Computer Motion Announces Completion of $9 Million Private Financing; Societe Generale Leads a Group of Five Institutional and Private Investors.

Business Editors

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Feb. 20, 2001

Computer Motion Inc. (Nasdaq:RBOT), the world leader and pioneer in medical robotics, today announced that it has raised $9 million through the private placement of convertible preferred stock with mandatory conversion.

Societe Generale is the lead investor in this financing. Proceeds from the sale will be used as general working capital to support Computer Motion's goal of profitability in the fourth quarter of 2001.

Others participating in the financing include Catalpa Enterprises, Robert W. Duggan (Computer Motion's chief executive officer, who previously purchased $5.4 million in equity during the year 2000) and Jeff Henley (board member and chief financial officer of Oracle). The preferred stock has a three-year maturity and is initially convertible into shares of Computer Motion's common stock at $5.77 per share. This conversion price may be reset at the six- and nine-month anniversary of the initial issuance if the average market price for Computer Motion's common stock in the twenty days prior to the reset date drops below the initial conversion price. This conversion price adjustment is subject to a price floor of $2.72. The investors shall receive a preferred annual dividend payable in stock or cash, at the company's option, at a rate of 4.90%.

In addition, the investors were granted 5-year warrants to purchase an aggregate of approximately 500,000 shares of Computer Motion common stock at an exercise price of $8.15 per share. SEC and Nasdaq rules require shareholder approval for private financings in excess of 20% of the total shares outstanding. With the warrants granted to investors and with the potential for a recalculation of the conversion price, this 20% level may be exceeded. Computer Motion will be asking for shareholder approval for this financing at the regular shareholders meeting to be held in mid-May. Societe Generale is asking that $2,000,000 of its investment be held in escrow until this shareholder approval is obtained and that Computer Motion realizes revenues in the first quarter of 2001 in excess of $4,500,000.

This positive news is compounded by the concurrent release of record revenue and gross profit for Q4 2000. Duggan, chairman and chief executive officer of Computer Motion, announced that the financing, which included highly respected institutions such as Societe Generale, will allow Computer Motion to expand revenues and pursue its goal of profitability. "Computer Motion's combination of high technology complementing medical science advances brings significant long-lasting benefits to society -- most importantly the ability for operating room patients to have reduced pain and trauma, as well as to potentially enjoy a full and active life relatively soon after surgery," said Duggan.

The company develops, manufactures and markets proprietary computer-enhanced and robotic surgical systems, which enhance surgeons' capabilities, improve outcomes and reduce costs. Computer Motion plays a significant role in transitioning the surgical community from current open procedures to increasingly demanded endoscopic procedures.

The Computer Motion products include the AESOP/ZEUS Robotic surgical system for new minimally invasive microsurgery procedures, such as endoscopic beating heart bypass surgery. Other products include the HERMES Control Center, a centralized system that enables the surgeon to voice control a network of "smart" medical devices. While AESOP is FDA approved, the ZEUS component is CE-Marked for commercial sale in the European community. Computer Motion has completed an FDA-approved Phase 1 Investigational Device Exemption (IDE) coronary bypass study and has initiated an IDE mitral valve surgery and general laparoscopic studies with ZEUS. Also, the company has begun the second phase of its tubal reanastomosis study. The company's Web site is www.ComputerMotion.com.

This news release contains forward-looking statements concerning the company's business and products. Actual results may differ materially depending on a number of risk factors, including the risks of competition and competing technologies, duration or suspension of clinical studies, regulatory clearances and approvals, and physician, hospital and payor acceptance of the company's products. These factors and other risks inherent in the company's business are described from time to time in the company's Securities and Exchange Commission filings, including its Annual Report on Form 10-K. The company undertakes no obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.