Document:

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                                                                   EXHIBIT 10.8

                                LICENSE AGREEMENT

THIS LICENSE AGREEMENT dated as of December 20, 1995 (the "Agreement"), is
entered into between SRI INTERNATIONAL, a California nonprofit public benefit
corporation ("SRI"), having a place of business located at 333 Ravenswood
Avenue, Menlo Park, California 94025-3493, and INTUITIVE SURGICAL DEVICES, INC.,
a Delaware corporation ("ISD"), having a place of business located at Five Palo
Alto Square, 3000 El Camino Real, Palo Alto, California 94306-2155.

                              W I T N E S S E T H :

WHEREAS, SRI owns or has rights in certain patent rights and know-how regarding
Telepresence Surgical Technology (defined below), as described in the SRI
disclosures listed in Exhibit A hereto.

WHEREAS, SRI and John G. Freund, M.D. ("Dr. Freund"), entered into an Option
Agreement dated September 12, 1995 (the "Option Agreement"), pursuant to which
SRI granted to Dr. Freund an option to obtain a certain license under SRI's
rights in such patent rights and know-how.

WHEREAS, by exercising the option granted under the Option Agreement, Dr. Freund
desires that SRI convey to ISD a license under SRI's rights in such patent
rights and know-how to develop, make use and sell products for use in performing
surgery on humans and animals, on the terms and subject to the conditions of the
Agreement.

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

                                    ARTICLE 1

                                   DEFINITIONS

For purposes of the Agreement, the terms defined in this article shall have the
respective meanings set forth below:

1.1 "AFFILIATE" shall mean, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. A Person shall be regarded as in control of another Person if
it owns, or directly or indirectly controls, at least fifty percent (50%) of

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the voting stock or other ownership interest of the other Person, or if it
directly or indirectly possesses the power to direct or cause the direction of
the management and policies of the other Person by any means whatsoever.

1.2 "FIELD" shall mean the manipulation of tissues and medical devices for
animal and human medicine (including but not limited to surgery, laparoscopic
surgery and microsurgery).

1.3 "ISD KNOW-HOW" shall mean all inventions, discoveries, processes, methods,
compositions, formulae, procedures, protocols, techniques, results of
experimentation and testing, information and data, which have not been published
and otherwise are not generally known, which are necessary or useful to the
development, manufacture, use or sale of products utilizing or incorporating the
Telepresence Surgical Technology, or otherwise relate to or arise from the
Telepresence Surgical Technology, and which are first conceived or reduced to
practice solely or jointly by employees or other Persons on behalf of ISD prior
to September 12, 1997; all to the extent and only to the extent that ISD has the
right to grant licenses, immunities or other rights thereunder.

1.4 "ISD PATENT RIGHTS" shall mean (a) all patent applications, heretofore or
hereafter filed or having legal force in any country which claim a discovery or
invention which is (i) necessary or useful to the development, manufacture, use
or sale of products utilizing or incorporating the Telepresence Surgical
Technology or (ii) otherwise relates to or arises from the Telepresence Surgical
Technology, and which is first conceived or reduced to practice solely or
jointly by employees or other Persons on behalf of ISD prior to September 12,
1997, (b) all valid and enforceable patents that have issued or in the future
issue from the patent applications described in clause (a) above, including
utility, model and design patents and certificates of invention, and (c) all
divisionals, continuations, continuations-in-part, reissues, renewals,
extensions, registrations, confirmations, re-examinations or additions to any
such patent applications and patents; all to the extent and only to the extent
that ISD has the right to grant licenses, immunities or other rights thereunder.

1.5 "MILESTONE" shall mean the good faith filing by ISD, its Affiliate or
sublicensee of a Pre-Market Approval application or 510K application with the
Food and Drug Administration in the United States (or the equivalent application
with the governing health authority of any country in Europe), supported by the
information that in ISD's best judgment would give the greatest likelihood of
approval by the FDA (or the governing health authority of the applicable country
in Europe).

1.6 "PERSON" shall mean an individual, corporation, partnership, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship,

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unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

1.7 "PRODUCT" shall mean any product for use in the Field which if made, used or
sold would infringe one or more valid claims of the SRI Patent Rights if in an
issued patent but for the license granted by the Agreement, or which otherwise
uses, incorporates or was conceived, developed or reduced to practice using the
SRI Patent Rights or SRI Know-How.

1.8 "SRI FUTURE TECHNOLOGY RIGHTS" shall mean all intellectual property rights
of SRI in all inventions, discoveries, processes, methods, compositions,
formulae, procedures, protocols, techniques, results of experimentation and
testing, information and data regarding Telepresence Surgical Technology, which
are first conceived or reduced to practice solely or jointly by employees or
other Persons on behalf of SRI on or after September 12, 1997 and prior to
September 12, 1999; all to the extent and only to the extent that SRI has the
right to grant licenses, immunities or other rights thereunder.

1.9 "SRI KNOW-HOW" shall mean all inventions, discoveries, processes, methods,
compositions, formulae, procedures, protocols, techniques, results of
experimentation and testing, information and data, which have not been published
and otherwise are not generally known, regarding Telepresence Surgical
Technology in which SRI has an ownership or other interest as of the date of the
Agreement or which are first conceived or reduced to practice solely or jointly
by employees or other Persons on behalf of SRI prior to September 12, 1997; all
to the extent and only to the extent that SRI has the right to grant licenses or
other rights thereunder.

1.10 "SRI PATENT RIGHTS" shall mean (a) all patent applications, heretofore or
hereafter filed or having legal force in any country, regarding Telepresence
Surgical Technology, which claim a discovery or invention in which SRI has an
ownership or other interest as of the date of the Agreement or which is first
conceived or reduced to practice solely or jointly by employees or other Persons
on behalf of SRI prior to September 12, 1997, (b) all valid and enforceable
patents that have issued or in the future issue from the patent applications
described in clause (a) above, including utility, model and design patents and
certificates of invention, and (c) all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions or additions to any such
patent applications and patents; all to the extent and only to the extent that
SRI has the right to grant licenses, immunities or other rights thereunder. A
list of the SRI Patent Rights as of the date of the Agreement is attached hereto
as Exhibit B.

1.11 "STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement dated
the date hereof, among ISD, SRI and the other signatories thereto.

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1.12 "TELEPRESENCE SURGICAL TECHNOLOGY" shall mean hardware, firmware and
software technology pertaining to the manipulation of tissues or medical devices
for human and animal medicine (including but not limited to surgery,
laparoscopic surgery and microsurgery) as described or contemplated in Exhibits
A and B to the Agreement and developed by SRI's Medical Technology Laboratory or
any successor SRI organization having the development of medical hardware,
firmware and software technology as its primary mission.

1.13 "THIRD PARTY" shall mean any Person other than SRI, ISD and their
respective Affiliates.

                                    ARTICLE 2

                         REPRESENTATIONS AND WARRANTIES

     Each party hereby represents and warrants to the other party as follows:

2.1 CORPORATE EXISTENCE AND POWER. Such party (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated; (b) has the corporate power and authority and the
legal right to own and operate its property and assets, to enter into the
Agreement and to perform its obligations hereunder, and to carry on its business
as it is now being conducted and (c) is in compliance with all requirements of
applicable law, except to the extent that any noncompliance would not have a
material adverse effect on the properties, business, financial or other
condition of it and would not materially adversely affect its ability to perform
its obligations under the Agreement.

2.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such party has taken all
necessary corporate action on its part to authorize the execution and delivery
of the Agreement and the performance of its obligations hereunder. The Agreement
has been duly executed and delivered on behalf of such party, and constitutes a
legal, valid, binding obligation, enforceable against such party in accordance
with its terms.

2.3 NO CONSENTS. All necessary consents, approvals and authorizations of all
governmental authorities and other Persons required to be obtained by such party
in connection with the Agreement have been obtained.

2.4 NO CONFLICT. The execution and delivery of the Agreement and the performance
of such party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations, and (b) do not conflict with, or
constitute a default under, any contractual obligation of it.

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2.5 SRI REPRESENTATIONS AND WARRANTIES. SRI hereby represents and warrants to
ISD that:

2.5.1 Except as otherwise specifically disclosed under the Agreement, it has not
granted any right to any Third Party under the SRI Patent Rights or and SRI
Technology.

2.5.2 It owns or controls under valid licenses with right of sublicense all of
the rights, title and interest in and to the patents and patent applications set
forth on Exhibit B attached hereto and the SRI Know-How, except as otherwise
provided herein.

2.5.3 It has disclosed to ISD all SRI invention disclosures regarding the
Telepresence Surgical Technology as of the date of the Agreement.

                                    ARTICLE 3

                                 LICENSE GRANTS

3.1 LICENSE GRANT TO ISD. Subject to the provisions of Section 5.3 below, SRI
hereby grants to ISD an exclusive, worldwide, royalty-free license (including
the right to grant sublicenses) under the SRI Patent Rights and SRI Know-How (a)
to conduct research and development with respect to Products for use in the
Field, and (b) to make, have made, use, market, distribute, import, offer for
sale and sell Products for use in the Field. Upon execution of the Agreement and
frequently thereafter until September 12, 1998, at mutually convenient times,
SRI shall disclose and make available to ISD all information available to SRI,
including without limitation SRI invention disclosures and SRI Know-How, as is
reasonably necessary for ISD's employees and consultants to understand and
practice the SRI Patent Rights and SRI Know-How in the Field, as such
information becomes available to SRI. ISD shall have the right, during normal
business hours upon reasonable notice, to review and make copies of those
portions of SRI employees' laboratory notebooks containing such information as
is reasonably necessary for ISD's employees and consultants to understand and
practice the SRI Patent Rights and SRI Know-How in the Field.

3.2 SUBLICENSES. Each sublicense by ISD under the Agreement shall be consistent
with the terms and conditions of the license granted to ISD by SRI and nothing
in such sublicense shall eliminate or reduce ISD's obligations to SRI under the
Agreement. Each sublicense by SRI under the Agreement shall be consistent with
the terms and conditions of the license granted to SRI by ISD and nothing in
such sublicense shall eliminate or reduce SRI's obligations to ISD under the
Agreement.

3.3 RESERVATION OF CERTAIN RIGHTS. Notwithstanding the foregoing, the license
granted to ISD by the Agreement is subject

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to the reservation of (a) the right of SRI to practice processes and methods,
and to make, use and sell products, which are covered by the SRI Patent Rights
or which are disclosed in or otherwise pertain to SRI Know-How, (i) for all
commercial and research purposes outside the Field and (ii) for SRI's internal
and collaborative non-commercial research purposes (including United States
Government sponsored research) in the Field; (b) certain rights held by or in
favor of the United States Government by applicable law or regulation; and (c)
the non-exclusive, worldwide, royalty-free right to use the SRI Patent Rights
and SRI Know-How for medical training and simulations, so long as products
created pursuant to such right are not used to perform medical procedures. To
the extent required by applicable United States laws or regulations, if at all,
ISD, its Affiliates and sublicensees shall manufacture the Products in the
United States or its territories.

3.4 DISCLAIMER OF WARRANTIES. NOTHING IN THE AGREEMENT SHALL BE CONSTRUED AS A
REPRESENTATION MADE OR WARRANTY GIVEN BY SRI THAT ANY PATENT WILL ISSUE BASED
UPON ANY PENDING PATENT APPLICATION INCLUDED IN THE SRI PATENT RIGHTS, THAT ANY
PATENT INCLUDED IN THE SRI PATENT RIGHTS WHICH ISSUES WILL BE VALID, OR THAT THE
USE OF ANY SRI PATENT RIGHTS OR SRI KNOW-HOW WILL NOT INFRINGE THE PATENT OR
PROPRIETARY RIGHTS OF ANY OTHER PERSON. EXCEPT AS OTHERWISE SET FORTH IN SECTION
2.5 ABOVE, SRI MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE SRI PATENT RIGHTS OR SRI KNOW-HOW, INCLUDING WITHOUT LIMITATION,
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

3.5 LICENSE GRANT TO SRI. ISD hereby grants to SRI a non-exclusive, worldwide,
royalty-free license (including the right to grant sublicenses) to practice
methods and processes, and to make, use and sell products, which are covered by
the ISD Patent Rights or which are disclosed in or otherwise pertain to ISD
Know-How (a) for all commercial and research purposes outside the Field and (b)
for SRI's internal and collaborative non-commercial research purposes (including
United States Government sponsored research) in the Field. At least quarterly
prior to September 12, 1998, at mutually convenient times, ISD shall disclose
and make available to SRI information available to ISD regarding the use of the
ISD Patent Rights and ISD Know-How outside the Field, as such information
becomes available to ISD.

3.6 TECHNICAL ASSISTANCE. Prior to September 12, 1997, upon reasonable notice
and during normal business hours, SRI (a) shall provide such technical
assistance regarding the SRI Patent Rights and SRI Know-How as ISD reasonably
requests to conduct its activities contemplated by the Agreement, and (b) shall
make available to ISD such technical personnel of SRI as reasonably necessary to
provide the foregoing technical assistance. Except for services reasonably
required for the technology transfer as set forth in Section 3.1 above, ISD
shall reimburse SRI for its standard research or consulting costs for any such
technical

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assistance, determined in accordance with SRI's normal business practice applied
on a consistent basis, together with all reasonable out-of-pocket travel and
other expenses incurred by SRI in providing such technical assistance. At the
request of ISD, SRI shall provide ISD with estimates of the anticipated costs of
any requested technical assistance prior to undertaking such technical
assistance.

3.7 ACCESS. During the term of the Agreement prior to September 12, 1997,
subject to the limitations of this Section 3.7, ISD shall have the right to
visit SRI's facilities to inspect and use SRI Telepresence Surgical Technology
demonstration or prototype equipment. ISD's access to SRI facilities and use of
equipment shall be subject to the following conditions:

          (a)  ISD shall provide reasonable prior notice;

          (b) ISD's use of SRI facilities and equipment shall be during normal
          business hours at times mutually convenient to SRI and ISD, which do
          not conflict with SRI's normal business activities;

          (c)  ISD shall repair or replace any SRI equipment damaged by ISD; and

          (d) ISD's access to SRI facilities shall be subject to the execution
          by ISD of an agreement with standard SRI terms and conditions
          regarding access to SRI facilities by contractors and other
          non-employee Third Parties.

3.8 RIGHT OF FIRST NEGOTIATION. SRI shall not sell, assign, license or otherwise
transfer the SRI Future Technology Rights for use in the Field to any Third
Party unless SRI first (a) gives to ISD written notice of SRI's desire to do so,
(b) provides ISD with information available to SRI regarding the use of the SRI
Future Technology Rights in the Field, sufficient to permit ISD to evaluate and
understand such SRI Future Technology Rights, subject to the confidentiality
provisions of Article 6 below, solely to evaluate its interest in negotiating a
license under such rights, and (c) offers to ISD the opportunity to negotiate
with SRI to obtain a license under the SRI Future Technology Rights for use in
the Field. IF ISD fails to give written notice to SRI of its desire to negotiate
a license under such rights within 60 days after receipt of the written notice
from SRI under clause (a) above, or if the parties are unable after good faith
negotiations to reach a mutually acceptable agreement, thereafter SRI shall have
the right in its sole discretion to sell, assign, license or otherwise transfer
the SRI Future Technology Rights for use in the Field to any one or more Third
Parties.

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                                    ARTICLE 4

                              CONSIDERATION TO SRI

4.1 ISSUANCE OF ISD SHARES. In consideration for the license granted to ISD
hereunder, concurrent with the execution of the Agreement, ISD shall issue to
SRI or SRI's designees five hundred eighty five thousand (585,000) shares of ISD
Common Stock on the terms and subject to the conditions of the Stock Purchase
Agreement.

4.2 REIMBURSEMENT OF CERTAIN SRI COSTS. Within five (5) business days following
the execution of the Agreement, ISD shall reimburse SRI for (a) all reasonable,
direct, out-of-pocket costs (not to exceed $116,000 in the aggregate) incurred
by SRI on or before the date of the Option Agreement in connection with the
preparation, filing, prosecution and maintenance of the patent applications and
patents included in the SRI Patent Rights; (b) all reasonable, direct,
out-of-pocket costs incurred by SRI after the date of the Option Agreement and
on or before the date of the Agreement in connection with the preparation,
filing, prosecution and maintenance of the patent applications and patents
included in the SRI Patent Rights, which are approved by ISD or Dr. Freund prior
to being incurred; and (c) all reasonable, outside counsel attorneys' fees and
costs (not to exceed $10,000 in the aggregate) incurred by SRI in connection
with the negotiation, drafting and execution of the Option Agreement, the
Agreement and the Stock Purchase Agreement; PROVIDED, HOWEVER, that no fees or
costs resulting from work performed by SRI in-house counsel shall be reimbursed
under this Section 4.2.

4.3 PAYMENT METHOD. All payments by ISD to SRI under the Agreement shall be paid
in United States dollars by bank wire transfer in immediately available funds to
such account as SRI shall designate before such payment is due.

                                    ARTICLE 5

                              DILIGENCE OBLIGATIONS

5.1 RESEARCH AND DEVELOPMENT EFFORTS. ISD shall use its commercially reasonable
and diligent efforts (a) to conduct such research, development and preclinical
and human clinical trials as necessary or desirable (in ISD's reasonable
discretion) to obtain regulatory approvals to manufacture and market Products
for use in the Field, and (b) to commence marketing and market each such Product
for use in the Field in such countries as ISD determines are commercially
desirable. ISD's obligation to commence marketing a Product in a country shall
not commence until all regulatory approvals necessary to market such Product in
such country have been obtained by ISD. ISD, at its sole expense and in its sole
discretion, shall fund the costs of all research, development, preclinical and
clinical trials, regulatory approval

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activities and commercialization of the Products, and SRI shall have no
obligation to fund any such activities.

5.2 REPORTS. Within ninety (90) days following the end of each calendar year
during the term of the Agreement, ISD shall prepare and deliver to SRI a summary
written report which shall summarize the status of the research, development and
testing of Products, and the status of obtaining the necessary approvals to
market Products.

5.3 FAILURE TO MEET THE MILESTONE. If ISD fails to achieve the Milestone on or
before September 12, 2002, then at SRI's election in its sole discretion, (a)
the license granted by SRI to ISD shall become non-exclusive, and (b) the right
to file and prosecute patent applications, to maintain and enforce any resulting
patents, included within the SRI Patent Rights under Article 7 below shall
revert to SRI, without any further action by ISD.

                                    ARTICLE 6

                                 CONFIDENTIALITY

6.1 CONFIDENTIAL INFORMATION. During the term of the Agreement, and for a period
of five (5) years following the expiration or earlier termination hereof, each
party shall exercise reasonable care to maintain in confidence all information
of the other party (including samples) disclosed by the other party and
identified as, or acknowledged to be, confidential (the "Confidential
Information"), and shall not use, disclose or grant the use of the Confidential
Information except on a need-to-know basis to those directors, officers,
employees, agents, permitted sublicensees and permitted assignees, to the extent
such disclosure is reasonably necessary in connection with such party's
activities as expressly authorized by the Agreement. To the extent that
disclosure is authorized by the Agreement, prior to disclosure, each party
hereto shall obtain the written agreement of any such Person, who is not
otherwise bound by fiduciary obligations to such party, to hold in confidence
and not make use of the Confidential Information for any purpose other than
those permitted by the Agreement. Each party shall notify the other promptly
upon discovery of any unauthorized use or disclosure of the other party's
Confidential Information.

6.2 PERMITTED DISCLOSURES. The nonuse and nondisclosure obligations contained in
this article shall not apply to the extent that (a) any receiving party (the
"Recipient") is required (i) to disclose information by law, order or regulation
of a governmental agency or a court of competent jurisdiction, or (ii) to
disclose information to any governmental agency for purposes of obtaining
approval to test or market a product, provided in either case that the Recipient
shall provide written notice thereof to the other party and sufficient
opportunity to object, time

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permitting, to any such disclosure or to request confidential treatment thereof;
or (b) the Recipient can demonstrate that (i) the information was public
knowledge at the time of such disclosure by the Recipient, or thereafter became
public knowledge, other than as a result of acts attributable to the Recipient
in violation hereof; (ii) the information was rightfully known by the Recipient
(as shown by its written records) prior to the date of disclosure to the
Recipient by the other party hereunder; (iii) the information was disclosed to
the Recipient on an unrestricted basis from a Third Party not under a duty of
confidentiality to the other party; or (iv) the information was independently
developed by employees or agents of the Recipient without access to the
Confidential Information of the other party.

6.3 PUBLICATION. ISD acknowledges SRI's interest in publishing the results of
its research to obtain recognition within the scientific community and to
advance the state of scientific knowledge. SRI and ISD each recognize their
mutual interest in obtaining valid patent protection and protecting their
respective business interests. Consequently, if SRI, its employees or
consultants desire to make a publication (including any oral disclosure made
without obligation of confidentiality) relating to any discovery or invention
regarding the technology which is the subject of the Agreement (except (a) such
technology as described in Section 3.8 above which is not licensed to ISD, and
(b) such technology as is conceived or invented by ISD), SRI shall give ISD a
copy of the proposed written publication at least 30 days prior to submission
for publication, or an outline of such oral disclosure at least 30 days prior to
presentation. ISD shall have the right to request a reasonable delay in
publication or presentation, not to exceed 90 days, in order to protect
patentable information. If ISD requests such a delay, SRI shall delay submission
or presentation of the publication for a period of 90 days to enable ISD to file
the applicable patent applications protecting each parties' rights in such
discoveries or inventions to be filed in accordance with Article 7 below. Upon
the expiration of 30 days in the case of proposed written publications, or 30
days in the case of proposed oral presentations, from delivery to ISD, SRI shall
be free to proceed with the written publication or presentation, respectively,
unless ISD has requested the delay described above.

6.4 TERMS OF THE AGREEMENT. Except as otherwise provided in this article or as
otherwise required by applicable law, regulation or order of a governmental
agency or court of competent jurisdiction, neither party shall disclose any
terms or conditions of the Agreement to any Third Party without the prior
consent of the other party; PROVIDED, HOWEVER, that ISD may, at its election,
disclose terms or conditions of the Agreement to an investor in ISD or a bona
fide potential investor in ISD, without the prior consent of SRI.

6.5 NO USE OF NAME. Except as otherwise required by applicable law, regulation
or order of a governmental agency or

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court of competent jurisdiction, neither party shall use the name of the other
party or the other party's directors, officers or employees in any advertising,
news release or other publication, without the prior express written consent of
the other party; PROVIDED, HOWEVER, that ISD may, at its election, identify SRI
as the licensor of the Telepresence Surgical Technology (whether under that name
or under some other designation) and/or of certain technology on which the
Products are in part based.

6.6 DESCRIPTION OF TELEPRESENCE SURGICAL TECHNOLOGY. Notwithstanding the
provisions of Section 6.1, ISD may, at its election and in its sold discretion,
disclose a description of the Telepresence Surgical Technology (whether under
that name or some other designation) in financing documents, in marketing
literature and in such other publications as ISD reasonably deems necessary to
meet ISD's diligence obligations under Article 5 above; PROVIDED, HOWEVER, that
ISD may not disclose SRI Know-How without the prior express written consent of
SRI.

                                    ARTICLE 7

                             INVENTIONS AND PATENTS

7.1 OWNERSHIP OF INVENTIONS. The entire right and title in all inventions,
discoveries, processes, methods, compositions, formulae, techniques, information
and data regarding Telepresence Surgical Technology, whether or not patentable
(collectively, the "Inventions"), and any patent applications or patents based
thereon, conceived in the performance of the parties' activities during the term
of the Agreement (a) by employees or other Persons acting solely on behalf of
SRI, shall be owned solely by SRI ("SRI Inventions"), (b) by employees or other
Persons acting solely on behalf of ISD shall be owned solely by ISD ("ISD
Inventions"), and (c) jointly by employees or other Persons acting on behalf of
SRI and by employees or other Persons acting on behalf of ISD, shall be owned
jointly by SRI and ISD (the "Joint Inventions"). SRI and ISD each hereby
represents that all employees and other Persons acting on its behalf in
performing its obligations under the Agreement shall be obligated to assign to
it, or as it shall direct, all Inventions conceived by such employees or other
Persons.

7.2  SRI PATENT RIGHTS.

7.2.1 FILING, PROSECUTION, AND MAINTENANCE. ISD shall file and prosecute patent
applications included in the SRI Patent Rights in the United States, Japan, the
European Patent Office (designating the United Kingdom, France, Germany and
Italy) and such other countries as ISD may select in its sole discretion, and
shall maintain any resulting patents. At ISD's election in its sole discretion,
such foreign filing may be initiated through the Patent Cooperation Treaty
designating such countries. In so doing, ISD shall endeavor to obtain the
strongest commercially

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desirable patent protection (under the circumstances) regarding the Telepresence
Surgical Technology with respect to the Products and shall consider in good
faith the interests of SRI. ISD (a) shall supply SRI with a copy of each such
patent application as filed, together with notice of its filing date and serial
number; (b) shall consult with SRI regarding the prosecution and maintenance of
the SRI Patent Rights, and shall implement reasonable requests of SRI with
respect thereto; (c) shall provide SRI with copies of all filings, submissions,
correspondence, office actions and responses thereto with the applicable patent
authorities regarding the SRI Patent Rights; and (d) shall inform SRI promptly
of the allowance and issuance of each patent included in the SRI Patent Rights,
together with the date and patent number thereof, and shall provide SRI with a
copy of such patent as issued. SRI shall cooperate with ISD, execute all lawful
papers and instruments and make all rightful oaths and declarations and and
instruments and make all rightful oaths and declarations as may be necessary in
the preparation, prosecution and maintenance of all such patents and patent
applications, ISD shall reimburse SRI for its standard costs for any such
assistance, determined in accordance with SRI's normal business practice applied
on a consistent basis, together with all reasonable out-of-pocket travel and
other expenses incurred by SRI in providing such assistance; PROVIDED, HOWEVER,
that ISD shall not be obligated to reimburse SRI for any consultation with SRI
which ISD is obligated to undertake pursuant to this Article 7. At the request
of ISD, SRI shall provide ISD with estimates of the anticipated costs of any
requested assistance prior to undertaking such assistance.

7.2.2 FUTURE PATENT COSTS. Except as otherwise set forth in this section, ISD
shall pay all costs incurred after the date of the Agreement in connection with
the preparation, filing, prosecution and maintenance of the patent applications
and patents included in the SRI Patent Rights. If, during the term of the
Agreement, SRI grants a license to any one or more Third Parties under the SRI
Patent Rights for use outside the Field, SRI shall pay or cause each such Third
party to reimburse ISD for such Third Party's PRO RATA share of the actual
out-of-pocket costs paid by ISD (or reimbursed by ISD to SRI) in connection with
the preparation, filing, prosecution and maintenance of the patent applications
and patents included in the SRI Patent Rights; PROVIDED, HOWEVER, that SRI shall
have no obligation to reimburse ISD for any such Third Party's share of such
out-of-pocket costs paid through the effective date of the license agreement
with such Third Party in excess of the total consideration received by SRI from
such Third Party for the license agreement with such Third Party. Patent costs
incurred after the date(s) of such Third Party license agreement(s) shall be
shared on a PRO RATA basis by ISD and each such Third Party; PROVIDED, HOWEVER,
that ISD may, at is election, seek reimbursement directly from each such Third
Party, and SRI shall cause each such Third Party to make reimbursement directly
to ISD, for such Third Party's PRO RATA share of those patent costs incurred
after the date of such Third Party license agreement. Notwithstanding anything
to the contrary in this Section 7.2, if ISD desires to abandon or materially

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narrow any claim of the SRI Patent Rights which has application outside the
Field, then SRI shall have the right, in its sole discretion and at its sole
expense, to assume control of the prosecution, maintenance and enforcement of
such claim, provided that the respective rights of each party under the
Agreement with respect to such claim shall not otherwise be affected solely by
virtue of ISD abandoning and SRI assuming control thereof.

7.2.3 ENFORCEMENT. Each party promptly shall notify the other party of any
infringement known to such party of the SRI Patent Rights and shall provide the
other party with the available evidence, if any, of such infringement. ISD, at
its sole expense, shall have the right (but not the obligation) to determine the
appropriate course of action to enforce the SRI Patent Rights in the Field or
otherwise abate the infringement thereof in the Field, to take (or refrain from
taking) appropriate action to enforce the SRI Patent Rights in the Field, to
control any litigation or other enforcement action in the Field and to enter
into, or permit, the settlement of any such litigation or other enforcement
action with respect to the SRI Patent Rights in the Field, and shall consider,
in good faith, the interests of SRI in so doing. If, within one hundred twenty
(120) days of receipt of notice from SRI, ISD does not abate the infringement in
the Field or file suit to enforce the SRI Patent Rights against at least one
infringing party in the Field, SRI shall have the right to take whatever action
it deems appropriate to enforce the SRI Patent Rights in the Field. The party
controlling any such enforcement action shall not settle the action or otherwise
consent to an adverse judgment in such action that adversely affects the rights
or interests of the non-controlling party or imposes additional obligations on
the non-controlling party, without the prior written consent of the
non-controlling party. All monies recovered upon the final judgment or
settlement of any such suit by ISD to enforce the SRI Patent Rights in the Field
shall be retained by ISD. All monies recovered upon the final judgment or
settlement of any such suit by SRI to enforce the SRI Patent Rights in the Field
shall be retained by SRI. Notwithstanding the foregoing, SRI and ISD shall fully
cooperate with each other in the planning and execution of any action to enforce
the SRI Patent Rights in the Field.

7.3  ISD PATENT RIGHTS.

7.3.1 FILING, PROSECUTION, AND MAINTENANCE. ISD, at its sole expense, shall have
the right to file and prosecute patent applications included in the ISD Patent
Rights in the United States, Japan, the European Patent Office (designating the
United Kingdom, France, Germany and Italy) and such other countries as ISD may
select in its sole discretion, and to maintain any resulting patents. At ISD's
election in its sole discretion, such foreign filing may be initiated through
the Patent Cooperation Treaty designating such countries. ISD shall provide SRI
with copies of each such patent application as filed,

                                       13
<PAGE>   14

together with notice of its filing date and serial number, and copies of all
office actions and responses thereto.

7.3.2 ENFORCEMENT. ISD, at its sole expense, shall have the right (but not the
obligation) to determine the appropriate course of action to enforce the ISD
Patent Rights or otherwise abate the infringement thereof, to take (or refrain
from taking) appropriate action to enforce the ISD Patent Rights, to control any
litigation or other enforcement action and to enter into, or permit, the
settlement of any such litigation or other enforcement action with respect to
the ISD Patent Rights, and shall consider, in good faith, the interests of SRI
in so doing. All monies recovered upon the final judgment or settlement of any
such suit to enforce the ISD Patent Rights shall be retained by ISD.

7.4 PATENT MARKINGS. With respect to each Product which would infringe a valid
claim of an issued patent of the SRI Patent Rights but for the license granted
to ISD hereunder, ISD, its Affiliates and sublicensees shall mark each such
Product sold or otherwise disposed of by any of them with the appropriate
marking, giving notice to the public that such Product is patented, by fixing
thereon either the word "patent" or the abbreviation "pat", together the number
of such issued patent of the SRI Patent Rights.

                                    ARTICLE 8

                              TERM AND TERMINATION

8.1 EXPIRATION. Subject to the provisions of this article, the Agreement shall
expire on the later of (a) the expiration of the last to expire of the SRI
Patent Rights, or (b) the date seventeen (17) years after the date of the
Agreement.

8.2 TERMINATION BY SRI. SRI may terminate the Agreement, in its sole discretion,
upon thirty (30) days prior written notice to ISD, (a) if ISD fails to timely
reimburse SRI for the costs described in Section 4.2 above, and if ISD has not
cured such breach within thirty (30) days after written notice thereof by SRI;
or (b) except as otherwise provided in the article below regarding force
majeure, upon or after the material breach of its obligations under the Stock
Purchase Agreement or under Section 6.1, 6.2, 6.3, 6.4, 7.2, 7.3, 9.1, 9.2 or
9.3 of the Agreement, if ISD has not cured such breach within ninety (90) days
after written notice thereof by SRI.

8.3 TERMINATION BY ISD. Except as otherwise provided in the article below
regarding force majeure, if SRI materially breaches its obligations under
Section 3.1, 3.6 or 3.7 of the Agreement, and SRI has not cured such breach
within sixty (60) days after written notice thereof by ISD, then (a) ISD may
terminate the Agreement upon thirty (30) days prior written notice to SRI, and

                                       14
<PAGE>   15

for the periods(s) specified in Section 2(a) of the Stock Purchase Agreement,
repurchase that portion of the shares of ISD Common Stock issued to SRI
specified in Section 2(a) of the Stock Purchase Agreement at the price and on
the terms and conditions set forth in the Stock Purchase Agreement, and (b) SRI
shall grant to ISD an exclusive, worldwide, royalty-free license with the right
to sublicense, under the SRI Patent Rights and SRI Know-How, to make, have made,
use, market, distribute, import, offer for sale and sell Products for use in the
Field.

8.4 CONVERSION TO NONEXCLUSIVE BY SRI. SRI may convert the license granted by
SRI to ISD to a nonexclusive license, in its sole discretion, upon thirty (30)
days prior written notice to ISD, (a) upon or after the material breach of ISD's
obligations under Section 5.1 of the Agreement, if ISD has not cured such breach
within sixty (60) days after written notice thereof by SRI; or (b) if ISD
voluntarily commences any action or seeks any relief regarding its liquidation,
reorganization, dissolution or similar act or under any bankruptcy, insolvency
or similar law; or (c) if a proceeding is commenced or an order, judgment or
decree is entered seeking the liquidation, reorganization, dissolution or
similar act or any other relief under any bankruptcy, insolvency or similar law
against ISD, without its consent, which continues undismissed or unstayed for a
period of sixty (60) days; PROVIDED, HOWEVER, that SRI shall not have the right
to terminate the Agreement solely by reason of the occurrence of any one or more
of the events described in this Section 8.4.

8.5 FAILURE TO ISSUE ISD SHARES. In the event that ISD fails to duly authorize,
validly issue and deliver to SRI or its designees the shares referenced in
Section 4.2 above concurrent with the execution of the Agreement, the Agreement
automatically shall terminate without further action by SRI.

8.6 EFFECT OF EXPIRATION OR TERMINATION. Expiration or termination of the
Agreement shall not relieve the parties of any obligation accruing prior to such
expiration or termination, and the provisions of Articles 6 and 9 shall survive
the expiration or termination of the Agreement. Upon expiration of the Agreement
under Section 8.1 above, ISD shall have an exclusive, worldwide, royalty-free
license under the SRI Know-How in the Field, and SRI shall have a non-exclusive,
worldwide, royalty-free license under the ISD Patent Rights and ISD Know-How for
use outside the Field.

8.7 ISD DATA. Notwithstanding anything to the contrary in the Agreement, (a) if
the Agreement is terminated pursuant to the provisions of Section 8.2 above,
upon SRI's request not more than ninety (90) days after such termination, within
thirty (30) days after such request, ISD shall provide provide SRI with copies
of all regulatory submissions and approvals, if any, regarding actual or
potential Products, (b) SRI shall have the right of reference to all data and
information in such regulatory submissions, and (c) ISD shall execute all such
documents and instruments reasonably necessary to enable SRI to reference all
such data, information

                                       15
<PAGE>   16

and submissions. ISD makes no representations and warranties whatsoever, express
or implied, regarding such data, information and submissions, and any such use
and reference of such data, information and submissions shall be at SRI's own
risk.

                                    ARTICLE 9

                          INDEMNIFICATION AND INSURANCE

9.1 INDEMNIFICATION. ISD shall indemnify, defend and hold harmless SRI, its
directors, officers, employees and agents from all losses, liabilities, damages
and expenses (including reasonable attorneys' fees and costs) that they may
suffer as a result of any claims, demands, actions or other proceedings made or
instituted by any Third Party or Affiliate against any of them and arising out
of or relating to (a) any use by ISD, its Affiliate or sublicensee of any SRI
Patent Rights or SRI Know-How, including any claim of patent infringement, or
(b) any personal injury to or death of any person or damage to any property in
connection with any act or omission (without regard to culpable conduct) by or
on behalf of ISD, its Affiliate or sublicensee in the performance of its
activities contemplated by the Agreement (including without limitation the
manufacture, use and sale of Products), other than those certain losses,
liabilities, damages and expenses arising solely out of the gross negligence or
willful misconduct of SRI. Notwithstanding the foregoing, ISD shall have no
obligation to indemnify, defend or hold harmless SRI from any losses,
liabilities, damages and expenses (including reasonable attorneys' fees and
costs) that it may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any current or former employee, consultant,
licensee or optionee of SRI.

9.2 INDEMNIFICATION PROCEDURE. SRI promptly shall notify ISD of any loss,
liability, damage or expense, or any claim, demand, action or other proceeding
with respect to which SRI intends to claim such indemnification. ISD's indemnity
obligations under this article shall not apply to amounts paid in any settlement
if effected without the consent of ISD, which consent shall not be unreasonably
withheld or delayed. ISD shall not settle or consent to an adverse judgment in
any such claim, demand, action or other proceeding that adversely affects the
rights or interests of SRI, its employees or agents or imposes additional
obligations on SRI, its employees or agents, without the prior express written
consent of SRI. SRI, its employees and agents, shall cooperate fully with ISD
and its legal representatives in the investigation of any action, claim or
liability covered by this indemnification.

9.3 INSURANCE. Concurrent with the commencement of the first human clinical
trial of any Product, ISD shall procure and maintain such liability insurance,
including contractual and product liability insurance, against claims for bodily
injury,

                                       16
<PAGE>   17

including death, or property damage arising from its activities contemplated by
the Agreement, in amounts not less than $2,000,000 per occurrence and $5,000,000
in the aggregate. ISD shall maintain such insurance for so long thereafter as it
continues to conduct its activities contemplated by the Agreement; PROVIDED,
HOWEVER, that in the event such insurance becomes unavailable to ISD or in the
event of extreme market conditions or other unforeseen events, the parties agree
to discuss such changed circumstances and appropriate mechanisms to address
them. Upon request, ISD shall provide SRI with certificates of insurance
evidencing ISD's compliance with the insurance requirements of this section. SRI
assumes no liability and disclaims any responsibility for the product
specifications, clinical trials, manufacture, use, marketing, sale or other
disposition, application, or delivery of any and all Products. No warranties
made by ISD in connection with Product shall expressly or implicitly obligate
SRI in any manner whatsoever.

9.4 LIMITED LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR
RELATED TO THE AGREEMENT OR WITH RESPECT TO ANY CLAIM, DEMAND, ACTION OR OTHER
PROCEEDING RELATING TO THE AGREEMENT HOWEVER CAUSED, AND ON ANY THEORY OF
LIABILITY (INCLUDING NEGLIGENCE) AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL SRI'S LIABILITY OWING TO
ISD WITH RESPECT TO ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING RELATING TO
THE AGREEMENT EXCEED THE VALUE OF THE CONSIDERATION ACTUALLY RECEIVED BY SRI
UNDER THE AGREEMENT OR THE STOCK PURCHASE AGREEMENT.

                                   ARTICLE 10

                                  FORCE MAJEURE

Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached the Agreement for failure or delay in
fulfilling or performing any term of the Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to fires,
earthquakes, floods, embargoes, wars, acts of war (whether war is declared or
not), insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or other party.

                                   ARTICLE 11

                                   ARBITRATION

Any controversy or claim arising out of or relating to the Agreement, or the
breach thereof, or any failure to agree where

                                       17
<PAGE>   18

agreement of the parties is necessary pursuant hereto, including the
determination of the scope of this agreement to arbitrate, shall be resolved by
the following procedures:

11.1 ATTEMPT TO RESOLVE DISPUTE. The parties shall use all reasonable efforts to
amicably resolve the dispute through direct discussions. The senior management
of each party commits itself to respond promptly to any such dispute. Either
party may send written notice to the other party identifying the matter in
dispute and invoking the procedures of this article. Within ten (10) days after
such written notice is received, unless a delay is agreed to by both parties or
the parties agree to confer by telephone, one or more principals of each party
shall meet in Menlo Park, California to attempt to amicably resolve the dispute
by written agreement. If said dispute cannot be settled through direct
discussions within twenty (20) days after such written notice is received, the
parties agree to first endeavor to settle the dispute in an amicable manner by
mediation in San Francisco and administered by the American Arbitration
Association ("AAA"), 417 Montgomery Street, San Francisco, California
94104-1113, pursuant to the Commercial Mediation Rules of AAA at the time of
submission prior to resorting to binding arbitration.

11.2 APPLICATION TO BINDING ARBITRATION. If after sixty (60) days from the first
written notice of dispute, the parties fail to resolve the dispute by written
agreement or mediation, either party may submit the dispute to final and binding
arbitration administered by the AAA, pursuant to the Commercial Arbitration
Rules of the AAA at the time of submission. California Arbitration Law shall
govern. The arbitration shall be held in Menlo Park, California before a single
neutral, independent, and impartial arbitrator (the "Arbitrator"). The language
of the arbitration shall be English, provided however that an interpreter may be
provided for any witness that desires an interpreter; the costs of such
interpretation shall be borne by the party requesting the interpreter, subject
to being awarded by the Arbitrator as a cost of arbitration.

11.3 BINDING ARBITRATION PROCEDURE. Unless the parties have agreed upon the
selection of the Arbitrator before then, the AAA shall appoint the Arbitrator as
soon as practicable, but in any event within thirty (30) days after the
submission to AAA for binding arbitration. The arbitration hearings shall
commence within forty-five (45) days after the selection of the Arbitrator.
Unless the Arbitrator otherwise directs, each party shall be limited to two
pre-hearing depositions each lasting no longer than 6 hours. The parties shall
exchange documents to be used at the hearing no later than ten (10) days prior
to the hearing date. Unless the Arbitrator otherwise directs, each party shall
have no longer than ten (10) hours to present its position, the entire
proceedings before the Arbitrator shall be on no more than three (3) hearing
days within a two week period. At the close of evidence, each side shall submit
a proposed award to the Arbitrator, one of which shall be selected by the
Arbitrator. The

                                       18
<PAGE>   19

award shall be made no more than thirty (30) days following the close of the
proceeding. Under no circumstance should any time limit on the arbitration
hearings be applied so as to render any award subject to vacation under
California Code of Civil Procedure Section 1286.2. Accordingly, the Arbitrator
shall have authority to alter any time period believed necessary to avoid
vacatur under Section 1286.2. The Arbitrator's award shall be a final and
binding determination of the dispute and shall be fully enforceable as an
arbitration award by the California courts in accordance with the California
Arbitration Law. The prevailing party shall be entitled to recover its
reasonable attorneys' fees and expenses, including arbitration administration
fees, incurred in connection with such proceeding. Except as otherwise required
by applicable law, regulation or order of a governmental agency or court of
competent jurisdiction, neither party nor the Arbitrator may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both parties.

11.4 FEDERAL CLAIM. Any controversy or claim arising out of or relating to the
provisions of Article 7 of the Agreement for which the United States District
Court or other federal court would have subject matter jurisdiction in the
absence of the arbitration provisions set forth in this Article 11 shall be
exempt from such arbitration provisions and the United States District Court for
the Northern District of California shall have exclusive jurisdiction over such
controversy or claim.

                                   ARTICLE 12

                                  MISCELLANEOUS

12.1 NOTICES. Any consent, notice or report required or permitted to be given or
made under the Agreement by one party to the other party shall be in writing,
delivered personally or by facsimile (and promptly confirmed by personal
delivery, U.S. first class mail, courier or nationally-recognized delivery
service), U.S. first class mail postage prepaid, courier or
nationally-recognized delivery service, and addressed to the other party at its
address indicated below, or to such other address as the addressee shall have
last furnished in writing to the addressor. Except as otherwise provided in the
Agreement, such consent, notice or report shall be effective upon receipt by the
addressee.

      If to SRI, for technical matters: SRI International 333 Ravenswood Avenue
      Menlo Park, California 94025-3493 Attention: Ajit Shah If to SRI, for all
      other matters: SRI International 333 Ravenswood Avenue Menlo Park,
      California 94025-3493 Attention: Technology Licensing

      If to ISD, for technical matters: Intuitive Surgical Devices, Inc. c/o
      Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El
      Camino Real Palo Alto, California 94306-2155 Attention: John G. Freund,
      M.D.

      If to ISD, for all other matters: Intuitive Surgical Devices, Inc. c/o
      Cooley Godward Castro Huddleson & Tatum Five Palo Alto Square 3000 El
      Camino Real Palo Alto, California 94306-2155 Attention: John G. Freund,
      M.D.

12.2 SOLICITATION OF SRI EMPLOYEES. ISD acknowledges that, during the term of
the Agreement, ISD will have access to SRI's business and employees, including
certain valuable proprietary information of SRI. ISD recognizes that misuse of
such proprietary information, including interference with the employment
relationship between SRI and its employees, would cause substantial loss and
irreparable harm to SRI. Therefore, as part of the consideration for the
Agreement, ISD shall not, prior to the expiration of twelve (12) months after
the effective date of the Agreement, either directly or indirectly, by any means
or device whatsoever, solicit any more than two of SRI's scientific or
laboratory personnel involved with or working on any project relating to
Telepresence Surgical Technology or otherwise induce or attempt to induce such
personnel to terminate their employment with SRI.

12.3 GOVERNING LAW. The Agreement, including the decision to arbitrate and any
decision by an arbitrator pursuant to Article 11, shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the conflicts of law principles thereof (except to the extent United States
law preempts California law), and shall not be governed by the United Nations
Convention on Contracts for the International Sale of Goods.

12.4 U.S. EXPORT LAWS AND REGULATIONS. Each party hereby acknowledges that the
rights and obligations of the Agreement are subject to the laws and regulations
of the United States relating to the export of products and technical
information. Without

                                       19
<PAGE>   20

limitation, each party shall comply with all such laws and regulations.

12.5 NO OTHER RIGHTS. The Agreement shall not be construed to grant any license
or other rights to ISD in any patent rights, know-how or other technology of
SRI, except as expressly provided in the Agreement.

12.6 ASSIGNMENT. ISD shall not assign its rights or obligations under the
Agreement, in whole or in part, by operation of law or otherwise, wihtout the
prior written consent of SRI, which consent shall not be unreasonably withheld;
PROVIDED, HOWEVER, that ISD may, without such consent, assign the Agreement and
its rights and obligations hereunder in connection with the transfer or sale of
all or substantially all of its business or divisions or subdivisions related to
Telepresence Surgical Technology, or in the event of its merger, consolidation,
change in control, spin-off, recapitalization or similar transaction. Any
permitted assignee shall assume all obligations of its assignor under the
Agreement. Any purported assignment in violation of this section shall be null
and void.

12.7 WAIVERS AND AMENDMENTS. No change, modification, extension, termination or
waiver of the Agreement, or any of the provisions herein contained, shall be
valid unless made in writing and signed by duly authorized representatives of
the parties hereto.

12.8 ENTIRE AGREEMENT. The Agreement embodies the entire understanding between
the parties and supersedes any prior understanding and agreements between and
among them respecting the subject matter hereof. There are no representations,
agreements, arrangements or understandings, oral or written, between the parties
hereto relating to the subject matter of the Agreement which are not fully
expressed herein. The Agreement supersedes the Option Agreement, and upon
execution of the Agreement by the parties, the Option Agreement is hereby
terminated.

12.9 SEVERABILITY. Any of the provisions of the Agreement which are determined
to bei nvalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability in such jurisdiction, without
rendering invalid or unenforceable the remaining provisions hereof and without
affecting the validity or enforceability of any of the terms of the Agreement in
any other jurisdiction.

12.10 WAIVER. The waiver by either party hereto of any right hereunder or the
failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.

12.11 COUNTERPARTS. The Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but

                                       20
<PAGE>   21

all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first
set forth above.

SRI INTERNATIONAL                     INTUITIVE SURGICAL DEVICES, INC.

By:     /s/ Harold E. Kruth           By:     /s/ John G. Freund
        -------------------                   ------------------
Title:  SR VP & G C                    Title:
        -----------                    ------

Agreed to, for purposes of the third sentence of Section 12.8 only, as of this
December 19, 1995

/s/ John G. Freund

John G. Freund, M.D.
<PAGE>   22

                                   EXHIBIT "A"
                     SRI International Invention Disclosures

#3026
Teleoperator System and Method with Telepresence Green (corresponds to #48)

P #3079
Steerable and Stereoscopic Laparoscope Green

P #3278
Remote Center Positioner
Jenses (corresponds to #29)

P #3308
Articulated Surgical Grasper
Hill

P #3311
Telepresence Surgery Demo System
Hill, Green, Jensen, Gorfa, Shah

P #3318
Sterilizable Inner Manipulator
Hill

P #3319
Method for Telemanipulation with Telepresence Green (corresponds to #33)

P #3336
Articulated Manipulator
Green, Hill, Jensen

P #3421
Method and Apparatus for Axial and Rotational Positioning Shaft with Application
to Laparoscopic Medical Instruments Green

P #3435
Combined Remote-Center Positioner and Abdominal Wall Lift Device Green

P #3441
Manipulator with Twist-Lock Tool Insertion Jensen, Hill (corresponds to #42)

P #3457
Quick-Change Surgical Instrument
Hill (corresponds to #44)

<PAGE>   23

                                   EXHIBIT "B"
                         SRI International Patent Rights

#48
Basic teleoperator system for providing operator tactile feedback and control
and a real or virtual image of the workspace (filed January 21, 1992). (SN:
07/8231932) (also filed in Europe, Japan and Canada)

#48-1
Divisional of -48, directed to tactile sensors and broader claim language re the
basic telepresence concept (filed August 21, 1995). (SN: 08/S17,052)

#29
Remote center positioner (RCP) - four bar linkage that constrains movement of an
endoscopic instrument about a remote point (i.e., a percutaneous penetration in
the patient) (filed May 14, 1993). (SN: 08/062,404) (also filed in Europe and
Japan)

#29-4
Divisional of RCP application-directed to method claims (filed July 20, 1995).
(SN:08/504,301)

#29-5
Divisional of RCP application-directed to flexible drive element (filed July 20,
1995). (SN: 08/504,620)

#29-6
Divisional of RCP application-directed to channel shaped linkage (filed July 20,
1995). (SN: 08/504,619)

#33
System and method for transforming view able real-time image into perspective
image simulating the view of an operator at the remote workspace (filed May 5,
1994). (SN: 08/239,086)

#33-1
Directed to the dynamic calibration system (filed April 20, 1995). (SN:
06/239,086)

#42, -44
Surgical instrument manipulator - receives signals from servomechanism and
manipulates instrument, provides at least four degrees of freedom and quick
attachment and release of different surgical instruments (filed June 7, 1995).
(42: 08/485,597, 44: 08/487,020)<PAGE>   1
                                                                    EXHIBIT 10.9

AGREEMENT ("Agreement") with an Effective Date of December 22, 1997, between
INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation (hereinafter
called IBM), and INTUITIVE SURGICAL, INC. a Delaware corporation (hereinafter
called INTUITIVE).

        IBM has the right to license others under certain patents and patent
applications relating to systems and methods for the augmentation of surgery.
INTUITIVE desires to acquire an exclusive license under those patents and patent
applications.

        In consideration of the premises and mutual covenants herein contained,
IBM and INTUITIVE agree as follows:

SECTION 1.     DEFINITIONS

1.1 "ASSOCIATED MATERIALS" shall mean copies of all inventor notebooks (or the
relevant portions thereof), files, data, information, results of testing,
drawings and schematics and all models, robots and prototypes which are owned by
IBM and are in IBM's possession on the Effective Date and which relate to the
LARS Patents.

1.2 "BIOPSY" shall mean the removal and microscopic examination of tissue taken
from a living body and performed to establish an exact diagnosis.

1.3 "CORPORATE PARTNERS" shall mean those parties who are essential to the
success of gaining regulatory approval for the sale of INTUITIVE Licensed
Products and Services in a given country and/or in making significant sales of
INTUITIVE Licensed Products and Services in a given country.

1.4 "ENDOSCOPE" shall mean any optical imaging device adapted to be inserted
through a small incision, puncture wound, or orifice into a natural or
artificial lumen or cavity of a human body.

1.5 "FIELD" shall mean Surgery performed in the practice of animal and human
medicine, with or without an Endoscope, provided, however, the medical fields of
neurology, ophthalmology and orthopedics, and all Surgery practiced in those
medical fields, and Biopsy procedures are excluded from the Field.

1.6 "INTUITIVE LICENSED PRODUCTS AND SERVICES" shall mean any product and/or
service the manufacture, use or sale of which is covered by a claim contained in
the LARS and/or ROBODOC Patents.

1.7 "INFORMATION HANDLING SYSTEM" OR "IHS" shall mean any instrumentality or
aggregate of instrumentalities primarily

                                       1.
<PAGE>   2

designed to compute, classify, process, transmit, receive, retrieve, originate,
switch, store, display, manifest, measure, detect, record, reproduce, handle or
utilize any form of information, intelligence or data for business, scientific,
control or other purposes.

1.8 "LARS PATENTS" shall have the meaning set forth in Exhibit I to this
Agreement.

1.9 "ROBODOC PATENTS" shall mean United States Patents 5,299,288; 5,408,409 and
5,086,401 and Japanese Patent 2132963 and all patents which are continuations,
continuations-in-part, divisions, reissues, renewals, extensions or additions
thereof (or which otherwise claim priority from the foregoing) and their
corresponding patents.

1.10    "SUBSIDIARY" shall mean a corporation, company or other entity:

1.10.1  more than fifty percent (50%) of whose outstanding shares or securities
        (representing the right to vote for the election of directors or other
        managing authority) are, now or hereafter, owned or controlled, directly
        or indirectly, by a party hereto; or

1.10.2  which does not have outstanding shares or securities, as may be the case
        in a partnership, joint venture or unincorporated association, but more
        than fifty percent (50%) of whose ownership interest representing the
        right to make the decisions for such corporation, company or other
        entity is now or hereafter, owned or controlled, directly or indirectly,
        by a party hereto, but such corporation, company or other entity shall
        be deemed to be a Subsidiary only so long as such ownership or control
        exists.

1.11    "SURGERY" shall mean operation on or manipulation of tissue for the
        treatment of disease, injury or deformity.

SECTION 2. GRANT OF RIGHTS

2.1 After the Effective Date and upon receipt of the payment of Section 4.1, IBM
agrees to grant and hereby grants to INTUITIVE an exclusive (subject to Sections
2.3 and 2.4), revocable (upon termination per Section 9), worldwide right (with
the right to grant sublicenses thereunder) under the LARS Patents to make, have
made for INTUITIVE, use, import, offer for sale, sell and/or otherwise transfer
INTUITIVE Licensed Products and Services in the Field.

2.2 After the Effective Date and upon receipt of the payment of Section 4.1, IBM
agrees to grant and hereby grants to INTUITIVE a nonexclusive revocable (upon
termination per Section 9), worldwide right (without the right to grant
sublicenses

                                       2.
<PAGE>   3

thereunder except as provided in Section 3) under the LARS Patents to make, have
made for INTUITIVE, use, import, offer for sale, sell and/or otherwise transfer
INTUITIVE Licensed Products and Services outside the Field.

2.3 The license of Section 2.1 is subject to a reserved right in IBM and its
Subsidiaries to practice the LARS Patents in its and their own facilities for
research, development, testing and engineering for any purpose and for the
manufacture and sale of IBM products and the provision of IBM services, other
than for IBM products and services within the Field.

2.4 INTUITIVE acknowledges that IBM has previously licensed the right to
practice the inventions claimed in the LARS Patents to the entities identified
in the letter dated December 18, 1997, from A. M. Torressen (IBM) to K. I.
McAusland (INTUITIVE) for use in "Information Handling Systems", but otherwise
without restriction as to field, and accepts the license of Section 2.1 above
subject to these identified prior licenses. IBM shall exclude the LARS Patents
from all patent licenses IBM enters into with third parties after the Effective
Date except for specific licenses which may be granted by IBM outside the Field.
INTUITIVE further acknowledges that IBM is negotiating the grant of license
rights under the LARS Patents outside the Field with Integrated Surgical
Systems.

2.5 After the Effective Date and upon receipt of the payment of Section 4.1, IBM
agrees to grant and hereby grants to INTUITIVE an exclusive (subject to Sections
2.7 and 2.8), revocable (upon termination per Section 9), worldwide right (with
the right to grant sublicenses thereunder) under the ROBODOC Patents to make,
have made for INTUITIVE, use, import, offer for sale, sell and/or otherwise
transfer INTUITIVE Licensed Products and Services in the Field.

2.6 After the Effective Date and upon receipt of the payment of Section 4.1, IBM
agrees to grant and hereby grants to INTUITIVE a nonexclusive revocable (upon
termination per Section 9), worldwide right (without the right to grant
sublicenses thereunder except as provided in Section 3) under the ROBODOC
Patents to make, have made for UNINTUITIVE, use, import, offer for sale, sell
and/or otherwise transfer INTUITIVE Licensed Products and Services outside the
Field.

2.7 The license of Section 2.5 is subject to a reserved right in IBM and its
Subsidiaries to practice the ROBODOC Patents in its and their own facilities for
research, development, testing and engineering for any purpose and for the
manufacture and sale of IBM products and the provisions of IBM services, other
than for IBM products and services within the Field. The license of

                                       3.
<PAGE>   4

Section 2.5 is also subject to a reserved right in the University of California
to practice the ROBODOC Patents for educational and research purposes.

2.8 INTUITIVE acknowledges that IBM has previously licensed the right to
practice the inventions claimed in the ROBODOC Patents to the entities
identified in the letter dated December 18, 1997, from A. M. Torressen (IBM) to
K. I. McAusland (INTUITIVE) for use in "Information Handling Systems", but
otherwise without restriction as to field, and accepts the license of Section
2.5 above subject to those identified prior licenses. IBM shall exclude the
ROBODOC Patents from all patent licenses IBM enters into with third parties
after the Effective Date except for specific licenses which may be granted by
IBM outside the Field. INTUITIVE further acknowledges that IBM has granted to
Integrated Surgical Systems, its Subsidiaries, and its and their customers, an
immunity from suit under the ROBODOC Patents, and accepts the license of Section
2.5 subject thereto, and that IBM is also negotiating the grant of license
rights under the ROBODOC Patents outside the Field with Integrated Surgical
Systems.

2.9 As soon as practicable after the payment of Section 4.1, IBM shall provide
INTUITIVE with all Associated Materials.

SECTION 3.     SUBLICENSES

3.1 The right to grant sublicenses granted in Section 2.2 and 2.6 shall extend
only to INTUITIVE's Subsidiaries and Corporate Partners and only to the extent
necessary for INTUITIVE to Partners and only to the extent necessary for
INTUITIVE to develop, manufacture, market, sell and/or otherwise transfer
INTUITIVE Licensed Products and Services.

3.2 INTUITIVE shall be responsible to IBM for the adherence of all such
Subsidiaries and Corporate Partners to the terms and conditions of this
Agreement as such terms and conditions are applicable to such Subsidiaries and
Corporate Partners. Any sublicenses to any such Subsidiaries or Corporate
Partners shall terminate on the date such Subsidiary or Corporate Partner ceases
to be a Subsidiary or Corporate Partner.

SECTION 4.     CONSIDERATION

4.1     In consideration for the rights and licenses granted in Sections 2.1 and
        2.2:

4.1.1   INTUITIVE shall pay IBM a non-refundable payment of nine hundred sixteen
        thousand, six hundred seventy dollars ($916,670) upon the Effective
        Date.

4.1.2   INTUITIVE shall also pay IBM four million, five hundred eighty three
        thousand, three hundred thirty dollars ($4,583,330) within ten (10) days
        after the closing of the first underwritten public offering registered
        under the Securities Act of 1933, as amended, but in any event not

                                       4.
<PAGE>   5

        later than September 1, 1998, which date may be extended until October
        1, 1998 upon a showing of good cause by INTUITIVE.

4.2     In consideration for the rights and licenses granted in Sections 2.5 and
        2.6:

4.2.1   INTUITIVE shall pay IBM a non-refundable payment of eighty three
        thousand, three hundred thirty dollars ($83,330) upon the Effective
        Date.

4.2.2   INTUITIVE shall also pay IBM four hundred sixteen thousand, six hundred
        seventy dollars ($416,670) within ten (10) days after the closing of the
        first underwritten public offering registered under the Securities Act
        of 1993, as amended, but in any event not later than September 1, 1998,
        which date may be extended until October 1, 1998 upon a showing of good
        cause by INTUITIVE.

4.3 INTUITIVE shall also pay IBM one million dollars ($1,000,000) within ninety
days (90) after the end of the fiscal year in which the cumulative total of all
sales of products and services (including INTUITIVE Licensed Products and
Services, if any) in that year by INTUITIVE (or any entity or person acting for
or on behalf of INTUITIVE which leases, sells and/or otherwise transfers
INTUITIVE products and/or services) first equals or exceeds twenty five million
dollars ($25,000,000) ("Due Date"). Such payments shall accrue on the date upon
which the above-noted total sales are attained ("Accrual Date").

4.4 INTUITIVE shall also pay IBM an additional one million dollars ($1,000,000)
within ninety days (90) after the end of the fiscal year in which the cumulative
total of all sales of products and services (including INTUITIVE Licensed
Products and Services, if any) in that year by INTUITIVE (or any entity or
person acting for or on behalf of INTUITIVE which leases, sells or otherwise
transfers INTUITIVE products and/or services) first equals or exceeds fifty
million dollars ($50,000,000) ("Due Date"). Such payments shall accrue on the
date upon which the above-noted total sales are attained ("Accrual Date").
INTUITIVE understands that, depending upon the total sales attained, the
payments of both Sections 43.3 and 4.4 may be due at the same time.

SECTION 5.     PATENT ENFORCEMENT AND PROSECUTION

5.1 INTUITIVE shall have the right but not the obligation to enforce the LARS
Patents and the ROBODOC Patents in the Field, at INTUITIVE's expense. IBM agrees
to cooperate with such enforcement efforts as necessary. INTUITIVE agrees to
reimburse IBM for its reasonable expenses incurred in connection with such
cooperation. If IBM becomes aware of infringement of the LARS Patents or the
ROBODOC Patents inside the Field and believes that

                                       5.
<PAGE>   6

enforcement of the patents is required in order to protect the value of the
patents in the face of the infringement, then IBM shall submit a written request
for enforcement of the patents to INTUITIVE. INTUITIVE shall respond to IBM
within sixty (60) days indicating whether INTUITIVE will enforce the patents
against the alleged infringer. In the event that INTUITIVE declines to enforce
the patents, and IBM disagrees with that position, INTUITIVE's CEO shall meet,
upon IBM's request, the IBM's Vice President of Intellectual Property and
Licensing to further discuss the necessity and advisability of enforcement
against the alleged infringer.

5.2 Outside the Field, INTUITIVE shall have no right to bring suit against any
third party under or in connection with this Agreement including, but not
limited to, alleged infringers of the LARS Patents or the ROBODOC Patents or any
one of them. If INTUITIVE becomes aware of infringement of the LARS Patents or
the ROBODOC Patents outside the Field and believes that enforcement of the
patents is required in order to protect the value of the patents in the face of
infringement, then INTUITIVE shall submit a written request for the enforcement
of the patents to IBM. IBM shall respond to INTUITIVE within sixty (60) days
indicating whether IBM will enforce the patents against the alleged infringer.
In the event that IBM declines to enforce the patents and INTUITIVE disagrees
with that position, IBM's Vice President of Intellectual Property and Licensing
shall meet, upon INTUITIVE's request, with INTUITIVE's CEO to further discuss
the necessity and advisability of enforcement against the alleged infringer.

5.3 If either Party is threatened with suit, intends to file suit or is sued, it
shall promptly advise the other Party in writing. Neither IBM nor INTUITIVE
shall enter any settlement or other agreement which negatively affects the
validity or enforceability of the LARS Patents or the ROBODOC Patents or any
issued claim thereof without the advice and prior written consent of the other
party, which consent shall not be unreasonably withheld.

5.4 INTUITIVE shall have the right but not the obligation, at its expense, to
participate in the prosecution (including the filing of foreign counterparts) of
the LARS Patents. At INTUITIVE's request IBM will provide INTUITIVE with copies
of patent office actions and filings in the United States and foreign countries
in sufficient time to permit INTUITIVE to comment on and advise IBM with respect
to such actions or filings prior to submission of IBM's response. INTUITIVE
shall have the right to suggest additional claims under the LARS Patents for
prosecution by IBM, at IBM's expense. If IBM elects not to prosecute such
claims, INTUITIVE may, at its election and its

                                       6.
<PAGE>   7

expense, prosecute such claims. IBM agrees to cooperate with such prosecution
and execute such papers as may be required for INTUITIVE to pursue such
prosecution. Any patent issuing therefrom shall be included in the LARS Patents
and will be subject to the licenses granted under Sections 2.1 and 2.2. However,
IBM shall continue the prosecution and maintenance of the LARS Patents at its
expense. However, if IBM elects to abandon prosecution or maintenance of any of
the LARS Patents, INTUITIVE may, at its election, assume such prosecution or
maintenance, and IBM will assign such patent or patent application to INTUITIVE
subject to a worldwide, non-exclusive, paid-up right outside the Field to make,
have made, practice, have practiced, use, import, offer for sale, sell and/or
otherwise transfer under such patents or patents issuing on such applications,
including the right to extend such license to IBM's IHS licensees.

SECTION 6.     WARRANTY

6.1     IBM represents and warrants that as of the Effective Date:

(A)     it has the full right and power to grant the licenses set forth in
        Section 2.1, 2.2, 2.5 and 2.6;

(B)     to the best of its knowledge, there are no outstanding agreements,
        licenses, assignments, or encumbrances inconsistent with the provisions
        of said licenses or with any other provision of this Agreement, other
        than those set forth in Sections 2.4 and 2.8;

(C)     to the best of its knowledge none of the licenses to the licensees
        listed in the letter referred to in Sections 2.4 and 2.8 grant the
        licensees the right to sublicense or assign their rights under such
        license except to a Subsidiary (as that term is defined herein) of such
        licensee (or of sublicensed Subsidiaries to sublicense other
        Subsidiaries).

IBM makes no representation or warranty, express or implied, as to the validity
or scope of any of the LARS Patents or the ROBODOC Patents. IBM shall have no
liability in respect of any infringement of patents, copyrights or other rights
of third parties due to INTUITIVE's operating under the rights and license
herein granted.

SECTION 7.     RECORDS

7.1 INTUITIVE shall keep records in accordance with generally accepted
accounting principles and in sufficient detail to permit the determination of
the amounts due to IBM under Sections 4.3 and 4.4. Such records shall be kept
until the payment of Section 4.4 is made.

7.2 Prior to the payment of Section 4.4, upon written notice for an audit,
INTUITIVE shall permit auditors designated by IBM, and reasonably acceptable to
INTUITIVE, together with such legal and

                                       7.
<PAGE>   8

technical support as IBM deems necessary, to examine, during ordinary business
hours, books, records, materials, and manufacturing processes of INTUITIVE for
the purpose of verifying compliance with Sections 4.2, 4.3 and 4.4. Each party
shall pay the costs that it incurs in the course of the audit. No more than one
audit may be conducted in any one fiscal year.

SECTION 8.     COMMUNICATIONS

8.1 Any notice or other communication required or permitted to be made or given
to either party hereto pursuant to this Agreement shall be sent to such party by
facsimile or certified mail, postage prepaid, addressed to it at its address set
forth below, or to such other address as it shall designate by written notice
given to the other party, and shall be deemed to have been made or given on the
date of facsimile transmission or mailing. The addresses are as follows:

8.1.1                 For IBM:

                      Direct of Licensing
                      International Business Machines Corporation
                      500 Columbus Avenue
                      Thornwood, New York 10594
                      United States of America

8.1.2                 For facsimile transmission to IBM:

                      (914) 742-6737

8.1.3                 For INTUITIVE:

                      Chief Patent Counsel
                      INTUITIVE Surgical, Inc.
                      1340 W. Middlefield Road
                      Mountain View, CA  94043

8.1.4                 For facsimile transmission to INTUITIVE:

                      (650) 526-2060

8.2     Payment by INTUITIVE to IBM shall be made by electronic funds transfer
        to:

                                       8.
<PAGE>   9

SECTION 9.     TERM AND TERMINATION

9.1 This Agreement shall expire upon the expiration of the last to expire of the
LARS or the ROBODOC Patents.

9.2 This agreement may be terminated by IBM upon 30 days written notice in the
event that INTUITIVE fails to make the payments of Sections 4.1 and 4.2 and, if
applicable, those of Sections 4.3 and 4.4, or fails to comply with the
conditions of Section 9.3 or 9.4, and fails to cure any such failure within the
aforementioned notice period.

9.3 In the event that fifty percent (50%) or more of the outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) of INTUITIVE are or become owned or controlled,
directly or indirectly, by a third (acquiring) party, INTUITIVE shall promptly
give written notice of such acquisition to IBM. If INTUITIVE does not have
outstanding shares or securities, such acquisition shall be deemed to occur if
more than fifty percent (50%) of its ownership interest representing the right
to make decisions for INTUITIVE is to be acquired by said third party. If such
event occurs before the date upon which the payment of Section 4.2 is made, IBM
may terminate this Agreement under this Section 9 unless the acquiring party
settles, to IBM's satisfaction, any outstanding disputes which it may have with
IBM or any of IBM's Subsidiaries, and agrees in writing with IBM to accept
assignment of this Agreement subject to all the rights, conditions, duties and
obligations thereof. If such event occurs after the date on which the payments
of Sections 4.3 and 4.4 are made, IBM may terminate this Agreement unless the
acquiring party agrees to in writing with IBM to accept assignment of this
Agreement subject to all the rights, conditions, duties and obligations thereof,
and makes the unpaid payments of Sections 4.3 and/or 4.4 to IBM prior to closing
such acquisition.

9.4 In the event that INTUITIVE is a party to a merger, consolidation,
amalgamation or other combination with another entity (whether preceded by an
acquisition or not) such that INTUITIVE will cease to exist as a legal entity
following such event, INTUITIVE shall promptly give written notice of such event

                                       9.
<PAGE>   10

to IBM. If such event occurs before the date on which the payment of Section 4.2
is made, IBM may terminate this Agreement unless the entity which survives or
results from such event settles, to IBM's satisfaction, any outstanding disputes
which it may have with IBM, or any of IBM's Subsidiaries, and agrees in writing
with IBM to accept assignment of this Agreement subject to all the rights,
conditions, duties and obligations thereof. If such event occurs after the date
on which the payment of Section 4.2 is made, but before one or both of the
payments of Sections 4.3 and 4.2 are made, IBM may terminate this Agreement
unless the acquiring party agrees in writing with IBM to accept assignment of
this Agreement subject to all the rights, conditions, duties and obligations
thereof, and makes the unpaid payments of Sections 4.3 and/or 4.4 to IBM prior
to closing such merger, consolidation, amalgamation or other combination.

9.5 No termination or this Agreement or the licenses granted hereunder shall
relieve INTUITIVE of any obligation or liability accrued hereunder prior to such
termination. If this Agreement is terminated by IBM prior to the payment of
Section 4.2, the payments of Sections 4.2, 4.3 and 4.4 shall not be due IBM. If
this Agreement is terminated by IBM prior the Accrual Date of either or both
Section 4.3 and 4.4, the payment or payments of Section 4.3 and/or Section 4.4
shall not be due IBM.

SECTION 10.    MISCELLANEOUS

10.1 Each party (the first party) shall, at its expense, defend, indemnify and
hold the other party (the second party), its Subsidiaries and each of them and
their officers, directors, agents, representatives and employees, harmless
against all claims, representatives and employees, harmless against all claims,
demands, damages, liabilities, penalties and expenses (including, but not
limited to, legal fees and expenses, including reasonable attorneys fees)
including those for infringement, property damage and personal injury or death,
whether arising in contract, tort (including negligence of any degree) or
otherwise, wherever and by whomever brought (including third parties) arising
out of, connected with or resulting from such first party's activities under or
in furtherance of this Agreement or the first party's use (including
sublicensing in the case of INTUITIVE) of the LARS Patents and/or ROBODOC
Patents licensed hereunder, including the use, sale or other transfers of
products of the first party covered, in whole or in part, by any claim of the
LARS Patents and/or ROBODOC Patents or made, in whole or in part, with any
process or apparatus covered by any claim of the LARS Patents or the ROBODOC
Patents.

10.2 Except as provided in Sections 9.3 or 9.4, INTUITIVE shall not assign this
Agreement, nor any of its rights or privileges, nor delegate any of its duties
or obligations, thereunder, under any circumstances, without the prior written
consent of IBM. Any

                                      10.
<PAGE>   11

attempt to do so shall be void. However, notwithstanding the foregoing,
INTUITIVE may grant sublicenses under the LARS Patents as provide din Sections
2.1, 2.2, 2.5 and 2.6 without the prior written consent of IBM.

10.3 This Agreement shall not be binding upon the parties and shall not obligate
either of the parties until it has been signed hereinbelow by both parties, in
which event it shall be effective as of the Effective Date.

10.4 Nothing contained in this Agreement shall be construed as conferring any
right to use in advertising, publicity, or other promotional activities any
name, trade name, trademark, or other designation of either party hereto
(including any contraction, abbreviation or simulation of any of the foregoing).
Each party hereto agrees not to use or refer to this Agreement or any provision
thereof in any publicity without the express written approval of the other
party, which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, the parties may disclose without approval of the other party the
existence and terms of this Agreement to the extent (a) required by law
(including securities laws); (b) the disclosure is made under a binder of
confidentiality to any person or entity who may be interested in investing in or
acquiring all or substantially all of the assets or securities of such party, or
(c) the disclosure is made to its financial advisors provided that such advisors
have signed a binder of confidentiality.

10.5 Nothing contained in this Agreement shall be construed as conferring on
either party any license or other right to copy the exterior design of the
products of the other party.

10.6 Nothing contained in this Agreement shall be construed as limiting the
rights which the parties have outside the scope of the licenses granted
hereunder, or restricting the right of either party or any of its Subsidiaries
to make, have made, use, lease, sell or otherwise dispose of any particular
product or products not herein licensed.

10.7 Except as expressly set forth in this Agreement nothing contained in this
Agreement shall be construed as conferring either directly or by implication,
estoppel or otherwise upon either party or any third party any license or other
right with respect to any patents, patent applications copyrights or mask works
or similar rights of other party.

INTUITIVE understands that its customers may need licenses or other rights from
third parties and/or International Business Machines Corporation for the use of
products acquired from INTUITIVE. However, provided that this Agreement is not

                                      11.
<PAGE>   12

terminated by IBM for breach, customers of INTUITIVE who were customers of
INTUITIVE prior to any such termination shall not need additional licenses from
IBM for INTUITIVE Licensed Products and Services and Subsidiaries and Corporate
Partners who were Subsidiaries and Corporate Partners prior to any such
termination shall not need additional licenses from IBM for INTUITIVE Licensed
Products and Services outside the Field but within the scope of Section 3.1.

10.8 Each party shall pay all taxes (including, without limitation, sales and
value added taxes), exclusive of taxes based on the other party's net income,
imposed by the national government, including any political subdivision thereof,
of any country in which said party is doing business, as the result of said
party's furnishing consideration hereunder. In the event such a tax becomes
payable as a result of a party furnishing consideration in respect of a
sublicense granted pursuant to Section 3 said sublicensing party shall be
reasonable for determining the amount of and paying, or causing said sublicensed
Subsidiary to pay, said tax.

10.9 The headings of the several Sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning of
interpretation of this Agreement.

10.10 If any Section of this Agreement is founded by competent authority to be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and unenforceability of such Section in every other respect and the
remainder of this Agreement shall continue in effect so long as the Agreement
still expresses the intent of the parties. If the intent of the parties cannot
be preserved, then the parties shall attempt to renegotiate this Agreement.

10.11 This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the law of the State of
New York, United States of America, without regard to its principles of
conflicts of law, as such law applies to contracts signed and fully performed in
the State of New York. Each of the parties waives its right to a jury trial.

10.12 Nothing in this Agreement shall be construed as creating any agency, joint
venture, partnership or other type of relationship between the parties.

10.13 No amendment or modification hereof shall be valid or binding upon the
parties unless made in writing and signed by both parties.

                                      12.
<PAGE>   13

10.14 This Agreement and its Exhibit embodies the entire understanding of the
parties with respect to the subject matter hereof and mergers all prior
communications (whether oral or written) between them, and neither of the
parties shall be bound by any conditions, definitions, warranties,
understandings or representations with respect thereto other than as expressly
provided in this Agreement.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly signed.

                                            INTERNATIONAL BUSINESS
                                            MACHINES CORPORATION

Date           12/30/97                     By     /s/ M. C. Phelps, Jr.
    -------------------------                  --------------------------------
                                                   M. C. Phelps, Jr.
                                                   Vice President

                                           INTUITIVE SURGICAL, INC.

Date           12/30/97                     By     /s/ Lonnie M. Smith
    -------------------------                  --------------------------------
                                                   Lonnie M. Smith
                                                   President and CEO

                                      13.
<PAGE>   14

EXHIBIT 1

This is an Exhibit to the Agreement with an Effective Date of December 22, 1997
between IBM and INTUTIVE SURGICAL, INC.

        "LARS Patents" shall mean the following patents, patents issuing from
        the following applications, and all patents which are continuations,
        continuations-in-part, divisions, reissues, renewals, extensions, or
        additional of or otherwise claim priority from the following patents and
        patent applications and their corresponding patents:

<TABLE>
<CAPTION>
             APPLICATION         APPLICATION     DATE
COUNTRY      FILED               NUMBER          ISSUED              PATENT NO.      DATE EXPIRES
----------   -----------------   -------------   -----------------   -------------   -----------------
<S>          <C>                 <C>             <C>                 <C>             <C>
US           July 27, 1992       0000919450      January 19, 1994    0005299309      June 13, 2011
US           October 11, 1994    0000321320      May 20, 1997        0005630431      May 20, 2014
US           April 6, 1994       0000223862      August 29, 1995     0005445166      August 29, 2012
US           April 28, 1994      0000234825      April 4, 1995       0005402801      April 4, 2012

AU           May 13, 1993        93107816.6                                          May 13, 2013
BE           May 13, 1993        93107816.6                                          May 13, 2013
FR           May 13, 1993        93107816.6                                          May 13, 2013
GE           May 13, 1993        93107816.6                                          May 13, 2013
IT           May 13, 1993        93107816.6                                          May 13, 2013
JA           April 19, 1993      0005-90989      October 24, 1996    0002575586      April 19, 2013
NE           May 13, 1993        93107816.6                                          May 13, 2013
SP           May 13, 1993        93107816.6                                          May 13, 2013
SW           May 13, 1993        93107816.6                                          May 13, 2013
SZ           May 13, 1993        93107816.6                                          May 13, 2013
UK           May 13, 1993        93107816.6                                          May 13, 2013

US           May 27, 1992        0000889215      May 23, 1995        0005417210      May 27, 2012

US           January 26, 1995    0000378433      November 12, 1996   0005572999      November 12, 2013

AU           October 27, 1993    93117400.7      April 23, 1997      000E152026      October 27, 2013
BE           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
FR           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
GE           October 27, 1993    93117400.7      April 23, 1997      69310085.0      October 27, 2013
IT           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
JA           October 4, 1993     005-248114      May 2, 1997         0002642047      October 4, 2013
NE           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
SP           October 27, 1993    93117400.7      April 23, 1997      0002102577      October 27, 2013
SW           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
SZ           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
UK           October 27, 1993    93117400.7      April 23, 1997      0000595291      October 27, 2013
US           October 30, 1992    0000968715      March 14, 1995      0005397323      October 20, 2012

JA           June 24, 1994       006-142841      March 11, 1997      0002620518      June 24, 2014
US           August 17, 1993     0000108027      August 30, 1994     0005343395      August 17, 2013

US           April 28, 1994      Y0991-080-G                                         **
US           November 2, 1993    Y0991-080XA                                         **
US           January 24, 1995    0000000000*                                         **
US           January 26, 1995    Y0992-080C                                          **
US           April 6, 1994       0000223969                          0005695500      **
US           July 17, 1997       Y0995-081X                                          **
</TABLE>

------------------
*  Filing receipt problem being resolved with USPTO
** Longer of either 17 years from issue or 20 years from earliest U.S. filing
date.

<PAGE>   15

                                                   LICENSE REFERENCE NO: L973288

        This is amendment number 1 ("Amendment") to the patent license agreement
in respect of systems and methods for the augmentation of surgery ("Agreement")
having an Effective Date of December 22, 1997 between International Business
Machines Corporation ("IBM") and Intuitive Surgical, Inc. ("INTUITIVE").

        INTUITIVE has asked IBM for an extension of time in which to make
certain payments specified in the Agreement. IBM is willing to grant the
requested extension of time on an interest-free basis.

        In consideration of the premises and mutual covenants herein contained,
IBM and INTUITIVE agree as follows:

        The Agreement is hereby amended as follows:

1.      In Section 4.1.2, delete "September 1, 1998" and insert therefor - -
        November 2, 1998 - -.

2.      In Section 4.2.2, delete "September 1, 1998" and insert therefor - -
        November 2, 1998 - -.

        This Amendment embodies the entire understanding of the parties with
respect to its subject matter and supersedes and merges all prior
communications, representations and understandings (whether written or oral)
between them relating to the subject matter hereof.

        This Amendment shall be effective as of the date of the last signature
below.

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

INTERNATIONAL BUSINESS                             INTUITIVE SURGICAL, INC.
MACHINES CORPORATION

By:        /s/ M.C. Phelps, Jr.               By:     /s/ Lonnie M. Smith
   ------------------------------------          ---------------------------
           M.C. Phelps, Jr.                           Lonnie M. Smith
           Vice President                             President and CEO

Date:      10/16/98                           Date:   Oct. 15, 1998
     ----------------------------------            -------------------------

                                      1.

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