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                                    EXHIBIT 10.53

             TECHNOLOGY STRATEGIC ALLIANCE : MEMORANDUM OF UNDERSTANDING

1.   This Memorandum defines the intent of Kaiser Aerospace & Electronics
     Corporation ("KAEC"), represented by its Kaiser Electro-Optics, Inc.
     subsidiary ("KEO"), and Vista Medical Technologies, Inc. ("VMTI") to
     cooperate in advancing the technology and application of head mounted
     displays for professional applications.  KAEC is focused on military and
     industrial applications; VMTI is focused on medical applications.

2.   KAEC and VMTI intend to cooperate in joint development programs as
     appropriate.  Such cooperation will be determined by the management of KEO
     and VMTI on a project by project basis.  Development programs undertaken by
     either party will be paid for according to a fee structure mutually agreed
     in advance of the program commencing.

3.   KAEC will grant VMTI right of first refusal to exclusively license for
     medical applications independently developed new technology or devices,
     exercisable provided that VMTI contracts with KAEC for a mutually agreed
     proportion of the development work and eventual production of the resulting
     medical device, according to the terms of a mutually acceptable
     Manufacturing Supply Agreement, and provided that KAEC has the right to
     sell the resulting product into non-medical markets under a mutually agreed
     license agreement.

4.   Technology independently developed by VMTI or developed by KAEC under
     contract to VMTI (provided that the technology, idea or product
     specification was an original contribution of VMTI and not the result of
     the exercise of the right of first refusal) remains the exclusive property
     of VMTI.  KAEC will have reciprocal right of first refusal to apply such
     technology in fields other than medicine provided that VMTI has the right
     to license such technology and according to the terms of a separately
     negotiated License Agreement.

5.   KAEC recognizes that VMTI will gradually build an independent technical
     capability.  Both VMTI and KAEC acknowledge the investment by the other
     party in its personnel and agree not to recruit them for a period of six
     years or one year after this understanding has been terminated, unless
     management of both KAEC and VMTI agree otherwise.

6.   KAEC and VMTI acknowledge that this memorandum represents a statement of
     intent by both parties and that all resulting cooperation will be managed
     on an arms length basis and on terms mutually agreed for each project.

7.   This Memorandum of Understanding supersedes the Technology Strategic
     Alliance:  Memorandum of Understanding dated July 19, 1995 between VMTI and
     KEO and shall prevail for a term of five years unless terminated sooner, in
     writing, by mutual consents of the parties.

     For Vista Medical Technologies:    For Kaiser Aerospace & Electronics

      /s/ John Lyon                      /s/ S. J. Hill
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     John Lyon, President               S. J. Hill, President

      December 9, 1997                   December 9, 1997
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     Date                               Date