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                                                                  Exhibit 10.16


                               CREDITANSTALT-BANKVEREIN
                                 TWO GREENWICH PLAZA
                          GREENWICH, CONNECTICUT 06836-1300


                                                                   June 3, 1997



Physio-Control International Corporation
Physio-Control Corporation
11811 Willows Road N.E.
Redmond, WA 98073-9706

                                  RELEASE AGREEMENT
                                  -----------------

Gentlemen:

     Physio-Control International Corporation, a Delaware corporation 
("Parent"), and Physio-Control corporation, a Delaware corporation 
("Borrower"), have entered into financing arrangements with 
Creditanstalt-Bankverein, a bank organized under the laws of the Republic of 
Austria ("Creditanstalt"), as set forth in the Amended and Restated Credit 
Agreement dated as of December 15, 1995 (as the same has been amended and 
supplemented, the "Loan Agreement"), between the borrower and Creditanstalt, 
and the other Loan Documents (as defined in the Loan Agreement) (all of the 
foregoing, together with the Loan Agreement, collectively, the "Existing 
Agreements") pursuant to which Creditanstalt has made loans and advances to 
Borrower (the "Loans") and Creditanstalt has issued the letters of credit 
listed on EXHIBIT A hereto for the account of borrower (collectively, the 
"Creditanstalt Letters of Credit").

          1.   RELEASES.

               (a)  Subject to the terms and conditions contained herein 
(including but not limited to Section 5), Creditanstalt hereby releases, 
discharges and acquits each of Parent and Borrower from any and all 
liabilities and obligations they may have to Creditanstalt arising out of the 
Existing Agreements.  Anything to the contrary in this Agreement 
notwithstanding, any provision of any Existing Agreement that by the terms of 
the Existing Agreements survives the termination thereof shall not be 
affected by this Agreement.

               (b)  Creditanstalt hereby terminates and releases any and all 
security interests in, liens and mortgages upon, and pledges of, all 
properties and assets of Borrower, its subsidiaries and Parent (whether 
personal, real or mixed, tangible or intangible) heretofore granted, pledged, 
assigned to,


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or otherwise claimed by, Creditanstalt, pursuant to the Loan 
Agreement and the other Existing Agreements.

               (c)  Subject to the terms and conditions contained herein, 
each of Borrower and Parent, for and in consideration of the release above, 
hereby releases, discharges and acquits Creditanstalt and its successors and 
assigns from all liabilities and obligations to Borrower and Parent and their 
respective successors and assigns arising out of the Existing Agreements.

          2.   INDEMNIFICATION FOR RETURNED ITEMS.

          Notwithstanding anything to the contrary contained in Section 
1 above, Borrower agrees to indemnify Creditanstalt from and hold 
Creditanstalt harmless against all loss, cost, damage or expense which 
Creditanstalt may suffer or incur as a result of any non-payment, claim, 
refund or dishonor of any checks or other items which have been credited by 
Creditanstalt to the account of Borrower in calculating the amount payable to 
Creditanstalt on the date hereof pursuant to Section 5(c) of this Agreement, 
together with any reasonable expenses or other reasonable and customary 
charges incident thereto.

          3.   DELIVERIES BY CREDITANSTALT.

          Creditanstalt agrees to deliver to Borrower, at the expense of 
Borrower, following the effectiveness hereof, the originals of:

               (a)  the promissory note or notes, if any, previously executed 
and delivered to Creditanstalt by Borrower duly marked "paid in full";

               (b)  Uniform Commercial Code releases and/or terminations in 
form acceptable for recording covering financing statements which have been 
filed by Creditanstalt against Borrower or Parent;

               (c)  trademark and patent releases or reassignments, 
reassigning, without representations and warranties, to Borrower and/or 
releasing the security interest of Creditanstalt in all trademarks, patents 
and related assets heretofore assigned by Borrower to Creditanstalt pursuant 
to the Existing Agreements;

               (d)  discharges or satisfactions of any mortgages or deeds of 
trust or similar real property instruments previously executed and delivered 
by Borrower or Parent in favor of Creditanstalt in form acceptable for 
recording; and

               (e)  any stock certificates and executed stock powers related 
thereto previously delivered to Creditanstalt by Borrower or Parent.


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          4.   TERMINATION OF LOCKBOXES.  Creditanstalt agrees to send 
written notification, upon request and at the expense of Borrower, to any 
bank or institution with which Creditanstalt has blocked accounts, lockbox 
accounts or other arrangements for the receipt or transfer to Creditanstalt 
of remittances or proceeds from customers of Borrower, to the effect that all 
such arrangements with Creditanstalt are terminated, and to the extent any 
such arrangements are in effect with Creditanstalt, such arrangements are 
hereby terminated.

          5.   CONDITIONS PRECEDENT.  The effectiveness of this Agreement, 
and of any termination statements or other similar release instruments 
delivered by Creditanstalt hereunder, are subject to and conditioned upon the 
receipt by Creditanstalt of:

               (a)  an original of this Agreement, duly executed by the 
parties hereto;

               (b)  the original of each Letter of Credit, marked 'CANCELED';
and

               (c)  payment, in immediately available funds, of 
$22,414,500.16 not later than 2:00 p.m. New York City time on June 4, 1997 
plus $4,385.00 per day for each additional day thereafter that such payment 
has not been made prior to such time.

          6.   FURTHER ASSURANCES.  Creditanstalt further agrees to furnish, 
at Borrower's expense, additional releases and/or termination statements and 
such other and further documents, instruments and agreements as may be 
reasonably requested by Borrower, in order to effect and evidence more fully 
the matters covered hereby.

          7.   COSTS AND EXPENSES.  Borrower and Parent agree to pay all 
costs and expenses, including without limitation, reasonable attorneys fees, 
in connection with the preparation, execution, delivery, filing, recording 
and administration of this Release Agreement and the performance of any other 
acts required to effect the release of any security granted to the 
undersigned under the Existing Agreements.  In addition, Parent and Borrower 
agree to pay any and all stamp and other taxes and fees payable or determined 
to be payable in connection with the execution and delivery, filing or 
recording of this Release Agreement and the other instruments and documents 
to be delivered hereunder, and agree to save the undersigned harmless from 
and against any and all liabilities with respect to or resulting from any 
delay in paying or omitting to pay such taxes or fees.

          8.   GOVERNING LAW.  This Agreement shall be construed in 
accordance with and be governed by the laws of the State of

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New York (without giving effect to the conflict of law principles thereof).

          9.   COUNTERPARTS.  This Agreement may be executed in any number of 
counterparts each of which shall be deemed to be an original hereof and 
submissible into evidence and all of which together shall be deemed to be a 
single instrument.

                                        Very truly yours,

                                        CREDITANSTALT-BANKVEREIN


                                        By:  _________________________
                                             Name:  Clifford L. Wells
                                             Title: Vice President


                                        By:  _________________________
                                             Name:  Lisa D. Bruno
                                             Title: Asst. V. President


ACKNOWLEDGED AND AGREED:

PHYSIO-CONTROL INTERNATIONAL CORPORATION


By:            _________________________     By:  __________________________
               Name:  Richard O. Martin           Name:  Joseph J.Caffarelli
               Title: Chairman and Chief          Title: Executive Vice
                      Executive Officer                  President/Chief
                                                         Financial Officer

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                                                                      EXHIBIT A


                           CREDITANSTALT LETTERS OF CREDIT
                           -------------------------------

                    Irrevocable Standby Letter of Credit No. 10099
                    Face Amount:  $500,000.00