of Series D Convertible Preferred Stock shall be designated as
"Series D-1 Convertible Preferred Stock" and "Series D-2 Convertible Preferred
Stock" and the number of shares constituting the Series D-1 Convertible
Preferred Stock shall be 8,965 and the number of shares constituting the Series
D-2 Convertible Preferred Stock shall be 1,785. The par value of each share of
the series shall be $0.001. Each share of the Series D Convertible Preferred
Stock shall have a stated value of $1,400 (the "Stated Value"). As used herein,
the "Initial Issuance
<PAGE>
Date" shall mean the date upon which the Corporation first issues shares of
Series D Convertible Preferred Stock.

      SECTION 2. DIVIDENDS ON SERIES D CONVERTIBLE PREFERRED STOCK.

      The Corporation shall pay dividends on the Stated Value of each share of
the Series D Convertible Preferred Stock at the initial rate of 8.0% per annum
and increasing to 12% per annum on the second anniversary of the Initial
Issuance Date. Dividends shall be computed based on a 360-day year consisting of
twelve 30-day months. Dividends shall be cumulative with respect to each share
of the Series D Convertible Preferred Stock while such share is outstanding.
Dividends shall be payable in arrears semi-annually to the holder of shares of
Series D Convertible Preferred Stock registered on the books of the Corporation
(the "Holder").

      (a)   Dividends on Series D-1 Convertible Preferred Stock. At the option
of the Corporation, dividends may be payable to the Holders of Series D-1
Convertible Preferred Stock in the form of either (i) such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts or (ii) the number of full shares of Common
Stock that the amount of accrued dividends payable would entitle such Holder to
acquire based upon a price per share equal to 90% of the average of the VWAP (as
defined below) for the twenty (20) Trading Day period immediately prior to the
date such dividend becomes due and payable; provided, however, that if the
Corporation elects to pay a Holder in shares of Common Stock, the Corporation
shall issue to the Holder freely tradeable shares of Common Stock; provided
further, that the Corporation may elect to pay a Holder in shares of Common
Stock only if the Registration Statement (the "Registration Statement") filed by
the Corporation pursuant to the Registration Rights Agreement, dated as of
October 31, 2002, among the Corporation and the holders of the Series D
Convertible Preferred Stock (the "Registration Rights Agreement") remains
effective. The Corporation shall notify the Holder in writing not less than
twenty-two (22) Trading Days of the date such dividends are due and payable of
the form in which the Corporation elects to pay accumulated dividends. In the
event the Corporation fails to timely provide such notice, payments of dividends
shall be in cash.

      As used herein, "VWAP" shall mean the Volume Weighted Average Price of the
Corporation's Common Stock as reported by Bloomberg, L.P. on such day on the
NASDAQ National Market (or the NASDAQ Small Cap Market, the New York Stock
Exchange or American Stock Exchange in the event any such market or exchange
constitutes the principal market on which the Common Stock is quoted or listed
or admitted to trading) (such four markets and exchanges, the "Approved
Markets") or, if not quoted or listed or admitted to trading on any such
Approved Market, the closing bid price in the over-the-counter market as
furnished by any New York Stock Exchange member firm that is selected from time
to time by the Corporation for that purpose. In lieu of any fractional share of
Common Stock to which the Holder would otherwise be entitled upon payment of a
dividend, the number of shares of Common Stock issuable upon payment thereof
shall be rounded up to the nearest whole number.

      (b)   Dividends on Series D-2 Convertible Preferred Stock. Dividends shall
be payable quarterly to the Holders of Series D-2 Convertible Preferred Stock in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.


                                       2
<PAGE>
      (c)   Failure to Timely Pay Dividends. If the Corporation fails to pay any
dividend payment to the Holders on the date such dividend payment is due, the
dividend rate then in effect shall increase by a rate per annum equal to three
percent (3%). During any period that such dividend payments are in arrears, the
Corporation shall not incur any indebtedness.

      SECTION 3. REDEMPTION.

      (a)   Redemption Date. The "Redemption Date" shall mean October 29, 2004.

            (b)   Corporation's Election to Redeem. At any time following the
Redemption Date, the Corporation may elect to redeem on a pro rata basis no less
than $2,000,000 of the outstanding Series D Convertible Preferred Stock, by
delivering at least 15 days' notice of such election (the "Redemption Election
Notice") to the Holders of the Series D Convertible Preferred Stock. Upon
receipt of the Redemption Election Notice, the Holder shall surrender to the
Corporation its stock certificate representing such Holder's pro rata portion of
shares of the Series D Convertible Preferred Stock being redeemed (the "Series D
Convertible Stock Certificates") and, upon such surrender, the Corporation shall
deliver to the Holder with respect to each share of Series D Convertible
Preferred Stock so redeemed, an amount of cash equal to the Stated Value plus
any accrued and unpaid dividends (the "Redemption Price"). In the event that
less than all of the outstanding shares of Series D Convertible Preferred Stock
are redeemed, the Corporation shall promptly return to the Holder its stock
certificate representing the balance of such shares of Series D Convertible
Preferred Stock not redeemed. Notwithstanding the foregoing, the Holder shall
have the right to convert any shares of Series D Convertible Preferred Stock in
accordance with Section 4(a) below until the close of business on the date fixed
for redemption in such Redemption Election Notice. The Series D Convertible
Preferred Stock shall not be redeemable at the election of the Holder.

            (c)   Effect of Redemption. At any time following delivery of the
Redemption Election Notice, unless there shall have been a default in payment of
the Redemption Price, all rights of the holders of the shares of Series D
Convertible Preferred Stock designated for redemption in the Redemption Election
Notice as holders of Series D Convertible Preferred Stock (except the right to
receive the Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or
deemed to be outstanding for any purpose whatsoever.

      SECTION 4. CONVERSION.

            (a)   Right to Convert. Subject to Section 3 and this Section 4, a
Holder has the right to convert shares of the Series D Convertible Preferred
Stock, in whole or from time to time in part, into such number of shares of
common stock, par value $.001 per share, of the Corporation (the "Common Stock")
equal to the aggregate Stated Value of the shares of Series D Convertible
Preferred Stock divided by the then effective Conversion Price (as defined
below) and any accrued and unpaid dividends shall then be payable in accordance
with Section 2 above.

            (b)   Automatic Conversion. At any time following 180 days after the
effectiveness of the Registration Statement, each share of Series D Convertible
Preferred Stock shall


                                       3
<PAGE>
automatically be converted into shares of Common Stock equal to the Stated Value
divided by the then effective Conversion Price on the sixth (6th) Trading Day
following the date that the Corporation provides written notice to each Holder
that immediately following any ten (10) consecutive Trading Days during which
the VWAP is greater than $3.00 (the "Threshold Appreciation Price"); provided,
however, that the Registration Statement remains effective on the sixth (6th)
Trading Day referred to above. In the event of an automatic conversion as
described above, any accrued and unpaid dividends shall be due and payable on
the date of such automatic conversion in accordance with Section 2 above.

      (c)   Conversion Price; Amount. The price at which the Holder may convert
shares of the Series D Convertible Preferred Stock (or any portion thereof) into
shares of Common Stock shall be $1.38, subject to adjustment as provided in
Section 4(f) (the "Conversion Price"). In lieu of any fractional share of Common
Stock to which the Holder would otherwise be entitled upon conversion of shares
of the Series D Convertible Preferred Stock, the number of shares of Common
Stock issuable upon conversion thereof shall be rounded up to the nearest whole
number.

      (d)   Mechanics of Conversion.

            (i)   To convert shares of the Series D Convertible Preferred Stock
in accordance with Section 4(a), the Holder must (i) complete and sign a Notice
of Conversion in form acceptable to the Corporation (the "Notice of Conversion")
and deliver the Notice of Conversion to the Corporation as herein provided and
(ii) prior to the date on which delivery of Common Stock is required to be made
hereunder, (x) duly endorse and deliver to the Corporation the Series D
Convertible Stock Certificate(s) representing the shares of the Series D
Convertible Preferred Stock being converted and (y) pay any transfer or similar
tax with respect to the delivery of such Series D Convertible Stock
Certificate(s) if required. The Holder shall surrender such Series D Convertible
Stock Certificate(s) and the Notice of Conversion to the Corporation (with an
advance copy by facsimile of the Notice of Conversion). The date on which Notice
of Conversion is given (the "Date of Conversion") shall be deemed to be the date
of receipt by the Corporation of the facsimile of the Notice of Conversion,
provided that such Series D Convertible Stock Certificate(s) are received by the
Corporation within five (5) business days thereafter. The Corporation shall not
be obligated to cause the transfer agent for the Common Stock (the "Transfer
Agent") to issue certificates evidencing the shares of Common Stock issuable
upon such conversion unless either such Series D Convertible Stock Certificate
has been received by the Corporation or, if such Series D Convertible Stock
Certificate(s) have been lost, stolen or destroyed, the Holder has executed and
delivered to the Corporation an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with the
shares of the Series D Convertible Preferred Stock represented by such Series D
Convertible Stock Certificate(s).

      If the Transfer Agent is participating in the Depository Trust Company
("DTC") Fast Automated Securities Transfer ("FAST") program, the Holder shall
deliver to the Corporation valid broker information, including DTC number, and
verification that such broker has been instructed to initiate the DWAC transfer
(as defined below) (collectively, the "Broker Information") and, thereafter, the
Corporation shall cause the Transfer Agent to transmit electronically the shares
of Common Stock issuable to the Holder upon conversion of shares of


                                       4
<PAGE>
the Series D Convertible Preferred Stock by crediting the account of the
Holder's prime broker with DTC through DTC's Deposit Withdrawal Agent Commission
("DWAC") system, within three (3) business days after delivery to the
Corporation of the Broker Information and the Holder's Series D Convertible
Stock Certificate(s). In the event the Holder otherwise elects in writing,
however, the Corporation shall cause the Transfer Agent to issue and deliver
(within such three (3) business day period) to the address of the Holder on the
books of the Corporation or as otherwise directed pursuant to the Notice of
Conversion, a certificate or certificates for the number of shares of Common
Stock to which such Holder shall be entitled as aforesaid. In the event the
Corporation fails to complete such delivery as aforesaid, it shall be
responsible for actual damages incurred by the Holder as a result thereof. The
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. Notwithstanding that the
Holder is required to deliver the Series D Convertible Stock Certificate(s),
duly endorsed, within five (5) business days after the Date of Conversion, if
such Series D Convertible Certificate(s) are not received by the Corporation
within ten (10) business days after the Date of Conversion, the Corporation may
at its option elect, by written notice given to the Holder within fifteen (15)
business days after the Date of Conversion, elect (A) to treat Notice of
Conversion as null and void or (B) to treat the Notice of Conversion as binding
and require the Holder to deliver the applicable Series D Convertible Stock
Certificate(s). In the event the Corporation elects to treat the Notice of
Conversion as binding, the shares of Series D Convertible Preferred Stock with
respect to which such Notice of Conversion was given shall thereafter no longer
be deemed outstanding and the Holder thereof shall not be entitled to any voting
or other rights attendant thereto, excepting only the right to receive, upon the
delivery to the Corporation of the applicable Series D Convertible Stock
Certificate(s), the shares of Common Stock upon the conversion thereof as
contemplated above.

      Following conversion of a share of the Series D Convertible Preferred
Stock, such share will no longer be outstanding and may not be reissued. In the
event of the conversion of less than all of the shares of the Series D
Convertible Preferred Stock represented by a Series D Convertible Stock
Certificate, the Corporation or its Transfer Agent will issue to the Holder a
new stock certificate representing the number of shares of the Series D
Convertible Preferred Stock not converted or shall endorse the Series D
Convertible Stock Certificate to reflect such conversion.

      If, within three (3) business days of the Corporation's receipt of the
Conversion Notice and the Series D Convertible Stock Certificate(s) to be
converted, the Corporation shall fail to issue and deliver to a Holder the
number of shares of Common Stock to which such Holder is entitled upon such
Holder's conversion of the Series D Convertible Preferred Stock or to issue a
new Series D Convertible Stock Certificate representing the number of shares of
Series D Convertible Preferred Stock to which such Holder is entitled pursuant
to this Section 4(d)(i), in addition to all other available remedies which such
Holder may pursue hereunder and under the Purchase Agreement, the Corporation
shall pay additional damages to such Holder on each business day after such
third (3rd) business day that such conversion is not timely effected in an
amount equal to 0.5% of the product of (A) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis pursuant to this Section
4(b)(i) and to which such Holder is entitled, and, in the event the Corporation
has failed to deliver a Series D Convertible Stock Certificate to the Holder on
a timely basis pursuant to this Section 4(b)(i), the number of


                                       5
<PAGE>
shares of Common Stock issuable upon conversion of the shares of Series D
Convertible Preferred Stock represented by such Series D Convertible Stock
Certificate, as of the last possible date which the Corporation could have
issued such Series D Convertible Stock Certificate to such Holder without
violating Section 4(b)(i) and (B) the VWAP of the Common Stock on the last
possible date which the Corporation could have issued such Common Stock and such
Series D Convertible Stock Certificate, as the case may be, to such Holder
without violating this Section 4(b)(i). If the Corporation fails to pay the
additional damages set forth in this Section 4(b)(i) within five (5) business
days of the date incurred, then such payment shall bear interest at the rate of
2% per month (pro rated for partial months) until such payments are made.

            (ii)  Upon conversion due to the event specified in Section 4(b)
above, the holders of Series D Convertible Preferred Stock shall surrender the
Series D Preferred Stock Certificate(s) representing such shares at the office
of the Corporation or the Transfer Agent. Thereupon, there shall be issued and
delivered to such holder in the manner described in Section 4(d)(i) the number
of shares of Common Stock into which the shares of Series D Convertible
Preferred Stock surrendered were convertible on the date on which such automatic
conversion occurred. Upon such automatic conversion, the outstanding shares of
Series D Convertible Preferred Stock shall be converted automatically into
shares of Common Stock without any further action on the part of the holders of
such shares whether or not the certificates representing such shares are
surrendered to the Corporation or its Transfer Agent; provided, however, that
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless the certificates
evidencing such shares of Series D Convertible Preferred Stock are either
delivered to the Corporation or its Transfer Agent or, if such Series D
Convertible Stock Certificate(s) have been lost, stolen or destroyed, the Holder
has executed and delivered to the Corporation an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection with the shares of the Series D Convertible Preferred Stock
represented by such Series D Convertible Stock Certificate(s).

      (e)   Reservation of Stock Issuable Upon Conversion. The Corporation shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock or shares of Common Stock held in treasury, or both,
solely for the purpose of effecting the conversion of the Series D Convertible
Preferred Stock, such number of shares of Common Stock as shall from time to
time be sufficient to effect the conversion of the Series D Convertible
Preferred Stock and all other securities of the Corporation convertible or
exchangeable into Common Stock.

      (f)   Adjustment to Conversion Price; Maximum Share Issuance.

            (i)   If, prior to the conversion of all shares of the Series D
Convertible Preferred Stock, the number of outstanding shares of Common Stock is
increased by a stock split, stock dividend of shares of Common Stock or other
shares of capital stock, reclassification or other similar event, the Conversion
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a combination or reclassification of shares or
other similar event, the Conversion Price shall be proportionately increased, in
each case, such that a Holder will have the right to receive upon conversion of
shares of the Series D Convertible Preferred Stock the number of shares of
Common Stock (or other shares of capital stock) of the


                                       6
<PAGE>
Corporation that such Holder would have been entitled to receive had the Holder
converted such shares of the Series D Convertible Preferred Stock immediately
prior to such action. The Threshold Appreciation Price (as defined in Section
4(c) above) shall likewise be proportionately adjusted upon any increase in the
number of outstanding shares of Common Stock on account of any stock split,
stock dividend of shares of Common Stock or other shares of capital stock,
reclassification or other similar event or upon any decrease in number of
outstanding shares of Common Stock on account of any combination or
reclassification of shares or other similar event.

            (ii)  In addition to the adjustments set forth above, if the
Corporation distributes to all holders of its Common Stock any of its assets or
debt securities or any rights or warrants to purchase securities other than
Common Stock, then the Conversion Price shall be adjusted in such a manner as
shall be agreed to by the Corporation and the Holders of at least ninety percent
(90%) of the outstanding shares of Series D Convertible Preferred Stock
(excluding the shares of Series D Preferred Stock beneficially owned by Robert
W. Duggan (the "Duggan Shares")) as shall fairly preserve the economic rights
and benefits of each Holder as contemplated by this Certificate of Designations.
In the event that within 15 days of any such event, the Corporation and such
Holders do not reach an agreement as to the appropriate adjustment, the
Corporation shall retain, and pay for, a nationally recognized investment bank
or accounting firm to determine the appropriate adjustment as soon as possible,
but in any event not later than 45 days, after the date of such event; provided
that such investment bank or accounting firm is mutually agreeable to the
Corporation and at least ninety percent (90%) of the Holders of the outstanding
shares of Series D Convertible Preferred Stock (excluding the Duggan Shares).

            (iii) In the event that, after the Initial Issuance Date, the
Corporation shall (other than (A) upon the exercise, exchange or conversion of
any securities of the Corporation that are exercisable or exchangeable for, or
convertible into, shares of Common Stock and that are outstanding as of the
Initial Issuance Date, (B) upon the issuance of shares of Common Stock to
strategic partners and/or in connection with a strategic merger or acquisition,
(C) upon the issuance of shares of Common Stock or options to purchase shares of
Common Stock to employees, officers, directors, consultants and vendors in
accordance with the Issuer's equity incentive plans in effect on the Initial
Issuance Date, (D) upon the issuance of securities pursuant to a shareholder
rights plan in effect on the Initial Issuance Date, (E) upon the conversion of
any shares of Series C Convertible Preferred Stock or Series D Convertible
Preferred Stock or (F) upon the issuance of shares of Common Stock to pay
dividends) at any time while any shares of Series C Convertible Preferred Stock
or Series D Convertible Preferred Stock are outstanding (x) issue shares of
Common Stock without consideration or at a price per share less than the then
effective Conversion Price (such Conversion Price, the "Minimum Trigger Price"),
(y) issue options, rights or warrants to subscribe for or purchase Common Stock
that provide for (upon the exercise thereof) the issuance of shares of Common
Stock without consideration or at a price per share, which when added to the
price or other consideration received for such options, rights or warrants, is
less than the Minimum Trigger Price or (z) issue securities convertible into
Common Stock having a conversion price less than the Minimum Trigger Price, the
Conversion Price to be in effect after the date of such issuance shall be
adjusted by multiplying the Conversion Price in effect immediately prior to the
date of any such issuances referenced above by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the date
of such issuance plus the number of shares of Common Stock that the aggregate
offering price of


                                       7
<PAGE>
the total number of shares of Common Stock so to be issued (or the aggregate
issue price of the convertible securities so to be issued) would purchase at the
Minimum Trigger Price and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of such issuance plus the number of
additional shares of Common Stock to be issued (or into which the convertible
securities so to be issued are initially convertible). In case the price for
such securities may be paid in a consideration part or all of which shall be in
a form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Corporation, whose determination
shall be conclusive. Such adjustment shall be made successively whenever the
date of such issuance is fixed and, in the event that such options, rights,
warrants or convertible securities (or portions thereof) expire or are otherwise
discharged or redeemed without being exercised or converted, any adjustment in
the Conversion Price on account of the issuance of the same shall be reversed.

            (iv)  Adjustments pursuant to this Section 4(f) shall be permanent
unless further adjustments are required pursuant to the terms of this Section
4(f). No adjustment to the Conversion Price pursuant to any of the events or
circumstances set forth herein shall be made unless such adjustment shall be in
an amount of at least one cent ($0.01); provided, however, that any adjustment
that would otherwise be required to be made hereunder but for the fact that it
is less than one cent ($0.01) shall be carried forward and made part of any
subsequent adjustment that (a) when aggregated with prior adjustment(s) that
have not been made because it was (or each of them was) less than one cent
($0.01) or (b) is in excess of one cent ($0.01).

            (v)   If any adjustment under this Section 4(f) would create a
fractional share of Common Stock or a right to acquire a fractional share of
Common Stock, such fractional share shall be disregarded and the number of
shares of Common Stock issuable upon conversion shall be the next higher number
of shares.

      (g)   Restrictions on Conversion.

            (i)   Notwithstanding anything to the contrary set forth in Section
4 of this Certificate of Designations, at no time may a Holder convert shares of
the Series D Convertible Preferred Stock if the number of shares of Common Stock
to be issued pursuant to such conversion would exceed, when aggregated with all
other shares of Common Stock owned by such holder at such time, the number of
shares of Common Stock which would result in such holder owning more than 4.99%
of all of the Common Stock outstanding at such time; provided, however, that
upon a Holder providing the Corporation with sixty-one (61) days notice (the
"Waiver Notice") that such Holder would like to waive Section 4(g) of this
Certificate of Designations with regard to any or all shares of Common Stock
issuable upon conversion of the Series D Convertible Preferred Stock, this
Section 4(g) shall be of no force or effect with regard to those shares of
Series D Convertible Preferred Stock reference in the Waiver Notice.

            (ii)  Notwithstanding anything to the contrary set forth in Section
4 of this Certificate of Designations, at no time may a Holder convert shares of
the Series D Convertible Preferred Stock if the number of shares of Common Stock
to be issued pursuant to such conversion would exceed, when aggregated with all
other shares of Common Stock owned by such holder at such time, would result in
such Holder beneficially owning (as determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended , and the


                                       8
<PAGE>
rules thereunder) in excess of 9.999% of the then issued and outstanding shares
of Common Stock outstanding at such time; provided, however, that upon a Holder
providing the Corporation with a Waiver Notice that such Holder would like to
waive Section 4(g) of this Certificate of Designations with regard to any or all
shares of Common Stock issuable upon conversion of the Series D Convertible
Preferred Stock, this Section 4(g) shall be of no force or effect with regard to
those shares of Series D Convertible Preferred Stock reference in the Waiver
Notice.

      SECTION 5. REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALE OF ASSETS.

      If at any time or from time to time after the Initial Issuance Date, there
is a capital reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification, exchange or substitution of shares
provided for elsewhere in Section 4(f)), then, as part of such capital
reorganization, provisions shall be made so that the holders of Series D
Convertible Preferred Stock shall thereafter have the right to receive upon
conversion of shares of the Series D Convertible Preferred Stock, upon the basis
and the terms and conditions specified herein, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for the
number of shares of Common Stock immediately theretofore receivable upon the
conversion of such shares of the Series D Convertible Preferred Stock, and in
any such case appropriate provisions shall be made with respect to the rights
and interests of the holders of Series D Convertible Preferred Stock such that
the provisions hereof shall thereafter be applicable in relation to any shares
of stock or securities thereafter deliverable upon the conversion of shares of
the Series D Convertible Preferred Stock; provided, however, that this Section 5
shall not apply to any Change of Control Transaction (as defined in Section 6)
in respect of which the Holders exercise their rights under Section 6. The
Corporation shall not effect any such capital reorganization unless the
resulting successor or acquiring entity (if not the Corporation) assumes by
written instrument the obligation to deliver to the holders of Series D
Convertible Preferred Stock such shares of stock and/or securities as such
holder is entitled to receive upon conversion in accordance with the foregoing.

      SECTION 6. CHANGE OF CONTROL.

      (a)   A "Change of Control Transaction" shall mean, (i) the sale,
conveyance or disposition of all or substantially all of the assets of the
Corporation, (ii) a consolidation or merger of the Corporation with or into any
other "Person" (as defined in the Exchange Act) (whether or not the Corporation
is the surviving Person) or (iii) (other than a consolidation or merger provided
for in clause (ii)) any Person or any "group" (as such term is used in Section
13(d) of the Exchange Act), becomes the beneficial owner or is deemed to
beneficially own (as described in Rule 13d-3 under the Exchange Act without
regard to the 60-day exercise period) in excess of 50% of the Corporation's
voting power of the capital stock of the Corporation normally entitled to vote
in the election of directors of the Corporation (other than (A) any Person or
any such group that held such voting power as of the Initial Issuance Date or
(B) any group that holds such voting power subsequent to the Initial Issuance
Date, provided that the Persons that constitute such group include the Person or
a majority of the members of, and at least 50% of the voting power held by, a
group referenced in the foregoing clause (A)).

      (b)   Upon the notice or occurrence of, or announcement of the
Corporation's intent (or a third party's or parties' intent in the case of a
Change of Control Transaction of the type set


                                       9
<PAGE>
forth in clause (iii) of the definition of a Change of Control Transaction) to
engage in a Change of Control Transaction, the Series D Convertible Preferred
Stock shall, at the option of the Holder thereof, be convertible in full upon
the terms set forth in this Section 6(b); provided, however, that the Holder's
ability to convert the Series D Convertible Preferred Stock pursuant to this
Section 6(b) shall be effective only if the Holder has delivered a Notice of
Conversion in accordance with Section 4(d) no later than twelve (12) Trading
Days prior to the date of the meeting of the Corporation's stockholders to
approve such Change of Control Transaction. In the event that the Holder elects
to convert pursuant to this Section 6(b), each share of Series D Convertible
Preferred Stock shall be convertible into that number of shares of Common Stock
equal to the quotient obtained by dividing (x) $1,890 plus the amount of any
accrued and unpaid dividends (the "Conversion Amount"), by (y) the average
closing bid prices for the twenty (20) consecutive Trading Days ending on the
date immediately preceding fifteen (15) Trading Days immediately preceding the
date of the meeting of the Corporation's stockholders to approve such Change of
Control Transaction but in no event less than $1.38. The conversion set forth in
this Section 6(b) related to a Change of Control Transaction shall be
conditioned upon and shall be effective immediately prior to consummation of
such Change of Control Transaction and all such shares of Series D Convertible
Preferred Stock shall no longer be outstanding and shall be automatically
cancelled and retired and shall cease to exist, and each certificate previously
representing any such shares shall thereafter represent the right to receive a
certificate representing the shares of Common Stock into which the Series D
Convertible Preferred Stock was converted.

      (c)   Unless otherwise converted pursuant to Section 6(b), conditioned
upon and effective immediately prior to the consummation of a Change of Control
Transaction, each share of Series D Convertible Preferred Stock shall
automatically be converted into that number of shares of Common Stock for each
share of Series D Convertible Preferred Stock owned by such Holder on the
Trading Day immediately preceding any such Change of Control Transaction as set
forth in Section 4(a) of the Series C Certificate of Designations. All such
shares of Series D Convertible Preferred Stock shall no longer be outstanding
and shall be automatically cancelled and retired and shall cease to exist, and
each certificate previously representing any such shares shall thereafter
represent the right to receive a certificate representing the shares of Common
Stock into which the Series D Convertible Preferred Stock was converted.

      (d)   The Corporation shall promptly mail written notice to the Holder of
either the occurrence of, or the announcement of the Corporation's intent to
engage in, a Change of Control Transaction (with a copy sent by facsimile), but
in any event such notice (other than, if applicable, in the case of a Change of
Control Transaction of the type set forth in clause (iii) of the definition of a
Change of Control Transaction) shall not be given less than twenty (20) days
prior to the effective date of such Change of Control Transaction."

      SECTION 7. REACQUIRED SHARES.

      Any shares of the Series D Convertible Preferred Stock redeemed,
purchased, converted or otherwise acquired by the Corporation in any manner
whatsoever shall not be reissued as part of the Series D Convertible Preferred
Stock and shall be retired promptly after the acquisition thereof. All such
shares of the Series D Convertible Preferred Stock upon their retirement and


                                       10
<PAGE>
the filing of any certificate required in connection therewith pursuant to the
Delaware General Corporation Law shall become authorized but unissued shares of
Preferred Stock.

      SECTION 8. EQUALITY.

      All Holders of Series D Convertible Preferred Stock shall be subject to
the same terms and conditions as set forth herein. No Holders of Series D
Convertible Preferred Stock shall be entitled to or receive terms that are more
favorable than those given to any other Holder of Series D Convertible Preferred
Stock. In the event a Holder of Series D Convertible Preferred Stock is given by
the Corporation or receives from the Corporation terms more favorable than those
given by the Corporation or received from the Corporation by any other Holder of
Series D Convertible Preferred Stock, then in such event all Holders of Series D
Convertible Preferred Stock shall be given and entitled to those more favorable
terms.

      SECTION 9. REGISTERED HOLDER.

      The Corporation may for all purposes treat the holder of shares of the
Series D Convertible Preferred Stock registered on the books of the Corporation
as the Holder, notwithstanding any notice or claim by any other Person with
respect to any interest in such shares.

      SECTION 10. VOTING RIGHTS.

      (a)   Prior to conversion thereof, Holders of the Series D Convertible
Preferred Stock shall be voted together with the shares of Common Stock of the
Company and not as a separate class, at any annual or special meeting of
stockholders of the Company upon the following basis: each share of Series D
Convertible Preferred Stock shall be entitled to one thousand (1,000) votes.

      (b)   So long as any shares of Series D Convertible Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the approval of
the Holders of at least ninety percent (90%) of the outstanding shares of Series
D Convertible Preferred Stock (excluding the Duggan Shares), authorize, create
or issue any class or series of stock ranking prior to the Series D Convertible
Preferred Stock with respect to the distribution of assets on liquidation,
dissolution or winding up as provided in Section 12 below.

      SECTION 11. RANK.

      All shares of the Series D Convertible Preferred Stock shall rank (i)
prior to the Common Stock, the Corporation's Series A Junior Participating
Convertible Preferred Stock, the Corporation's Series B Convertible Preferred
Stock and prior to any class or series of capital stock of the Corporation
hereafter created other than any series or class of capital stock of the
Corporation (A) that has been consented to by the Holders of at least ninety
percent (90%) of the outstanding shares of Series D Convertible Preferred Stock
(excluding the Duggan Shares), and (B) that specially, by its terms, ranks
senior to or pari passu with the Series D Convertible Preferred Stock (the
Common Stock, the Corporation's Series A Junior Participating Convertible
Preferred Stock, the Corporation's Series B Convertible Preferred Stock and any
class or series of capital stock of the Corporation hereafter created that does
not specifically, by its terms, and


                                       11
<PAGE>
in accordance with the terms of this Section 11, rank senior to or pari passu
with the Series D Convertible Preferred Stock being hereinafter referred to
collectively as "Junior Securities"); (ii) pari passu with the Corporation's
Series D Convertible Preferred Stock and any class or series of capital stock of
the Corporation hereafter created (A) that has been consented to by the Holders
of at least ninety percent (90%) of the outstanding shares of Series D
Convertible Preferred Stock (excluding the Duggan Shares) and (B) that,
specifically by its terms and in accordance with the terms of this Section 11,
ranks on a parity with the Series D Convertible Preferred Stock (the "Pari Passu
Securities"); and (iii) junior to any class or series of capital stock of the
Corporation hereafter created (A) that has been consented to by the Holders of
at least ninety percent (90%) of the outstanding shares of Series D Convertible
Preferred Stock (excluding the Duggan Shares) and (B) that specifically, by its
terms, ranks senior to the Series D Convertible Preferred Stock (all of the
foregoing, collectively, the "Senior Securities"), in each case as to
distribution of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary.

      SECTION 12. LIQUIDATION PREFERENCE.

      (a)   If the Corporation shall commence a voluntary case under the U.S.
Federal bankruptcy laws or any other applicable bankruptcy, insolvency or
similar law, or consent to the entry of an order for relief in an involuntary
case under any law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Corporation
or of any substantial part of its property, or make an assignment for the
benefit of its creditors, or admit in writing its inability to pay its debts
generally as they become due, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the U.S. Federal bankruptcy laws or any other
applicable bankruptcy, insolvency or similar law resulting in the appointment of
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and any such decree or
order shall be unstayed and in effect for a period of sixty (60) consecutive
days and, on account of any such event, the Corporation shall liquidate,
dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve
or wind up (a "Liquidation Event"), no distribution shall be made to the holders
of any shares of capital stock of the Corporation (other than Senior Securities
and, together with the Holders of Series D Convertible Preferred Stock, the Pari
Passu Securities) upon liquidation, dissolution or winding up unless prior
thereto the Holders shall have received the Liquidation Preference (as
hereinafter defined) with respect to each share of Series D Convertible
Preferred Stock. If, upon the occurrence of a Liquidation Event, the assets and
funds available for distribution among the Holders and holders of Pari Passu
Securities shall be insufficient to permit the payment to such Holders of the
preferential amounts payable thereon, then the entire assets and funds of the
Corporation legally available for distribution to the Series D Convertible
Preferred Stock and the Pari Passu Securities shall be distributed ratably among
such shares in proportion to the ratio that the Liquidation Preference payable
on each such share bears to the aggregate Liquidation Preference payable on all
such shares.

      (b)   The purchase or redemption by the Corporation of stock of any class
or series, in any manner permitted by law, shall not, for the purposes hereof,
be regarded as a liquidation, dissolution or winding up of the Corporation.
Neither the consolidation or merger of the


                                       12
<PAGE>
Corporation with or into any other entity nor the sale or transfer by the
Corporation of all or substantially all of its assets shall, for the purposes
hereof, be deemed to be a liquidation, dissolution or winding up of the
Corporation.

      (c)   The "Liquidation Preference" with respect to a share of Series D
Convertible Preferred Stock means an amount equal to the Stated Value thereof
plus a premium equal to thirty five percent (35%) of the Stated Value thereof,
and any other amounts that may be due from the Corporation with respect thereto
pursuant to this Certificate of Designations (including, without limitation,
accrued and unpaid dividends), the Purchase Agreement or the Registration Rights
Agreement. The Liquidation Preference with respect to any Pari Passu Securities
shall be as set forth in the Certificate of Designations filed in respect
thereof and, as applicable, any other agreements related thereto.

      SECTION 13. LOST OR DESTROYED CERTIFICATES.

      If a Series D Convertible Stock Certificate shall be mutilated, lost,
stolen or destroyed, the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of such mutilated Series D Convertible
Stock Certificate, or in lieu of or in substitution for a lost, stolen or
destroyed Series D Convertible Stock Certificate, a new Series D Convertible
Stock Certificate for the Series D Convertible Stock Certificate so mutilated,
lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft
or destruction of such Series D Convertible Stock Certificate, and of the
ownership thereof, and indemnity, if requested, all reasonably satisfactory to
the Corporation.

      SECTION 14. CERTAIN DEFINITIONS.

      (a)   Business Day. For purposes hereof, the term "business day" shall
mean any day on which banks are generally open for business in the City of New
York.

      (b)   Trading Day. For purposes hereof, the term "trading day" shall mean
any day on which the principal market on which the Common Stock is traded is
open for business.

      (c)   Person. For purposes hereof, the term "Person" means an individual
or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, governmental authority or other
entity of any kind.

      SECTION 15. WAIVER AND AMENDMENTS.

      Any waiver by the Corporation or a Holder of a breach of any provision of
this Certificate of Designations shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other
provision of the Series D Convertible Preferred Stock. The failure of the
Corporation or the Holder to insist upon strict adherence to any term of this
Certificate of Designations on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Certificate of Designations of
the Series D Convertible Preferred Stock. Any waiver must be in writing. The
provisions of this Certificate of Designations may not be amended, modified or
supplemented unless the same shall be in writing and signed by the Company and
the Holders of at least ninety percent (90%) of the outstanding shares of Series
D


                                       13
<PAGE>
Convertible Preferred Stock (excluding the Duggan Shares); provided, however,
any amendment or modification of Section 2 of this Certificate of Designations
shall require the written consent of the Company and at least ninety percent
(90%) of the outstanding shares of Series D-1 Convertible Preferred Stock
(excluding the Duggan Shares) and all of the outstanding shares of Series D-2
Convertible Preferred Stock.

      SECTION 16. UNENFORCEABLE PROVISIONS.

      If any provision of this Certificate of Designations is invalid, illegal
or unenforceable, the remaining provisions of thereof shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall
nevertheless remain applicable to all other Persons and circumstances.

      SECTION 17. COPIES OF AGREEMENTS, INSTRUMENTS, DOCUMENTS.

      Copies of any of the agreements, instruments or other documents referred
to in this Certificate of Designations shall be furnished to any Holder of
Series D Convertible Preferred Stock upon written request to the Corporation at
its principal place of business.

      SECTION 18. NOTICES.

      All notices, demands, requests, consents, approvals or other
communications required or permitted to be given hereunder or that are given
with respect to the Series D Convertible Preferred Stock shall be in writing and
shall be personally served or deposited in the mail, registered or certified,
return receipt requested, postage prepaid, or delivered by reputable air courier
service with charges prepaid, or transmitted by hand delivery, telegram, telex
or facsimile, addressed as set forth below: (i) if to the Corporation, to:
Computer Motion, Inc., 130 Cremona Drive, Goleta, California 93117, Attention:
Larry Redfern, Facsimile No.: (805) 685-9277 (or to such other address of which
notice has been given as herein provided, with copies (which shall not
constitute notice) to: Stradling, Yocca, Carlson & Rauth, 302 Olive Street Santa
Barbara, CA 93101, Attention: David Lafitte, Facsimile No.: (805) 564-1044; and
(ii) if to the Holder, to the address of the registered holder according to the
books and records of the Corporation or its transfer agent. Notice shall be
deemed given on the date so served, deposited for mailing, transmitted by hand
delivery, telegram, telex or facsimile or delivered to a reputable air courier
for delivery as contemplated above and shall be deemed received on the date so
served, if served or transmitted by hand delivery, telegram, telex or facsimile,
one business day after being so delivered to a reputable air courier for
delivery as contemplated above or three business days after being so mailed as
contemplated above.


                                       14
<PAGE>
      IN WITNESS WHEREOF, COMPUTER MOTION, INC. has caused this Certificate of
Designations to be executed by its Chief Executive Officer and attested to by
its Secretary this 6th day of March, 2003.


                                       COMPUTER MOTION, INC.


                                       /s/ Robert W. Duggan
                                       -----------------------------------------
                                       Robert W. Duggan, Chief Executive Officer


ATTEST:

/s/ Larry Redfern
---------------------------------
Larry Redfern, Secretary


                                       15

