<PAGE>

                      LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT


    THIS LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT (the "Agreement"), made
effective this 6th day of January, 1997 ("Effective Date"), by and between
SHERWOOD MEDICAL COMPANY, a corporation organized and existing under the laws
of the State of Delaware, doing business as Sherwood-Davis & Geck, having an
office at 1915 Olive Street, St. Louis, Missouri 63103 ("Sherwood") and
INNERDYNE, INC., a corporation organized and existing under the laws of the
State of Delaware, having an office at 1244 Reamwood Avenue, Sunnyvale,
California 94089 ("InnerDyne").

    WHEREAS, Sherwood manufactures and sells a variety of medical devices
including a line of enteral feeding products; and

    WHEREAS, InnerDyne manufactures and sells a variety of medical devices
including a line of radially expanding access devices (hereinafter
R.E.A.D.s"); and

    WHEREAS, Sherwood desires to obtain a sole source for the supply of
R.E.A.D.s for resale in combination with certain of Sherwood's enteral
feeding tubes and other products in the form of kits, and InnerDyne desires
to supply such R.E.A.D.s to Sherwood; and

    WHEREAS, InnerDyne is willing to grant, and Sherwood desires to obtain,
certain license rights in order to market, sell and use R.E.A.D.s in the
gastrointestinal placement of its enteral feeding products;

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

SECTION 1.    DEFINITIONS

    As used in this Agreement, the following terms shall be deemed to have
the following meanings:

    1(a)     "Affiliate" means, for so long as one of the following
relationships is maintained, any corporation or other business entity
controlled by, controlling, or under common control with another entity, with
"control" meaning direct or indirect beneficial ownership of more than fifty
percent (50%) of the voting stock of such corporation, or more than a fifty
percent (50%) interest in the decision-making authority of such other
business entity.

    1(b)     "Development Costs" means any costs or expenses incurred by
InnerDyne in the development, research and testing of any modification to an
InnerDyne Product made by InnerDyne to accommodate the assembly of the
InnerDyne Products with Sherwood Products into Kits and/or at the request of
Sherwood.

    1(c)     "FDA" shall mean the United States Food and Drug Administration.

    1(d)     "Field" shall mean gastrointestinal placement of enteral feeding
products.

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    1(e)     "InnerDyne Products" shall mean the R.E.A.D.s listed in Exhibit
A attached hereto, any Modifications thereto, and any products manufactured
by InnerDyne which the parties may agree to include in Kits.

    1(f)     "Kit" shall mean any combination of Sherwood Products (including
one of Sherwood's enteral feeding tubes) and an InnerDyne Product for use in
the Field.

    1(g)     "Major Country" shall mean [  *    *    *    *    *].

    1(h)     "Modifications" shall mean improvements, derivative works,
alterations or other modifications made by InnerDyne to InnerDyne Products or
Sherwood Products pursuant to this Agreement.

    1(i)     "Sherwood Products" shall mean Sherwood's enteral feeding tubes
and other products supplied by Sherwood and listed in Exhibit B attached
hereto, any Modifications thereto, and any products manufactured by Sherwood
which the parties may agree to include in Kits.

    1(k)     "Territory" shall mean the world.

SECTION 2.    GRANT OF LICENSE

    2(a)     GRANT OF LICENSE. Subject to the terms and conditions of this
Agreement, and for the term of this Agreement, InnerDyne hereby grants to
Sherwood and its Affiliates an exclusive license in the Territory to import,
export, sublicense (as stated in Section 2(b)), distribute, market and sell
the InnerDyne Products and any Modifications thereto solely in combination
with Sherwood Products or Modifications thereto as part of a Kit for use in
the Field throughout the Territory. Sherwood shall also have the license to
manufacture InnerDyne Products for assembly with Sherwood Products into Kits,
in the event that:

         (i)  InnerDyne materially defaults in the performance of its
obligations under Section 5(b) of the Agreement and fails to cure such
default within ninety (90) days after receipt of written notice by Sherwood
of such material default, EXCEPT if InnerDyne in good faith disputes the
existence of such material default, in which event the existence of such
material default shall be determined in accordance with the provisions of
Section 13 hereto; or

         (ii) InnerDyne becomes insolvent, is declared a bankrupt or makes an
assignment for the benefit of creditors.

    2(b)     RIGHT TO SUBLICENSE. Subject to the terms and conditions of this
Agreement, Sherwood shall be entitled to grant sublicenses of its rights
under this Agreement to non-Affiliates solely upon prior written approval by
InnerDyne, which approval shall not unreasonably be withheld.  Sherwood shall
deliver a complete copy of any sublicense agreement granted under this
Agreement to InnerDyne promptly upon execution of such sublicense agreement.
Sherwood shall have no other rights with respect to the InnerDyne Products or
any relationship with InnerDyne, except as specifically set forth in this
Agreement.

    2(c)     INDEPENDENT CONTRACTORS. It is understood that both parties
hereto are independent contractors and are engaged in the operation of their
own businesses. Neither

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party hereto is to be considered the agent of the other party for any purpose
whatsoever, and neither party has any authority to enter into any contracts
or assume any obligations for the other party or make any warranties or
representations on behalf of the other party. Nothing in this Agreement or in
the activities of either party shall be deemed to create an agency,
partnership, or joint venture relationship.

SECTION 3.    DILIGENCE; SUPPORT; OWNERSHIP

    3(a)     PROMOTION. Sherwood agrees to use reasonable efforts to promote
and sell the Kits, at its own expense, in Major Countries in the Territory as
soon as feasible after obtaining any necessary government approvals, using
generally the same channels and methods, exercising the same diligence and
adhering to the same standards which it employs with respect to its own
products.

    3(b)     MARKETING. Sherwood shall maintain the financial capability to
perform its obligations under this Agreement and shall, at its own expense,
establish and maintain sales, marketing and distribution, organization and
personnel of sufficient size to adequately and effectively sell the Kits in
the Territory. Sherwood will be responsible for the market launch of the Kits
in the Territory during the term of the Agreement. InnerDyne shall provide
Sherwood with marketing and technical information concerning the InnerDyne
Products as well as reasonable quantities of brochures, instructional
material, advertising literature and other product data, provided that all
such material will be printed in the English language. InnerDyne shall be
responsible for the accuracy of all information so provided to Sherwood.
Sherwood will produce, and obtain InnerDyne's prior approval of, all
materials relating to or otherwise describing InnerDyne Products used to
promote the Kits in the Territory. Each party agrees to share with the other
its marketing intelligence regarding the Kits by means of quarterly meetings
or business reports.

    3(c)     SALE TO QUALIFIED INDIVIDUALS. Sherwood shall use its reasonable
commercial efforts to distribute and sell the Kits for use only by qualified
individuals, as appropriate in the Territory, in compliance with local laws
and regulations and good commercial practice and for uses and applications
reasonably approved by InnerDyne for the Kits.

    3(d)     RECORDS AND REPORTING. Sherwood shall maintain adequate and
accurate books and records with respect to the sale or distribution of the
Kits during the term of the Agreement and for a minimum of three (3) years
after its termination. Upon prior notice, InnerDyne shall have the right
during reasonable business hours, to inspect the facilities of Sherwood which
are used or provided in connection with the manufacturing of components of
and distribution of the Kits.

    3(e)     SOLE SUPPLIER. Sherwood shall purchase or cause to be purchased
from InnerDyne all quantities of the Kits required by Sherwood to meet demand
by purchasers and potential purchasers of the Kits in the Territory, except
as otherwise contemplated by Section 2(a).

    3(f)     HARMFUL ACTS. Both InnerDyne and Sherwood understand,
acknowledge and agree that the maintenance of an image of excellence and high
level ethical marketing of the Kits is essential to the success of both
parties. Both parties agree that their respective sales, marketing,
distribution, or advertising will not knowingly reflect unfavorably on, or
dilute in any

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way, the other party's image of excellence and high level ethical marketing.
Both parties agree that they shall not do anything, directly or indirectly,
to impair the current image or to lower the prestige or quality of the other
party's products or the Kits. Sherwood shall not make any changes,
alterations, modifications or additions to the InnerDyne Products without
prior written approval of InnerDyne.

    3(g)     OWNERSHIP. The parties hereto acknowledge and agree that, as
between InnerDyne and Sherwood, InnerDyne owns all right, title, and interest
in and to InnerDyne Products and Modifications to InnerDyne Products
developed by InnerDyne. In addition, the parties hereto acknowledge and agree
that, as between InnerDyne and Sherwood, Sherwood owns all right, title, and
interest in and to the Sherwood Products, and modifications to Sherwood
Products developed by Sherwood.

SECTION 4.    ROYALTY AND MILESTONE PAYMENTS

    4(a)     ROYALTY. In exchange for the license granted pursuant to Section
2 of this Agreement, Sherwood agrees to make a [*     *    *    *    *], with
[*    *] due and payable upon the execution of this Agreement and the
remaining [*    *    *     *     *    *] to InnerDyne on the last day of each
of the first three full calendar months following the Effective Date of this
Agreement.

    4(b)     MILESTONE PAYMENTS. Within seven (7) business days of the date
of InnerDyne's receipt of FDA clearance of a 510(k) pre-market notification
of a Kit, Sherwood shall make a payment to InnerDyne of [*   *    *].

SECTION 5.    MANUFACTURING AND INNERDYNE PRODUCT DEVELOPMENT

    5(a)     KIT DEVELOPMENT. The parties will cooperate to develop the
assembly of the Kits as deemed necessary by Sherwood and will negotiate in
good faith a budget for the Development Costs required for the development of
any Modifications to InnerDyne Products for their use with Sherwood Products
and their assembly in the Kits (the "Budget").

    5(b)     INNERDYNE MANUFACTURING RIGHTS. InnerDyne shall have the
exclusive right to manufacture Kits on behalf of Sherwood or its Affiliates
for use in the Field, and Sherwood hereby commits to purchase all of its
requirements of Kits from InnerDyne; except as otherwise provided in Section
2(a).

    5(c)     SUPPLY OF SHERWOOD PRODUCTS. Sherwood shall manufacture and/or
supply, without charge to InnerDyne, InnerDyne's requirements of Sherwood
Products to meet Sherwood's requirements for Kits.
[*        *    *    *    *    *] of Sherwood Products. Sherwood shall fill
any and all requisition orders received from InnerDyne for Sherwood Products,
within [*      *    *] business days after receipt of such requisition
orders. InnerDyne shall only use Sherwood Products in the assembly of the
Kits and for no other purpose.

    5(d)     MANUFACTURING REQUIREMENTS. The Kits will be assembled and the
InnerDyne Products will be manufactured by InnerDyne in accordance with the
requirements of the FDA's current Good Manufacturing Practices regulations
and ISO 9001 standards, at InnerDyne's

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cost. All Kits provided to Sherwood under this Agreement shall be C.E. marked
as soon as reasonably possible for immediate sale.

    5(e)     REIMBURSEMENT OF DEVELOPMENT COSTS. Sherwood shall reimburse
InnerDyne up to [*    *    *] for its Development Costs in accordance with
the Budget, upon presentation of an invoice, for any Modifications to the
InnerDyne Products that are required for such InnerDyne Products to conform
to the specifications set forth in Exhibit A. The expense of registering the
Kits for C.E. Marking shall also be reimbursed by Sherwood in accordance with
Exhibit D.

    5(f)     MACHINERY AND EQUIPMENT. InnerDyne has or will obtain all
machinery and equipment needed to meet Sherwood's requirements for the Kits
and the InnerDyne Products. All machinery and equipment used in the assembly
of the Kits and the manufacture of the InnerDyne Products shall be and remain
the sole and exclusive property of InnerDyne.  InnerDyne shall maintain the
financial capability to perform its obligations under this Agreement and
shall at its own expense (unless otherwise provided by this Agreement)
establish and maintain a manufacturing organization and personnel of
sufficient size to adequately and effectively assemble the Kits.

    5(g)     SUPPLY OF INNERDYNE PRODUCTS. Pursuant to the terms of this
Agreement, InnerDyne shall supply to Sherwood all of Sherwood's requirements
for Kits.

SECTION 6.    PRICE AND PAYMENT TERMS

    6(a)     PRICES.

         (i)  The initial purchase price of a Kit shall be [*        *    *]
(the "Initial Price"). [*   *    *    *    *    *    *    *] The Adjusted
Price as determined by InnerDyne during the Adjustment Period shall become
effective as of the date of written notice thereof to Sherwood and shall
continue in effect until the subsequent Price Adjustment Date. If the
Adjusted Price is not further adjusted during the Adjustment Period following
such subsequent Price Adjustment Date, the Adjusted Price then in effect
shall continue in effect until the next subsequent Price Adjustment Date.
Notwithstanding the foregoing, such revisions in price shall not exceed
InnerDyne's actual changes in its cost for labor and materials directly
related to the manufacture of the InnerDyne Products, utilizing generally
accepted accounting principles consistently applied, but in no event will any
price increase, cumulatively, be proportionately greater than the increases,
if any, of the Producer Price Index (unadjusted) of the United States Bureau
of Labor Statistics, Commodity Code 06-6 ("Plastic resins and materials") for
the preceding [*  *    *]. Sherwood shall have the right, at its sole cost
and expense, to review InnerDyne's records to verify InnerDyne's costs, and
InnerDyne shall make such records available to Sherwood at all reasonable
times for such purposes.

         (ii) All prices are calculated F.O.B. InnerDyne's manufacturing
facility, currently located in Salt Lake City, Utah. Customs, duties and
charges, if any, shall be borne by Sherwood. All import or export licenses,
approvals or both shall be obtained by Sherwood at its cost. Prices to
Sherwood do not include any federal, state or local taxes that may be
applicable to products. When InnerDyne has the legal obligation to collect
such taxes, the appropriate amount shall be added to Sherwood's invoice and
paid by Sherwood unless Sherwood provides InnerDyne with a valid tax
exemption certificate authorized by the appropriate taxing authority.

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                                                CONFIDENTIAL TREATMENT REQUESTED
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    6(b)     PAYMENT. Full payment of the purchase price then in effect for a
Kit (including any freight, taxes or other applicable costs initially paid by
InnerDyne but to be borne by Sherwood) shall be in United States of America
dollars. All exchange, interest, banking, collection, and other charges shall
be at Sherwood's expense. Payment terms shall be net thirty (30) days, and
payment shall be made by wire transfer, check or other instrument approved by
InnerDyne. Any invoiced amount not paid when due shall be subject to a
service charge at the lower of the rate of one and one-half percent (1.5%)
per month or the maximum rate permitted by law. If Sherwood fails to make any
payment to InnerDyne when due, InnerDyne may, after written notice to
Sherwood and without affecting its rights under this Agreement, cancel or
delay any future shipments to Sherwood until such delinquent payment is made.
In the event that Sherwood shall contest an InnerDyne invoice in good faith
and shall notify InnerDyne of the reason(s) therefor, InnerDyne shall not
impose a service charge and/or discontinue any shipments except after first
considering Sherwood's claim and then notifying Sherwood in writing of any
unfavorable disposition. Five (5) days after the date of written notification
from InnerDyne to Sherwood that Sherwood's claim lacks merit, the service
charge set forth in this Section 6(b) shall be applied to the delinquent
payment and shall start to accrue, and InnerDyne may thereafter cancel or
delay any future shipments to Sherwood until the delinquent payment and
related service charge is paid in full to InnerDyne.

SECTION 7.    PURCHASING, DELIVERY, TITLE, RISK OF LOSS, RETURNS

    7(a)     PURCHASE ORDERS; FORECASTS. Pursuant to this Agreement, Sherwood
will submit purchase orders for the Kits. Any terms and conditions included
in such purchase orders that conflict with the terms of this Agreement shall
be of no force or effect and shall form no part of this Agreement. Firm
purchase orders are to be placed by Sherwood at least [*  *    *] prior to
the required delivery date. From and after the date of FDA clearance of a
510(k) pre-market notification (the "510(k)") and thereafter during the final
quarter of each calendar year during the term of this Agreement, Sherwood
will provide InnerDyne with an annual forecast of its anticipated needs of
Kits for the following [*        *    *], and, beginning immediately upon the
date of the 510(k), will maintain a [*  *    *] rolling forecast of Kit
requirements, updated monthly, of which [*      *    *] will constitute a
firm order. Notwithstanding the foregoing, InnerDyne shall have no obligation
to supply Kits to Sherwood prior to [*    *     *] after the availability of
the initial commercial production lot of Kits or during any period for which
any of Sherwood's payments due to InnerDyne hereunder are [*        *    *]
or more past due in accordance with Section 6(b).

    7(b)     MINIMUM PURCHASE COMMITMENTS. Following the date of the
availability of the initial commercial production lot of Kits, Sherwood shall
purchase from InnerDyne the minimum quantity of Kits during each of the
[*   *    *    *    *    *] as set forth in Exhibit C attached hereto.
[*   *] prior to the expiration of the [*     *    *    *] and [*   *    *]
prior to the expiration of each subsequent [*  *    *    *] (a "Subsequent
Purchase Period") during the term of this Agreement, Sherwood and InnerDyne
[*     *    *    *    *    *    *].  The parties hereby agree that
[*   *    *     *    *    *    *    *    *    *] shall have the option [***].
In the event that InnerDyne does not receive [*    *    *    *    *    *],
the minimum quantity of Kits to be purchased by Sherwood during such
Subsequent Purchase Period shall be deemed to be [*  *   *].

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    7(c)     FAILURE TO MEET ANNUAL PURCHASE COMMITMENTS. During the term of
this Agreement, and provided InnerDyne shall supply Kits to Sherwood
according to forecast, if Sherwood fails to purchase or order the minimum
quantities of Kits set forth above during any Twelve Month Purchase Period or
Subsequent Purchase Period, InnerDyne may, on [*     *     *    *] prior
written notice to Sherwood, convert the license granted to Sherwood under
Section 2 of this Agreement to a non-exclusive license for the full remaining
term of this Agreement, thereby permitting InnerDyne to also market, sell or
otherwise distribute InnerDyne Products to third parties for use in the Field
throughout the Territory. If the License is converted to non-exclusive by
InnerDyne, Sherwood [*   *    *    *    *    *], and the price of Kits
sold to Sherwood for the remaining term of this Agreement shall be
[*    *     *    *    *    *].  If InnerDyne converts the License to
non-exclusive as a result of Sherwood's failure to purchase or
[*     *    *    *    *    *    *] Purchase Period or Subsequent Purchase
Period as required by Section 7(b), InnerDyne's conversion of the License to
non-exclusive shall be InnerDyne's sole remedy against Sherwood for
Sherwood's breach of its minimum annual purchase obligations under Section
7(b) for that particular [* *    *    *    *], as the case may be.  However,
InnerDyne's conversion of the License to non-exclusive shall not be its sole
remedy for (i) a breach by Sherwood of any other term of this Agreement,
whether in the course of a breach by Sherwood of its obligations under
Section 7(b) or otherwise, (ii) a breach by Sherwood of its obligations under
Section 7(b) [*  *    *    *    *], or (iii) a breach by Sherwood of its
obligations under Section 7(b) for any previous
[*     *    *    *    *    *    *    *    *    *].  In the event that
Sherwood fails to sell the Kit [* *    *    *    *    *], InnerDyne shall
have the right, on written notice to Sherwood, to convert the License to
non-exclusive for that country and to thereafter market, sell or otherwise
distribute InnerDyne Products to third parties for use in the Field in such
country.  For purposes of this Section 7(c), if Sherwood cancels an order of
Kits made during a [*   *    *    *    *    *] after the expiration of any
such period, the number of Kits deemed to have been ordered by Sherwood
during any such period, as applicable, shall be reduced by such cancellations.

    7(d)     SHIPPING . All Kits delivered pursuant to the terms of this
Agreement shall be suitably packed and marked for shipment at InnerDyne's
manufacturing facility to Sherwood's address set forth in this Agreement or
such other address as Sherwood may specify, and delivered to Sherwood or
Sherwood's carrier agent F.O.B. InnerDyne's manufacturing facility, at which
time title to such products and risk of loss shall pass to Sherwood.
InnerDyne shall deliver products to the carrier selected by Sherwood. In the
event that Sherwood does not provide written notice of such carrier,
InnerDyne shall select the carrier. Sherwood will obtain insurance sufficient
to cover the value of each shipment.  Sherwood shall have the right to
inspect each lot of Kits and to reject any lot which in its reasonable
opinion is defective.

    7(e)     RETURNS. Sherwood will be responsible for receiving the initial
calls from customers regarding damaged or defective Kits through Sherwood's
sales and customer service forces and will work directly with such customers
to ensure the return and, if appropriate, replacement of such Kits. InnerDyne
will provide all reasonable assistance to Sherwood's sales and customer
service forces in connection with such efforts and shall designate a
representative with authority to coordinate the delivery of assistance.
Sherwood will initially be responsible for testing and determining the cause
of all Kit malfunctions and InnerDyne shall test and determine the cause of
such malfunctions only upon the reasonable request of Sherwood after Sherwood
has conducted such initial testing. InnerDyne will replace any defective Kit
at its expense and will be responsible for the return shipping and insurance

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charges for defective Kits being returned if the defect is caused by or due
to a defective InnerDyne Product or InnerDyne's assembly of the Kits. To
return a defective Kit, Sherwood shall notify InnerDyne immediately and
request a Material Return Authorization ("MRA") number. InnerDyne shall
provide the MRA number to Sherwood within seven (7) days of receipt of the
request. Within seven (7) days of receipt of the MRA number, Sherwood shall
return to InnerDyne the rejected Kit with the MRA number displayed on the
outside of the carton. Sherwood shall be responsible for the shipping and
insurance charges of replacement Kits being shipped back to Sherwood if the
defect is not caused by or due to a defective InnerDyne Product or
InnerDyne's assembly of the Kits, and Sherwood shall also bear all of the
costs and expenses resulting from the return and replacement of any such
defective Kit or any recall of the Kits, to the extent that such recall is
not caused by or due to a defective InnerDyne Product or InnerDyne's assembly
of the Kits.

SECTION 8.    GOVERNMENT REGULATIONS

    8(a)     APPROVALS AND REGISTRATIONS.

         (i)  InnerDyne agrees that it will use its commercially reasonable
efforts to obtain the 510(k) for the Kit. Upon InnerDyne's receipt of the
510(k) and the payment required by Section 4(b) above, the 510(k) shall be
transferred to and placed in the name of Sherwood. InnerDyne also agrees that
it will use its commercially reasonable efforts to obtain C.E. marking for
the Kit. Sherwood shall reimburse InnerDyne on a mutually agreed upon
schedule for all costs and expenses incurred by InnerDyne in registering the
Kits for C.E. marking, which costs and expenses shall be included in the
Budget for C.E. Marking, attached hereto as Exhibit D. Sherwood shall have
the right to reference the 510(k) and such C.E. marking in any regulatory
filings required for Sherwood to market the Kits in the Territory.

         (ii) InnerDyne agrees that [* *    *    *], secure any and all other
required United States regulatory approvals necessary for the implementation,
execution and performance of this Agreement. Sherwood agrees to cooperate
fully with InnerDyne in its pursuit of such approvals. To the extent
permissible, InnerDyne shall obtain such approvals in Sherwood's name.
[*          *    *    *    *    *    *    *]. InnerDyne shall obtain all
documents or licenses and shall comply with all applicable laws, including,
if required, registration of the Agreement necessary for the implementation,
execution and performance of this Agreement. InnerDyne shall notify Sherwood
of all permits, approvals and registrations obtained by it relating to Kits
or this Agreement and shall provide Sherwood with copies of all materials
documents related thereto.


         (iii) Sherwood agrees [*  *    *    *], secure any and all
required regulatory approvals or registrations in each jurisdiction within
the Territory that is outside of the United States as soon as feasible after
the date of this Agreement necessary for the implementation, execution and
performance of this Agreement. InnerDyne agrees to cooperate fully with
Sherwood in its pursuit of applicable approvals or registrations. Sherwood
shall obtain all necessary documents or licenses and shall comply with all
applicable laws, including, if required, registration of the Agreement.
Sherwood shall notify InnerDyne each time it submits an application for a
permit, approval or registration and shall notify InnerDyne of all permits,
approvals and registrations obtained by it.

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         (iv) Upon any expiration, cancellation, or termination of this
Agreement, the approvals obtained under subsections (i), (ii) and (iii) above
relating solely to InnerDyne Products shall promptly be transferred and
delivered to, and shall inure to the benefit of InnerDyne or its designee, to
the extent that this is permissible under applicable law, at no cost to
InnerDyne other than the direct costs of transferring such approvals. Within
seven (7) days of any such expiration, cancellation, or termination, Sherwood
shall provide to InnerDyne copies of all documentation necessary to have any
applicable regulatory approvals relating solely to InnerDyne Products in each
jurisdiction of the Territory not already in InnerDyne's name transferred to
InnerDyne.

    8(b)     ILLEGAL TRANSFER. Sherwood agrees that it shall comply with all
applicable laws in the distribution of the Kits and that it shall not allow
the Kits, any trademarks or tradenames of InnerDyne, any proprietary
information of InnerDyne, or any direct product of such information, to be
knowingly made available, either directly or indirectly, or in any way to be
knowingly given, transferred, sold or re-exported to any country in violation
of the laws or export control regulations of such country or the European
Union. United States laws and export control regulations governing the
exportability of technical data and products to nations are subject to
change. If any jurisdiction included within the Territory shall, at the time
of execution of the Agreement, or at any time during the term of the
Agreement, be placed in an excluded category by the United States government
for the receipt of either technical data or the manufacture or sale of Kits
or products such as those of InnerDyne and/or Sherwood, Sherwood agrees that
it shall take actions necessary to cease business activity in the Kits in the
excluded country.

SECTION 9.    WARRANTIES, COVENANTS AND INDEMNIFICATION

    9(a)     MUTUAL. The parties represent and warrant that they have the
full right to enter into this Agreement and that this Agreement does not
conflict with any other agreements so long as the terms of this Agreement are
met. The parties represent and warrant that their respective products shall
be manufactured and produced in accordance with their respective product
specifications, in compliance with all applicable laws, and in accordance
with Good Manufacturing Practices ("GMP").

    9(b)     INNERDYNE. InnerDyne represents and warrants that to its
knowledge it has the exclusive right to manufacture, sell and distribute the
InnerDyne Products and Modifications used in the Kits, that the assembly of
the InnerDyne Products and Modifications into Kits with the Sherwood Products
shall be in conformity with the Kit specifications as embodied in Exhibits A
and B, read together, and that to InnerDyne's knowledge the use of any
InnerDyne Product or Modification as contemplated by this Agreement shall not
infringe the intellectual property rights of any third party.

    9(c)     INDEMNIFICATION BY SHERWOOD. Sherwood shall defend, indemnify
and hold InnerDyne harmless from and against any action brought against
InnerDyne to the extent such action is based on a claim (including, without
limitation, a claim for infringement or willful infringement, except to the
extent that such infringement has been caused by the action of InnerDyne, its
employee or agents or is based upon or arises out of the manufacture,
importation, offer for sale, sale or use of an InnerDyne Product as
specifically authorized by InnerDyne) made by any third party: (i) arising
out of the negligent marketing, promotion, distribution and sale of the Kits,
where and to such extent the damages have been caused by the action of
Sherwood, its employees or agents; (ii) except as set forth in 9(d), arising
out of

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the use of a Kit; (iii) arising out of the use of a Sherwood Product; or (iv)
that any Sherwood Product (or any part thereof or any intellectual property
incorporated therein) or the use of any Sherwood Product as contemplated by
the parties under this Agreement infringes any intellectual property right of
any third party; provided, however, that InnerDyne: (A) provides Sherwood
with prompt notice of any such claim; (B) allows Sherwood to direct the
defense and settlement of such claims; (C) provides Sherwood with the
information and assistance necessary for such defense and settlement of the
claims; and (D) does not enter into any settlement with respect to such
claim. If a final injunction is obtained on an action based on any such claim
against InnerDyne's assembly of the Kits by reason of such infringement, or
if in Sherwood's reasonable opinion, such an injunction is likely to be
obtained, Sherwood may, at its sole option, either: (x) obtain for InnerDyne
the right to continue assembling the Kits; (y) replace or modify the Kits so
that such Kits become non-infringing; or (z) terminate this Agreement.
[*    *    *    *    *    *    *    *    *    *    *].

    9(d)     INDEMNIFICATION BY INNERDYNE. InnerDyne shall defend, indemnify
and hold Sherwood  harmless from and against any action brought against
Sherwood to the extent such action is based on a claim (including, without
limitation, a claim for infringement or willful infringement, except to the
extent such infringement has been caused by a modification or use of an
InnerDyne Product not specifically authorized by InnerDyne or is based upon
or arises out of the manufacture, importation, offer for sale, sale or use of
a Sherwood Product) made by any third party: (i) arising out of the
manufacture of Kits by InnerDyne where and to such extent the damages have
been caused by the negligent action of InnerDyne, its employees or agents;
(ii) arising out of the use of any InnerDyne Product; or (iii) that any
InnerDyne Product (or any part thereof or any intellectual property
incorporated therein) or the use of any InnerDyne Product as contemplated by
parties hereunder infringes any patent or trade secret owned by any third
party; provided, however, that Sherwood: (A) provides InnerDyne with prompt
notice of any such claim; (B) allows InnerDyne to direct the defense and
settlement of such claims; (C) provides InnerDyne with the information and
assistance necessary for such defense and settlement of the claims; and (D)
does not enter into any settlement with respect to such claim. If a final
injunction is obtained on an action based on any such claim against
Sherwood's promotion, sale, or use of the Kits by reason of such
infringement, or if in InnerDyne's reasonable opinion, such an injunction is
likely to be obtained, InnerDyne may, at its sole option, either: (x) obtain
for Sherwood the right to continue promoting, selling, or using the Kits; (y)
replace or modify the Kits so that such Kits become non-infringing; or (z)
terminate this Agreement.
[*      *    *    *    *    *    *    *    *    *    *].

    9(e)     COMBINED INFRINGEMENT. If as a result of a claim of infringement
of any intellectual property right of any third party,
[*    *    *    *    *    *] by reason that the combination of the parties'
respective products as contemplated by this Agreement infringes the
intellectual property rights of a third party, then either of the parties
upon written notice to the other, or both parties acting jointly by mutual
agreement, may (i) obtain the right for the parties to continue their
respective performance obligations under the Agreement, or (ii) replace or so
modify their respective products so that the combination of their respective
products as contemplated by this Agreement becomes non-infringing.
[*          *     *     *    *    *    *].  Notwithstanding the foregoing, if
the parties are unable to reach agreement
[*      *         *         *         *] to the dispute resolution process
set forth in Section 13 below.  If as part of such dispute resolution
process, [*     *    *    *    *    *    *    *].  In the event that neither
of the parties, either individually or jointly, is, after the use of
reasonable commercial efforts, able to

                                         -10-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

accomplish such replacement or modification or to obtain the right to
continue the manufacture, importation, offer for sale, sale and/or use of the
combination of the parties' respective products in the manner contemplated by
this Agreement, [*      *    *    *    *].  If the arbitrator determines
[*     *    *    *    *    *    *    *    *    *].

    9(f)      LIMITATION OF LIABILITY. THE PROVISIONS OF THIS ARTICLES 9 AND
7(e) SET FORTH THE ENTIRE LIABILITY OF INNERDYNE AND THE SOLE REMEDIES OF
SHERWOOD WITH RESPECT TO ANY THIRD-PARTY CLAIMS ARISING OUT OF INNERDYNE'S
MANUFACTURE OF THE KITS OR THE INNERDYNE PRODUCTS AND THE ENTIRE LIABILITY OF
SHERWOOD AND THE SOLE REMEDIES OF INNERDYNE WITH RESPECT TO THIRD-PARTY
CLAIMS ARISING OUT OF SHERWOOD'S MANUFACTURE OF THE SHERWOOD PRODUCTS AND ITS
MARKETING, PROMOTION, DISTRIBUTION AND SALE OF THE KITS. IN NO EVENT SHALL
INNERDYNE BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT
UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE
THEORY FOR ANY DIRECT (EXCEPT AS OTHERWISE SET FORTH IN ARTICLES 9 AND 7(e)
HERETO), INDIRECT, CONSEQUENTIAL, PUNITIVE OR OTHER DAMAGES, INCLUDING COST
OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES, SUFFERED BY
SHERWOOD OR ANY OF ITS CUSTOMERS ARISING OUT OF OR RELATED TO THE
DISTRIBUTION, PROMOTION, MARKETING, SALE OR USE OF THE KITS OR INNERDYNE
PRODUCTS IN THE TERRITORY.

    9(f)      DISCLAIMER OF WARRANTY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, AND TO THE FULLEST EXTENT PERMITTED BY LAW, NEITHER PARTY
MAKES ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITH RESPECT TO
ITS PRODUCTS OR THE KITS AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND, IN THE CASE OF INNERDYNE, NONINFRINGEMENT WITH RESPECT TO SUCH INNERDYNE
PRODUCTS AND KITS.

SECTION 10.   USE OF TRADEMARKS; LABELING

    10(a)     TRADEMARK LICENSE. The Kits shall bear Sherwood's trademarks
and/or tradenames. Sherwood hereby grants to InnerDyne the right to reproduce
Sherwood's trademarks and tradenames, whether registered or not, for use on
the Kits, solely in connection with sales of Kits by InnerDyne to Sherwood
under this Agreement. Except as otherwise stated herein, all right, title and
interest to Sherwood's trademarks and tradenames shall remain with Sherwood.
Sherwood shall have the right to reproduce InnerDyne trademarks and
tradenames in labeling, advertising and promoting the sale of the Kits for
use in the Field in the Territory, provided such trademarks and tradenames
shall be identified as the property of InnerDyne and used in accordance with
InnerDyne's trademark use guidelines.

    10(b)     ARTWORK/LABELING. Sherwood will solely be responsible for
providing the artwork for all over-labeling and/or outer packaging for
InnerDyne's prior approval, which will not be unreasonably withheld, at least
ninety (90) days prior to InnerDyne's first shipment of such Kits to Sherwood
hereunder. InnerDyne will perform the over-labeling and/or create the outer
packaging (as appropriate) on all Kits such that the Sherwood names and
trademarks are clearly visible and such labeling, and Kit markings generally,
comply with applicable regulatory

                                         -11-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

requirements, which shall have been identified by Sherwood and communicated
in writing sufficiently in advance to InnerDyne.

    10(c)     KITS LABELING. Sherwood shall solely be responsible for
providing labeling in conformance with the requirements of any United States
regulatory agency, for C.E. marking, and the requirements of any regulatory
agency in any jurisdiction in the Territory that is outside of the United
States. Sherwood shall not modify or alter any labeling provided by InnerDyne
for Kits without prior written approval by InnerDyne. InnerDyne shall have
the right to approve to any labeling provided by Sherwood, which approval
shall not unreasonably be withheld.

SECTION 11.   FACILITY AND RECORD AUDIT

    Upon giving reasonable notice to InnerDyne, Sherwood and any
representative thereof shall have the right to inspect, during normal
business hours, the manufacturing facility in which InnerDyne manufactures
the InnerDyne Products and assembles the Kits, and to review records of
InnerDyne to assure compliance with the terms of this Agreement. InnerDyne
shall exert its commercially reasonable efforts to obtain similar rights of
inspection and review at any subcontractors of InnerDyne involved in the
manufacture of the InnerDyne Products and the assembly of the Kits.

SECTION 12.   CONFIDENTIALITY AND DISCLOSURE

    12(a)     CONFIDENTIALITY. Each party acknowledges that it has or will
have access to valuable proprietary information of the other party, including
but not limited to, technical data and customer and marketing information,
all of which are the property of the other party, have been maintained
confidential, and are used in the course of such other party's business. Each
party shall not, either during the term of this Agreement or thereafter,
disclose the other party's proprietary information to anyone other than those
of its employees having a need to know and shall refrain from use of such
information other than in the performance of this Agreement. In addition, the
receiving party shall take all reasonable precautions to protect the value
and confidentiality of such information to the originating party. All
records, files, notes, drawings, prints, samples, advertising material and
the like relating to the business, products or projects of the originating
party and all copies made from such documents, shall remain the sole and
exclusive property of the originating party and shall be returned to the
originating party immediately upon written request thereby. Each party agrees
to continue to maintain all proprietary information in confidence for a
period of five (5) years following termination of this Agreement, unless
written authorization to disclose any such information is first obtained from
the originating party hereunder.

    12(b)     EXCEPTIONS. Neither party shall be obligated or required to
maintain in confidence any information that (A) it is required to disclose
information by order or regulation of a governmental agency or a court of
competent jurisdiction, provided that such party shall not make any such
disclosure (other than a filing of information or materials with the U.S.
Securities and Exchange Commission made with a request for confidential
treatment for portions of such material for which such treatment may
reasonably be expected to be granted or a similar filing of information or
materials with the National Association of Securities Dealers) without first
notifying the other party and allowing the other party a reasonable
opportunity to seek injunctive relief from (or protective order with respect
to) the obligation to make such disclosure or (B) it can demonstrate with
written records: (i) is in the public domain or known to the receiving party

                                         -12-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

prior to disclosure by the originating party, (ii) becomes known to the
public after disclosure by the originating party, other than through breach
of this Agreement, (iii) becomes known to the receiving party from a source
other than the disclosing party without breach of any obligation of
confidence, or (iv) is or has been furnished to a third party by the
originating party without restriction on the third party's right to disclose.

SECTION 13.   DISPUTE RESOLUTION

    13(a)     PRE-ARBITRATION. No arbitration with reference to this
Agreement shall arise until the following procedures have been satisfied. In
the event a disagreement or dispute under this Agreement is not resolved by
the designated representatives of each party by mutual agreement within
thirty (30) days after a meeting to discuss the disagreement, either party
may at any time thereafter provide the other written notice specifying the
terms of such disagreement in reasonable detail and the time sensitivity of
such issue. Upon receipt of such notice, the Chief Executive Officer of
InnerDyne and the President of Sherwood shall meet at a mutually agreed upon
time, but no later than ten (10) days after receipt of such notice, and
location for the purpose of resolving such disagreement. They will discuss
the problems and/or negotiate for a period of up to thirty (30) days, or
shorter period as specified in the notice, in an effort to resolve the
disagreement or negotiate an acceptable interpretation or revision of the
applicable portion of this Agreement mutually agreeable to both parties,
without the necessity of formal procedures relating thereto. During the
course of such negotiation, the parties will reasonably cooperate and provide
information that is not materially confidential in order that each of the
parties may be fully apprised of the issues in dispute. The institution of
arbitration to resolve the disagreement may occur only after the earlier of:
(a) the Chief Executive Officer and President mutually agreeing that
resolution of the disagreement through continued negotiation is not likely to
occur, or (b) following expiration of the thirty (30) days negotiation period.

    13(b)     ARBITRATION. Subject to Section 13(a), any claim, dispute or
controversy arising out of or in connection with or relating to this
Agreement or the breach or alleged breach thereof, except arising under
Sections 3(g) or 12, shall be submitted by the parties to arbitration in
accordance with the then current commercial arbitration rules of the Center
for Public Resources, Inc. ("CPR") except as otherwise provided herein. All
proceedings shall be held in English and a transcribed record prepared in
English. The parties shall choose one (1) arbitrator from a panel of five (5)
arbitrators provided by CPR within thirty (30) days of the establishment of
the panel. Each party shall be entitled to strike two (2) arbitrators from
the panel. The arbitration shall be conducted at a site designated by the
arbitrator and that is mutually acceptable to the parties. The parties hereby
agree that any remedy or relief, whether legal or equitable, that may be
granted by such arbitrator shall not exceed the scope of the agreement of the
parties as set forth in this Agreement. The judgment rendered by the
arbitrator shall include costs of arbitration, reasonable attorneys' fees and
reasonable costs for expert and other witnesses, and judgment on such award
may be entered in any court having jurisdiction thereof. Nothing in this
Agreement shall be deemed as preventing either party from seeking injunctive
relief (or any other provisional remedy) from any court having jurisdiction
over the parties and the subject matter of the dispute as necessary to
protect either party's name, proprietary information, trade secrets, know-how
or any other proprietary rights. If the issues in dispute involve scientific
or technical matters, any arbitrator chosen hereunder shall have educational
training and/or experience sufficient to demonstrate a reasonable level of
relevant scientific or medical knowledge.

                                         -13-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

SECTION 14.   TERM AND TERMINATION

    14(a)     TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and  continue in full force and effect for a fixed term of
[*        *    *] from the date of receipt of the 510(k), unless terminated
earlier under the provisions of this Section 14 or other applicable
termination provisions of this Agreement. At the end of such fixed term, this
Agreement may be renewed in one-year increments provided that InnerDyne and
Sherwood agree in writing prior to the end of such fixed term, and each
additional term, upon the terms and conditions of such renewal, including,
without limitation, any amendments to this Agreement and the exhibits hereto
and the term of such renewal period. If such written agreement is not reached
prior to the end of the then-current contract term, then this Agreement shall
terminate at the end of such current contract term.

    14(b)     TERMINATION FOR CAUSE. If either party defaults in the
performance of any provision of this Agreement, then the nondefaulting party
shall give written notice of the default to the defaulting party, and if the
default is not cured within sixty (60) days, the Agreement will be
terminated; provided, however, if the default is such that it cannot
reasonably be cured within sixty (60) days, and the defaulting party shall
immediately and diligently undertake to cure the default after written notice
from the nondefaulting party during such sixty (60) day period, then the
Agreement shall not terminate at the end of the sixty (60) days period;
provided further, however, that if such default is not cured during the
following thirty (30) day period, then the Agreement shall automatically
terminate at the end of that thirty (30) day period.

    14(c)     TERMINATION FOR INSOLVENCY. Either party may terminate this
Agreement in the event that the other becomes insolvent, files a petition in
bankruptcy, or is declared bankrupt, or makes an assignment for benefit of
creditors, or there is reasonable evidence indicating the possibility of such
filing or assignment, during the term that this Agreement is in effect.
Termination under this provision shall be effective twenty (20) days
following written notice that this Agreement is being terminated for the
reason stated in this subject.

    14(d)     EFFECT OF TERMINATION; LIMITATION OF LIABILITY. In the event of
termination by either party in accordance with any of the provisions of this
Agreement, neither party shall be liable to the other, because of such
termination, for compensation, reimbursement or damages on account of the
loss of prospective profits or anticipated sales or on account of
expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of InnerDyne or Sherwood. Termination shall
not, however, relieve either party of obligations incurred prior to the
termination or of any obligations in this Agreement which by their terms
survive termination (including, without limitation, obligations of
confidentiality and transfer of regulatory approvals as set forth in Section
8(a)(iii) above, as discussed herein, and the obligations of the parties set
forth in Sections 9 and 13 above). Both InnerDyne and Sherwood shall be
entitled to cancel all Purchase Orders, to the extent Kits have not been
delivered to Sherwood, which are outstanding at the time of notice of
termination, provided however that, subject to payment in advance to
InnerDyne, Sherwood shall be entitled to receive the number of Kits necessary
to fulfill valid and binding customer purchase orders accepted by Sherwood
prior to notification of termination of this Agreement. Prior to filling such
purchase orders, InnerDyne shall be entitled to request and receive
documentary evidence of all such outstanding purchase orders and an
accounting of Sherwood's existing inventory of Kits. InnerDyne shall return
to Sherwood any Sherwood Products still on hand, at Sherwood's expense.

                                         -14-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

    14(e)     POST-TERMINATION USE OF MATERIALS. After termination of this
Agreement, neither party shall use any trademarks, tradenames, patents,
intellectual property, signs, equipment, advertising matter or material which
refer to or are related to the other and shall refrain from acts and
omissions that indicate or suggest a relationship with the other and shall
immediately discontinue use of all of the other's property, promotional
material, and proprietary information.

    14(f)     NO DAMAGES FOR TERMINATION. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER, INCLUDING DIRECT (OTHER THAN PURSUANT TO A TERMINATION UNDER
SECTION 14(b) ABOVE), INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
ON ACCOUNT OF THE TERMINATION OR EXPIRATION OF THIS AGREEMENT IN ACCORDANCE
WITH THIS ARTICLE 14. SHERWOOD WAIVES ANY RIGHTS IT MAY HAVE TO RECEIVE ANY
COMPENSATION OR REPARATIONS ON TERMINATION OR EXPIRATION OF THIS AGREEMENT
UNDER THE LAW OF ANY COUNTRY OUTSIDE THE UNITED STATES. Neither party shall
be liable to the other on account of termination or expiration of this
Agreement for reimbursement or damages for the loss of goodwill, prospective
profits or anticipated income, or on account of any expenditures,
investments, leases or commitments made by the other or for any other reason
whatsoever. THE PARTIES ACKNOWLEDGE THAT THIS SECTION 14(f) HAS BEEN INCLUDED
AS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT AND
THAT NEITHER PARTY WOULD HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE
LIMITATIONS OF LIABILITY AS SET FORTH HEREIN.

SECTION 15.   MISCELLANEOUS

    15(a)     ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other, which consent shall not be
unreasonably withheld; provided, however, that either party may assign or
transfer its rights and obligations under this Agreement to a successor to
all or substantially all of its assets, whether by sale, merger, operation of
law or otherwise.

    15(b)     ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
entire agreement between the parties hereto with respect to the within
subject matter and supersedes all previous agreements, whether written or
oral. This Agreement shall not be changed or modified orally, but only by an
instrument in writing signed by both parties.

    15(c)     SEVERABILITY. If any provision of this Agreement is declared
invalid by a court of last resort or by any court from the decision of which
an appeal is not taken within the time provided by law, then and in such
event, this Agreement will be deemed to have been terminated only as to the
portion thereof which relates to the provision invalidated by that decision
and only in the relevant jurisdiction, but this Agreement, in all other
respects and all other jurisdictions, will remain in force; provided,
however, that if the provision so invalidated is essential to this Agreement
as a whole, then the parties shall negotiate in good faith to amend the terms
hereof as nearly as practical to carry out the original interest of the
parties and, failing such amendment, either party may submit the matter to
arbitration for resolution pursuant to Section 13(b).

    15(d)     NOTICES. All notices specified in this Agreement shall be given
in writing and shall be effective when either served by personal delivery or
facsimile transmission, or five (5) days

                                         -15-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

after being addressed to the other party at the address specified below and
deposited in first class mail. Unless otherwise specified in accordance with
the provision of this Section, the addresses of the parties shall be:

         InnerDyne, Inc.
         1244 Reamwood Avenue
         Sunnyvale, California 94089
         Attention: CEO or CFO
         Facsimile Number: [*     *    *]

         Sherwood Medical Company
         1915 Olive Street
         St. Louis, Missouri 63103
         Attention: V.P. of Business Development
         Facsimile Number: [*     *    *]

    15(e)     CHOICE OF LAW. The validity, performance, construction, and
effect of this Agreement shall be governed by the laws of the State of
California which are applicable to contracts between California residents to
be performed wholly within California.

    15(f)     WAIVER. The failure of either party to assert a right hereunder
or to insist upon compliance with any term or condition of this Agreement
shall not constitute a waiver of that right or excuse a similar subsequent
failure to perform any such term or condition by the other party. None of the
terms, covenants and conditions of this Agreement can be waived except by the
written consent of the party waiving compliance.

    15(g)     FORCE MAJEURE. If either party shall be delayed, interrupted in
or prevented from the performance of any obligation hereunder by reason of
force majeure including an act of God, fire, flood, earthquake, war (declared
or undeclared), public disaster, strike or labor differences, governmental
enactment, rule or regulation, or any other cause beyond such party's
control, such party shall not be liable to the other therefor; and the time
for performance of such obligation shall be extended for a period equal to
the duration of the contingency which occasioned the delay, interruption or
prevention, provided the party invoking such force majeure rights of this
subparagraph shall notify the other party of the force majeure as soon as
possible and exercises due diligence to remove the cause as soon as
reasonably practicable.

    15(h)     PUBLICITY. InnerDyne and Sherwood shall agree upon the
publication time and date of any press release or other public statement
announcing this Agreement or any transaction contemplated under this
Agreement. Neither party shall make any public statement prior to the public
release of such press release except as may be required by law, judicial
order or any listing agreement with a national securities exchange or
over-the-counter trading system to which InnerDyne or Sherwood is a party.
Except as permitted by this Section 15(h) or except as required by law,
judicial order or any listing agreement with a national securities exchange
or over-the-counter trading system to which InnerDyne or Sherwood is a party,
neither party shall disclose the terms and conditions of this Agreement
unless expressly authorized to do so by the other party, which authorization
shall not be unreasonably withheld; provided that disclosure is expressly
permitted by either party to its attorneys and accountants on a confidential
basis. Notwithstanding the foregoing, InnerDyne may disclose on a
confidential basis the terms and conditions of this Agreement to potential
underwriters in

                                         -16-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

connection with any proposed public offering by InnerDyne or to third parties
interested in merging with or acquiring or entering into a corporate partner
transaction with InnerDyne.

    15(i)     HEADINGS; CONSTRUCTION. The captions used herein are inserted
for convenience of reference only and shall not be construed to create
obligations, benefits, or limitations. No presumption shall operate in either
party's favor as a result of it or its counsel's role in drafting the terms
and provisions hereof.

    15(j)     EXPORT. Each party acknowledges that the laws and regulations
of the United States restrict the export and re-export of commodities and
technical data of United States origin. Each party agrees that it will not
export or re-export the technical data of the other party in any form without
any required United States and foreign government licenses.

    15(k)     COUNTERPARTS. This Agreement may be executed in counterparts,
all of which taken together shall be regarded as one and the same instrument.
 Execution and delivery of this Agreement by exchange of facsimile copies
bearing the facsimile signature of a party hereto shall constitute a valid
and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.

                                         -17-
                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

    15(l)     ATTORNEYS' FEES. If any action or proceeding shall be commenced
to enforce this Agreement or any right arising in connection with this
Agreement, the prevailing party in such action or proceeding shall be
entitled to recover from the other party, the reasonable attorneys' fees,
costs and expenses incurred by such prevailing party in connection with such
action or proceeding.

                              [Signature page follows.]

                                         -18-

<PAGE>

    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate originals by their duly authorized representatives.

INNERDYNE, INC.                     SHERWOOD MEDICAL COMPANY
                                    D/B/A SHERWOOD-DAVIS & GECK

By:   /s/ William G. Mavity         By:  /s/ D.G. Thomas
    ------------------------------      ------------------------------------
         (Signature)                                  (Signature)

          William G. Mavity                      D.G. Thomas
    ------------------------------      ------------------------------------
         (Print Name)                                 (Print Name)

Title:    President/CEO                 VP Global Strategic Planning and R&D
      ----------------------------      ------------------------------------

Date: January 6, 1997                   January 6, 1997
      ----------------------------      ------------------------------------

SIGNATURE PAGE TO LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT


<PAGE>

                                                                         SL-1992
                                                                        03/24/97

                                      EXHIBIT A

                                  INNERDYNE PRODUCTS

                                PRODUCT SPECIFICATION
                       RADIALLY EXPANDING ACCESS DEVICE (READ)
                                     PRELIMINARY


    The Radially Expanding Access Device (READ) will consist of four
assemblies:  Radially Expanding Sleeve, Needle, Cannula and Dilator.

System Requirements:

    [    *    *    *    *    *    *    *    *    *]

Radially Expanding Sleeve:
    [    *    *    *    *    *    *    *    *    *]

Cannula
    [    *    *    *    *    *    *    *    *    *]

Dilator
    [    *    *    *    *    *    *    *    *    *]

Needle
    [    *    *    *    *    *    *    *    *    *]

                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                                                                         SL-1992
                                                                        03/24/97

                                      EXHIBIT B

                                  SHERWOOD PRODUCTS




         Product
         -------

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

    [    *    *    *    *    *    *    *    *    *]

                                                CONFIDENTIAL TREATMENT REQUESTED

<PAGE>

                                                                         SL-1992
                                                                        03/24/97

                                      EXHIBIT C

                              MINIMUM ANNUAL QUANTITIES



    Year                          Kits (Units)
    ----                          ------------

    [    *    *    *    *    *    *    *    *    *]
    [    *    *    *    *    *    *    *    *    *]
    [    *    *    *    *    *    *    *    *    *]

                                                CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

                                                                         SL-1992
                                                                        03/24/97

                                      EXHIBIT D

                               BUDGET FOR C.E. MARKING

                       REGULATORY CE MARKING BUDGET FOR THE KIT




-  ANNUAL COSTS TO BE ADJUSTED AS NECESSARY IN THE EVENT OF CHANGE

    --> Annual Certificate fee (including Project Management) [*     *]

    --> Annual audit costs estimated to be [*     *]

    --> Annual audit of Sherwood and Sherwood vendors [*     *]

    --> Annual maintenance cost for IDYN personnel 20 hours [*     *]




-  FIRST YEAR COSTS IN ADDITION TO THE ANNUAL COSTS

    --> Kema-RQI one time audit fee estimated to be [*     *]

    --> Cost for IDYN personnel 150 hours [*     *]

                                                CONFIDENTIAL TREATMENT REQUESTED