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                                 EXHIBIT 10.57

                       EXCLUSIVE DISTRIBUTION AGREEMENT

        IN THIS AGREEMENT, Sofamor Danek L.P., a Tennessee limited
partnership having a principal office at 1800 Pyramid Place, Memphis, TN
38132 ("SDLP"), and Vista Medical Technologies, a Delaware corporation having
a principal office at 5451 Avenida Encinas, Carlsbad, CA 92008, by and
through its HNS Microsurgery Division ("VMT"), hereby agree as follows:

                             ARTICLE I - RECITALS

        WHEREAS:

        1.1     VMT has products known as StereoSite-TM- Systems and certain
related products, all as described in Schedule A hereto.

        1.2     VMT owns and licenses intellectual property ("IP") rights and
technology related to the design, manufacture and operation of its products.
VMT conducts continuing research and development directed to improvements,
modifications and additions to its products.

        1.3     SDLP sells devices for neurosurgery, orthopedic surgery and
otolaryngology applications and implants and instruments for spinal and
cranial surgery, and SDLP has considerable experience in the marketing, sale
and service of such devices and systems for such applications.

        1.4     SDLP desires an exclusive right of distribution of certain
products made by VMT in certain defined fields and territories corresponding
to SDLP's current and anticipated markets, and VMT is willing to grant to
SDLP such a distribution right.

        1.5     SDLP and VMT recognize that application of the VMT's products
in SDLP's fields will require development of improved and modified products,
and VMT and SDLP, therefore, have agreed to conduct joint research and
development pursuant to the terms and conditions of a Cooperative Technology
Agreement concurrently executed by the parties.

        NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties mutually agree as follows:

                           ARTICLE II - DEFINITIONS

        2.1     "Change of Control" means, with respect to VMT, any of the
following events: (1) any "person" (as such term is used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), in a single transaction acquires "beneficial ownership" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, or securities
of VMT representing more than 33% of the combined voting power (with respect
to the election of directors) of VMT's then outstanding securities; or (ii)
the consummation of a merger, combination or consolidation which would result
in the voting securities of VMT outstanding immediately prior thereto failing
to continue to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 33% of
the combined voting power (with respect to the election of directors) of the
securities of VMT or of such surviving entity outstanding immediately after
such merger, combination or consolidation.

        2.2     "Distribution Territory" shall mean and include all countries
of the world.

        2.3     "Effective Date" shall mean the date of signature of the last
party to sign.


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<PAGE>

        2.4     "Endoscopy System" shall mean the StereoSite System
identified as the Endoscopy System on Schedule A attached hereto.

        2.5     "Europe" shall include all of continental Europe, and further
include the United Kingdom, Ireland and the Scandinavian countries and
Eastern Europe, including the Czech Republic, Serbia, Russia and Central
Independent States of the former USSR.

        2.6     "FDA" shall mean the United States Food and Drug
Administration.

        2.7     "North America" shall include the United States of America,
Canada and Mexico, including all territories and possessions thereof.

        2.8     "Microscopy System" shall mean the StereoSite System
identified as the Microscopy System on Schedule A attached hereto.

        2.9     "Related Company" shall mean (a) a corporation, firm or
association which, or an individual who, owns a controlling interest in a
party hereto by stock ownership or otherwise, (b) a corporation, firm or
association in which a party hereto owns a controlling interest, by stock
ownership or otherwise, or (c) a corporation, firm or association in which a
controlling interest, by stock ownership or otherwise, is owned by a
corporation, firm or association which, or an individual who, also owns a
controlling interest in a party hereto by stock ownership or otherwise.  A
"controlling interest" shall mean ownership or control of more than 50% of
the shares of stock entitled to vote for the election of directors in the
case of a corporation, or more than 50% of the voting power in the case of a
business entity other than a corporation.

        2.10    "SDLP Field" shall mean all:

                (a)     neurosurgery, including, without limitation, cranial,
functional, skull base and spinal surgery;
                (b)     spinal surgery;
                (c)     radiation delivery, including, without limitation,
radiosurgery and radiotherapy;
                (d)     otolaryngology, including, without limitation,
functional endoscopic sinus surgery; and
                (e)     maxillafacial surgery.

        2.11    "Spinal System" shall mean the StereoSite System identified
as the Spinal System on Schedule A attached hereto.

        2.12    "StereoSite Systems" shall mean the current version of
Vista's visualization and related information systems for microsurgery,
endoscopy and spinal surgery, together with all associated accessories,
software and disposables specific to such systems, together with any updates,
modifications or new versions thereof.

        2.13    "Systems" shall mean the StereoSite Systems, the Visual
(Seeing Eye) Instruments identified on Schedule A hereto and Vista's Series
8000 visualization and related information systems, as currently sold,
together with all improvements and enhancements thereto.

        2.14    "VMT Current Products"' shall mean the StereoSite Systems and
related products, including, without limitation, the apparatus and software
listed in Schedule A hereto.

        2.15    "VMT Improvements" shall mean any modified VMT Current
Product and any addition to the StereoSite System product line.

        2.16    "VMT Products" shall mean and include VMT Current Products
and any VMT Improvements that subsequently become subject to this Agreement
pursuant to its terms.


                                       2

<PAGE>

                         ARTICLE III - DISTRIBUTORSHIP

        3.1     VMT hereby appoints SDLP, and SDLP hereby accepts
appointment, as VMT'S exclusive distributor, even unto VMT, of VMT Products
in the SDLP Field, with the right to market, sell and distribute VMT Products
throughout the world in accordance with the terms of this Agreement.  SDLP
agrees to use its best efforts to successfully market (including, without
limitation, performing in accordance with the marketing plans contemplated by
Article V hereof) the VMT Product on a continuing basis, but nothing in this
paragraph 3.1 shall require SDLP to take an unnecessary or unreasonable
business, legal, regulatory or financial risk or action.

        3.2     As consideration for the exclusive distribution rights
granted in paragraph 3.1, SDLP hereby agrees (a) to pay to VMT on execution
of the Agreement, a non-refundable, non-creditable fee of      ***
***        in cash, payable by check or wire transfer to VMT's account, and
(b) not to market or sell visualization products with the same specific
purpose as the VMT Products in the SDLP Field.  VMT acknowledges that SDLP is
currently selling lines of minimally invasive endoscopic visualization
equipment, currently known as MED Products and MicroEndo Products, and VMT
acknowledges and agrees that these products and any improvements or
enhancements thereto (except for improvements or enhancements containing
three-dimensional visualization technology) do not cause and will not
constitute or be construed to constitute a violation of this paragraph 3.2.

        3.3     SDLP may appoint third parties to act for SDLP in selling and
distributing VMT Products in the SDLP Field, provided, however, that SDLP
shall remain responsible for performance of such third parties of all
covenants and obligations under this Agreement, including payment for any VMT
Products sold to any such third party pursuant to the terms of the third
party's agreement with SDLP.  Any shipments by VMT to SDLP subdistributors
made at the specific request of SDLP, shall be billed by VMT to SDLP
directly.

        3.4     VMT shall forward promptly to SDLP all leads for sales of VMT
Products in the SDLP Field.

        3.5     (a)     In the event that VMT proposes to enter into any
distribution agreement with any third party regarding the distribution of the
VMT Products in the field of orthopedic surgery (other than arthroscopy and
the SDLP Field), then, prior to entering into any discussions regarding such
distribution agreement, VMT shall notify SDLP in writing of such intention to
enter into such discussions, including the material terms and conditions upon
which VMT would be willing to enter into a distribution agreement ("VMT's
Notice").

                (b)     For a period of 60 days after SDLP's receipt of VMT's
Notice (the "Exclusive Period"), VMT shall negotiate in good faith
exclusively with SDLP regarding such distribution agreement.  During the
Exclusive Period, VMT will not solicit offers from, negotiate with, or
provide information to any third party regarding the distribution arrangement
contemplated by VMT's Notice.

                (c)     If SDLP and VMT fail to reach mutual agreement upon
the terms and conditions of a definitive agreement for such distribution
relationship, then VMT shall have 90 days from the expiration of the
Exclusive Period to enter into a definitive agreement for such distribution
with a third party; provided, however, that VMT may not enter into such
definitive agreement if the terms and conditions thereof are, in the
aggregate, more favorable to the third party than the terms and conditions
proposed to SDLP by VMT during the Exclusive Period.  If VMT fails to enter
into such definitive agreement within such 90-day period, then SDLP's rights
under this paragraph 3.5 shall be reinstated and VMT may not enter into any
distribution relationship for VMT Products in such field and territory
without first giving SDLP a new VMT's Notice and complying with the terms of
this paragraph 3.5.

        3.6     Notwithstanding anything else set forth in this Agreement,
VMT reserves all rights to collaborate with third parties with respect to VMT
Products in the field of arthroscopic surgery (the "Excluded

***     Portions of this page have been omitted pursuant to a request for
    Confidential Treatment and filed separately with the Commission.


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<PAGE>

Field").  VMT shall provide written notice to SDLP identifying any potential
collaborator prior to entering into any collaboration therewith in the
Excluded Field.  In the event SDLP, in its reasonable judgment, acting in
good faith, objects to any collaboration in the Excluded Field due to the
fact that the potential collaborator is an existing competitor of SDLP or any
SDLP Related Company, then, SDLP shall provide VMT written notice of such
objection (the "Objection Notice") within twenty-one (21) days of receipt of
notice from VMT of the identity of the proposed collaborator.  Upon receipt
of the Objection Notice, VMT shall allow SDLP 120 days to develop a business
plan for the VMT Products in the Exclusive Field, during which period the
parties shall negotiate the terms and conditions of a collaboration in good
faith.  If following the 120 day period contemplated above, VMT enters into a
collaboration with a party identified by SDLP in an Objection Notice, VMT
shall contractually restrict such party from using, selling or distributing
VMT Products in the SDLP Field, and VMT, in addition to enforcing the
contractual restrictions against the competitor by termination of the
arrangement if unauthorized distribution continues after notice is provided
in accordance with the terms of the arrangement, shall contractually obligate
the collaborator to pay to SDLP as a third party beneficiary a twenty percent
(20%) royalty on net sales by the collaborator of VMT Products in the SDLP
Field.

             ARTICLE IV - SPECIFICATIONS AND REGULATORY APPROVALS

        4.1     (a)     VMT reserves the right to discontinue any VMT Product
at any time, provided that SDLP is given at least six (6) months prior
written notice.

                (b)     During the term of this Agreement, VMT shall promptly
notify SDLP of any material changes or modifications to any VMT Product in
writing (the "VMT Material Change Notice").

        4.2     (a)     VMT will be use commercially reasonable efforts to
obtain, at VMT's expense and in VMT's name with respect to the VMT Products,
as promptly as reasonably possible, (i) any necessary regulatory approvals
from the FDA prerequisite to the commercial sale in the United States, (ii)
any required Underwriter's Laboratory or equivalent certifications or IEC
601-1:1988 Certification, (iii) the CE Mark under the applicable Medical
Device Directive and (iv) other necessary regulatory approvals or clearances
or equivalent certifications of a substantially equivalent nature to those
set forth above in this Paragraph 4.2(a) in the United States or Europe.  VMT
shall promptly notify SDLP of receipt of any such approvals, and shall
provide SDLP with such information regarding the status of pending approvals,
as SDLP may reasonably request.

                (b)     Except as set forth in 4.2(a) above, SDLP shall be
responsible, at its sole expense, to ascertain and comply with all applicable
laws and standards of industry or professional conduct, including without
limitation, those applicable to regulatory approvals, product claims,
labelling, approvals, registrations and notifications, and also to obtain
Distributor's prior written consent to all claims, labels, instructions,
packaging or the like, which consent shall not be unreasonably withheld.

                            ARTICLE V - PERFORMANCE

        5.1     Before March 31, 1998, the parties shall jointly develop a
plan for the implementation of a focused marketing effort for VMT Products in
the SDLP Field for calendar year 1998 (the "1998 Marketing Plan").  The 1998
Marketing Plan shall be commercially reasonable, but will provide in each of
Europe, North America and Japan, for technical sales specialists to be
employed by SDLP and adequate demonstration inventory (not to exceed 30
StereoSite Systems) to be purchased by SDLP.  The 1998 Marketing Plan shall
include agreed upon sales, regulatory and development milestones for 1998.

        5.2     Before September 30 of each year during the term of this
Agreement, the parties shall agree upon a marketing plan for the following
calendar year.  Such marketing plan shall include the number of additional
demonstration StereoSite Systems (if any) that SDLP will be entitled to
acquire based on the reasonable business needs and sales projections of SDLP
for the following calendar year and (b) minimum


                                       4

<PAGE>

annual sales volumes (worldwide and for each of Europe, North America and
Japan) of VMT Products in the SDLP Field for the immediately following
calendar year. Prior to a Change in Control, if any, in the event that SDLP
and VMT do not agree upon a marketing plan contemplated by this paragraph 5.2
within six (6) months following the date upon which such plan was to be
established, the minimum annual sales volumes for the immediately preceding
year shall be deemed to apply to the then current year.

        5.3     On the Effective Date, SDLP shall deliver to VMT a purchase
order with respect to    ***      VMT Products to be used as demonstration
units and    ***      VMT Products for resale (the "Initial Order").

        5.4     During calendar year 1999, SDLP agrees to deliver to VMT, for
delivery during such calendar year in accordance with the marketing plan,
purchase orders with respect to a minimum of (i) an aggregate of ***
Microscopy Systems and Endoscopy Systems and (ii) *** Spinal Systems.  SDLP
shall be obligated under this paragraph 5.4 only if (a) customers (other than
SDLP and Related Companies) have placed orders with SDLP and/or its
subdistributors for at least *** StereoSite Systems during 1998, (b) VMT's
responsibilities under the development and regulatory milestones incorporated
into the 1998 Marketing Plan have been performed, except to the extent that
the failure to perform such responsibilities results from a breach by SDLP of
this Agreement or the Cooperative Technology Agreement and (c) the Endoscopy
System and Spinal System are available for commercial sale on or prior to
December 31, 1998.

                 ARTICLE VI - TERMINATION OF EXCLUSIVE RIGHTS

        6.1     VMT shall have the option of terminating SDLP's rights set
forth in paragraph 3.1 hereof upon providing SDLP with a notice identifying
the asserted basis for termination and scope of termination, as follows:

                (a)     In any of Europe, North America or Japan, as
applicable, if at least *** of the minimum annual sales volumes for such
territory as agreed upon in accordance with paragraph 5.2 hereof are not
achieved on a cumulative basis for any two year period ("Measurement
Period").  For purposes of this Agreement, the initial Measurement Period
shall commence on January 1, 1999 and conclude on December 31, 2000.

                (b)     In the entire Distribution Territory, if at  ***
of the minimum annual sales volumes for the Distribution Territory as agreed
upon in accordance with paragraph 5.2 hereof are not achieved for any
Measurement Period.

                (c)     In any portion of the SDLP Field or the Distribution
Territory, if SDLP fails to implement the marketing plans (other than the
minimum annual sales volume component of such marketing plans) contemplated
by paragraphs 5.1 and 5.2 hereof in any material respect.

        6.2     For a period of one (1) year following the date of the
termination of SDLP's exclusive rights in any field or territory in
accordance with paragraph 6.1 hereof, SDLP shall retain a nonexclusive right
to distribute and sell VMT Products within the terminated field and/or
territory.  During the aforementioned one (1) year period, the parties will
discuss in good faith alternatives to the termination of SDLP's rights in the
affected field and/or territory; provided, however, that neither SDLP or VMT
shall be precluded from discussing alternatives for such products, fields and
territories with other parties.

        6.3     The provisions of paragraph 6.1(a) and 6.1(b) hereof shall
not apply in the event that the failure to achieve the minimum annual sales
volumes during any Measurement Period are the result of the failure or
inability of VMT to supply VMT Products in a timely manner in accordance with
the terms of this Agreement.

        6.4     In the event of a Change of Control of VMT, in no event will
the minimum annual sales volumes used in any calendar year for purposes of
Section 6.1(a) and 6.1(b) exceed *** of the minimum annual

***     Portions of this page have been omitted pursuant to a request for
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<PAGE>

sales volumes for the immediately preceding calendar year.

                      ARTICLE VII - ORDERING AND DELIVERY

        7.1     All SDLP purchase orders for VMT Products shall include all
information reasonably required by VMT and shall be in a form that is
approved by VMT and reasonably acceptable to SDLP.  SDLP's orders shall be
given no less favorable treatment than orders from other VMT customers.  VMT
will deliver in the time and in the manner directed in any purchase order
accepted by VMT.

        7.2     All purchase orders from SDLP shall be subject to acceptance
by VMT in accordance with the terms of this Agreement.  Orders not rejected
by written notice to SDLP within ten (10) business days after receipt by VMT
shall be considered accepted by VMT.  Each purchase order accepted by VMT
shall constitute a contract between VMT and SDLP for the sale of VMT Products
ordered and shall be subject to the terms and conditions of the purchase
order and of this Agreement.  The terms and conditions of this Agreement
shall govern and supersede any additional or contrary terms set forth in
SDLP's purchase order or in any VMT or SDLP acceptance, confirmation, invoice
or other document unless duly signed by an officer of each party and
expressly identifying and stating agreement with the specific additional or
contrary term or condition.

        7.3     On or before January 1, 1999, SDLP shall provide VMT with a
twelve month rolling forecast indicating by month the number and type of VMT
Products anticipated to be sold by SDLP or purchased by SDLP for
demonstration use or inventory.  The forecast shall be updated quarterly by
the first day of each calendar quarter.  The first four (4) months of the
forecast shall constitute a firm purchase commitment by SDLP for delivery of
the VMT Products specified therein.  SDLP otherwise may modify the forecast
upon reasonable advance notice.  VMT shall not be required to deliver
quantities of VMT Products in excess of 125% of SDLP's forecasted
requirements unless VMT has been given at least four (4) months advance
written notice of the quantities of VMT Products that exceed the forecast,
provided, however, that VMT shall use all commercially reasonable efforts to
supply such excess even without such advance notice.

        7.4     No accepted purchase order shall be modified or canceled
except upon the mutual agreement of the parties.  Mutually agreed change
orders shall be subject to the terms of this Agreement.  Notwithstanding the
foregoing, any purchase order may be canceled by SDLP as to any VMT Products
that are not delivered within ninety (90) days of the delivery date
("Cancellation Date") requested in the purchase order, and any cancellation
shall not limit or affect any contract remedies available to SDLP with
respect thereto.  Any cancellation by SDLP shall be by written notice to VMT
received within three (3) business days after the Cancellation Date.

        7.5     In the event VMT has a shortage of supply, VMT shall ship its
products in the order in which purchase orders are received.

        7.6     In the event VMT does not supply a VMT Product as ordered
pursuant to a Purchase order accepted by VMT, VMT shall so notify SDLP and
the parties shall agree upon a new delivery date within ninety (90) days
after the delivery date specified in the accepted purchase order.  In the
event VMT fails to meet the new delivery date on any three accepted orders in
any rolling six month period, and such failures are not excused pursuant to
Article XIII hereof SDLP shall be deemed to have been granted a temporary
nonexclusive right to make or have made those VMT Products that VMT has been
unable to supply in a timely manner for sale solely within the SDLP Field and
the territories in which SDLP has a right to distribute VMT Products pursuant
to this Agreement.  In the event that VMT notifies SDLP that it has cured its
production problems, VMT and SDLP shall meet and develop a forecast for VMT's
manufacture of VMT Products for the next three (3) months.  The right to make
or have made granted pursuant to this paragraph, shall continue until VMT has
demonstrated, by successful and timely delivery of VMT Products pursuant to
the agreed upon forecasts contemplated by this Section for three successive
months, that its delivery problems are cured. The license shall terminate
upon such a demonstration.  Upon termination of the license, SDLP shall have
a reasonable time to phase out the alternative


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<PAGE>

arrangements made under the license, and VMT shall  reimburse SDLP for all
reasonable incremental costs incurred by SDLP as a result of termination of
the license and reversion to supply by VMT pursuant to this Agreement.

        7.7     All deliveries of VMT Products shall be FOB at VMT's facility
located at Westborough, MA, or such other location within the United States
which VMT shall designate.  VMT shall have no further responsibility for VMT
Products, and all risk of damage or loss or delay of VMT Products shall pass
to SDLP, upon their delivery at the aforesaid FOB point.  All VMT Products
shall be delivered by a common carrier selected by SDLP, and, in the event
SDLP has not selected a common career fifteen (15) business days prior to the
shipment date, VMT shall ship by a common carrier reasonably selected by VMT.

        7.8     VMT shall be responsible for all packaging and required
sterilization of VMT Products purchased pursuant to this Agreement in
accordance with specifications which are reasonably satisfactory to both
parties.

                         ARTICLE VIII - PRICING AND ROYALTIES

        8.1     ***

        8.2     In addition to the amounts set forth in paragraph 8.1 above,
SDLP shall pay to VMT a royalty of *** of    ***                   of VMT
Products, including upgrades or replacement parts, sold by SDLP or Related
Companies to third parties in calendar years 1998, 1999, 2000, 2001, and
2002. SDLP's and any Related Party's    ***       shall be determined in
accordance with GAAP as then currently applied by SDLP.  The royalty required
by this paragraph shall be payable on ***      VMT Products only after the
first

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<PAGE>

***      VMT Products are sold by SDLP.  The parties agree to reconsider in
good faith the royalty calculation set forth in the first sentence of this
paragraph during the last calendar quarter of 1999 in respect of sales of VMT
Products to subdistributors outside the United States.

                                      ***
                                      ***
                                      ***
                                      ***
                                      ***
                                      ***
                                      ***.

        8.4     Payments for VMT Products sold to SDLP shall be due and
payable by SDLP within fifty (50) days after the date of the invoice by VMT.
Notwithstanding the foregoing,   ***    of the amount payable to VMT with
respect to the Initial Order shall be due on the Effective Date as an advance
against payment for the Initial Order.  All payments set forth hereunder
shall be made in U.S. dollars in the U.S.

        8.5     (a)     Within forty-five (45) days after the close of each
calendar quarter during 1998 through 2002, SDLP shall remit to VMT the
royalties payable pursuant to paragraph 8.2 hereof.  SDLP shall maintain
books of account sufficient to determine SDLP's    ***
of VMT Products sold by SDLP, its subdistributors or Related Companies.

                (b)     Each royalty payment shall be accompanied by a
written report, prepared at the direction of a financial officer of SDLP,
showing for the quarter for which payment is being made, the ***        ***
of VMT Products sold by SDLP or Related Companies to third parties during the
immediately preceding calendar quarter and the royalties which shall have
accrued with respect thereto.  In the event that, for any quarter following
the first quarter in which a SDLP Product is sold for which such a royalty
would be payable, no such royalty is due, SDLP shall report the same to VMT.

                (c)     At the request and expense of VMT, SDLP shall permit
an independent certified public accountant appointed by VMT and reasonably
acceptable to SDLP, at reasonable times and upon reasonable notice (but not
exceeding once in any twelve (12) month period), to examine on a confidential
basis those records as may be necessary (with respect to any calendar year
ending not more than three (3) years prior to such party's request) to: (i)
determine the correctness of any report or payment under this Agreement; or
(ii) obtain information as to the VMT Product   *** and SDLP      ***
for such calendar year.  Said independent certified public accountant shall
verify to the requesting party only the amount of payment due or costs
incurred hereunder and disclose no other information revealed in its audit.
Results of any such examination shall be made available to the parties.  Any
amount of deficiency, or overcharge, shall be paid or refunded promptly by
the parties, plus interest at the commercial prime lending rate of Citibank,
N.A., New York (or equivalent banking institution) until the date paid.  VMT
shall bear the full cost of the performance of any such audit unless such
audit discloses an underpayment by SDLP to VMT of more than five percent (5%)
from the amount of the original report, royalty or payment calculation, in
which case SDLP shall bear the full cost of the performance of such audit.

        8.6     Notwithstanding the pricing set forth above in paragraph 8.1,
SDLP shall be entitled to purchase from VMT the number of demonstration
StereoSite Systems contemplated in the marketing plans adopted pursuant to
Article V hereof at a price equal to VMT's fully-burdened manufacturing cost
for a System as determined in accordance with paragraph 8.1, plus a mark-up
of ***.

***     Portions of this page have been omitted pursuant to a request for
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<PAGE>

                         ARTICLE IX - TERM

        9.1     Unless earlier terminated or extended pursuant to its terms,
this Agreement shall continue from the Effective Date to December 31, 2002
(the "Initial Term").  At the end of the Initial Term, this Agreement shall
automatically be renewed for periods of two (2) years each, provided that at
least *** of the minimum annual sales volumes for the Distribution Territory
as agreed upon in accordance with paragraph 5.2 hereof have been achieved for
the most recently completed Measurement Period.  For example, if at least ***
of the minimum annual sales volumes for the Distribution Territory as agreed
upon in accordance with paragraph 5.2 hereof are achieved for the Measurement
Period of January 1, 2001 through December 31, 2002, then this Agreement
shall be renewed through December 31, 2004.

        9.2     This Agreement may be terminated by either party for a
material breach by the other party of the provisions hereof.  Such
termination shall be effective sixty (60) days after written notice to the
other party of the breach if the breach has not been remedied.  This
provision shall not apply to breaches by SDLP of the performance provisions
of Article V.

        9.3     In the event of termination of this Agreement by either party,

                (a)  SDLP shall have the right to complete all sales of VMT
                     Products for which purchase orders have been accepted
                     by VMT, provided SDLP pays the sale price and any
                     royalties on such sales pursuant to paragraph 7.5;

                (b)  SDLP shall make all payments that accrued and were
                     payable prior to the date of termination;

                (c)  SDLP shall assign to VMT all assignable regulatory
                     approvals that are specific and limited to VMT Products;

                (d)  The parties shall cooperate to assure continued service
                     and support to purchasers of VMT Products from SDLP; and

                (e)  VMT shall purchase from SDLP, at SDLP's cost, all unsold
                     VMT Products in SDLP's inventory.

        9.4     This Agreement shall automatically terminate in the event (1)
either party ceases to do business, or otherwise terminates its business
operations or (2) if either party shall seek protection under any bankruptcy,
receivership, trust deed, creditors arrangement, composition or comparable
proceeding, or if any such proceeding is instituted against the other party.

        9.5     The right of either party to terminate under the provisions
of this Article shall not be an exclusive remedy, and either party shall be
entitled, if the circumstances warrant alternatively or cumulatively, to
damages for breach or this Agreement, to an order requiring performance of
the obligations of this Agreement or to any other legally available remedy.

                  ARTICLE X - MARKETING, SALES AND SERVICE

        10.1    SDLP shall supply all sales and marketing materials at its
sole expense, all such materials to be approved by VMT in its reasonable
discretion. Any sales and marketing materials not disapproved in writing by
VMT, shall be deemed approved by VMT thirty (30) days after receipt by VMT
for review.  VMT shall supply SDLP, as reasonably requested from time to
time, information required in order to prepare sales and marketing materials.


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<PAGE>

        10.2    SDLP shall be responsible for marketing activities in the
SDLP Field.  Upon reasonable request from SDLP, VMT shall cooperate with
marketing activities promoting VMT Products, including, without limitation,
providing VMT employees for training, demonstrations and customer contact.

        10.3    SDLP will use the then current names and designations used by
VMT for the VMT Products.  All advertisements, promotional materials and
packaging shall identify VMT as the owner of such names and designations and
the manufacturer of the VMT Products and shall be subject to prior written
approval of VMT, which approval shall not be unreasonably withheld.  SDLP
shall have the right and license to use VMT trade names and trademarks in
conjunction with the promotion and sale of VMT Products in the SDLP Field.
SDLP shall acquire no right or title in such VMT trademarks and trade names.
SDLP shall have the right to use its own trade name and trademarks in
conjunction with the VMT trade names and trademarks.  All rights of SDLP
under this paragraph shall terminate with termination of this Agreement.

        10.4    VMT shall provide initial training of SDLP sales specialists
and field service representatives with respect to use and installation of VMT
Products.  Such training shall take place at reasonable times and places, as
agreed upon by the parties.  All SDLP employee costs shall be borne by SDLP.

        10.5    SDLP shall be responsible for obtaining any licenses
necessary to export VMT Products from the United States to the country of
delivery as indicated on SDLP's purchase order.  SDLP shall also be
responsible for obtaining any import licenses required by any such country.

        10.6    VMT shall make available to SDLP any software and hardware
upgrades for VMT Products at prices set in accordance  with paragraphs 8.1,
8.2 and 8.3 hereof and on terms and conditions consistent with this Agreement.

        10.7    Except as provided in Article X hereof regarding VMT's
warranty obligations, VMT shall sell replacement parts for VMT Products to
SDLP at prices determined in accordance with paragraphs 8.1, 8.2 and 8.3
hereof.

ARTICLE XI - INSPECTIONS, RETURNS, REPRESENTATIONS, WARRANTIES AND COVENANTS

        11.1    In the event of any shortage, damage or discrepancy in or to
a shipment of VMT Products or in the event any VMT Product fails to comply
with the then current agreed-upon specifications for the VMT Product, SDLP
shall report the same to VMT and shall furnish such written evidence or other
documentation as VMT reasonably may deem appropriate.  If such evidence
establishes that such shortage, damage or discrepancy existed at the time of
delivery of the VMT Product at the FOB point, SDLP may return the VMT Product
to VMT at VMT's expense, and, at SDLP's request, VMT shall use all reasonable
efforts to deliver promptly replacement VMT Products in accordance with the
delivery procedures established herein.

        11.2    VMT represents and warrants to SDLP that all VMT Products
sold and delivered under this Agreement will have been manufactured, if
required by law, in accordance with FDA Good Manufacturing Practices,
European Medical Device Directive requirements, ISO 9001 certification or
successor requirements, and all other applicable manufacturing requirements.
VMT further agrees that no VMT Product delivered by VMT under this Agreement
shall be adulterated or misbranded at the time of delivery within the meaning
of the U.S. Food, Drug and Cosmetic Act and regulations thereunder.  VMT
shall permit SDLP's regulatory personnel reasonable access, from time to
time, to the facilities and records of VMT for the purpose of confirming
VMT's compliance with this paragraph.

        11.3    VMT warrants to SDLP that the use, sale, offer for sale or
import of VMT Products sold by VMT under this Agreement will not infringe any
then currently issued patents, trade secrets, trademarks or other IP rights
of any third party, and any such VMT Products shall, when delivered at the
FOB point, meet the then effective and agreed upon specifications and shall
be free from defects in materials and workmanship.

                               10

<PAGE>

        11.4    VMT hereby extends and agrees to extend to any original
purchaser of a VMT Product from SDLP or its designee pursuant to the terms of
this Agreement a warranty for a period of the earlier of (i)   ***    months
from the date of shipment from VMT's facilities or (ii)   ***   year from
SNT's sale to a third party customer, against defects in materials or
workmanship that occur in normal use; provided, however that the    ***
month period set forth above shall be    ***           months for VMT
Products sold by VMT to SDLP in 1998 and    ***        months for VMT
Products sold by VMT to SDLP in 1999.  VMT shall be responsible for the
repair and/or replacement of VMT Products that prove to be defective.  The
warranty shall be void if the VMT Product was misused, abused, improperly
installed or operated, or repaired, serviced or modified by anyone other than
service personnel designated by VMT.

        11.5    All service for VMT Products sold pursuant to this Agreement
shall be coordinated by VMT from its facilities.  In service literature, SDLP
shall identify a VMT facility as an authorized repair center, shall provide a
toll-free telephone number at this facility for assistance, and shall include
as the SDLP mailing address for service matters the address of this VMT
facility. VMT shall maintain a customer service capability sufficient to
respond to the needs of SDLP's customers.






***     Portions of this page have been omitted pursuant to a request for
    Confidential Treatment and filed separately with the Commission.

                                   11

<PAGE>

        11.6    THE WARRANTIES SET FORTH IN THIS SECTION ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, AND VMT HEREBY DISCLAIMS AND EXCLUDES
ANY AND ALL WARRANTIES, GUARANTEES, OBLIGATIONS, LIABILITIES, RIGHTS AND
REMEDIES, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING, BUT NOT
LIMITED TO, (a) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, (b) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE IN THE TRADE, AND (c) ANY OBLIGATION,
RIGHT, LIABILITY, CLAIM OR REMEDY FOR LOSS OF USE, REVENUE OR PROFIT, OR ANY
OTHER DAMAGES, INCLUDING CONSEQUENTIAL DAMAGES, EXCEPT THAT VMT SHALL PROVIDE
WITH RESPECT TO VMT PRODUCTS SOLD TO SDLP SUCH OTHER WARRANTIES AS VMT
CUSTOMARILY PROVIDES TO ITS CUSTOMERS OR END USERS FOR PRODUCTS COMPARABLE TO
VMT PRODUCTS USEFUL IN THE SDLP FIELD.

        11.7    VMT represents and warrants to SDLP that:

                (a)  VMT is the exclusive owner or licensee of all right,
                     title and interest in and to all IP used in the
                     research, design, development, manufacture or sale of
                     VMT Products (the "VMT IP").

                (b)  Neither VMT, its business, any of VMT Products, nor the
                     execution and performance of this Agreement and the
                     transactions contemplated herein, infringes, misuses,
                     misappropriates or conflicts with the rights, including
                     patent and other intellectual property rights or
                     contract rights, of others.

                (c)  To the knowledge of VMT, the VMT IP is valid and has not
                     been challenged in any judicial or administrative
                     proceeding.

                (d)  To the knowledge of VMT, VMT has taken any necessary
                     steps or appropriate actions to record its interests, or
                     to protect its rights, in the VMT IP.

                (e)  To the knowledge of VMT, no person or entity, nor such
                     person's or entity's business or products, has
                     infringed, misused, misappropriated or conflicted with
                     the VMT IP or currently is infringing, misusing,
                     misappropriating or conflicting with the VMT IP.

        11.8    SDLP represents and warrants to VMT and agrees as follows:

                (a)  to immediately notify VMT of any adverse or unexpected
                     results or any actual or potential government action
                     relevant to a product and, if and to the extent
                     requested by VMT in writing to suspend distribution of
                     that product.

                (b)  to keep for five years after termination of this
                     Agreement records of all product sales and customers
                     sufficient to adequately administer a recall of any
                     product and to fully cooperate in any decision by VMT to
                     recall, retrieve and/or replace any product.

                (c)  to keep VMT informed as to any problems encountered with
                     the VMT Products and any resolutions arrived at for
                     those problems, and to communicate promptly to VMT any
                     and all modifications, design changes or improvements of
                     the VMT Products suggested by any customer, employee or
                     agent.  SDLP further agrees that VMT shall have any and
                     all right, title and interest in and to any such
                     suggested modifications, design changes or improvements
                     of the VMT Products, without the payment of any
                     additional consideration therefor either to SDLP, or its
                     employees, agents or customers.  SDLP will also promptly
                     notify VMT of any infringement of any trademarks or
                     other proprietary rights relating to the VMT Products.

                                   12

<PAGE>

                (d)  to comply with all applicable export control laws and
                     regulations of the United States Department of Commerce
                     or other United States agency or authority and not to
                     export any VMT Product in violation of such laws or
                     regulations.

        11.9    For a period of sixty (60) days following SDLP's receipt of
any VMT Material Change Notice, SDLP shall be entitled to replace VMT
Products which remain unsold by returning such Products to VMT.  All returned
Products must be in original packaging, which shall conspicuously bear the
Material Return Authorization Number SDLP obtains from VMT prior to return.
VMT shall deliver replacement VMT Products promptly to SDLP.

        11.10   Except for the obligations of VMT set forth elsewhere in this
Agreement, SDLP agrees to ascertain and comply with in the performance of or
exercise of rights under this Agreement, all applicable laws or regulations
of any organization, country, group of countries or political or governmental
entity located within the Distribution Territory.

                   ARTICLE XII - INDEMNITY AND INSURANCE

        12.1    VMT shall indemnify, defend and hold harmless SDLP and each
of its subsidiaries, officers, directors, employees, shareholders, Related
Companies and distributors ("Indemnified Party) from and against and in
respect of any and all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, interest and penalties, costs and
expenses (including, without limitation, reasonable legal fees and
disbursements incurred in connection therewith and in seeking indemnification
therefor, and any amounts or expenses required to be paid or incurred in
connection with any action, suit, proceeding, claim, appeal, demand,
assessment or judgment), resulting from, arising out of, or imposed upon or
incurred by any person to be indemnified hereunder by reason of (i) any
breach of representation, warranty, covenant or agreement on the part of VMT
under this Agreement, (ii) total or partial recalls of VMT Products, or (iii)
alleged defects in materials, workmanship, product performance, or design of
VMT Products, but in any event excluding matters for which SDLP is
responsible under paragraph 12.2 below.  VMT shall maintain product liability
insurance or self-insurance in such amounts as is advisable pursuant to
ordinary good business practice for a similar company in a similar type of
business, and shall provide SDLP with evidence of this coverage.

        12.2    SDLP shall indemnify, defend and hold harmless VMT and each
of its subsidiaries, officers, directors, employees, shareholders, Related
Companies and suppliers ("Indemnified Party") from and against and in
response of any and all demands, claims, actions or causes of action,
assessments, losses, damages, liabilities, interest and penalties, costs and
expenses (including, without limitation, reasonable legal fees and
disbursements incurred in connection therewith and in seeking indemnification
therefor, and any amounts or expenses required to be paid or incurred in
connection with any action, suit proceeding, claim, appeal, demand,
assessment or judgment), resulting from, arising out of, or imposed upon or
incurred by any person to be indemnified hereunder by reason of (i) any
breach of representation, warranty, covenant, or agreement on the part of
SDLP under this Agreement, (ii) product claims, whether written or oral, made
or alleged to be made, by SDLP in its advertising, publicity, promotion, or
sale of any VMT Product where such product claims were not provided by or
approved by VMT, or (iii) negligent handling by SDLP of VMT Products, but in
any event excluding matters for which VMT is responsible under paragraph 12.1
above.

        12.3    If a claim by a third party is made against any Indemnified
Party, and if the Indemnified Party intends to seek indemnity with respect
thereto under this Article 12, such Indemnified Party shall promptly notify
the indemnifying party of such claim; provided, however, that failure to give
timely notice shall not affect the rights of the Indemnified Party so long as
the failure to give timely notice does not materially adversely affect the
indemnifying party's ability to defend such claim against a third party.  The
indemnifying party shall be entitled to settle or assume the defense of such
claim, including the employment of counsel reasonably satisfactory to the
Indemnified Party, as provided below.  If the indemnifying party elects to
settle or defend

                                13

<PAGE>

such claim, it shall notify  the Indemnified Party within thirty (30) days
(but in no event less than twenty (20) days before any pleading, filing or
response on behalf of the Indemnified Party is due) of its intent to do so.
If the indemnifying party elects not to settle or defend such claim or fails
to notify the Indemnified Party of its election within thirty (30) days (or
such shorter period provided above) after receipt of the Indemnified Party's
notice of a claim of indemnity hereunder, the Indemnified Party shall have
the right to contest, settle or compromise the claim without prejudice to any
rights to indemnification hereunder.  Regardless of which party is
controlling the settlement or defense of any claim, (i) both the Indemnified
Party and the indemnifying party shall act in good faith, (ii) the
indemnifying party shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of any Indemnified Party or of its
subsidiaries, (iii) the indemnifying party shall permit the Indemnified Party
to participate in such settlement or defense through counsel chosen by the
Indemnified Party, provided that all fees, costs and expenses of such counsel
in an action controlled by the indemnifying party shall be borne by the
Indemnified Party, unless the indemnifying party and Indemnified Party have
different available defenses to such third party claim, in which case such
fees, costs and expenses shall be borne by the indemnifying party, (iv) no
entry of judgment or settlement of a claim may be agreed to without the
written consent of both the Indemnified Party and the indemnifying party,
which consents shall not be unreasonably withheld, and (v) the indemnifying
party shall agree promptly to reimburse the Indemnified Party for the full
amount of such claim pursuant to this Article 12.  So long as the
indemnifying party is reasonably contesting any such claim in good faith as
permitted herein, the Indemnified Party shall not pay or settle any such
claim; provided that the Indemnified Party may settle any such claim so long
as the indemnifying party is not adversely affected thereby.  The controlling
party shall deliver, or cause to be delivered, to the other party copies of
all correspondence, pleadings, motions, briefs, appeals or other written
statements relating to or submitted in connection with the settlement or
defense of any such claim, and timely notices of, and the right to
participate pursuant to (iii) above in any hearing or other court proceeding
relating to such claim.

        12.4    Each party hereto shall cooperate fully with the other
parties with respect to access to books, records, or other documentation
within such party's control, if deemed reasonably necessary or appropriate by
any party in the defense of any claim which may give rise to indemnification
hereunder.

                    ARTICLE XIII - FORCE MAJEURE

        13.1    "Force Majeure" shall mean any event or condition, not
existing as of the date of signature of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of either
party, which prevents, in whole or in material part, the performance by one
of the parties of its obligations hereunder, such as act of God, act of
government, war or related actions, civil insurrection, riot, sabotage,
strike or other labor disturbance, epidemic, fire, flood, windstorm, and
similar events.  "Force Majeure" shall also mean any failure to perform by a
sole source supplier, other than a Related Party to VMT, which prevents in
whole, or in material part, the performance by VMT of its obligations
hereunder.

        13.2    Upon giving notice to the other party, a party affected by an
event of Force Majeure shall be released without any liability on its part
from the performance of its obligations under this Agreement, except for the
obligation to pay any amounts due and owing hereunder, but only to the extent
and only for the period that its performance of such obligations is prevented
by the event of Force Majeure.

        13.3    During the period that the performance by one of the parties
of its obligations under this Agreement has been suspended by reason of an
event of Force Majeure, the other party may likewise suspend the performance
of all or part of its obligations hereunder to the extent that such
suspension is commercially reasonable.

                     ARTICLE XIV - MISCELLANEOUS

        14.1    Each party may designate information disclosed to the other
party in writing pursuant to this Agreement as confidential ("Confidential
Information").  Except as permitted or required for performance by the

                                 14

<PAGE>

party receiving such Confidential Information, each party agrees (i) not to
disclose or use any Confidential Information of the other party obtained in
connection with the performance of this Agreement, and (ii) not to disclose
or provide any of such Confidential Information of the other party to any
third party.  Each party agrees to treat the other party's Confidential
Information the same way the receiving party treats its own proprietary data
but in any event with no less than reasonable care.  The obligations set
forth in this paragraph shall continue to apply for five (5) years following
the expiration or termination of this Agreement.

        14.2    This Agreement does not make either party the employee, agent
or legal representative of the other for any purpose whatsoever.  Neither
party is granted any right or authority to assume or to create any obligation
or responsibility, express or implied, on behalf of or in the name of other
party. In fulfilling its obligations pursuant to this Agreement, each party
shall be acting as an independent contractor.

        14.3    This Agreement shall be binding upon and inure to the benefit
of the parties hereto and the successors or permitted assigns of the parties
hereto.  The Agreement is personal to the parties and cannot be assigned by
either party without the prior written consent of the other party, provided,
however, that either party may assign this Agreement and all rights and
obligations to a Related Company or to any person who succeeds to
substantially all of the assets and business of such party to which this
Agreement relates.

        14.4    This Agreement and the Cooperative Technology Agreement
constitute the entire agreement between the parties hereto with respect to
the subject matter hereof and superseded all prior agreements whether written
or oral relating hereto.

        14.5    This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California, including all matters of
construction, validity, performance and enforcement without giving effect to
principles of conflict of laws and without regard to the United Nations
Convention on Contracts for the International Sale of Goods.  In any action
or proceeding to enforce rights under this Agreement, the prevailing party
shall be entitled to recover costs and attorneys' fees.

        14.6    All of the representations, warranties, and covenants made in
this Agreement, and all terms and provisions hereof intended to be observed
and performed by the parties after the termination hereof, shall survive such
termination and continue thereafter in full force and effect.

        14.7    EXCEPT FOR THE OBLIGATIONS OF THE PARTIES SET FORTH IN
ARTICLE XII HEREOF, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER
UNDER ANY SECTION OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY (A) FOR ANY AMOUNTS IN EXCESS IN
THE AGGREGATE OF THE AMOUNTS PAID TO VMT HEREUNDER DURING THE TWELVE MONTH
PERIOD PRIOR TO DATE THE CAUSE OF ACTION AROSE OR (B) FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES, OR (C) FOR COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES.  NEITHER PARTY SHALL HAVE LIABILITY FOR ANY FAILURE
OR DELAY DUE TO MATTERS BEYOND ITS REASONABLE CONTROL.

        14.8    The failure of any party hereto to enforce at any time any of
the provisions of this Agreement shall in no way be construed to be a waiver
of any such provision, nor in any way to affect the validity of this
Agreement or any part thereof or the right of the party thereafter to enforce
each and every such provision.  No waiver of any breach of this Agreement
shall be held to be a waiver of any other or subsequent breach.  Any
amendment to this Agreement shall be in writing and signed by the parties
hereto.

        14.9    This agreement may be executed in any number of counterparts,
each of which shall be deemed as original and all of which together shall
constitute one instrument.

        14.10   The titles and headings to Sections herein are inserted for
the convenience of reference only

                                 15

<PAGE>

and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.  This Agreement shall be construed without
regard to any presumption or other rule requiring construction hereof against
the party causing this Agreement to be drafted.

        14.11   Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties to this Agreement or their
respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.  Except as specifically
granted or required in order to perform the respective obligations of the
parties hereto, nothing in this Agreement shall be construed as a grant by
one party to the other of a license under any IP rights of the other party.

        14.12   All notices or other communications to a party required or
permitted hereunder shall be deemed given if in writing and delivered
personally or sent by telecopy (with confirmation of transmission) or
certified mail (return receipt requested) to such party at the following
addresses (or at such other addresses as shall be specified by like notice):

        if to SDLP, to:

                Sofamor Danek L.P.
                1800 Pyramid Place,
                Memphis, TN 38132

        with copies to:

                Sofamor Danek Group, Inc.
                c/o Kenneth G. Hayes, Jr.
                President
                Surgical Navigation Technologies
                1800 Pyramid Place
                Memphis, TN 38132
                FAX (901) 344-1568

                Vice President & General Counsel
                Sofamor Danek Group, Inc.
                1800 Pyramid Place
                Memphis, TN 38132
                FAX (901) 344-1576

        and if to VMT, to:

                Vista Medical Technologies, Inc.
                5451 Avenida Encinas, Suite A
                Carlsbad, CA 92008
                Attention: John Lyon
                FAX (760) 603-9170

        with a copy to:

                Brobeck Phleger & Harrison LLP
                550 West C Street, Suite 1300
                San Diego, CA 92101
                Attention: Craig Andrews
                FAX (619) 234-3848


                                     16

<PAGE>

SDLP or VMT may change their respective above-specified recipient and/or
mailing address by notice to the other party given in the manner herein
prescribed.  All notices shall be deemed given on the day when actually
delivered as provided above (if delivered personally or by telecopy) or on
the day shown on the return receipt (if delivered by mail) or on the next day
following delivery to a reputable overnight carrier.

        14.13   In the event any provision of this Agreement shall be
declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

        14.14   Each of the parties to this Agreement hereby agrees with the
other parties hereto that, except as may be required to comply with the
requirements of applicable law or any exchange upon which such party's
capital stock is listed or traded, no press release or similar public
announcement or communication will be made or caused to be made concerning
the execution or performance of this Agreement unless specifically approved
in advance by SDLP and VMT.  The foregoing shall not restrict either party's
communications with employees, customers or private investors.

        14.15   Each party agrees to execute and deliver without further
consideration any further applications, licenses, assignments or other
documents, and to perform such other awful acts as the other party may
reasonably require to fully secure and/or evidence the rights or interests
herein.

        14.16   SDLP agrees to comply with all applicable export control laws
and regulations of the United States Department of Commerce or any other
United States agency or authority and not to export any VMT Product in
violation of such laws or regulations.

        14.17   SDLP shall be responsible for all taxes designated, levied or
based on the prices, rates, charges or fees set forth in this Agreement or
the products provided hereunder, including but not limited to sales, value
added, withholding and use taxes, duties, termination payments or compulary
licensing fees and other governmental assessments.

           [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                    17

<PAGE>

        IN WITNESS WHEREOF, each of the parties has caused this Sales
Agreement to be executed in the manner appropriate to each, as of the date
first above written,

                                VISTA MEDICAL TECHNOLOGIES, INC.



                                By: /s/ John Lyon
                                   ----------------------------------
                                Title:  President & CEO
                                       ------------------------------
                                Date:   January 6, 1998
                                       ------------------------------


                                SOFAMOR DANEK L.P.



                                By: /s/ Kenneth G. Hayes, Jr.
                                   ----------------------------------
                                Title:  President
                                       ------------------------------
                                Date:
                                       ------------------------------







                                    18

<PAGE>


                                SCHEDULE A

                     CURRENT PRODUCT CONFIGURATIONS



STEREOSITE M = MICROSCOPY SYSTEM

Head Mounted Display (2)
Information Processing Unit (1)
Camera Control Unit (1)
Microscopic Stereo Video Adapter (2)
3 Chip Camera (2)


STEREOSITE E = ENDOSCOPY SYSTEM

Head Mounted Display (1)
Information Processing Unit (1)
4.7mm Diameter Stereoendoscope (1)
Stereo Camera Control Unit (1)


STEREOSITE SP = SPINAL SYSTEM (FLEX CAMERA)

Head Mounted Display (1)
Information Processing Unit (1)
Flexible Stereo Camera with Mount (1)
Stereo Camera Control Unit (1)


    ***


***     Portions of this page have been omitted pursuant to request for
        Confidential Treatment and filed separately with the Commission.

                                 19