Document:

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                                                                EXHIBIT 10.10

VER. EQ.7/9/98                                     LAST MODIFIED:_______________
                                                            TLO:________________

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY

                       EXCLUSIVE PATENT LICENSE AGREEMENT

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                                      TABLE OF CONTENTS

<TABLE>
<S>                                                                               <C>
R E C I T A L S....................................................................1

1.  Definitions....................................................................2

2.  Grant of Rights................................................................4

3.  COMPANY Diligence Obligations..................................................5

4.  Royalties and Payment Terms....................................................5

5.  Reports and Record keeping.....................................................7

6.  Patent Prosecution.............................................................8

7.  Infringement...................................................................8

8.  Indemnification and Insurance..................................................10

9.  No Representations or Warranties...............................................11

10.  Assignment....................................................................12

11.  General Compliance with Laws..................................................12

12.  Termination...................................................................13

13.  Dispute Resolution............................................................14

14.  Miscellaneous.................................................................16

APPENDIX A.........................................................................18

APPENDIX B.........................................................................19

APPENDIX C.........................................................................20

APPENDIX D.........................................................................22

APPENDIX E.........................................................................23

APPENDIX F.........................................................................24

APPENDIX G.........................................................................25
</TABLE>

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VER. EQ.7/9/98

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY
                       EXCLUSIVE PATENT LICENSE AGREEMENT

        This Agreement, effective as of the date set forth above the signatures
of the parties below (the "EFFECTIVE DATE"), is between the Massachusetts
Institute of Technology ("M.I.T."), a Massachusetts corporation, with a
principal place of business at 77 Massachusetts Avenue, Cambridge, MA 02139-4307
and Intuitive Surgical, Inc. ("COMPANY"), a Delaware corporation, with a
principal place of business at 1340 W. Middlefield Road, Mountain View, CA
94043.

                                 R E C I T A L S

        WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) relating to M.I.T. Case No. 7830, PCT/US 98/19508 "Robotic Apparatus "
by Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr. and has the
right to grant licenses under said PATENT RIGHTS, subject only to a
royalty-free, nonexclusive non-transferable license to practice the PATENT
RIGHTS granted to the United States Government for government purposes;

        WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder;

        WHEREAS, COMPANY has represented to M.I.T., to induce M.I.T. to enter
into this Agreement, that COMPANY has committed itself to a thorough, vigorous
and diligent program of exploiting the PATENT RIGHTS so that public utilization
shall result therefrom; and

        WHEREAS, J. Kenneth Salisbury, a current employee of M.I.T., and also an
M.I.T. inventor of the PATENT RIGHTS now holds an equity position in COMPANY,
the Conflict Avoidance Statement of J. Kenneth Salisbury is attached hereto as
Appendix C; and

        WHEREAS, Akhil Madhani an inventor of the PATENT RIGHTS holds equity in
COMPANY, his waiver of participation in M.I.T.'s institutional equity share is
attached hereto as Appendix E; and

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        WHEREAS, Gunter Niemeyer an inventor of the PATENT RIGHTS holds equity
in COMPANY, his waiver of participation in M.I.T.'s institutional equity share
is attached hereto as Appendix F; and

        WHEREAS, J, Kenneth Salisbury an inventor of the PATENT RIGHTS holds
equity in COMPANY, his waiver of participation in M.I.T.'s institutional equity
share is attached hereto as Appendix G; and

        WHEREAS, M.I.T. is also accepting equity in consideration for the
license granted hereunder, M.I.T.'s Vice President for Research has granted
approval;

        WHEREAS, COMPANY desires to obtain a license under the PATENT RIGHTS
upon the terms and conditions hereinafter set forth.

        NOW, THEREFORE, M.I.T. and COMPANY hereby agree as follows:

                                 1. DEFINITIONS.

        1.1 "AFFILIATE" shall mean any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by COMPANY. For
the purposes of this definition, the term "control" means (i) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (ii) a
fifty percent (50%) or greater interest in the net assets or profits of a
partnership or other business organization without voting securities.

        1.2 "EXCLUSIVE PERIOD" shall mean the period of time set forth in
Section 2.2.

        1.3  "FIELD" shall mean Medical Devices.

        1.4 "LICENSED PRODUCT" shall mean any product that cannot be
manufactured, used, leased, or sold, in whole or in part, without infringing one
or more claims under the PATENT RIGHTS.

        1.5 "LICENSED PROCESS" shall mean any process that cannot be performed,
in whole or in part, without using at least one process that infringes one or
more claims under the PATENT RIGHTS or which uses a LICENSED PRODUCT.

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        1.6 "PATENT RIGHTS" shall mean:

               (a) the United States and international patents listed on
Appendix A;

               (b) the United States and international patent applications
and/or provisional applications listed on Appendix A and the resulting patents;

               (c) any patent applications resulting from the provisional
applications listed on Appendix A, and any divisionals, continuations,
continuation-in-part applications, and continued prosecution applications (and
their relevant international equivalents) of the patent applications listed on
Appendix A and of such patent applications that result from the provisional
applications listed on Appendix A, to the extent the claims are directed to
subject matter specifically described in the patent applications listed on
Appendix A, and the resulting patents;

               (d) any patents resulting from reissues, reexaminations, or
extensions (and their relevant international equivalents) of the patents
described in (a), (b), and (c) above; and

               (e) international (non-United States) patent applications and
provisional applications filed after the EFFECTIVE DATE and the relevant
international equivalents to divisionals, continuations, continuation-in-part
applications and continued prosecution applications of the patent applications
to the extent the claims are directed to subject matter specifically described
in the patents or patent applications referred to in (a), (b), (c), and (d)
above, and the resulting patents.

        1.7 "REPORTING PERIOD" shall begin on the first day of each calendar
quarter and end on the last day of such calendar quarter.

        1.8 "SUBLICENSEE" shall mean any non-AFFILIATE sublicensee of the rights
granted COMPANY under Section 2.1.

        1.9 "TERM" shall mean the term of this Agreement, which shall commence
on the EFFECTIVE DATE and shall remain in effect until the expiration or
abandonment of all issued patents and filed patent applications within the
PATENT RIGHTS, unless earlier terminated in accordance with the provisions of
this Agreement.

        1.10 "TERRITORY" shall mean world-wide.

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                               2. GRANT OF RIGHTS.

        2.1 License Grants. Subject to the terms of this Agreement, M.I.T.
hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing
license under the PATENT RIGHTS to develop, make, have made, use, sell, lease,
and import LICENSED PRODUCTS in the FIELD in the TERRITORY and to develop and
perform LICENSED PROCESSES in the FIELD in the TERRITORY.

        2.2 Exclusivity. In order to establish an exclusive period for COMPANY,
its AFFILIATES and SUBLICENSEES, M.I.T. agrees that it shall not grant any other
license to make, have made, use, sell, lease and import LICENSED PRODUCTS in the
FIELD in the TERRITORY or to perform LICENSED PROCESSES in the FIELD in the
TERRITORY during the period of time commencing on the EFFECTIVE DATE and
terminating with the last to expire of the PATENT RIGHTS.

        2.3 Sublicenses. COMPANY shall have the right to grant sublicenses of
its rights under Section 2.1. COMPANY shall incorporate terms and conditions
into its sublicense agreements sufficient to enable COMPANY to comply with this
Agreement. Upon termination of this Agreement for any reason, any SUBLICENSEE
not then in default shall have the right to seek a license from M.I.T. M.I.T.
agrees to negotiate such licenses in good faith under reasonable terms and
conditions.

        2.4 U.S. Manufacturing. LICENSEE agrees that any LICENSED PRODUCTS used,
leased, or sold in the United States will be manufactured substantially in the
United States.

        2.5 Retained Rights.

               (a) M.I.T. M.I.T. retains the right to practice under the PATENT
RIGHTS for research, teaching, and educational purposes.

               (b) Federal Government. COMPANY acknowledges that the U.S.
federal government retains a royalty-free, non-exclusive, non-transferable
license to practice any government-funded invention claimed in any PATENT RIGHTS
as set forth in 35 U.S.C. Sections 201-211, and the regulations promulgated
thereunder, as amended, or any successor statutes or regulations.

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        2.6 No Additional Rights. Nothing in this Agreement shall be construed
to confer any rights upon COMPANY by implication, estoppel, or otherwise as to
any technology or patent rights of M.I.T. or any other entity other than the
PATENT RIGHTS, regardless of whether such technology or patent rights shall be
dominant or subordinate to any PATENT RIGHTS.

                        3. COMPANY DILIGENCE OBLIGATIONS.

        3.1 Diligence Requirements. COMPANY shall use diligent efforts, or shall
cause its AFFILIATES and SUBLICENSEES to use diligent efforts, to develop
LICENSED PRODUCTS or LICENSED PROCESSES and to introduce LICENSED PRODUCTS or
LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its
AFFILIATES or SUBLICENSEES shall make LICENSED PRODUCTS or LICENSED PROCESSES
reasonably available to the public. Specifically, COMPANY or AFFILIATE or
SUBLICENSEE shall fulfill the following obligations:

        3.2 COMPANY shall fund, or shall cause its AFFILIATES or SUBLICENSEES to
fund, no less than Five Hundred Thousand Dollars ($500,000) of research toward
the development of LICENSED PRODUCTS and/or LICENSED PROCESSES in each calendar
year (pro-rated for partial years) beginning in 1999 and ending with the first
commercial sale of a LICENSED PRODUCT or a first commercial performance of a
LICENSED PROCESS.

        3.3 In the event that M.I.T. determines that) has failed to fulfill its
obligations under this Section 3.2, then M.I.T. may treat such failure as a
material breach in accordance with Section 12.3(b).

                         4. Royalties and Payment Terms.

        4.1 Consideration for Grant of Rights.

               (a) License Issue Fee and Patent Cost Reimbursement. COMPANY
shall pay to M.I.T. on the EFFECTIVE DATE a license issue fee of Twelve Thousand
Dollars ($12,000), and, in accordance with Section 6.3, shall reimburse M.I.T.
for its actual expenses incurred as of the EFFECTIVE DATE in connection with
obtaining the PATENT RIGHTS. These payments are nonrefundable.

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               (b) Equity.

                      (i) Grant. COMPANY shall issue a total of Thirty Five
Thousand Eight Hundred Thirty Four (35,834) shares of Common Stock of COMPANY,
(the "Shares") in the name of M.I.T and shall mail to M.I.T. a stock certificate
for such number of shares on or before June 1, 1999

                      (ii) Investor Rights. COMPANY further agrees that within
ninety (90) days from the Effective Date, and in any event prior to such time as
the COMPANY files a registration statement with the Securities and Exchange
Commission for the initial public offering of any of the COMPANY's securities,
COMPANY will cause that certain Amended and Restated Investor Rights Agreement
(Attached hereto as Appendix H) dated July 31, 1998 by and between the COMPANY
and certain holders of the COMPANY's capital stock to be amended to make M.I.T.
a party thereto, with respect to of Thirty Five Thousand Eight Hundred Thirty
Four (35,834) shares of Common Stock to be issued by COMPANY to MIT in
consideration of the grant of the license hereunder.

        4.2 Payments.

               (a) Method of Payment. All payments under this Agreement should
be made payable to "Massachusetts Institute of Technology" and sent to the
address identified in Section 14.1. Each payment should reference this Agreement
and identify the obligation under this Agreement that the payment satisfies.

               (b) Payments in U.S. Dollars. All payments due under this
Agreement shall be payable in United States dollars. Conversion of foreign
currency to U.S. dollars shall be made at the conversion rate existing in the
United States (as reported in the Wall Street Journal) on the last working day
of the calendar quarter of the applicable REPORTING PERIOD. Such payments shall
be without deduction of exchange, collection, or other charges, and,
specifically, without deduction of withholding or similar taxes or other
government imposed fees or taxes.

               (c) Late Payments. Any payments by COMPANY that are not paid on
or before the date such payments are due under this Agreement shall bear
interest, to the extent permitted by law, at two percentage points above the
Prime Rate of interest as reported in the Wall Street Journal on the date
payment is due.

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                         5. REPORTS AND RECORD KEEPING.

        5.1  Frequency of Reports.

               (a) Before First Commercial Sale. Prior to the first commercial
sale of any LICENSED PRODUCT or first commercial performance of any LICENSED
PROCESS, COMPANY shall deliver reports to M.I.T., annually, within sixty (60)
days of the end of each calendar year, containing information concerning the
funds spent toward the commercialization of LICENSED PRODUCTS and LICENSED
PROCESSES, and shall also deliver to M.I.T. the same reports delivered to other
common shareholders, and with the same frequency.

               (b) Upon First Commercial Sale of a LICENSED PRODUCT or
Commercial Performance of a LICENSED PROCESS. COMPANY shall report to M.I.T. the
date of first commercial sale of a LICENSED PRODUCT or first commercial use of a
LICENSED PROCESS.

               (c) After First Commercial Sale. After the first commercial sale
of a LICENSED PRODUCT or first commercial performance of a LICENSED PROCESS,
LICENSEE shall deliver to M.I.T the same reports delivered to other common
shareholders, and with the same frequency.

        5.2 Names and Addresses of SUBLICENSEES and AFFILIATES. COMPANY shall
inform M.I.T. of the names and addresses of its AFFILIATES and SUBLICENSEES.

        5.3 Financial Statements. On or before the ninetieth (90th) day
following the close of COMPANY's fiscal year, COMPANY shall provide M.I.T. with
COMPANY's financial statements for the preceding fiscal year including, at a
minimum, a balance sheet and an income statement, certified by COMPANY's
treasurer or chief financial officer or by an independent auditor.

        5.4 Record keeping. COMPANY shall maintain, and shall cause its
AFFILIATES and SUBLICENSEES to maintain, complete and accurate records relating
to the rights and obligations under this, which records shall contain sufficient
information to permit M.I.T. to confirm the accuracy of any reports delivered to
M.I.T. and compliance in other respects with this Agreement. The relevant party
shall retain such records for at least five (5) years following the end of the
calendar year to which they pertain, during which time M.I.T., or M.I.T.'s
appointed agents, shall have the right, at M.I.T.'s expense, to inspect such
records during normal business hours to verify any reports and payments made or
compliance in other respects under

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this Agreement. In the event that any audit performed under this Section
noncompliance with the terms of this Agreement, COMPANY shall bear the full cost
of such audit, and shall remit any amounts due to M.I.T. within thirty (30) days
of receiving notice thereof from M.I.T.

                             6. PATENT PROSECUTION.

        6.1 Responsibility for PATENT RIGHTS. M.I.T. hereby appoints COMPANY its
agent to apply for, seek prompt issuance of, and maintain the PATENT RIGHTS
during the term of this Agreement, provided that COMPANY uses commercially
reasonable efforts to obtain broad and strong patent protection in the best
interest of M.I.T. and COMPANY, and further provided that COMPANY agrees to copy
M.I.T. on all patent prosecution documents, and to give M.I.T. reasonable
opportunities to advise COMPANY on patent prosecution related decisions. M.I.T.
agrees to cooperate with COMPANY in such filing, prosecution and maintenance. If
COMPANY elects not to initiate or to discontinue patent prosecution of a
particular patent application, COMPANY agrees to give M.I.T. sufficient notice
of its decision so that M.I.T. may elect, at its sole discretion, to continue
prosecuting such patent application at its sole expense.

        6.2 International (non-United States) Filings. Appendix B is a list of
countries in which patent applications corresponding to the United States patent
applications listed in Appendix A shall be filed, prosecuted, and maintained.
Appendix B may be amended by mutual agreement of COMPANY and M.I.T.

        6.3 Payment of Expenses. Payment of all fees and costs, including
attorneys fees, relating to the filing, prosecution and maintenance of the
PATENT RIGHTS shall be the responsibility of COMPANY, whether such amounts were
incurred before or after the EFFECTIVE DATE. As of March 29, 1999, M.I.T. has
incurred approximately $33,731.17 for such patent-related fees and costs.
COMPANY shall reimburse all amounts due pursuant to this Section within thirty
(30) days of invoicing; late payments shall accrue interest pursuant to Section
4.2(c). In all instances, M.I.T. shall pay the fees prescribed for large
entities to the United States Patent and Trademark Office.

                                7. INFRINGEMENT.

        7.1 Notification of Infringement. Each party agrees to provide written
notice to the other party promptly after becoming aware of any infringement of
the PATENT RIGHTS.

        7.2 Right to Prosecute Infringements.

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               (a) COMPANY Right to Prosecute. So long as COMPANY remains the
exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY,
to the extent permitted by law, shall have the right, under its own control and
at its own expense, to prosecute any third party infringement of the PATENT
RIGHTS in the FIELD in the TERRITORY, subject to Section 7.4. If required by
law, M.I.T. shall permit any action under this Section to be brought in its
name, including being joined as a party-plaintiff, provided that COMPANY shall
hold M.I.T. harmless from, and indemnify M.I.T. against, any costs, expenses, or
liability that M.I.T. incurs in connection with such action.

                   Prior to commencing any such action, COMPANY shall consult
with M.I.T. and shall consider the views of M.I.T. regarding the advisability of
the proposed action and its effect on the public interest. COMPANY shall not
enter into any settlement, consent judgment, or other voluntary final
disposition of any infringement action under this Section without the prior
written consent of M.I.T.

               (b) M.I.T. Right to Prosecute. In the event that COMPANY is
unsuccessful in persuading the alleged infringer to desist or fails to have
initiated an infringement action within a reasonable time after COMPANY first
becomes aware of the basis for such action, M.I.T. shall have the right, at its
sole discretion, to prosecute such infringement under its sole control and at
its sole expense, and any recovery obtained shall belong to M.I.T.

        7.3 Declaratory Judgment Actions. In the event that a declaratory
judgment action is brought against M.I.T. or COMPANY by a third party alleging
invalidity, unenforceability, or non-infringement of the PATENT RIGHTS, M.I.T.,
at its option, shall have the right within twenty (20) days after commencement
of such action to take over the sole defense of the action at its own expense.
If M.I.T. does not exercise this right, COMPANY may take over the sole defense
of the action at COMPANY's sole expense, subject to Section 7.4.

        7.4 Recovery. Any recovery obtained in an action brought by COMPANY
under Sections 7.2 or 7.3 shall be distributed as follows: (i) each party shall
be reimbursed for any expenses incurred in the action (including the amount of
any royalty or other payments withheld from M.I.T. as described below), (ii) as
to ordinary damages, COMPANY shall receive an amount equal to its lost profits
or a reasonable royalty on the infringing sales, or whichever measure of damages
the court shall have applied, and COMPANY shall pay to M.I.T. based upon such
amount a reasonable approximation of the royalties and other amounts that
COMPANY would have paid to M.I.T. if COMPANY had sold the infringing products,
processes and services rather than the infringer, and (iii) as to special or
punitive damages, the parties shall share equally in any award.

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        7.5 Cooperation. Each party agrees to cooperate in any action under this
Article which is controlled by the other party, provided that the controlling
party reimburses the cooperating party promptly for any costs and expenses
incurred by the cooperating party in connection with providing such assistance.

        7.6 Right to Sublicense. So long as COMPANY remains the exclusive
licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY shall have
the sole right to sublicense any alleged infringer in the FIELD in the TERRITORY
for future use of the PATENT RIGHTS in accordance with the terms and conditions
of this Agreement relating to sublicenses. Any upfront fees as part of such
sublicense shall be shared equally between COMPANY and M.I.T.; other revenues to
COMPANY pursuant to such sublicense shall be treated as set forth in Article 4.

                        8. INDEMNIFICATION AND INSURANCE

        8.1  Indemnification.

               (a) Indemnity. COMPANY shall indemnify, defend, and hold harmless
M.I.T. and its trustees, officers, faculty, students, employees, and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against any
liability, damage, loss, or expense (including reasonable attorneys fees and
expenses) incurred by or imposed upon any of the Indemnitees in connection with
any claims, suits, actions, demands or judgments arising out of any theory of
liability (including without limitation actions in the form of tort, warranty,
or strict liability and regardless of whether such action has any factual basis)
concerning any product, process, or service that is made, used, sold, imported,
or performed pursuant to any right or license granted under this Agreement.

               (b) Procedures. The Indemnitees agree to provide COMPANY with
prompt written notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement. COMPANY agrees, at its own
expense, to provide attorneys reasonably acceptable to M.I.T. to defend against
any such claim. The Indemnitees shall cooperate fully with COMPANY in such
defense and will permit COMPANY to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to
litigation, appeal, and settlement); provided, however, that any Indemnitee
shall have the right to retain its own counsel, at the expense of COMPANY, if
representation of such Indemnitee by the counsel retained by COMPANY would be
inappropriate because of actual or potential differences in the interests of
such Indemnitee and any other party represented by such

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counsel. COMPANY agrees to keep M.I.T. informed of the progress in the defense
and disposition of such claim and to consult with M.I.T. with regard to any
proposed settlement.

        8.2 Insurance. COMPANY shall obtain and carry in full force and effect
commercial general liability insurance, including product liability and errors
and omissions insurance which shall protect COMPANY and Indemnitees with respect
to events covered by Section 8.1(a) above. Such insurance (i) shall be issued by
an insurer licensed to practice in the Commonwealth of Massachusetts or an
insurer pre-approved by M.I.T., such approval not to be unreasonably withheld,
(ii) shall list M.I.T. as an additional named insured thereunder, (iii) shall be
endorsed to include product liability coverage, and (iv) shall require thirty
(30) days written notice to be given to M.I.T. prior to any cancellation or
material change thereof. The limits of such insurance shall not be less than One
Million Dollars ($1,000,000) per occurrence with an aggregate of Three Million
Dollars ($3,000,000) for bodily injury including death; One Million Dollars
($1,000,000) per occurrence with an aggregate of Three Million Dollars
($3,000,000) for property damage; and One Million Dollars ($1,000,000) per
occurrence with an aggregate of Three Million Dollars ($3,000,000) for errors
and omissions. In the alternative, COMPANY may self-insure subject to prior
approval of M.I.T. COMPANY shall provide M.I.T. with Certificates of Insurance
evidencing compliance with this Section. COMPANY shall continue to maintain such
insurance or self-insurance after the expiration or termination of this
Agreement during any period in which COMPANY or any AFFILIATE or SUBLICENSEE
continues (i) to make, use, or sell a product that was a LICENSED PRODUCT under
this Agreement or (ii) to perform a service that was a LICENSED PROCESS under
this Agreement, and thereafter for a period of five (5) years.

                       9. NO REPRESENTATIONS OR WARRANTIES

        EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T.
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS
CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE. Specifically, and not to limit the foregoing,
M.I.T. makes no warranty or representation (i) regarding the validity or scope
of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any
LICENSED PRODUCT or LICENSED PROCESS will not infringe any patents or other
intellectual property rights of M.I.T. or of a third party.

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        IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES
AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND,
INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF
WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT
SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

                                 10. ASSIGNMENT.

        This Agreement is assignable with M.I.T.'s written consent, which shall
not unreasonably be withheld provided that the assignee agrees in writing to be
bound by all the terms and conditions of this Agreement.

                        11. GENERAL COMPLIANCE WITH LAWS

        11.1 Compliance with Laws. COMPANY shall use reasonably commercial
efforts to comply with all commercially material local, state, federal, and
international laws and regulations relating to the development, manufacture,
use, and sale of LICENSED PRODUCTS and LICENSED PROCESSES.

        11.2 Export Control. COMPANY and its AFFILIATES and SUBLICENSEES shall
comply with all United States laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit or require a license for the
export of certain types of commodities and technical data to specified
countries. COMPANY hereby gives written assurance that it will comply with, and
will cause its AFFILIATES and SUBLICENSEES to comply with, all United States
export control laws and regulations, that it bears sole responsibility for any
violation of such laws and regulations by itself or its AFFILIATES or
SUBLICENSEES, and that it will indemnify, defend, and hold M.I.T. harmless (in
accordance with Section 8.1) for the consequences of any such violation.

        11.3 Non-Use of M.I.T. Name. COMPANY and its AFFILIATES and SUBLICENSEES
shall not use the name of "Massachusetts Institute of Technology," "Lincoln
Laboratory" or any variation, adaptation, or abbreviation thereof, or of any of
its trustees, officers, faculty, students, employees, or agents, or any
trademark owned by M.I.T., or any terms of this Agreement in any promotional
material or other public announcement or disclosure without the prior written
consent of M.I.T. The foregoing notwithstanding, without the consent

                                      -12-
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of M.I.T., COMPANY may state that it is licensed by M.I.T. under one or more of
the patents and/or patent applications comprising the PATENT RIGHTS.

        11.4 Marking of LICENSED PRODUCTS. To the extent commercially feasible
and consistent with prevailing business practices, COMPANY shall mark, and shall
cause its AFFILIATES and SUBLICENSEES to mark, all LICENSED PRODUCTS that are
manufactured or sold under this Agreement with the number of each issued patent
under the PATENT RIGHTS that applies to such LICENSED PRODUCT.

                                12. TERMINATION.

        12.1 Voluntary Termination by COMPANY. COMPANY shall have the right to
terminate this Agreement, for any reason, (i) upon at least six (6) months prior
written notice to M.I.T., such notice to state the date at least six (6) months
in the future upon which termination is to be effective, and (ii) upon payment
of all amounts due to M.I.T. through such termination effective date.

        12.2 Cessation of Business. If COMPANY ceases to carry on its business
related to this Agreement, M.I.T. shall have the right to terminate this
Agreement immediately upon written notice to COMPANY.

        12.3  Termination for Default.
              -----------------------

               (a) Nonpayment. In the event COMPANY fails to pay any amounts due
and payable to M.I.T. hereunder, and fails to make such payments within thirty
(30) days after receiving written notice of such failure, M.I.T. may terminate
this Agreement immediately upon written notice to COMPANY.

               (b) Material Breach. In the event COMPANY commits a material
breach of its obligations under this Agreement, except for breach as described
in Section 12.3(a), and fails to cure that breach within sixty (60) days after
receiving written notice thereof, M.I.T. may terminate this Agreement
immediately upon written notice to COMPANY.

                                      -13-
<PAGE>   16

        12.4 Effect of Termination.

               (a) Survival. The following provisions shall survive the
expiration or termination of this Agreement: Articles 1, 8, 9, 13 and 14, and
Sections 4.1(b), 5.4, 11.1, 11.2 and 12.4.

               (b) Inventory. Upon the early termination of this Agreement,
COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any
work-in-progress and inventory of LICENSED PRODUCTS that exist as of the
effective date of termination, provided that (i) COMPANY pays M.I.T. the
applicable running royalty or other amounts due on such sales of LICENSED
PRODUCTS in accordance with the terms and conditions of this Agreement, and (ii)
COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all
work-in-progress and inventory of LICENSED PRODUCTS within six (6) months after
the effective date of termination.

               (c) Pre-termination Obligations. In no event shall termination of
this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from the obligation
to pay any amounts that became due on or before the effective date of
termination.

                             13. DISPUTE RESOLUTION.

        13.1 Mandatory Procedures. The parties agree that any dispute arising
out of or relating to this Agreement shall be resolved solely by means of the
procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement.
If either party fails to observe the procedures of this Article, as may be
modified by their written agreement, the other party may bring an action for
specific performance of these procedures in any court of competent jurisdiction.

        13.2 Equitable Remedies. Although the procedures specified in this
Article are the sole and exclusive procedures for the resolution of disputes
arising out of or relating to this Agreement, either party may seek a
preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.

                                      -14-
<PAGE>   17

        13.3  Dispute Resolution Procedures.

               (a) Mediation. In the event any dispute arising out of or
relating to this Agreement remains unresolved within sixty (60) days from the
date the affected party notified the other party of such dispute, either party
may initiate mediation upon written notice to the other party ("Notice Date"),
whereupon both parties shall be obligated to engage in a mediation proceeding
under the then current Center for Public Resources ("CPR") Model Procedure for
Mediation of Business Disputes (http://www.cpradr.org/medmodel.htm), except that
specific provisions of this Article shall override inconsistent provisions of
the CPR Model Procedure. The mediator will be selected from the CPR Panels of
Neutrals. If the parties cannot agree upon the selection of a mediator within
fifteen (15) business days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to
resolve the dispute through mediation until the first of the following occurs:
(i) the parties reach a written settlement; (ii) the mediator notifies the
parties in writing that they have reached an impasse; (iii) the parties agree in
writing that they have reached an impasse; or (iv) the parties have not reached
a settlement within sixty (60) days after the Notice Date.

               (b) Trial Without Jury. If the parties fail to resolve the
dispute through mediation, or if neither party elects to initiate mediation,
each party shall have the right to pursue any other remedies legally available
to resolve the dispute, provided, however, that the parties expressly waive any
right to a jury trial in any legal proceeding under this Article.

        13.4 Performance to Continue. Each party shall continue to perform its
undisputed obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement; provided, however, that a
party may suspend performance of its undisputed obligations during any period in
which the other party fails or refuses to perform its undisputed obligations.
Nothing in this Article is intended to relieve LICENSEE from its obligation to
make undisputed payments pursuant to Articles 4 and 6 of this Agreement.

        13.5 Statute of Limitations. The parties agree that all applicable
statutes of limitation and time-based defenses (such as estoppel and laches)
shall be tolled while the procedures set forth in Sections 13.3(a) are pending.
The parties shall cooperate in taking any actions necessary to achieve this
result.

                                      -15-
<PAGE>   18

                               14. MISCELLANEOUS.

        14.1 Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:

        If to M.I.T.:    Technology Licensing Office, Room NE25-230
                         Massachusetts Institute of Technology
                         77 Massachusetts Avenue
                         Cambridge, MA  02139-4307
                         Attention:  Director
                         Tel:   617-253-6966
                         Fax:   617-258-6790

        If to COMPANY:   Intuitive Surgical Corporation
                         1340 W. Middlefield Road,  Mountain View, CA 94043.
                         Attention: Lonnie M. Smith
                         President and Chief Executive Officer
                         Tel:   (650) 237-7000
                         Fax:   (650 526-2060

               All notices under this Agreement shall be deemed effective upon
receipt. A party may change its contact information immediately upon written
notice to the other party in the manner provided in this Section.

        14.2 Governing Law. This Agreement and all disputes arising out of or
related to this Agreement, or the performance, enforcement, breach or
termination hereof, and any remedies relating thereto, shall be construed,
governed, interpreted and applied in accordance with the laws of the
Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws
principles, except that questions affecting the construction and effect of any
patent shall be determined by the law of the country in which the patent shall
have been granted.

        14.3 Force Majeure. Neither party will be responsible for delays
resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or riot, provided that
the nonperforming party uses commercially reasonable efforts to avoid or remove
such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed.

        14.4 Amendment and Waiver. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of

                                      -16-
<PAGE>   19

any rights or failure to act in a specific instance shall relate only to such
instance and shall not be construed as an agreement to waive any rights or fail
to act in any other instance, whether or not similar.

        14.5 Severability. In the event that any provision of this Agreement
shall be held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect any other provision of this Agreement, and the
parties shall negotiate in good faith to modify the Agreement to preserve (to
the extent possible) their original intent. If the parties fail to reach a
modified agreement within thirty (30) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 13. While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.

        14.6 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective permitted successors and
assigns.

        14.7 Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.

        14.8 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to its subject matter and supersedes all prior
agreements or understandings between the parties relating to its subject matter.

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

        M.I.T.'s offer to Intuitive Surgical Corporation to execute this license
shall extend to April 5, 1999.

THE EFFECTIVE DATE OF THIS AGREEMENT IS APRIL 1, 1999

MASSACHUSETTS INSTITUTE OF          INTUITIVE SURGICAL CORPORATION
TECHNOLOGY

By:     /s/ J. David Litster                 By:     /s/ Lonnie M. Smith
   ------------------------------------          -------------------------------
Name:   J. David Litster                     Name:   Lonnie M. Smith
     ----------------------------------            -----------------------------
Title:  Vice President for Research          Title:  President & CEO
      ---------------------------------             ----------------------------

                                      -17-
<PAGE>   20

                                   APPENDIX A

                     List of Patent Applications and Patents

I. United States Patents and Applications

MIT Case 7830
"Robotic Apparatus"
by Akhil Madhani, Gunter Niemeyer, and J. Kenneth Salisbury
PCT/US98/19508 designating the United States

II. International (non-U.S.) Patents and Applications

MIT Case 7830
"Robotic Apparatus"
by Akhil Madhani, Gunter Niemeyer, and J. Kenneth Salisbury
PCT/US98/19508 designating the EPO, Canada, and Japan

                                      -18-
<PAGE>   21

                                   APPENDIX B

              List of Countries (excluding United States) for which
       PATENT RIGHTS Applications Will Be Filed, Prosecuted and Maintained

Please advise

                                      -19-
<PAGE>   22

                      CONFLICT AVOIDANCE STATEMENT

        Name:            J. Kenneth Salisbury
        Dept. or Lab.:   Mechanical Engineering
        Company:         Intuitive Surgical Corporation
        Address:         1340 W. Middlefield Road,
                         Mountain View, CA 94043.

        Licensed Technology:

                         MIT Case 7830
                         "Robotic Apparatus"
                         by Akhil Madhani, Gunter Niemeyer, and
                         J. Kenneth Salisbury

Because of the M.I.T. license granted to the above company and my equity*
position and continuing relationship with this company, I acknowledge the
potential for a possible conflict of interest between the performance of
research at M.I.T. and my contractual or other obligations to this company.
Therefore, I will not:

               1)   use students at M.I.T. for research and development projects
                    for the company;

               2)   restrict or delay access to information from my M.I.T.
                    research;

               3)   take direct or indirect research support from the company in
                    order to support my activities at M.I.T.; or

               4)   employ students at the company, except in accordance with
                    Section 2.12.2, "Relations of Faculty and Students," in the
                    Policies and Procedures Guide.

In addition, in order to avoid the appearance of a conflict, I will attempt to
differentiate clearly between the intellectual directions of my M.I.T. research
and my contributions to the company. To that end, I will expressly inform my
department head/laboratory director annually of the general nature of my
activities on behalf of the company.

                                      Signed:  /s/ J. Kenneth Salisbury, Jr.
                                             -----------------------------------

                                      Date:    3/31/99
                                            --------------

Approved by:   Illegible
            -----------------------
Name (print):
             ----------------------
(Dept. Head or Lab Dir)

                                                         Conf Avoid Stmnt 941017

                                      -20-
<PAGE>   23

* "Equity" includes stock, options, warrants or other financial instruments
convertible into Equity, which are directly or indirectly controlled by the
inventor.

                                      -21-
<PAGE>   24

                                    APPENDIX

                                     WAIVER

        For good and valuable consideration, including the grant of a license to
Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

               M.I.T. Case No. 7830
               7830, PCT/US 98/19508 "Robotic Apparatus " by
               Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

               a company in which I hold equity, I hereby release all rights,
        title and interest I and my heirs and assigns may have as an
        inventor/author under M.I.T.'s Guide to the Ownership, Distribution and
        Commercial Development of M.I.T. Technology, as that policy may be
        amended from time to time, to receive my inventor's share of M.I.T.'s
        institutional equity. pursuant to this License Agreement.

Witness:   Illegible                    Signed:   /s/ Akhil Madhani
        -----------------                      ------------------------------
                                        Name:     Akhil Madhani
                                             --------------------------------
                                        Date:     3/31/99
                                               ------------------------------

                                      -22-
<PAGE>   25

                                    APPENDIX

                                     WAIVER

        For good and valuable consideration, including the grant of a license to
Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

               M.I.T. Case No. 7830
               7830, PCT/US 98/19508 "Robotic Apparatus " by
               Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

               a company in which I hold equity, I hereby release all rights,
        title and interest I and my heirs and assigns may have as an
        inventor/author under M.I.T.'s Guide to the Ownership, Distribution and
        Commercial Development of M.I.T. Technology, as that policy may be
        amended from time to time, to receive my inventor's share of M.I.T.'s
        institutional equity. pursuant to this License Agreement.

Witness:    /s/ Gary Guthart                Signed:  /s/ G. Niemeyer
        ------------------------                   --------------------------
                                            Name:    Gunter D. Niemeyer
                                                 ----------------------------
                                            Date:    3/31/99
                                                 ----------------------------

                                      -23-
<PAGE>   26

                                    APPENDIX

                                     WAIVER

        For good and valuable consideration, including the grant of a license to
Intuitive Surgical Corporation ("COMPANY"), of the invention referenced below:

               M.I.T. Case No. 7830
               7830, PCT/US 98/19508 "Robotic Apparatus " by
               Akhil Madhani, Gunter D. Niemeyer, And J. Kenneth Salisbury Jr.

               a company in which I hold equity, I hereby release all rights,
        title and interest I and my heirs and assigns may have as an
        inventor/author under M.I.T.'s Guide to the Ownership, Distribution and
        Commercial Development of M.I.T. Technology, as that policy may be
        amended from time to time, to receive my inventor's share of M.I.T.'s
        institutional equity. pursuant to this License Agreement.

Witness:    /s/ Gary Guthart            Signed:  /s/ J. Kenneth Salisbury, Jr.
        ------------------------               --------------------------------
                                        Name:    J.Kenneth Salisbury
                                             ----------------------------------
                                        Date:    3/31/99
                                               --------------------------------

                                      -24-

<PAGE>   27

                      MASSACHUSETTS INSTITUTE OF TECHNOLOGY
                     EXCLUSIVE PATENT LICENSE AGREEMENT WITH
                            INTUITIVE SURGICAL, INC.
                                 APRIL, 1, 1999

                                    ADDENDUM

WHEREAS, Intuitive Surgical, Inc. ("Intuitive") has represented in good faith
that its present efforts to acquire regulatory approval for, and commercialize,
its da Vinci(TM) Surgical System in both Europe and the United States require
its complete and undivided attention;

WHEREAS, Intuitive believes in good faith that its future depends upon its
undivided commitment to making its da Vinci(TM) Surgical System widely available
to the public, and that the public will benefit from having access to its
technology; and

WHEREAS, Intuitive has asked MIT for a clarification of certain obligations
under the Parties April 1, 1999 License Agreement in order for Intuitive to
devote its resources solely to successfully introducing its technology into the
world's markets;

NOW:

MIT hereby clarifies and agrees that Intuitive's present efforts to
commercialize its da Vinci(TM) Surgical System in the United States and abroad
satisfy the spirit of section 3.1 and 3.2 of the Parties April 1, 1999 License
Agreement, and thus that Intuitive's obligations under section 3.1 and 3.2 of
that Agreement shall be deemed satisfied.

Read, Understood, Executed and Agreed to:

/s/ Lonnie M. Smith                      /s/ Lita Nelsen
------------------------------           ---------------------------------------
Lonnie Smith                             Lita Nelsen
President & CEO                          Director
Intuitive Surgical, Inc.                 Technology Licensing Office, NE25-230
1340 W. Middlefield Road                 Massachusetts Institute of Technology
Mountain View, CA 94043                  77 Massachusetts Avenue
                                         Cambridge, MA 02139-4307

Feb. 24, 2000                            Feb. 29, 2000
------------------------------           ---------------------------------------
Date                                     Date

                                       1.<PAGE>   1
                                                                  EXHIBIT 10.11

                               RENAULT & HANDLEY
                       INDUSTRIAL & COMMERCIAL REAL ESTATE

                  This LEASE, executed in duplicate at Palo Alto, California,
PARTIES           this 9th day of September, 1996, by and between

                  Zappettini Investment Co.

                  and

                  Intuitive Surgical

                  hereinafter called respectively Lessor and Lessee, without
                  regard to number or gender,

PREMISES          1. WITNESSETH: That Lessor hereby leases to Lessee, and Lessee
                  hires from Lessor, those certain premises, hereinafter in this
                  lease designated as "the Premises", with the appurtenances,
                  situated in the City of Mountain View, County of Santa Clara,
                  State of California, and more particularly described as
                  follows, to-wit:

                  Approximate 25,000 square feet of R & D buildings commonly
                  referred to as 1340 Middlefield Road, Mountain View,
                  California together with landscaped areas and parking lot and
                  further described in Exhibit A attached hereto.

USE               2. The Premises shall be used and occupied by Lessee for the
                  development of technology in the field of minimum evasive
                  surgery and for no other purpose without the prior written
                  consent of Lessor.

TERM              3. The term shall be for five (5) years, commencing on the 1st
                  day of January, 1997, and ending on the 31st day of December
                  2001.

RENTAL            4. Rent shall be payable to the Lessor without deduction or
                  offset at such place or places as may be designated from time
                  to time by the Lessor as follows:

                  Thirty-Eight Thousand and Seven Hundred Fifty Dollars
                  ($38,750.00) shall be due upon the execution of this Lease
                  representing rental due January 1, 1997. $38,750.00 shall be
                  due on February 1, 1997 and on the 1st day of each and every
                  succeeding month through December 2001.

<PAGE>   2

SECURITY
DEPOSIT             5.   Lessee has deposited with Lessor $38,750.00 as security
                  for the full and faithful performance of each and every term,
                  provision, covenant and condition of this Lease.In the event
                  Lessee defaults in respect of any of the terms, provisions,
                  covenants or conditions of this Lease, including, but not
                  limited to the payment of rent, Lessor may use, apply or
                  retain the whole or any part of such security for the payment
                  of any rent in default or for any other sum which Lessor may
                  spend or be required to spend by reason of Lessee's
                  default.Should Lessee faithfully and fully comply with all of
                  the terms, provisions, covenants and conditions of this Lease,
                  the security of any balance thereof shall be returned to
                  Lessee or, at the option of Lessor, to the last assignee of
                  Lessee's interest in this Lease at the expiration of the term
                  hereof.Lessee shall not be entitled to any interest on said
                  security deposit.

POSSESSION        6. If Lessor, for any reason whatsoever, cannot deliver
                  possession of the Premises to Lessee at the commencement of
                  the said term, as hereinbefore specified, this Lease shall not
                  be void or voidable, nor shall Lessor, or Lessor's agents, be
                  liable to Lessee for any loss or damage resulting therefrom;
                  but in that event the commencement and termination dates of
                  the Lease and all other dates affected thereby shall be
                  revised to conform to the date of Lessor's delivery of
                  possession. The above is, however, subject to the provision
                  that the period of delay of delivery of the Premises shall not
                  exceed 30 (thirty) days from the commencement date herein. If
                  the period of delay of delivery exceeds the foregoing, Lessee,
                  at his or its option, may declare this Lease null and void. If
                  such a delay occurs, and Lessee agrees to extend possession
                  date, rent will commence on tenant occupancy.

ACCEPTANCE          7.  By entry hereunder, the Lessee accepts and Lessor
OF                warrants the Premises as being in good and satisfactory
PREMISES          working condition, including all HVAC, electrical and
AND               mechanical systems unless within fifteen (15) days after such
CONSENT TO        entry Lessee shall give Lessor written notice specifying in
SURRENDER         reasonable detail the respects in which the Premises were not
                  in satisfactory condition. The Lessee agrees on the last day
                  of the term hereof, or on sooner termination of this Lease, to
                  surrender the premises, together with all alterations,
                  additions, and improvements which may have been made in, to,
                  or on the Premises by Lessor or Lessee, including all HVAC,
                  electrical and mechanical systems unto Lessor in the same good
                  condition as at Lessee's entry into the Premises excepting for
                  such wear and tear as would be normal for the period of the
                  Lessee's occupancy. The Lessee, on or before the end of the
                  term or sooner termination of this Lease, shall remove all
                  Lessee's personal property and trade fixtures from the
                  premises and all property not so removed shall be deemed to be
                  abandoned by the Lessee. If the Premises be not surrendered at
                  the end of the term or sooner termination of this Lease, the
                  Lessee shall indemnify the Lessor against loss or liability
                  resulting from delay by the Lessee in so surrendering the
                  Premises including, without limitation, any claims made by any
                  succeeding tenant founded on such delay.

USES                8.  Lessee shall not commit, or suffer to be committed, any
PROHIBITED        waste upon the Premises, or any nuisance, or other act or
                  thing which may disturb the quiet enjoyment of any other
                  tenant in or around the buildings in which the Premises may be
                  located, or allow any sale by auction upon the Premises, or
                  allow the Premises to be used for any improper, immoral,
                  unlawful or objectionable purpose, or place any loads upon the
                  floor, walls, or roof which endanger the structure, or place
                  any harmful liquids in the drainage system of the building. No
                  waste materials or refuse shall be dumped upon or permitted to
                  remain upon any part of the Premises outside of the building
                  proper. No materials, supplies, equipment, finished products
                  or semi-finished products, raw materials or articles of any
                  nature shall be stored upon or permitted to remain on any

<PAGE>   3

                  portion of the Premises outside of the buildings proper,
                  unless they are in approved enclosures.

ALTERATIONS         9.  The Lessee shall make no alterations, additions or
AND               improvements in excess of $10,000.00 to the Premises or any
ADDITIONS         part thereof without first obtaining the prior written consent
                  of the Lessor. The Lessor may impose as a condition to the
                  aforesaid consent such requirements as Lessor may deem
                  necessary in Lessor's sole discretion, including without
                  limitation thereto, the manner in which the work is done, a
                  right of approval of the contractor by whom the work is to be
                  performed, the times during which it is to be accomplished,
                  and the requirement that upon written request of Lessor prior
                  to the expiration or earlier termination of the Lease, Lessee
                  will remove any or all improvements or additions to the
                  Premises installed at Lessee's expense. All such alterations,
                  additions or improvements not specified to be removed shall at
                  the expiration of earlier termination of the lease become the
                  property of the Lessor and remain upon and be surrendered with
                  the Premises. All movable furniture, business and trade
                  fixtures, and machinery, equipment and all special electrical,
                  mechanical or HVAC systems installed by Lessee and used solely
                  for the purpose of Lessee's manufacturing process shall remain
                  the property of the Lessee and may be removed by the Lessee at
                  any time during the Lease term when Lessee is not in default
                  hereunder. Items which are not to be deemed as movable
                  furniture, business and trade fixtures, or machinery and
                  equipment shall include heating, lighting, electrical systems,
                  air conditioning, partitioning, carpeting, or any other
                  installation which has become an integral part of the
                  Premises. The Lessee will at all times permit notices of
                  non-responsibility to be posted and to remain posted until the
                  completion of alterations or additions which have been
                  approved by the Lessor.

MAINTE-             10.  Lessee shall, at Lessee's sole cost, keep and maintain
NANCE OF          the Premises and appurtenances and every part thereof,
PREMISES          including but not limited to, glazing, sidewalks, parking
                  areas, including resealing when necessary except for initial
                  resealing to be performed by Lessor prior to January 1, 1997,
                  plumbing, electrical systems, heating and air conditioning
                  installations, any store front, roof covering--unless it is
                  not feasible to repair the existing roof covering and a new
                  roof covering is required, and the interior of the Premises in
                  good order, condition, and repair. Lessor at Lessor's sole
                  cost and expense shall maintain the exterior of the walls, and
                  structural portions of the roof, foundations, walls, and
                  floors except for any repairs caused by the wrongful act of
                  the Lessee and Lessee's agents. The Lessor will replace the
                  roof covering if repairs to said covering are no longer
                  economically feasible in the judgment of roofing experts, and
                  provided that said replacement is not made necessary by acts
                  of the Lessee and Lessee's agents. The Lessee shall water,
                  maintain and replace, when necessary, any shrubbery and
                  landscaping provided by the Lessor on the Premises. The Lessee
                  expressly waives the benefits of any statute now or hereafter
                  in effect which would otherwise afford the Lessee the right to
                  make repairs at Lessor's expense or to terminate this lease
                  because of Lessor's failure to keep the Premises in good
                  order, conditions or repair.

<PAGE>   4
FIRE AND            11.
EXTENDED
COVERAGE
INSURANCE
AND
SUBROGATION

                  REVISED INSURANCE CLAUSE

                  This Lease Clause replaces the Insurance Clause (11.) in the
                  Renault & Handley Net Lease Form.

                  11. Lessee shall not use, or permit the Premises, or any part
                  thereof, to be used, for any purposes other than that for
                  which the Premises are hereby leased; and no use shall be made
                  or permitted to be made on the Premises, nor acts done, which
                  will cause a cancellation of any insurance policy covering
                  said building, or any part thereof, nor shall Lessee sell or
                  permit to be kept, used or sold, in or about the Premises, any
                  article which may be prohibited by the standard form of fire
                  insurance policies. Lessee shall, at his sole cost and
                  expense, comply with any and all requirements, pertaining to
                  the Lessee's use and occupancy of the Premises, of any
                  insurance organization or company, necessary for the
                  maintenance of reasonable fire and public liability insurance,
                  covering said building and appurtenances.

                  11.1 Lessee shall, at its expense, obtain and keep in force
                  during the term of this Lease a policy of comprehensive public
                  liability insurance insuring Lessee, Lessor, agents, invitees,
                  and contractors, including Lessor's lender, against any
                  liability arising out of the Lessee's use, occupancy or
                  maintenance of the Premises. Such insurance policy shall have
                  a combined single limit for both bodily injury and property
                  damage in an amount not less than One Million Dollars
                  ($1,000,000.00). The limits of said insurance shall not limit
                  the liability of Lessee hereunder.

INSURANCE         11.2 Lessee shall, at its expense, keep in force during the
                  term of this Lease, a policy of fire and property damage
                  insurance in an "all risk" form with a sprinkler leakage
                  endorsement, insuring Lessee's inventory, fixtures, equipment
                  and personal property within the Premises for the full
                  replacement value thereof.

                  11.3 Lessor shall maintain a policy or policies of fire and
                  property damage insurance in an "all risk" form, with
                  sprinkler and, at the option of the Lessor, earthquake
                  endorsements, covering loss or damage to the building,
                  including Lessee's leasehold improvements installed with the
                  written consent of the Lessor, in such amounts and with such
                  coverage as Lessor deems advisable.

                    11.4 Lessee shall pay to Lessor as additional rent, during
                  the term hereof within 10 days after receipt of an invoice
                  therefore, 100 percent of the premiums for any insurance
                  obtained by Lessor pursuant to 11.3 above. Lessor may obtain
                  such insurance for the Building separately, or together with
                  other buildings and improvements which Lessor elects to insure
                  together under blanket policies of insurance. In such case
                  Lessee shall be liable for only such portion of the premiums
                  for such blanket policies as are allocable to the Premises. It
                  is understood and agreed that Lessee's obligation under this
                  paragraph shall be prorated to reflect the Commencement Date
                  and Expiration Date of the Lease.

                    11.5 Lessee and Lessor each hereby waives any and all rights
                  of recovery against the other, or against the officers,
                  directors, employees, partners, agents and representatives of
                  the other, for loss of or damage to the property of the
                  waiving party or the property of others under its control, to
                  the extent such loss or damage is insured against under any
                  insurance policy carried by Lessor or Lessee hereunder. Each
                  party shall notify their respective insurance carriers of this
                  waiver and obtain from the respective insurer, a waiver by
                  such insurer of all rights of subrogation or assignment of
                  claims in connection with a claim against Lessor or Lessee, as
                  the case may be, covered by such insurance.

<PAGE>   5

                  SEE REVISED INSURANCE CLAUSE ATTACHED

ABANDONMENT         12. Lessee shall not vacate or abandon the Premises at
                  any time during the term; and if Lessee shall abandon, vacate
                  or surrender the premises, or be dispossessed by process of
                  law, or otherwise, any personal property belonging to Lessee
                  and left on the Premises shall be deemed to be abandoned, at
                  the option of Lessor, except such property as may be mortgaged
                  to Lessor. Abandonment shall be defined as outlined in section
                  1951.3 of the California Civil Code.

FREE FROM           13. Lessee shall keep the Premises and the property in
LIENS             which the Premises are situated, free from any liens arising
                  out of any work performed, materials furnished, or obligations
                  incurred by Lessee.

COMPLIANCE          14. Lessee shall, at his sole cost and expense, comply
WITH              with all of the requirements of all Municipal, State and
GOVERN-           Federal authorities now in force, or which may hereafter be
MENTAL            in force, pertaining to the Lessee's specific use, and shall
REGULATIONS       faithfully observe in the use of the Premises all Municipal
                  ordinances and State and Federal statutes now in force or
                  which may hereafter be in force. The judgment of any court of
                  competent jurisdiction, or the admission of Lessee in any
                  action or proceeding against Lessee, whether Lessor be a party
                  thereto or not, that Lessee has violated any such ordinance or
                  statute in the use of the Premises, shall be conclusive of
                  that fact as between Lessor and Lessee.

INDEMNI-            15. The Lessee, as a material part of the consideration
FICATION OF       to be rendered to the Lessor, hereby waives all claims
LESSOR AND        against the Lessor for damages to goods, wares and
LESSEE'S          merchandise, and all other personal property in, upon, or
LIABILITY         about the Premises and for injuries to persons in or about
INSURANCE         the Premises, from any cause arising at any time, excepting
                  claims arising from the Lessor's negligence, and the Lessee
                  will hold the Lessor exempt and harmless from any damage or
                  injury to any person, or to the goods, wares and merchandise
                  and all other personal property of any person, arising from
                  the use of the Premises by the Lessee, or from the failure of
                  the Lessee to keep the Premises in good condition and repair,
                  as herein provided.

                      SEE REVISED INSURANCE CLAUSE ATTACHED

ADVERTISE-          16. Lessee will not place or permit to be placed, in,
MENTS AND         upon or about the Premises any unusual or extraordinary
SIGNS             signs, or any signs not approved by the city or other
                  governing authority. The Lessee will not place, or permit to
                  be placed, upon the Premises, any signs, advertisements or
                  notices without the written consent of the Lessor first had
                  and obtained. Any sign so placed on the Premises shall be so
                  placed upon the understanding and agreement that Lessee will
                  remove same at the termination of the tenancy herein created
                  and repair any damage or injury to the Premises caused
                  thereby, and if not so removed by Lessee then Lessor may have
                  same so removed at Lessee's expense.

UTILITIES         17. Lessee shall pay for all water, gas, heat, light, power,
                  telephone service and all other service supplied to the
                  Premises. If the premises are not served by a separate water
                  meter, the Lessee shall pay to the Lessor 100 percent of the
                  water bill for the entire property covered by said bill and of
                  which the Premises are a part.

ATTORNEY'S          18. In case suit should be brought for the possession of
FEES              the Premises, for the recovery of any sum due hereunder, or
                  because of the breach of any other covenant herein, the losing
                  party shall pay to the prevailing party a reasonable

<PAGE>   6

                  attorney's fee, which shall be deemed to have accrued on the
                  commencement of such action and shall be enforceable whether
                  or not such action is prosecuted to judgment.

DEFAULT             19. In the event of any breach of this Lease by the
                  Lessee, or an abandonment of the Premises by the Lessee, the
                  Lessor has the option of 1) removing all persons and property
                  from the Premises and repossessing the Premises in which case
                  any of the Lessee's property which the Lessor removes from the
                  Premises may be stored in a public warehouse or elsewhere at
                  the cost of, and for the account of Lessee, or 2) allowing the
                  Lessee to remain in full possession and control of the
                  Premises. If the Lessor chooses to repossess the Premises, the
                  Lease will automatically terminate in accordance with
                  provisions of the California Civil Code, Section 1951.2. In
                  the event of such termination of the Lease, the Lessor may
                  recover from the Lessee: 1) the worth at the time of award of
                  the unpaid rent which had been earned at the time of
                  termination including interest at 7% per annum; 2) the worth
                  at the time of award of the amount by which the unpaid rent
                  which would have been earned after termination until the time
                  of award exceeds the amount of such rental loss that the
                  Lessee proves could have been reasonably avoided including
                  interest at 7% per annum; 3) the worth at the time of award of
                  the amount by which the unpaid rent for the balance of the
                  term after the time of award exceeds the amount of such rental
                  loss that the Lessee proves could be reasonably avoided; and
                  4) any other amount necessary to compensate the Lessor for all
                  the detriment proximately caused by the Lessee's failure to
                  perform his obligations under the Lease or which in the
                  ordinary course of things would be likely to result therefrom.
                  If the Lessor chooses not to repossess the premises, but
                  allows the Lessee to remain in full possession and control of
                  the Premises, then in accordance with provisions of the
                  California Civil Code, Section 1951.4, the Lessor may treat
                  the Lease as being in full force and effect, and may collect
                  from the Lessee all rents as they become due through the
                  termination date of the lease as specified in the lease. For
                  the purposes of this paragraph, the following do not
                  constitute a termination of Lessee's right to possession:

                  a) Acts of maintenance or preservation or efforts to relet the
                  property.

                  b) The appointment of a receiver on the initiative of the
                  Lessor to protect his interest under this Lease.

LATE                20. Lessee hereby acknowledges that late payment by
CHARGES           Lessee to Lessor of rent and other sums due hereunder will
                  cause Lessor to incur costs not contemplated by this lease,
                  the exact amount of which will be extremely difficult to
                  ascertain. Such costs include, but are not limited to,
                  processing and accounting charges, and late charges which may
                  be imposed on Lessor by the terms of any mortgage or trust
                  deed covering the Premises. Accordingly, if any installment of
                  rent or any other sum due from Lessee shall not be received by
                  Lessor or Lessor's designee within ten (10) days after such
                  amount shall be due, Lessee shall pay to Lessor a late charge
                  equal to ten percent (10%) of such overdue amount. The parties
                  hereby agree that such late charge represents a fair and
                  reasonable estimate of the costs Lessor will incur by reason
                  of late payment by Lessee. Acceptance of such late charge by
                  Lessor shall in no event constitute a waiver of

<PAGE>   7

                  Lessee's default with respect to such overdue amount, nor
                  prevent Lessor from exercising any of the other rights and
                  remedies granted hereunder.

SURRENDER
OF LEASE            21. The voluntary or other surrender of this Lease by
                  Lessee, or a mutual cancellation thereof, shall not work a
                  merger, and shall, at the option of Lessor, terminate all or
                  any existing subleases or subtenancies, or may, at the option
                  of Lessor, operate as an assignment to him of any or all such
                  subleases or subtenancies.

TAXES               22. The Lessee shall be liable for all taxes levied against
                  personal property and trade or business fixtures. The Lessee
                  also agrees to pay, as additional rental, during the term of
                  this Lease and any extensions thereof, all real estate taxes
                  plus the yearly installments of any special assessments which
                  are of record or which may become of record during the term of
                  this lease. If said taxes and assessments are assessed against
                  the entire building and building site, and this Lease does not
                  cover the entire building or building site, the taxes and
                  assessment installments allocated to the Premises shall be
                  pro-rated on a square footage or other equitable basis, as
                  calculated by the Lessor. It is understood and agreed that the
                  Lessee's obligation under this paragraph will be pro-rated to
                  reflect the commencement and termination dates of this Lease.

NOTICES           23. All notices to be given to Lessee may be given in writing
                  personally or by depositing the same in the United States
                  mail, postage prepaid, and addressed to Lessee at the said
                  Premises, whether or not Lessee has departed from, abandoned
                  or vacated the Premises.

ENTRY BY            24. Lessee shall permit Lessor and his agents to enter into
LESSOR            and upon and with prior notice the Premises at all reasonable
                  times for the purpose of inspecting the same or for the
                  purpose of maintaining the building in which the Premises are
                  situated, or for the purpose of making repairs, alterations or
                  additions to any other portion of said building, including the
                  erection and maintenance of such scaffolding, canopies, fences
                  and props as may be required without any rebate of rent and
                  without any liability to Lessee for any loss of occupation or
                  quiet enjoyment of the Premises thereby occasioned; and shall
                  permit Lessor and his agents, at any time within ninety days
                  prior to the expiration of this Lease, to place upon the
                  Premises any usual or ordinary "For Sale" or "To Lease" signs
                  and exhibit the Premises to prospective tenants at reasonable
                  hours.

DESTRUCTION OF      25. In the event of a partial destruction of the Premises
PREMISES          during the said term from any cause, Lessor shall forthwith
                  repair the same, provided such repairs can be made within
                  ninety (90) days from date of destruction under the laws and
                  regulations of State, Federal, County or Municipal
                  authorities, but such partial destruction shall in no way
                  annul or void this Lease, except that Lessee shall be entitled
                  to a proportionate reduction of rent while such repairs are
                  being made, such proportionate reduction to be based upon the
                  extent to which the making of such repairs shall interfere
                  with the business carried on by Lessee in the Premises. If
                  such repairs cannot be made in ninety (90) days from date of
                  destruction Lessor may, at his option, make same within a
                  reasonable time, this Lease continuing in full force and
                  effect and the rent to be proportionately reduced as aforesaid
                  in this paragraph provided. In the event that Lessor does not
                  so elect to make such repairs which cannot be made in ninety
                  (90) days, or such repairs cannot be made under such laws and
                  regulations, this Lease may be terminated at the option of
                  either party. In respect to any partial destruction which
                  Lessor is obligated to repair or may

<PAGE>   8

                  elect to repair under the terms of this paragraph, the
                  provision of Section 1932, Subdivision 2, and of Section 1933,
                  Subdivision 4, of the Civil Code of the State of California
                  are waived by Lessee. In the event that the building in which
                  the Premises may be situated be destroyed to the extent of not
                  less than 33 1/3% of the replacement cost thereof, Lessor may
                  elect to terminate this Lease, whether the Premises be injured
                  or not. A total destruction of the building in which the
                  Premises may be situated shall terminate this Lease. In the
                  event of any dispute between Lessor and Lessee relative to the
                  provisions of this paragraph, they shall each select an
                  arbitrator, the two arbitrators so selected shall select a
                  third arbitrator and the three arbitrators so selected shall
                  hear and determine the controversy and their decision thereon
                  shall be final and binding upon both Lessor and Lessee, who
                  shall bear the cost of such arbitration equally between them.

ASSIGNMENT AND      26. The Lessee shall not assign, transfer, or hypothecate
SUBLETTING        the leasehold estate under this Lease, or any interest
                  therein, and shall not sublet the Premises, or any part
                  thereof, or any right or privilege appurtenant thereto, or
                  suffer any other person or entity to occupy or use the
                  Premises, or any portion thereof, without, in each case, the
                  prior written consent of the Lessor. Lessor agrees not to
                  unreasonably withhold consent to sublet or assign. As a
                  condition for granting its consent to any subletting the
                  Lessor may require the Lessee to agree to pay to the Lessor,
                  as additional rental, all rents received by the Lessee from
                  its Sublessee which are in excess of the amount payable by the
                  Lessee to the Lessor hereunder. The Lessee shall, by sixty
                  (60) days written notice, advise the Lessor of its intent to
                  sublet the Premises or any portion thereof for any part of the
                  term hereof. Within thirty (30) days after receipt of Lessee's
                  notice, Lessor shall either give approval to Lessee to
                  sublease the portion of the Premises described in Lessee's
                  notice, or Lessor shall terminate this Lease as to the portion
                  of the Premises described in Lessee's notice on the date
                  specified in Lessee's notice. If Lessee intends to sublet the
                  entire Premises and Lessor elects to terminate this Lease,
                  this Lease shall be terminated on the date specified in
                  Lessee's notice. If, however, this Lease shall terminate
                  pursuant to the foregoing with respect to less than all the
                  Premises, the rent, as defined and reserved herein above shall
                  be adjusted on a prorata basis to the number of square feet
                  retained by Lessee, and this Lease as so amended shall
                  continue in full force and effect. If the Lessor approves a
                  subletting, the Lessee may sublet immediately after receipt of
                  the Lessor's written approval. In the event Lessee is allowed
                  to assign, transfer or sublet the whole or any part of the
                  Premises, with the prior written consent of Lessor, no
                  assignee, transferee or sublessee shall assign or transfer
                  this Lease, either in whole or in part, or sublet the whole or
                  any part of the Premises, without also having obtained the
                  prior written consent of the Lessor. A consent of Lessor to
                  one assignment, transfer, hypothecation, subletting,
                  occupation or use by any other person shall not release Lessee
                  from any of Lessee's obligations hereunder or be deemed to be
                  a consent to any subsequent similar or dissimilar assignment,
                  transfer, hypothecation, subletting, occupation or use by any
                  other person. Any such assignment, transfer, hypothecation,
                  subletting, occupation or use without such consent shall be
                  void and shall constitute a breach of this Lease by Lessee and
                  shall, at the option of Lessor exercised by written notice to
                  Lessee, terminate this Lease. The

<PAGE>   9

                  leasehold estate under this Lease shall not, nor shall any
                  interest therein, be assignable for any purpose by operation
                  of law without the written consent of Lessor. As a condition
                  to its consent, Lessor may require Lessee to pay all expense
                  in connection with the assignment, and Lessor may require
                  Lessee's assignee or transferee (or other assignees or
                  transferees) to assume in writing all of the obligations under
                  this Lease.

CONDEMNATION        27. If any part of the premises shall be taken for any
                  public or quasi-public use, under any statute or by right of
                  eminent domain or private purchase in lieu thereof, and a part
                  thereof remains which is susceptible of occupation hereunder,
                  this Lease shall, as to the part so taken, terminate as of the
                  date title shall vest in the condemnor or purchaser, and the
                  rent payable hereunder shall be adjusted so that the Lessee
                  shall be required to pay for the remainder of the term only
                  such portion of such rent as the value of the part remaining
                  after such taking bears to the value of the entire

<PAGE>   10

                  premises prior to such taking, but in such event Lessor shall
                  have the option to terminate this Lease as of the date when
                  title to the part so taken vests in the condemnor or
                  purchaser. If all of the premises, or such part thereof be
                  taken so that there does not remain a portion susceptible for
                  occupation hereunder, this Lease shall thereupon terminate. If
                  a part or all of the Premises be taken, all compensation
                  awarded upon such taking shall go to the Lessor and the Lessee
                  shall have no claim thereto.

EFFECT OF           28. The term "Lessor" as used in this Lease, means only the
CONVEYANCE        owner for the time being of the land and building containing
                  the Premises, so that, in the event of any sale of said land
                  or building, or in the event of a lease of said building, the
                  Lessor shall be and hereby is entirely freed and relieved of
                  all covenants and obligations of the Lessor hereunder, and it
                  shall be deemed and construed, without further agreement
                  between the parties and the purchaser at any such sale, or the
                  Lessee of the building, that the purchaser or lessee of the
                  building has assumed and agreed to carry out any and all
                  covenants and obligations of the Lessor hereunder. If any
                  security be given by the Lessee to secure the faithful
                  performance of all or any of the covenants of this Lease on
                  the part of the Lessee, the Lessor may transfer and deliver
                  the security, as such, to the purchaser at any such sale or
                  the lessee of the building, and thereupon the Lessor shall be
                  discharged from any further liability in reference thereto.

SUBORDINATION       29. Lessee agrees that this Lease may, at the option of
                  Lessor, be subject and subordinate to any mortgage, deed of
                  trust or other instrument of security which has been or shall
                  be placed on the land and building or land or building of
                  which the Premises form a part, and this subordination is
                  hereby made effective without any further act of Lessee. The
                  Lessee shall, at any time hereinafter, on demand, execute any
                  instruments, releases, or other documents that may be required
                  by any mortgagee, mortgagor, or trustor or beneficiary under
                  any deed of trust for the purpose of subjecting and
                  subordinating this Lease to the lien of any such mortgage,
                  deed of trust or other instrument of security, and

WAIVER              30. The waiver by Lessor of any breach of any term, covenant
                  or condition, herein contained shall not be deemed to be a
                  waiver of such term, covenant or condition or any subsequent
                  breach of the same or any other term, covenant or condition
                  therein contained. The subsequent acceptance of rent hereunder
                  by Lessor shall not be deemed to be a waiver of any preceding
                  breach by Lessee of any term, covenant or condition of this
                  Lease, other than the failure of Lessee to pay the particular
                  rental so accepted, regardless of Lessor's knowledge of such
                  preceding breach at the time of acceptance of such rent.

HOLDING OVER        31. Any holding over after the expiration of the said term,
                  with the consent of Lessor, shall be construed to be a tenancy
                  from month to month, at a rental to be negotiated by Lessor
                  and Lessee prior to the expiration of said term, and shall
                  otherwise be on the terms and conditions herein specified, so
                  far as applicable.

SUCCESSORS          32. The covenants and conditions herein contained shall,
AND               subject to the provisions as to assignment, apply to and bind
ASSIGNS           the heirs, successors, executors, administrators and assigns
                  of all of the parties hereto; and all of the parties hereto
                  shall be jointly and severally liable hereunder.

TIME                33. Time is of the essence of this Lease.

<PAGE>   11
MARGINAL            34. The marginal headings or titles to the paragraphs
CAPTIONS          of this Lease are not a part of this Lease and shall have no
                  effect upon the construction or interpretation of any part
                  thereof. This instrument contains all of the agreements and
                  conditions made between the parties hereto and may not be
                  modified orally or in any other manner than by an agreement in
                  writing signed by all of the parties hereto or their
                  respective successors in interest.

                  PARAGRAPHS 35, 36 & 37 ATTACHED HERETO ARE HEREBY MADE A PART
                  OF THIS LEASE THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO
                  YOUR ATTORNEY WHO WILL REVIEW THE DOCUMENT AND ASSIST YOU TO
                  DETERMINE WHETHER YOUR LEGAL RIGHTS ARE ADEQUATELY PROTECTED.
                  RENAULT & HANDLEY IS NOT AUTHORIZED TO GIVE LEGAL AND TAX
                  ADVICE. NO REPRESENTATION OR RECOMMENDATION IS MADE BY RENAULT
                  & HANDLEY OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
                  SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT
                  OR ANY TRANSACTION RELATING THERETO. THESE ARE QUESTIONS FOR
                  YOUR ATTORNEY WITH WHOM YOU SHOULD CONSULT BEFORE SIGNING THIS
                  DOCUMENT.

                  IN WITNESS WHEREOF, Lessor and Lessee have executed these
                  presents, the day and year first above written.

                       LESSOR                              LESSEE

                  ZAPPETTINI INVESTMENT Co.          INTUITIVE SURGICAL

                  /s/ George O. McKee                /s/ Frederic H. Moll
                  -------------------                --------------------

                                                     Subject to Board approval

                                                     V.P., Medical Director

<PAGE>   12

                              ADDITIONAL PARAGRAPHS

The following additional paragraphs are hereby made a part of that certain Lease
dated September 9, 1996, by and between Zappettini Investment Co., Lessor, and
Intuitive Surgical, Lessee, covering the Premises located at 1340 Middlefield,
Mountain View, California.

35. Lessor will indemnify Lessee from and against all costs of response,
corrective action, remedial action, claims, demands, losses and liabilities
arising from any pre-existing environmental contamination which may have
occurred prior to the Lessee taking possession of the Premises.

Lessee will only be responsible for contamination of the Premises or the soils
or ground water thereon or thereunder in violation of Hazardous Materials Laws,
that is caused by Lessee or Lessee's agents or contractors during the term as
may be extended. All hazardous materials and toxic wastes that Lessee brings on
the Premises shall be stored according to Hazardous Materials' Laws.

All hazardous materials and toxic wastes that Lessee brings on the site shall be
stored according to all local, state and national governmental regulations.
Hazardous Materials shall be defined as those substances that are recognized as
posing a risk of injury to health or safety by the Santa Clara Fire Department,
the Santa Clara County Health Department, the Regional Water Quality Control
Board, the State of California or the Federal Government.

For purposes of this Lease, "Hazardous Materials' Laws" shall mean all local,
state and federal laws, statutes, ordinances, rules, regulations, judgements
injunctions, stipulations, decrees, orders, permits, approvals, treaties or
protocols now or hereafter enacted, issued or promulgated by any governmental
authority which relate to any Hazardous Material or the use, handling,
transportation, production, disposal, discharge, release, emission, sale or
storage of, or the exposure of any person to, a Hazardous Material.

36. Quite Enjoyment. Landlord covenants and agrees that Tenant, so long as it
shall not be in default hereunder, shall and may, at all times during the term
of this Lease and any extension and renewal hereof, peacefully and quietly have,
hold, occupy, and enjoy the Premises without any hindrance or molestation
whatever.

37. Option. Lessor hereby grants to Lessee the option to renew this Lease for 1
(one) additional 3 (three) year term commencing on the termination date of the
Lease. Said option shall be exercised by letter and no later than 60 (sixty)
days and no earlier than 120 (one hundred twenty) days prior to the termination
date of this Lease. All the terms and conditions contained in the original Lease
shall govern the extension period excepting the monthly rental shall be 95% of
the then fair market value for similar buildings within a one mile radius from
the above location.

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