Document:

<PAGE>

                                                                   EXHIBIT 10.27

                              ASSIGNMENT AGREEMENT

      THIS ASSIGNMENT AGREEMENT (this "Agreement") is made as of December 30,
1999, by and between Quinton Fitness, Inc., a Delaware corporation ("Quinton"),
and W.R. Hambrecht/StairMaster, LLC, a California limited liability company
("WRH/SM").

                                    RECITALS

      A.    Quinton is the owner of 23,077 shares of common stock (the "Shares")
of StairMaster Holding, Inc., a Delaware corporation ("Stairmaster Holding"),
having acquired the Shares pursuant to that certain Stock Subscription Agreement
dated as of December 17, 1999 between Quinton and StairMaster Holding (the
"Subscription Agreement") entered into in connection with a sale by Quinton of
its assets to StairMaster Sports/Medical Products, Inc., a wholly owned
subsidiary of StairMaster Holding. As owner of the Shares, Quinton has certain
rights with respect to future registrations by StairMaster Holding of its shares
of common stock pursuant to that certain Registration Rights Agreement dated
September 5, 1997, among StairMaster Holding, Quinton and other investors, as
amended by an Amended No. 1 to the Registration Rights Agreement dated as of
December 17, 1999 (as so amended, the "Rights Agreement") (the Subscription
Agreement and the Rights Agreement are sometimes collectively referred to herein
as the "Share Agreements").

      B.    WRH/SM desires to purchase all of the Shares and all of Quinton's
rights under the Share Agreements, and Quinton is willing to sell the Shares and
assign all of its rights under the Share Agreements to Quinton on the terms and
subject to the conditions hereinafter set forth.

      NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants and conditions set forth therein, the parties agree as follows:

1.    ASSIGNMENT AND PURCHASE OF SHARES AND RIGHTS.

      1.1   Sale of Shares and Assignment and Assumption of Rights. Subject to
the terms and conditions set forth in this Agreement, Quinton hereby sells,
transfers and assigns to WRH/SM, and WRH/SM hereby purchases from Quinton, on
the Closing Date, all of Quinton' rights, title and interest in the Shares and
the Share Agreements, and assumes and agrees to be bound by the terms and
conditions of and obligations under the Share Agreements. WRH/SM hereby makes as
to itself each of the representations made by Quinton in Section 3 of the
Subscription Agreement. WRH/SM's manager, by its execution of this Agreement,
acknowledges and agrees to

<PAGE>

be bound by the provisions of Section 4 of the Subscription Agreement.
StairMaster Holding is an intended third party beneficiary of this Section 1.1.

      1.2   Consideration Payable By WRH/SM. As consideration to Quinton for the
assignment of the Shares and the Share Agreements, WRH/SM has tendered to
Quinton, at the time of execution and delivery of this Agreement, by wire
transfer current funds in the amount of Three Million Dollars ($3,000,000.00).

      1.3   Delivery of Shares. Simultaneous with the execution and delivery of
this Agreement by WRH/SM and its payment of the consideration under Section 1.2,
Quinton shall have delivered to WRH/SM with all necessary endorsements the
original certificate evidencing the Shares and complete and correct copies (with
original counterparts where available) of the Share Agreements.

2.    REPRESENTATIONS AND WARRANTIES OF QUINTON. To induce WRH/SM to enter into
this Agreement, Quinton hereby represents and warrants as follows:

      2.1   Organization; Authority. Quinton is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Quinton has full power and authority to enter into this Agreement and to carry
out the transactions contemplated hereby. The Board of Directors of Quinton has
duly authorized the execution and delivery of this Agreement and the
transactions contemplated hereby, and no other action on the part of Quinton is
necessary to authorize this Agreement and the transactions contemplated hereby.

      2.2   Absence of Conflict. The performance of this Agreement and the
consummation of the transactions herein contemplated will not with the passage
of time, the giving of notice, or both, result in a breach of or violation of
any of the terms or provisions of, or constitute a default under, any statute,
indenture, mortgage, deed of trust, note, agreement, lease or other instrument
to which Quinton is a party or by which Quinton is bound, the organizational or
charter documents of Quinton, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Quinton or any of its
properties; and no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by Quinton of the
transactions contemplated by this Agreement, other than filings and approvals
provided for in this Agreement.

      2.3   No Prior Agreement. Quinton is the owner of the Shares and its
rights under the Share Agreements free of all liens and encumbrances, except
those in favor of Silicon Valley bank, which Bank has consented to the transfer
of the Shares and the Share Agreements hereunder; and Quinton has made no
assignment to any person of

                                      -2-
<PAGE>

the Shares or the Share Agreements or any of its rights thereunder other than
the sale, transfer and assignment to WRH/SM pursuant to this Agreement.

3.    MISCELLANEOUS PROVISIONS.

      3.1   Survival. All representations, warranties, covenants, and agreements
in this Agreement shall survive indefinitely until they are no longer operative
or are otherwise limited by an applicable statute of limitations. All statements
in any certificate, schedule, or exhibit delivered by any party under this
Agreement or in connection with the transactions contemplated by this Agreement
shall constitute representations and warranties by that party under this
Agreement.

      3.2   Notices. All consents, waivers, claims, notices, requests, demands
and other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered by courier or messenger
(on the date delivered), by telecopy (on the date receipt thereof is confirmed
by telecopy) or by mail, first class certified mail, return receipt requested,
with postage paid (on the third day, excluding Saturdays, Sundays and federal
legal holidays, after the date mailed):

      If to Quinton:    Quinton Fitness, Inc.
                        3303 Monte Villa Parkway
                        Bothell, WA  98021-8906
                        Attn:  President
                        Telecopy: (425) 402-2020

      If to WRH/SM:     W.R. Hambrecht/StairMaster, LLC
                        c/o W.R. Hambrecht + Co.
                        550 Fifteenth Street
                        San Francisco, CA  94103
                        Attn:  J.D. Delafield
                        Telecopy:  (415) 551-8686

or to such other persons or addresses as WRH/SM, or Quinton shall furnish to
each other in writing.

      3.4   Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Except as provided in Section 1.1, nothing in
this Agreement, express or implied, is intended to confer upon any third party
any rights or remedies of any nature whatsoever under this Agreement.

                                      -3-
<PAGE>

      3.5   Governing Law. This Agreement shall be governed by the internal laws
of the State of California as to all matters of validity, construction, effect
and performance.

      3.6   Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one instrument.

      3.7   Headings. Title headings are for reference purposes only and shall
have no interpretative effect.

      3.8   Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto relating to the subject matter hereof and supersedes
all prior agreements and understandings between the parties with respect to such
subject matter. This Agreement may be changed, amended or modified only if in
writing and signed by the parties hereto.

      3.9   Finder's Fees. Neither Quinton nor WRH/SM or any of their respective
affiliates has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.

      3.10  Severability. If any clause, paragraph, section or part of this
Agreement is held or declared void, invalid or illegal, for any reason, by any
court of competent jurisdiction, such provision shall be ineffective but shall
not in any way invalidate or affect any other clause, paragraph, section or part
of this Agreement, provided that the severance of such provision does not affect
the material terms of this Agreement.

      3.11  Further Assurances. Each party hereto agrees to do such further acts
and things and to execute and deliver such additional agreements and instruments
as any other party may reasonably request to consummate, evidence, or confirm
any agreement or covenant contained herein.

      3.12  Confidentiality. Each party agrees to hold in strict confidence, and
not disclose to any other person, the terms and conditions of the transactions
contemplated under this Agreement and all confidential information received by
such party in connection with the transactions contemplated hereunder, whether
or not such transactions are consummated, except as disclosure may be required
by law, to StairMaster Holding, or as otherwise contemplated herein.

                                      -4-
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Assignment Agreement as
of the date first above written.

                                          QUINTON FITNESS, INC.

                                          By:    /s/ Michael Blomeyer
                                             -----------------------------------
                                          Name:  Michael Blomeyer
                                               ---------------------------------
                                          Title: President/CEO
                                                --------------------------------

                                          W.R. HAMBRECHT/STAIRMASTER, LLC

                                          By   W.R. Hambrecht/StairMaster
                                               Management, LLC

                                          By:  /s/ W.R. Hambrecht/StairMaster
                                                   Management, LLC
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

      The undersigned manager of WRH/SM agrees to be bound by Section 1.1 of the
foregoing Assignment Agreement:

W.R. HAMBRECHT/STAIRMASTER MANAGEMENT, LLC

By:   /s/ W.R. Hambrecht/StairMaster
          Management, LLC
   -----------------------------------
Name:
     ---------------------------------
Title:
      --------------------------------

                                      -5-<PAGE>

                                                                   EXHIBIT 10.28

                                                                    Page 1 of 44

                   SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT

      THIS AGREEMENT, made effective as of the 10 day of February, 1995,
(hereafter "Effective Date" by and between Quinton Instrument Company, a
corporation incorporated under the laws of the State of Washington of the United
States of America, having its headquarters offices at 3303 Monte Villa Parkway,
Bothell, Washington 98021 (hereinafter referred to as "Quinton Headquarters")
and any wholly owned divisions or subsidiaries thereof (hereinafter referred to
as "Quinton"), American Home Products Corporation (the parent company of
Quinton) a corporation incorporated under the laws of the State of Delaware,
having offices at 5 Giralda Farms, Madison, New Jersey 07940 (hereinafter
referred to as "AHPC") and Hewlett-Packard Company, a corporation incorporated
under the laws of the State of California, having offices at 1700 South Baker
Street, McMinnville, Oregon 97128 (hereinafter referred to as "HP").

                                   WITNESSETH

      WHEREAS, HP designs and manufactures electromedical equipment including
electrocardiographs that incorporate ECG 12-lead analysis software and ECG
12-lead transmission software;

      WHEREAS, Quinton designs and manufactures electromedical equipment
including ECG stress test systems and other instruments and desires to
incorporate ECG 12-lead analysis software and ECG 12-lead transmission software
into its instruments;

      WHEREAS, Quinton desires to commence a product design program that will
lead to the incorporation of a Ported Analysis Program for use on Quinton
Instrumentation as set forth below;

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 2 of 44

      WHEREAS, HP is the owner of the Analysis Program that performs 12-lead ECG
measurement and interpretation and that has received FDA approval and is
currently licensed by HP for use in various FDA approved products of HP and that
is periodically updated and improved by HP and is currently actively marketed by
HP on a broad scale;

      WHEREAS, HP is willing to grant to Quinton and Affiliate Companies rights
and licenses to HP Licensed Works on the terms and conditions contained herein;
and

      WHEREAS, Quinton and Affiliate Companies are willing to grant to HP rights
and licenses to Quinton Licensed Works on the terms and conditions contained
herein;

      NOW, THEREFORE, the parties further agree as follows:

SECTION 1: DEFINITIONS

      As used in this Agreement, the following terms shall be deemed to have the
following meanings:

1(A)  "Affiliate Companies," singular or plural, shall mean any parent or
      subsidiary of American Home Products Corporation (AHPC) or any subsidiary
      or division of any division or subsidiary of AHPC.

1(B)  "Analysis Program" shall mean the comment-removed Source Code (written in
      the "C" programming language) and Object Code which is otherwise
      equivalent to the following HP software packages used in the most current
      version and release of the HP PageWriter XLi and 200i products:

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 3 of 44

         -  HP ECG Measurement Program, Release 7

         -  HP Adult ECG Criteria Package, Release 08

         -  HP Pediatric ECG Criteria Package, Release P4

1(C)  "Confidentiality Period" shall extend for five (5) years beyond the
      termination of this Agreement, except that the Confidentiality Period for
      the Source Code of the Analysis Program, the Test Bed, and the Source Code
      of the Ported Analysis Program shall be fifty (50) years from the date of
      execution of this Agreement, and further provided that the Confidentiality
      Period for the Source Code of each Enhanced Analysis Program and the
      Source Code of each corresponding Ported Enhanced Analysis Program shall
      be fifty (50) years from the date each such Enhanced Analysis Program is
      made available under Section 13(A) of this Agreement.

1(D)  "Development Documentation" shall mean any written documentation in hard
      copy or electronic form that contains interface, data format or other
      development information about the Analysis Program, the Test Bed, or any
      Enhanced Analysis Program provided to Quinton by HP.

1(E)  "DT Documents" shall mean the following most current releases of the ECG
      data transfer documents:

          "Hewlett-Packard PageWriter XLi Disk Storage Format Overview"
                      Revision A.01.01 dated March 15,1993

           "HP Diagnostic Cardiology Digital Communications Overview"
                      Revision 3.0 dated September 25,1985

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 4 of 44

1(F)  "DT Software" shall mean any data transfer software developed by Quinton
      for use with the Licensed Products using the DT Documents.

1(G)  "End Use" shall mean a customer, researcher, clinician or other health
      care worker that will use Quinton Instrumentation.

1(H)  "Enhanced Analysis Program" shall mean any comment-removed revision of the
      Analysis Program that incorporates an Enhancement which is otherwise
      equivalent to the Enhancement provided by HP to users of HP
      Instrumentation.

1(I)  "Enhancement" shall mean any improvement in the features, function or
      operation of the Analysis Program that HP offers for sale, lease, or
      license to end users of HP Instrumentation at an average invoice price
      over the first thirty (30) days of the sale of the Enhancement by HP of
      more than one hundred dollars ($100.00) per unit of the revised Analysis
      Program that incorporates each such improvement.

1(J)  "Governmental Approval" shall mean the approval of any governmental agency
      which has the authority to substantially restrict the sale, lease or other
      transfer of Quinton Instrumentation to End Users unless the approval from
      such agency is received.

1(K)  "HP Confidential Information" shall mean the Analysis Program or any
      portion thereof, the DT Documents, the Test Bed, the Development
      Documentation, the Physician's Guide, any Enhanced Analysis Program or any
      portion thereof; the HP evaluations of Quinton's validation test results
      of the Ported Analysis Program or Ported Enhanced Analysis Program; this
      Agreement; all tangible information related to the performance of this
      Agreement and identified as HP Confidential; all

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 5 of 44

      intangible information (e.g. orally disclosed information) related to the
      performance of this Agreement, treated as confidential at the time of
      disclosure and designated as HP Confidential in tangible form within
      thirty (30) days of disclosure, detailing the HP Confidential Information.

1(L)  "HP Instrumentation" shall mean any present or future data acquisition,
      analysis or other patient information related device or system
      manufactured by or for HP or leased, licensed, sold and/or otherwise
      transferred by HP to a third party and which includes the Analysis Program
      and/or the Enhanced Analysis Program operational therein.

1(M)  "HP Licensed Works" shall mean the Analysis Program, DT Documents, Test
      Bed, Development Documentation, Physician's Guide, and each Enhanced
      Analysis Program accepted under Section 13(A) below.

1(N)  "Licensed Product" shall mean any Quinton Instrumentation having the
      Ported Analysis Program or any Ported Enhanced Analysis Program
      operational therewith for use by an End User.

1(O)  "Object Code" shall mean software in object or other non-humanly
      understandable format.

1(P)  "Physician's Guide" shall mean the "Hewlett Packard Interpretive
      Cardiograph Physician's Guide," edition 4, revision 0994 which is the most
      current edition and revision of the Physician's Guide as of the Effective
      Date of this Agreement, except Appendix D (relating to signal-averaged
      ECG) which is excluded in its entirety and except the technical content of
      Chapter 3 (relating to ECG acquisition

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 6 of 44

      by HP equipment) which Quinton shall modify to correctly reflect the
      technical characteristics of the Quinton Instrumentation.

1(Q)  "Ported Analysis Program" shall mean the Source Code and Object Code of
      any translation of the Analysis Program that executes on Quinton
      Instrumentation and which produces results equivalent to the results
      produced by the Analysis Program executing on the corresponding Test Bed.

1(R)  "Ported Development Documentation" shall mean any written documentation in
      hard copy or electronic form which is developed by Quinton and based on
      information received by Quinton from HP that contains interface, data
      format or other development information about the Ported Analysis Program
      or any Ported Enhanced Analysis Program.

1(S)  "Ported Enhanced Analysis Program" shall mean the Source Code and Object
      Code of any translation of an Enhanced Analysis Program that executes on
      Quinton Instrumentation and which produces results equivalent to the
      results produced by the corresponding Enhanced Analysis Program executing
      on the corresponding Test Bed.

1(T)  "Ported Physician's Guide" shall mean any translation and/or modification
      of the Physician's Guide developed by Quinton for use with Licensed
      Products.

1(U)  "Quinton Confidential Information" shall mean the Ported Analysis Program
      or any portion thereof, the DT Software, the Ported Development
      Documentation, the Ported Physician's Guide, the Ported Enhanced Analysis
      Program or any portion

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 7 of 44

      thereof, the validation test results of the Ported Analysis Program or
      Ported Enhanced Analysis Program; this Agreement; all tangible information
      related to the performance of this Agreement and identified as Quinton
      Confidential; all intangible information (e.g. orally disclosed
      information) related to the performance of this Agreement, treated as
      confidential at the time of disclosure and designated as Quinton
      Confidential in tangible form within thirty (30) days of disclosure,
      detailing the Quinton Confidential Information.

1(V)  "Quinton Instrumentation" shall mean any present or future data
      acquisition, analysis or other patient information related device or
      system manufactured by or for Quinton and/or Affiliate Companies, or
      leased, licensed, sold, and/or otherwise transferred by Quinton or
      Affiliate Companies to a third party, provided all such devices are marked
      with the Quinton Instrument Company logo or Quinton Instrument Company
      name. Quinton Instrumentation shall exclude the Q-Cath cardiac
      catheterization system currently marketed by Quinton, or similar cardiac
      catheterization products.

1(W)  "Quinton Licensed Works" shall mean the Ported Analysis Program, DT
      Software, Ported Development Documentation, Ported Physician's Guide, and
      each Ported Enhanced Analysis Program.

1(X)  "Source Code" shall mean software in source or other humanly
      understandable format.

1(Y)  "Test Bed" shall mean all Object Code versions of the HP software and HP
      ECG waveforms, as modified by HP from time to time, used to test the
      Analysis Program and Enhanced Analysis Programs.

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 8 of 44

1(Z)  "Test Bed Equipment" shall include a PC and related software, a PageWriter
      XLi, and other equipment necessary to run the Test Bed.

SECTION 2: HP OBLIGATIONS

2(A)  HP shall provide Quinton, within sixty (60) days of the Effective Date of
      this Agreement, the Evaluation Package as set forth in Exhibit A which is
      attached hereto.

2(B)  HP shall provide Quinton, within forty-five (45) days of the Acceptance
      Date as set forth in Section 3(D) of this Agreement, the Test Bed that
      corresponds to the most current version and revision of the Analysis
      Program for Quinton's use in developing and validating the Ported Analysis
      Program, and HP shall promptly provide Quinton any subsequent updates or
      modifications thereof, provided that said updates or modifications relate
      to the version and revision of the Analysis Program (or Enhanced Analysis
      Program) then in use by Quinton.

2(C)  HP shall provide Quinton, within forty-five (45) days of the Acceptance
      Date of this Agreement, the most current version and revision of the
      Source Code of the Analysis Program for Quinton's use in developing the
      Ported Analysis Program, and HP shall promptly provide Quinton any
      subsequent updates or modifications thereof as governed by Section 13
      hereof.

2(D)  HP shall provide Quinton within forty-five (45) days of the Acceptance
      Date of this Agreement with a copy of the most current version and
      revision of the DT

HP Confidential         Quinton Confidential

<PAGE>

                                                                    Page 9 of 44

      Documents for Quinton's use in developing the DT Software, and HP shall
      promptly provide Quinton any subsequent updates or modifications thereof.

2(E)  HP shall provide Quinton within forty-five (45) days of the Acceptance
      Date of this Agreement with a copy of the Development Documentation that
      corresponds to the most current version and revision of the Analysis
      Program for Quinton's use in developing the Ported Analysis Program, and
      HP shall promptly provide Quinton any subsequent updates or modifications
      thereof, provided that said updates or modifications relate to the version
      and revision of the Analysis Program (or Enhanced Analysis Program) then
      in use by Quinton.

2(F)  HP shall provide Quinton within forty-five (45) days of the Acceptance
      Date of this Agreement with a copy of the Physician's Guide that
      corresponds to the most current version and revision of the Analysis
      Program for Quinton's use in developing the Ported Physician's Guide, and
      HP shall promptly provide Quinton any subsequent updates or modifications
      thereof, provided that said updates or modifications relate to the version
      and revision of the Analysis Program (or Enhanced Analysis Program) then
      in use by Quinton.

2(G)  HP shall review and provide written evaluations of Quinton's validation
      test results of the Ported Analysis Program prior to the submission of
      such test results to the U.S. Food and Drug Administration (hereinafter
      "FDA") and prior to the first commercial release of each version of
      Licensed Product. The rights in such test results shall be owned solely by
      Quinton, and such evaluations by HP shall be completed within sixty (60)
      days after the receipt by HP of such test results from Quinton. The rights
      in such evaluations by HP shall be owned solely by HP and Quinton shall
      have the right to use such evaluations for internal use only unless
      otherwise agreed to in writing by HP. The decision to submit the test
      results to the

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 10 of 44

      FDA and/or any other agency for Governmental Approval to market each
      version of Licensed Product shall be at the sole discretion of Quinton.

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 11 of 44

2(H)  HP shall provide Quinton the FDA "K-number" of the HP PageWriter 200i for
      Quinton's use in the preparation of its FDA submittal of the Licensed
      Product. HP shall provide assistance to Quinton for Governmental Approval
      of the Ported Analysis Program and the Ported Enhanced Analysis Program by
      promptly assisting Quinton to respond to the FDA's or other governmental
      agencies' questions or inquiries during the approval process relating
      specifically to the development, operation and/or maintenance of the
      Analysis Program or an accepted Enhanced Analysis Program, but not
      relating to the development, operation and/or maintenance of the Ported
      Analysis Program, the Ported Enhanced Analysis Program or the Quinton
      Instrumentation.

SECTION 3: QUINTON OBLIGATIONS

3(A)  As consideration for the right to exercise the licenses granted herein,
      Quinton shall pay HP five hundred thousand dollars ($500,000.00) according
      to the following payment schedule:

      (i)   Two hundred thousand dollars ($200,000.00) within thirty (30) days
            after the Effective Date of this Agreement.

      (ii)  One hundred thousand dollars ($100,000.00) within thirty (30) days
            after the first, second, and third anniversary dates of the
            Effective Date of this Agreement.

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 12 of 44

3(B)  Quinton shall develop the Ported Analysis Program from the Source Code of
      the Analysis Program and develop the Ported Enhanced Analysis Program from
      the Source Code of each accepted Enhanced Analysis Program, and shall
      validate that the Ported Analysis Program and Ported Enhanced Analysis
      Programs produce equivalent results when compared with the results of the
      corresponding Analysis Program or Enhanced Analysis Program executing on
      the corresponding Test Bed.

3(C)  Quinton shall perform all testing of the Ported Analysis Program and
      Ported Enhanced Analysis Program as incorporated in Quinton
      Instrumentation that Quinton deems necessary, in Quinton's sole
      discretion, for the Governmental Approval and commercialization of
      Licensed Product.

3(D)  Within ninety (90) days after the receipt of the Evaluation Package, as
      set forth above in Section 2 and identified in Exhibit A, Quinton shall
      complete an evaluation of the development time and expenses necessary to
      develop the Ported Analysis Program for Quinton Instrumentation. In the
      event that Quinton, at its sole discretion, determines to proceed with the
      present project, Quinton shall notify HP in writing of such decision
      within ten (10) days after completion of the evaluation and the date of
      receipt of the written notice shall be the Acceptance Date for the
      purposes of Section 2. In the event that Quinton, at its sole discretion,
      determines that the project is not advisable, based on the development
      time, expenses or other reasons, Quinton shall notify HP in writing of
      such decision within ten (10) days after the completion of the evaluation.
      HP shall then refund payments made by Quinton pursuant to Section 3(A)
      hereof within thirty (30) days of the receipt of such notice, and this
      Agreement shall immediately terminate. As

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 13 of 44

      consideration for the services provided and expenses incurred by HP in
      support of said Quinton evaluation, HP shall be entitled to withhold
      monies from such refund calculated at the rate of thirty thousand dollars
      ($30,000.00) per calendar month (or portion thereof) from the date of
      receipt by Quinton of the Evaluation Package until the date of receipt by
      HP of said notice of Quinton's decision not to proceed with the project.
      Within thirty (30) days of the date of said notice of Quinton's decision
      not to proceed with the project, Quinton shall return to HP all materials
      and portions thereof, and all copies of materials and portions thereof,
      that HP has provided to Quinton under this Agreement and shall destroy all
      materials that Quinton has generated in conducting its evaluation except
      for one copy of all said HP and Quinton materials which is to be retained
      in the legal department to serve solely as a record of Quinton's
      obligations under this Agreement. Not withstanding the above, Quinton will
      return the Test Bed Equipment to HP.

3(E)  In the event Quinton decides to withdraw all Licensed Products from the
      market, Quinton shall promptly notify HP of such decision and this
      Agreement shall terminate under Section 12(B)(ii).

SECTION 4: OWNERSHIP AND LICENSE

4(A)  The Analysis Program shall be owned by HP. Contingent upon no payments due
      hereunder being in arrears from Quinton and Affiliate Companies, HP hereby
      grants and Quinton accepts a nonexclusive, royalty-bearing, revocable upon
      termination, worldwide limited license to internally use, copy, and
      translate the Analysis Program at Quinton Headquarters to make the Ported
      Analysis Program for use with Quinton Instrumentation. The right to use,
      copy, and translate granted herein is limited solely to what is necessary
      for the Ported Analysis Program to

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 14 of 44

      execute with the Quinton Instrumentation, and to produce equivalent
      results when compared with the results of the Analysis Program executing
      on the corresponding Test Bed. Quinton may not otherwise modify the
      Analysis Program. Quinton may not externally distribute the Analysis
      Program or any portion thereof. Quinton may not use, copy, or translate
      the Analysis Program for any purpose other than the limited purpose stated
      herein. All other rights are expressly reserved by HP, including the right
      to grant licenses to others. As used in this Section 4(A), "Quinton" shall
      not include any subsidiary or division of Quinton Instrument Company.

4(B)  The Ported Analysis Program shall be owned by Quinton and Affiliate
      Companies, subject to HP's underlying rights in the Analysis Program.
      Quinton and Affiliate Companies hereby grant and HP accepts a
      nonexclusive, royalty-free, revocable upon termination, worldwide limited
      license to internally use, copy, and modify the Ported Analysis Program
      for the purpose of providing support for Quinton and Affiliate Companies
      which is consistent with the present Agreement and Quinton acknowledges
      that HP may use the ideas, concepts, know-how and techniques learned by HP
      during their support of Quinton and Affiliate Companies and the ideas,
      concepts, know-how and techniques learned by HP may be nonexclusively and
      irrevocably used by HP during the development of a separate and
      independent ported Analysis Program. Quinton and Affiliate Companies agree
      not to externally distribute the Source Code of the Ported Analysis
      Program or any portion thereof. Quinton and Affiliate Companies further
      agree not to externally distribute the Object Code of the Ported Analysis
      Program except to End Users for use with Licensed Products and to
      subcontractors and/or consultants for use in the development of Licensed
      Products. All other rights are expressly reserved by Quinton and Affiliate
      Companies, including but not limited to the right to have

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      Object Code of the Ported Analysis Program reproduced by others for use
      with Licensed Products.

4(C)  The DT Documents shall be owned by HP. Contingent upon no payments due
      hereunder being in arrears from Quinton and Affiliate Companies, HP hereby
      grants and Quinton accepts a nonexclusive, royalty-free, revocable upon
      termination, worldwide limited license to use, copy, and modify the DT
      Documents to make the DT Software for use with Licensed Products. Quinton
      may not externally distribute the DT Documents or any portion thereof
      without the express written permission of HP except for use by
      subcontractors and/or consultants who agree in advance and in writing to
      abide by the HP confidentiality agreement attached hereto as Exhibit B.
      (Quinton shall provide to HP copies of all such executed confidentiality
      agreements.) Quinton may not modify or use the DT Documents for any
      purpose other than the limited purpose stated herein. All other rights are
      expressly reserved by HP, including the right to grant licenses to others.

4(D)  The DT Software shall be owned by Quinton and Affiliate Companies, subject
      to HP's underlying rights in the DT Documents. Quinton and Affiliate
      Companies agree not to externally distribute the Source Code of the DT
      Software or any portion thereof except for use by subcontractors and/or
      consultants who agree in advance and in writing to abide by the
      confidentiality provisions of Section 8 hereof. Quinton and Affiliate
      Companies further agree not to externally distribute the Object Code of
      the DT Software except to End Users for use with Licensed Products and to
      subcontractors and/or consultants for use in the development of Licensed
      Products. All other rights are expressly reserved by Quinton and Affiliate
      Companies, including but not limited to the right to have Object Code of
      the DT Software reproduced by others for use with Licensed Products.

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4(E)  The Test Bed shall be owned by HP. Contingent upon no payments due
      hereunder being in arrears from Quinton and Affiliate Companies, HP hereby
      grants and Quinton accepts a nonexclusive, royalty-free, revocable upon
      termination, worldwide limited license to internally use and copy the Test
      Bed at Quinton Headquarters to validate and support the Ported Analysis
      Program and any accepted Ported Enhanced Analysis Program for use with
      Quinton Instrumentation. Quinton may not modify or externally distribute
      the Test Bed or any portion thereof. Quinton may not use or copy the Test
      Bed for any purpose other than the limited purpose stated herein. All
      other rights are expressly reserved by HP, including the right to grant
      licenses to others.

4(F)  Development Documentation shall be owned by HP. Contingent upon no
      payments due hereunder being in arrears from Quinton and Affiliate
      Companies, HP hereby grants and Quinton accepts a nonexclusive,
      royalty-free, revocable upon termination, worldwide limited license to
      internally use, copy, and modify the Development Documentation at Quinton
      Headquarters to make the Ported Development Documentation and to support
      the development of Quinton Instrumentation used with the Ported Analysis
      Program or any accepted Ported Enhanced Analysis Program. Quinton may not
      externally distribute the Development Documentation or any portion
      thereof. Quinton may not use, copy, or modify the Development
      Documentation for any purpose other than the limited purpose stated
      herein. All other rights are expressly reserved by HP, including the right
      to grant licenses to others.

4(G)  The Ported Development Documentation shall be owned by Quinton and
      Affiliate Companies, subject to HP's underlying rights in the Development
      Documentation.

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      Quinton and Affiliate Companies hereby grant and HP accepts a
      nonexclusive, royalty-free, revocable upon termination, worldwide limited
      license to internally use, copy, and modify the Ported Development
      Documentation for the purpose of providing support for Quinton and
      Affiliate Companies which is consistent with the present Agreement and
      Quinton acknowledges that HP may use the ideas, concepts, know-how and
      techniques learned by HP during their support of Quinton and Affiliate
      Companies and the ideas, concepts, know-how and techniques learned by HP
      may be nonexclusively and irrevocably used by HP during the development of
      a separate and independent ported Analysis Program and/or separate and
      independent ported Enhanced Analysis Program. Quinton and Affiliate
      Companies agree not to externally distribute the Ported Development
      Documentation or any portion thereof. All other rights are expressly
      reserved by Quinton and Affiliate Companies.

4(H)  The Physician's Guide shall be owned by HP. Contingent upon no payments
      due hereunder being in arrears from Quinton and Affiliate Companies, HP
      hereby grants and Quinton and Affiliate Companies accept a nonexclusive,
      royalty-free, revocable upon termination, worldwide limited license to
      internally, use, copy, and modify the Physician's Guide to make the Ported
      Physician's Guide for use with Licensed Products. Quinton and Affiliate
      Companies may not use, copy, modify, or externally distribute the
      Physician's Guide for any purpose other than the limited purpose stated
      herein except for use by subcontractors and/or consultants who agree in
      advance and in writing to abide by the confidentiality provisions of
      Section 8 hereof. All other rights are expressly reserved by HP, including
      the right to grant licenses to others.

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4(1)  The Ported Physician's Guide shall be owned by Quinton and Affiliate
      Companies, subject to HP's underlying rights in the Physician's Guide.
      Quinton and Affiliate Companies agree not to externally distribute the
      Ported Physician's Guide except to End Users or prospective buyers for use
      with Licensed Products and to subcontractors and/or consultants for use in
      the development of Licensed Products. All other rights are expressly
      reserved by Quinton and Affiliate Companies, including but not limited to
      the right to have the Ported Physician's Guide reproduced by others for
      use with Licensed Products.

4(J)  Each Enhanced Analysis Program shall be owned by HP. For each Enhanced
      Analysis Program that is accepted by Quinton under Section 13(A) below and
      contingent upon no payments due hereunder being in arrears from Quinton
      and Affiliate Companies, HP hereby grants and Quinton accepts a
      nonexclusive, royalty-bearing, revocable upon termination, worldwide
      limited license to internally use, copy, and translate each Enhanced
      Analysis Program at Quinton Headquarters to make a corresponding Ported
      Enhanced Analysis Program for use with Quinton Instrumentation. The right
      to use, copy, and translate granted herein is limited solely to what is
      necessary for the Ported Enhanced Analysis Program to execute with the
      Quinton Instrumentation, and to produce equivalent results when compared
      with the results of the corresponding Enhanced Analysis Program executing
      on the corresponding Test Bed. Quinton may not otherwise modify the
      Enhanced Analysis Program. Quinton may not externally distribute the
      Enhanced Analysis Program or any portion thereof. Quinton may not use,
      copy, or translate the Enhanced Analysis Program for any purpose other
      than the limited purpose stated herein. All other rights are expressly
      reserved by HP, including the right to grant licenses to others. As used
      in this Section 4(J), "Quinton" shall not include any subsidiary or
      division of Quinton Instrument Company.

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4(K)  Each Ported Enhanced Analysis Program shall be owned by Quinton and
      Affiliate Companies, subject to HP's underlying rights in the Analysis
      Program and each Enhanced Analysis Program. Quinton and Affiliate
      Companies hereby grant and HP accepts a nonexclusive, royalty-free,
      revocable upon termination, worldwide limited license to internally use,
      copy, and modify the Ported Enhanced Analysis Program for the purpose of
      providing support for Quinton and Affiliate Companies which is consistent
      with the present Agreement and Quinton acknowledges that HP may use the
      ideas, concepts, know-how and techniques learned by HP during their
      support of Quinton and Affiliate Companies and the ideas, concepts, know-
      how and techniques learned by HP may be nonexclusively and irrevocably
      used by HP during the development of a separate and independent ported
      Enhanced Analysis Program. Quinton and Affiliate Companies agree not to
      externally distribute the Source Code of the Ported Enhanced Analysis
      Program or any portion thereof. Quinton and Affiliate Companies further
      agree not to externally distribute the Object Code of the Ported Enhanced
      Analysis Program except to End Users for use with Licensed Products and to
      subcontractors and/or consultants for use in the development of Licensed
      Products. All other rights are expressly reserved by Quinton and Affiliate
      Companies, including but not limited to the right to have Object Code of
      the Ported Enhanced Analysis Program reproduced by others for use with
      Licensed Products.

4(L)  Upon termination, the revocation of the licenses granted to Quinton and
      Affiliate Companies above shall not affect the ability of Quinton's and/or
      Affiliate Companies' End Users to continue using Licensed Products (for
      which a royalty as set forth in Section 5 hereof has been paid) obtained
      prior to termination, and it also shall not affect the ability of Quinton
      and Affiliate Companies to continue

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      providing customer support to its End Users who obtained Licensed Products
      (for which a royalty as set forth in Section 5 hereof has been paid) prior
      to termination.

4(M)  Upon termination, the revocation of the licenses granted to HP and Quinton
      and Affiliate Companies above shall not affect the ability of HP to
      continue providing support to Quinton to enable Quinton and Affiliate
      Companies to continue providing customer support to its End Users who
      obtained Licensed Products (for which a royalty as set forth in Section 5
      hereof has been paid) prior to termination.

4(N)  Test Bed Equipment shall be owned by HP and loaned to Quinton without
      charge for the duration of this Agreement. Quinton agrees to return the
      Test Bed Equipment within thirty (30) days of termination of this
      Agreement. HP agrees to maintain and update the Test Bed Equipment at HP's
      expense as appropriate for the version and revision of the Analysis
      Program and Enhanced Analysis Program then in use by Quinton.

SECTION 5: ROYALTIES

5(A)  As consideration for the rights granted herein from HP to Quinton and
      Affiliate Companies, Quinton agrees to pay HP a royalty of two hundred
      seventy-five dollars ($275.00) for each unit of the Licensed Product sold,
      leased, sublicensed, or otherwise transferred to a third party or an End
      User. For the purposes of the payment of royalty payments, a unit shall be
      deemed to be sold, leased, sublicensed, or otherwise transferred to a
      third party or an End User when invoiced (including "no charge" invoices)
      by Quinton or by an Affiliate Company for the account of Quinton, except
      that no royalties shall be paid for demonstration,

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      service, repair or replacement units. If no Ported Analysis Program or any
      Ported Enhanced Analysis Program is operational in the Quinton
      Instrumentation when sold, leased, sublicensed, or otherwise transferred
      to the third party or End User, but is subsequently made available,
      altered or otherwise modified to become operational, a royalty shall then
      be payable when invoiced (including no charge" invoices) by Quinton or by
      an Affiliate Company for the account of Quinton for such Licensed Product.

5(B)  In the event multiple users have the capability to use a single Licensed
      Product simultaneously, the royalty payment specified in this Section 5
      shall be for each user having the capability to simultaneously execute the
      Ported Analysis Program or any Ported Enhanced Analysis Program for use
      with a single Licensed Product.

5(C)  Royalties shall be paid by Quinton or by an Affiliate Company for the
      account of Quinton to HP within thirty (30) days after the end of each
      calendar quarter and shall be made payable to Hewlett-Packard Company and
      mailed as follows:

                             Hewlett-Packard Company
                             1700 South Baker Street
                             McMinnville, Oregon 97128

                             Attention:  Controller

5(D)  In the event HP licenses the Analysis Program or any Enhanced Analysis
      Program to a third party for a lower royalty than that specified in
      Section 5(A), the royalty specified in Section 5(A) shall be reduced to
      equal this lower royalty for all subsequent royalty payments made to HP by
      Quinton or by an Affiliate Company for the account of Quinton.

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5(E)  In the event that prior to the third anniversary of the Effective Date of
      this Agreement, HP licenses the Analysis Program or any Enhanced Analysis
      Program to a third party for a lower payment than that specified in
      Section 3(A), the payment specified in Section 3(A) shall be reduced to
      equal this lower payment to HP by Quinton or by an Affiliate Company for
      the account of Quinton. If the total of all payments actually made by
      Quinton and by Affiliate Companies for the account of Quinton to HP
      pursuant to Section 3(A) is in excess of said lower payment, then such
      excess payments shall be applied as prepaid royalties against future
      royalties due pursuant to Section 5(A).

SECTION 6: WARRANTIES

6(A)  HP represents and warrants to the best of its knowledge, as of the
      Effective Date of this Agreement, that the rights granted by HP to Quinton
      under this Agreement do not infringe any enforceable copyright, trade
      secret, patent or any other intellectual property right of any third
      party. HP further represents and warrants that HP is not aware, as of the
      Effective Date of this Agreement, of any enforceable copyright, trade
      secret, patent or other intellectual property right of a third party that
      is infringed by HP's use of HP Licensed Works.

6(B)  HP warrants that it has all rights necessary to grant the licenses granted
      in Section 4 hereof and that all rights of HP which are necessary for
      Quinton to incorporate the Analysis Program and Enhanced Analysis Program
      into Quinton Instrumentation are granted to Quinton by the present
      Agreement.

6(C)  HP warrants that the Analysis Program provided hereunder is equivalent to
      the corresponding software that HP is shipping in the current edition and
      revision of

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      the HP PageWriter XLi and 200i cardiographs as of the Effective Date of
      this Agreement and that the Analysis Program is currently classified as
      "Active" in accordance with the HP life cycle classification code set
      forth in Section 13(E), and HP has no formal plans to reclassify the
      Analysis Program as of the Effective Date of this Agreement.

6(D)  HP warrants that the Analysis Program provided hereunder will, when
      properly installed on the Test Bed, execute its programming instructions.
      HP does not warrant that the HP Licensed Works are error free, nor that
      the operation of HP software, including but not limited to the Analysis
      Program, Test Bed, and any Enhanced Analysis Program, shall be
      uninterrupted or error free.

6(E)  Both parties warrant that they have the right to disclose any Confidential
      Information transferred or disclosed to the other party hereunder.

6(F)  NO OTHER WARRANTIES ARE MADE BY EITHER PARTY UNDER THIS AGREEMENT. ALL
      OTHER WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
      FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY DISCLAIMED. IN ADDITION,
      HP MAKES NO WARRANTY WITH RESPECT TO THE SUFFICIENCY FOR REGULATORY
      SUBMITTALS AND APPROVALS OF ANY INFORMATION PROVIDED BY HP TO QUINTON.

SECTION 7: ROYALTY CALCULATION, REPORTS, RECORDS AND WITHHOLDING TAXES

7(A)  Quinton agrees to keep true and accurate records adequate to establish any
      royalty payable under this Agreement and to permit an independent
      accounting organization chosen and compensated by HP, and reasonably
      acceptable to

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                                                                   Page 24 of 44

      Quinton (which acceptance shall not be unreasonably withheld), to audit,
      on a confidential basis, said records once annually at reasonable times
      upon reasonable notice, but only within a period of three (3) years after
      the royalty period to which such records relate. In the event that the
      results of such audit demonstrates an underpayment by Quinton and
      Affiliate Companies of at least 10%, then Quinton shall reimburse HP for
      the expenses of such audit. Any underpayment or overpayment shall be
      included or credited with the next payment under this Agreement. Quinton
      or Affiliate Companies for the account of Quinton shall provide HP royalty
      reports of royalties paid at the same time payments are made in accordance
      with paragraph 5(A) hereof.

7(B)  All taxes, assessments and fees of any nature levied by any governmental
      entity on the sale, lease, license or sublicense of, including or
      utilizing the Licensed Product shall be paid by Quinton or an Affiliate
      Company for its accounts. Notwithstanding the above, HP shall be
      responsible for taxes based upon its net income and for withholding taxes.
      If Quinton or an Affiliate Company tentatively concludes that an income or
      other tax, fee or assessment may be levied on HP under this Agreement by
      any governmental entity and Quinton or the Affiliate Company might be
      legally required to withhold such tax from the payment of royalty from
      Quinton or an Affiliate Company to HP, Quinton or the Affiliate Company
      shall immediately notify HP and request instructions. In the event of a
      disagreement between Quinton or an Affiliate Company and HP as to the
      advisability of the payment of an income or other tax, fee, or assessment,
      by Quinton or an Affiliate Company which may be levied on HP, Quinton or
      the Affiliate Company may, at their discretion make such payment for the
      account of HP. In any case where taxes are withheld, Quinton shall provide
      HP with all

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                                                                   Page 25 of 44

      documents relating to withheld taxes including receipts necessary to claim
      the applicable credit.

SECTION 8: CONFIDENTIALITY

8(A)  Until the expiration of the Confidentiality Period, Quinton and Affiliate
      Companies agree to use the same degree of care, but no less than a
      reasonable degree of care, to prevent the unauthorized disclosure,
      publication or dissemination of HP Confidential Information as Quinton and
      Affiliate Companies use to protect their own confidential information of a
      like nature. Quinton and Affiliate Companies further agree to limit the
      internal circulation of HP Confidential Information to those Quinton and
      Affiliate Companies employees who have a need to know for purposes of
      evaluating or performing this Agreement. Quinton and Affiliate Companies
      further agree not to use HP Confidential Information for any purpose other
      than authorized by this Agreement.

8(B)  Until the expiration of the Confidentiality Period, HP agrees to use the
      same degree of care, but no less than a reasonable degree of care, to
      prevent the unauthorized disclosure, publication or dissemination of
      Quinton Confidential Information as HP uses to protect its own
      confidential information of a like nature. HP further agrees to limit the
      internal circulation of Quinton Confidential Information to those HP
      employees who have a need to know for purposes of evaluating or performing
      this Agreement. HP further agrees not to use Quinton Confidential
      Information for any purpose other than authorized by this Agreement.

8(C)  This Agreement imposes no obligation upon Quinton and Affiliate Companies
      with respect to confidential information that: (a) was in Quinton's or an
      Affiliate

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      Company's possession before receipt from HP; (b) is or becomes a matter of
      public knowledge through no fault of Quinton or an Affiliate Company; (c)
      is rightfully received by Quinton or an Affiliate Company from a third
      party without a duty of confidentiality to HP; (d) is disclosed by HP to a
      third party without a duty of confidentially on the third party; (e) is
      independently developed by Quinton or an Affiliate Company, (f) is
      disclosed under operation of law; or (g) is disclosed by Quinton or an
      Affiliate Company with HP's prior written approval. Not withstanding the
      foregoing, Quinton shall notify HP at least thirty (30) days prior to
      Quinton's or an Affiliate Company's disclosure of any portion of the
      Source Code of the Analysis Program or any Enhanced Analysis Program that
      Quinton or an Affiliate Company believes to be covered by (a) through (e)
      and (g) of this Section 8(C). Prior to any disclosure of any portion of
      the Source Code of the Analysis Program or any Enhanced Analysis Program
      under (f) of this Section 8(C), Quinton agrees to notify HP immediately
      upon receipt by Quinton or an Affiliate Company of a notice from a
      governmental entity requiring such disclosure so that HP may seek a
      protective order blocking such disclosure.

8(D)  This Agreement imposes no obligation upon HP with respect to confidential
      information that: (a) was in HP's possession before receipt from Quinton
      or an Affiliate Company; (b) is or becomes a matter of public knowledge
      through no fault of HP; (c) is rightfully received by HP from a third
      party without a duty of confidentiality to Quinton or an Affiliate
      Company; (d) is disclosed by Quinton or an Affiliate Company to a third
      party without a duty of confidentiality on the third party; (e) is
      independently developed by HP; (f) is disclosed under operation of law; or
      (g) is disclosed by HP with Quinton's or an Affiliate Company's prior
      written approval. Not withstanding the foregoing, HP shall notify Quinton
      at least thirty (30) days prior to HP's disclosure of any portion of the
      Source Code of the Ported

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                                                                   Page 27 of 44

      Analysis Program or any Ported Enhanced Analysis Program that HP believes
      to be covered by (a) through (e) and (g) of this Section 8(D). Prior to
      any disclosure of any portion of the Source Code of the Ported Analysis
      Program or any Ported Enhanced Analysis Program under (f) of this Section
      8(D), HP agrees to notify Quinton immediately upon receipt of a notice
      from a governmental entity requiring such disclosure so that Quinton or an
      Affiliate Company may seek a protective order blocking such disclosure.

8(E)  Both parties shall adhere to all applicable laws, regulations and rules
      relating to the export of technical data, and shall not export or reexport
      any technical data, any products received from the other party, or the
      direct product of such technical data to any proscribed country listed in
      such applicable laws, regulations and rules unless properly authorized.

8(F)  Quinton and Affiliate Companies agree that they will not reverse assemble,
      reverse compile, or re-engineer any portion of the Object Code of the Test
      Bed to obtain Source Code of the Test Bed, nor induce or in any way assist
      any third party to do the same.

8(G)  Upon expiration of the Confidentiality Period for any Confidential
      Information of either party, any use, disclosure, publication, and
      dissemination of the formerly Confidential Information is subject to any
      copyright or other intellectual property right and/or licenses still in
      effect on the date of expiration.

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SECTION 9: TECHNICAL SUPPORT

9(A)  HP shall provide (at Quinton's, HP's, or other mutually agreeable
      facilities), beginning with the Effective Date and continuing until the
      date of Quinton's or an Affiliate Company's first sale of a Licensed
      Product, technical consultation to Quinton or an Affiliate Company, as may
      be reasonably required by Quinton or an Affiliate Company, to facilitate
      Quinton's or an Affiliate Company's understanding of HP Licensed Works.
      Quinton or an Affiliate Company for Quinton's account shall reimburse HP
      for authorized documented travel related to the provision of services
      hereunder that are approved in advance and in writing by Quinton.
      Technical consultation provided hereunder in excess of a total of ten (10)
      man-months shall be approved in advance and in writing by Quinton, and
      Quinton or an Affiliate Company for Quinton's account shall pay HP, as
      consideration for such additional consultation, monies in amounts
      calculated by using HP's then current customer engineer billing rate.

9(B)  HP shall provide (at Quinton's, HP's, or other mutually agreeable
      facilities), beginning with the date of Quinton's acceptance of each
      Enhanced Analysis Program under Section 13(A) set forth below and
      continuing until the date of Quinton's or an Affiliate Company's first
      sale of a Licensed Product containing the corresponding Ported Enhanced
      Analysis Program, technical consultation to Quinton or an Affiliate
      Company, as may be reasonably required by Quinton or an Affiliate Company,
      to facilitate Quinton's or an Affiliate Company's understanding of the
      Enhanced Analysis Program. Quinton or an Affiliate Company for Quinton's
      account shall reimburse HP for authorized documented travel related to the
      provision of services hereunder that are approved in advance and in
      writing by Quinton. Technical consultation provided hereunder in excess of
      a total of three

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      (3) man-months shall be approved in advance and in writing by Quinton, and
      Quinton or an Affiliate Company for Quinton's account shall pay HP, as
      consideration for such additional consultation, monies in amounts
      calculated by using HP's then current customer engineer billing rate.

9(C)  Should additional technical consultation be requested of HP by Quinton or
      an Affiliate Company through Quinton during times other than those set
      forth in Sections 9(A) and 9(B) above, HP will use reasonable efforts to
      provide such consultation, consistent with HP's other business
      requirements and subject to Section 13(E) below. Quinton or an Affiliate
      Company for Quinton's account shall reimburse HP for authorized documented
      travel related to the provision of services hereunder that are approved in
      advance and in writing by Quinton. Quinton or an Affiliate Company for
      Quinton's account shall pay HP, as consideration for such additional
      consultation, monies in amounts calculated by using HP's then current
      customer engineer billing rate.

9(D)  Quinton and Affiliate Companies shall provide all direct customer service
      and direct customer support for Quinton Instrumentation and Licensed
      Products.

9(E)  Coordination of all technical support in Section 9 hereof shall be through
      Quinton Headquarters.

SECTION 10: PUBLICATION

10(A) The parties acknowledge and agree that a joint public announcement of the
      present Agreement is desirable and shall be made as soon as practical
      after the Effective Date of this Agreement. The public announcement shall
      be approved in

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      advance by both parties to this Agreement during the evaluation period set
      forth in Section 3(D) above, and shall constitute the only public
      disclosure of the details of the present Agreement unless otherwise agreed
      to in writing by both parties to this Agreement. The use by both parties
      to this Agreement of said approved public announcement shall be
      conditional upon Quinton's determination to proceed with the project and
      its notification to HP of such decision as specified in Section 3(D)
      above.

10(B) HP agrees to allow Quinton and Affiliate Companies to refer to the source
      of the Analysis Program or Enhanced Analysis Program without further
      compensation in all literature or other materials that relate or refer to
      the Licensed Products, provided such reference is done in a purely factual
      and not misleading manner.

10(C) Quinton and Affiliate Companies may externally distribute the Ported
      Physician's Guide or any similar related literature or materials specified
      in Section 10(B) to subcontractors and/or consultants for use in the
      development of Licensed Products. Quinton and Affiliate Companies agree
      not to otherwise externally distribute the Ported Physician's Guide or any
      similar related literature or materials specified in Section 10(B) except
      to End Users or prospective buyers for use with Licensed Products without
      first providing a copy to HP of the information to be externally
      distributed at least thirty (30) days prior to distribution and obtaining
      from HP written approval for distribution, such approval by HP shall be
      provided in writing within 30 days of HP's receipt thereof and may not be
      unreasonably withheld by HP. During the evaluation period set forth in
      Section 3(D), the parties hereto shall agree on standard approved language
      for use in Quinton literature. Thereafter, all literature or related
      materials which relate or refer to the Licensed Products using only the
      standard approved language in the same context as

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                                                                   Page 31 of 44

      approved shall not be subject to additional prior review by HP. Any
      modifications and/or additions to the standard approved language or the
      context in which it is used shall be submitted in the manner set forth
      above. Upon approval of such modifications and/or additions by HP, such
      modifications and/or additions shall then be treated in the same manner as
      the standard approved language set forth above. Not withstanding the
      foregoing, the external distribution by Quinton and Affiliate Companies of
      any of the said standard approved language shall be conditional upon
      Quinton's determination to proceed with the project and its notification
      to HP of such decision as specified in Section 3(D) above.

10(D) Quinton and Affiliate Companies agree not to externally distribute the
      performance characteristics of the Analysis Program or any Enhanced
      Analysis Program without submitting the performance characteristics
      thereof to HP for the review and approval of HP thirty (30) days prior to
      the external distribution thereof and any such approval by HP shall be
      provided in writing within thirty (30) days of HP's receipt thereof and
      may not be unreasonably withheld by HP. The limitations se forth herein
      shall not apply to any information which is in the public domain and no
      rights in the information provided to HP are granted to HP under this
      Section.

10(E) Quinton and Affiliate Companies agree not to externally distribute the
      performance characteristics of the Ported Analysis Program or any Ported
      Enhanced Analysis Program without submitting the performance
      characteristics to HP thirty (30) days prior to the external distribution
      thereof for HP's review and comment. The limitations set forth herein
      shall not apply to any information which is in the public domain and no
      rights in the information provided to HP are granted to HP under this
      Section.

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10(F) HP agrees not to externally distribute the performance characteristics of
      the Ported Analysis Program or any Ported Enhanced Analysis Program
      without submitting the performance characteristics to Quinton for the
      review and approval of Quinton thirty (30) days prior to the external
      distribution thereof and any such approval by Quinton shall be provided in
      writing within thirty (30) days of Quinton's receipt thereof and may not
      be unreasonably withheld by Quinton.

SECTION 11: COPYRIGHT

11(A) Quinton and Affiliate Companies agree to include HP copyright notices in
      the Ported Physician's Guide and embedded in the Source Code and Object
      Code of the Ported Analysis Program and any Ported Enhanced Analysis
      Program.

SECTION 12: TERM AND TERMINATION

12(A) Term. This Agreement shall be effective upon the Effective Date specified
      at the beginning hereof and shall remain in force, unless otherwise
      terminated as provided herein, for automatically renewable terms of five
      (5) years. In the event that Quinton or any Affiliate Company for
      Quinton's account fails to pay HP a royalty for five (5) consecutive
      calendar quarters, beginning after regulatory approval by the FDA as
      necessary for the sale, license or other transfer of the Licensed Product
      to an End User for the first Licensed Product, then such Agreement shall
      be subject to termination pursuant to Section 12(B)(iii) set forth below.

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                                                                   Page 33 of 44

12(B) Termination.

      (i)   Beginning with the first day of the third year following the
            Effective Date of this Agreement, HP shall have the right to
            terminate this Agreement without cause upon written notice to
            Quinton. Such termination under this Section shall become effective
            three (3) years from the date of receipt of such notice of
            termination by Quinton.

      (ii)  Quinton shall have the right to terminate this Agreement without
            cause upon written notice to HP. Such termination under this Section
            shall become effective thirty (30) days after the date of receipt by
            HP of such notice of termination. Any portion of the $500,000
            payment specified in Section 3(A) and as possibly reduced by Section
            5(E), which has not already been paid by Quinton shall become
            immediately due and payable upon receipt by HP of such notice of
            termination. In addition, Quinton shall remain obligated to pay any
            undisputed payments or royalties pursuant to Sections 5(A) (as
            possibly reduced by 5(D)), 9, and 13(A) that are due or owing prior
            to the effective date of such notice of termination. This paragraph
            shall not apply to the evaluation period set forth in section 3(D).

      (iii) In the event that Quinton shall fail to comply with any of its
            material obligations under this Agreement after HP has given thirty
            (30) days written notice of such failure to Quinton, which notice
            shall fully specify the obligation with which Quinton has not
            complied, then HP, upon further written notice to Quinton, may
            terminate this Agreement thirty (30) days after such further written
            notice. Any portion of the $500,000 payment

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 34 of 44

            specified in Section 3(A) and as possibly reduced by Section 5(E),
            which has not already been paid by Quinton shall become immediately
            due and payable upon such termination. In addition, Quinton shall
            remain obligated to pay any undisputed payments or royalties
            pursuant to Sections 5(A) (as possibly reduced by 5(D)), 9, and
            13(A) that are due or owing prior to the date of such termination.

      (iv)  In the event that HP shall fail to comply with any of its material
            obligations under this Agreement after Quinton shall have given
            thirty (30) days written notice of such failure to HP, which notice
            shall fully specify the obligation with which HP has not complied,
            then Quinton, upon further written notice to HP, may terminate this
            Agreement thirty (30) days after such further written notice, and no
            further payments under Section 3(A) and 5(A) shall be paid to HP.
            Furthermore, if such failure occurs prior to the fifth anniversary
            of the Effective Date of this Agreement, then HP shall be obligated
            to return a prorated portion of Quinton's payments under Section
            3(A) with such proration being calculated by multiplying the
            payments made by Quinton and Affiliate Companies for Quinton's
            account under Section 3(A) times the number of months remaining
            until the fifth anniversary of the Effective Date of this Agreement
            and dividing this amount by the total number of months between the
            first royalty generating sale by Quinton or an Affiliate Company
            pursuant to Section 5 and the number of months until the fifth
            anniversary of the Effective Date of this Agreement. In no event
            shall HP's obligation under this Section 12(B)(iv) to return a
            prorated portion of Quinton's payments under Section 3(A) exceed the
            total amount actually paid to HP by Quinton and Affiliate Companies
            for Quinton's account under Section 3(A).

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<PAGE>

                                                                   Page 35 of 44

      (v)   To the extent permitted by bankruptcy laws, either party shall have
            the right to terminate this Agreement in the event of the filing of
            a voluntary or involuntary petition of bankruptcy of the other
            party.

12(C) Survival. In the event of any termination of this Agreement, those
      Sections that by their nature would survive termination shall survive and
      continue in effect and shall inure to the benefit of and be binding upon
      the parties and their legal representatives.

SECTION 13: ENHANCEMENTS AND ANOMALIES

13(A) HP agrees to make each Enhanced Analysis Program available to Quinton no
      later than 45 days from the release of the Enhanced Analysis Program to
      end users of HP and to give Quinton a ninety (90) day option of developing
      a corresponding Ported Enhanced Analysis Program. If Quinton accepts said
      option in writing within the ninety (90) day option period, Quinton agrees
      to pay HP one hundred thousand dollars ($100,000.00) as consideration for
      the License granted herein for that specific Enhanced Analysis Program.
      Such payments shall be due within thirty (30) days of the acceptance by
      Quinton of said option and shall be paid by Quinton or an Affiliate
      Company for Quinton's account. Contingent upon no payments due hereunder
      being in arrears from Quinton and Affiliate Companies, Quinton and
      Affiliate Companies shall have the right to upgrade all then existing
      Licensed Products (for which a royalty as set forth in Section 5 hereof
      has been paid) with the resulting Ported Enhanced Analysis Program without
      payment to HP of an additional unit royalty as set forth in Section 5
      hereof.

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<PAGE>

                                                                   Page 36 of 44

13(B) Quinton shall have the right to accept or reject each Enhanced Analysis
      Program without prejudice to the subsequent acceptance or rejection of
      other Enhanced Analysis Programs and shall not otherwise affect Quinton's
      or Affiliate Company's rights granted under this Agreement.

13(C) HP agrees to waive the one hundred thousand dollar ($100,000.00) payment
      as set forth in this Section 13 for the Enhancement to the HP ECG
      Measurement Program Release 7 that is project code named Crystal, if and
      when it is released by HP. Contingent upon no payments due hereunder being
      in arrears from Quinton and Affiliate Companies, Quinton and Affiliate
      Companies shall have the right to upgrade all then existing Licensed
      Products (for which a royalty as set forth in Section 5 hereof has been
      paid) with the resulting Ported Enhanced Analysis Program without payment
      to HP of an additional unit royalty as set forth in Section 5 hereof.

13(D) HP agrees that the one hundred thousand dollar ($100,000.00) payment as
      set forth in this Section 13 does not apply to corrections of anomalies
      and improvements in the Analysis Program that do not qualify as
      Enhancements. Quinton and Affiliate Companies shall have the right to
      upgrade all then existing Licensed Products (for which a royalty as set
      forth in Section 5 hereof has been paid) with such corrections of
      anomalies and improvements without payment to HP of an additional unit
      royalty as set forth in Section 5 hereof.

13(E) HP agrees to provide technical support and correction of anomalies in the
      Analysis Program and any Enhanced Analysis Program accepted under Section
      13(A) herein according to the then in effect life cycle classification
      code of the specific version of such HP software. HP shall provide Quinton
      with written notice at least

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<PAGE>

                                                                   Page 37 of 44

      ninety (90) days prior to any reclassification of the Analysis Program and
      Enhanced Analysis Program from active to discontinued as set forth below
      and such notice shall specify the date on which such program shall be
      classified as obsolete. The current life cycle classification code is as
      follows:

      (i)   Active - HP software is "Active" if it is part of an HP product that
            is actively marketed by HP on a broad scale. Technical support is
            available for Active HP software, and it is maintained to correct
            anomalies based on market need.

      (ii)  Discontinued - HP software is "Discontinued" if it is no longer part
            of any HP product that is actively marketed by HP on a broad scale.
            Technical support is available for Discontinued HP software, and it
            is maintained only to the extent HP deems necessary to correct
            serious and critical anomalies.

      (iii) Obsolete - HP software is "Obsolete" after three (3) years past the
            date when the HP software was classified as Discontinued. HP has no
            responsibility to provide any technical support or correct any
            anomalies for Obsolete HP software. However, HP, at its sole
            discretion, may offer time and material support on a best efforts
            basis.

13(F) HP agrees to promptly enter all possible anomalies in the Analysis Program
      and any Enhanced Analysis Program accepted under Section 13(A) herein
      reported to HP by Quinton into HP's normal anomaly tracking and resolution
      process, and to provide a written report to Quinton on a monthly basis
      detailing HP's disposition of such possible anomalies.

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<PAGE>

                                                                   Page 38 of 44

13(G) Both parties agree that any disagreement between a medical doctor's
      opinion and the output of the Analysis Program, the Ported Analysis
      Program, any Enhanced Analysis Program, or any Ported Enhanced Analysis
      Program shall not be considered an anomaly.

SECTION 14: RECALLS

14(A) If either party determines that it is necessary to recall any product
      incorporating the Analysis Program, Ported Analysis Program, any Enhanced
      Analysis Program accepted by Quinton under Section 13(A) above, or any
      Ported Enhanced Analysis Program, it shall immediately notify the other
      party.

14(B) Prior to commencing any such recall, the parties shall review with one
      another the need for a recall; the manner in which the recall is to be
      carried out; and any instructions or suggestions of the applicable
      regulatory authorities.

14(C) If, at HP's sole discretion, HP initiates any recall of the Analysis
      Program (or any Enhanced Analysis Program that has been accepted by
      Quinton under Section 13(A) above) that necessitates a recall of the
      Ported Analysis Program (or the corresponding Ported Enhanced Analysis
      Program), HP shall, at HP's sole discretion, either (i) reimburse Quinton
      for expenses incurred in implementing such recall, limited to a maximum of
      two hundred dollars ($200.00) times the number of Licensed Products
      included in such recall, or (ii) offer to implement such recall on behalf
      of Quinton at HP's expense.

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<PAGE>

                                                                   Page 39 of 44

SECTION 15: LITIGATION

15(A) HP agrees to, at its expense, defend and indemnify Quinton and Affiliate
      Companies, together with its officers, directors, employees, agents,
      insurers, and customers for actions based on any claim that the Analysis
      Program or any Enhanced Analysis Program used with a Licensed Product
      infringes any patents, copyrights, trade secrets, or other intellectual
      property rights, and to pay all costs associated with and damages finally
      awarded in any such suit by a court of competent jurisdiction, provided
      that HP is notified promptly in writing of the suit and that HP may, at
      its option and expense, control the suit and receive reasonable assistance
      from Quinton and Affiliate Company in defending the suit.

15(B) In the event the Analysis Program, or any Enhanced Analysis Program
      accepted by Quinton under Section 13(A) herein, is enjoined from use
      and/or sale as a result of such suit, HP additionally agrees to, at its
      option and expense, a) obtain for Quinton the right to use and/or sell the
      Analysis Program (Enhanced Analysis Program) and the right of the
      Affiliate Company to sell the Analysis Program (Enhanced Analysis Program)
      at no additional expense to Quinton or Affiliate Company; b) substitute a
      non-infringing Analysis Program (Enhanced Analysis Program) to Quinton
      having equivalent functions, features and efficiency; or c) immediately
      terminate this Agreement and refund to Quinton one-half (1/2) of the
      initial payments made by Quinton as set forth in Section 3(A) and one-half
      (1/2) of the royalties paid in Section 5(A) during the previous three (3)
      calendar years.

15(C) UNDER NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL OR
      CONSEQUENTIAL DAMAGES.

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<PAGE>

                                                                   Page 40 of 44

15(D) UNDER NO EVENT SHALL EITHER PARTY BE LIABLE TO DEFEND OR INDEMNIFY THE
      OTHER PARTY FOR ACTIONS BASED ON ANY CLAIM OTHER THAN THE CLAIMS STATED IN
      THIS SECTION 15.

SECTION 16: MISCELLANEOUS

16(A) Force Majeure. Either party shall be excused from delays in performing or
      from its failure to perform hereunder to the extent that such delays or
      failures result from causes beyond the reasonable control of such party;
      provided that, in order to be excused from delay or failure to perform,
      such party must act diligently to remedy the cause of such delay or
      failure and provide prompt notice to the other party of the reason for
      such delay or failure and the intended course of action to be undertaken
      to remedy such delay or failure.

16(B) Section Headings: Attachments. The section and subsection headings used
      herein are for reference and convenience only, and shall not enter into
      the interpretation of the present Agreement.

16(C) No Waiver. No delay or omission by either party hereto to exercise any
      right or power occurring upon any noncompliance or default by the other
      party with respect to any of the terms of this Agreement shall impair any
      such right or power or be construed to be a waiver thereof. A waiver by
      either of the parties hereto of any of the covenants, conditions or
      agreements to be performed by the other shall not be construed to be a
      waiver of any succeeding breach thereof or of any other covenant,
      condition or agreement herein contained. Unless stated otherwise, all
      remedies provided for in this Agreement shall be cumulative and in
      addition to and

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<PAGE>

                                                                   Page 41 of 44

      not in lieu of any other remedies available to either party at law, in
      equity or otherwise.

16(D) Applicable Law. This Agreement shall be governed by and construed in
      accordance with the laws of the State of Washington, the courts of which
      shall have exclusive jurisdiction over any dispute arising hereunder
      without regard to its conflict of laws provisions.

16(E) Entire Agreement. This Agreement and any Attachments hereto constitute the
      entire agreement between the parties. No change, waiver or discharge
      hereof shall be valid unless it is in writing and is executed by both
      parties.

16(F) Notices and Contacts. Under this Agreement, if one party is required to
      give notice to the other, such notice shall be deemed given if mailed by
      U.S. mail, first class, postage prepaid, and addressed as first indicated
      on page 1 hereof unless otherwise provided for herein. HP's principal
      Quinton contact for the term of this Agreement shall be Mr. Harv
      Hauschildt; Quinton's principal HP contact shall likewise be Mr. David
      Shultheis. The names of either principal contact may be changed at any
      time by written notice to the other party.

16(G) Assignment. This Agreement may not be assigned by either party or
      Affiliate Company except with the written consent of the other party,
      which shall not be unreasonably withheld.

16(H) Binding Effect. This Agreement shall be binding upon and shall inure to
      the exclusive benefit of the respective parties, their legal
      representatives, successors,

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<PAGE>

                                                                   Page 42 of 44

      or permitted assigns. This Agreement is not intended to, nor shall it
      create any right in any other party.

16(l) Payments. Any payment due from Quinton to HP under this Agreement may be
      paid by an Affiliate Company for the account of Quinton. Although an
      Affiliate Company may make payments to HP for the account of Quinton,
      Quinton shall be ultimately responsible to HP for all payments due
      hereunder.

      IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
as shown below.

HP                                        QUINTON
          /s/ Jerry Shea                              /s/ A.G. Perri
--------------------------------------    --------------------------------------
Jerry Shea                        Date    A. G. Perri                       Date
General Manager                           President
Hewlett-Packard Company                   Quinton Instrument Company
1700 South Baker Street                   3303 Monte Villa Parkway
McMinnville, OR  97128                    Bothell, WA  98021

                                          AHPC

                                                      /s/ E. Thomas
                                          --------------------------------------
                                          Name                              Date
                                                      Vice-President
                                          --------------------------------------
                                          Title
                                          American Home Products Corporation
                                          5 Giralda Farms
                                          Madison, New Jersey  07940

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<PAGE>

                                                                   Page 43 of 44

                          EXHIBIT A: EVALUATION PACKAGE

--------------------------------------    --------------------------------------
PURPOSE                                   WHAT (FOR ELK COVE CONSUMPTION)
--------------------------------------    --------------------------------------
Evaluate clinical performance             Test Bed Equipment that consists of a
                                          PC and software, PageWriter XLi.
                                          Example ECGs.

                                          The PC software will run the HP
                                          analysis program on the supplied ECGs
                                          and provide expected outputs.

                                          The PC software can transform "raw"
                                          ECG data into XLi format then analyze
                                          it. "Requires 10 seconds/channel, 500
                                          sps, 2's complement binary data in
                                          Intel format, 5 uV/lsb).
--------------------------------------    --------------------------------------
Execution speed                           Use Test Bed Equipment (see above).
                                          Quinton can time analysis with the
                                          XLi, and PC, then extrapolate for
                                          their processor.
--------------------------------------    --------------------------------------
Static data structure sizes               List of all static data structures,
                                          and their (approximate) sizes.
--------------------------------------    --------------------------------------
Stack sizes                               List of estimated stack sizes.
--------------------------------------    --------------------------------------
Input data requirements -- patient        Specs on XLi data bandwidth, sampling
data                                      rate, bits/lsb and front-end filtering
                                          requirements.

                                          Method to analyze Quinton data with HP
                                          analysis (assumes data meets HP input
                                          format)
--------------------------------------    --------------------------------------
Input data requirements-- patient         Document the input data structures.
demographics etc.
--------------------------------------    --------------------------------------
Output data structures                    Document the output data structures.
--------------------------------------    --------------------------------------
Estimate of time to do the port           Info on 2 HP ports.
--------------------------------------    --------------------------------------
FDA -- 510k information                   Description of HP approach to FDA.
--------------------------------------    --------------------------------------
Numeric data types                        Document types of floating point and
                                          other numbers.
--------------------------------------    --------------------------------------
Floating point operations                 List of floating point operations.
--------------------------------------    --------------------------------------
Code size estimate                        ROM size estimate of executable.
--------------------------------------    --------------------------------------
Operating system interfaces               (none)
--------------------------------------    --------------------------------------

HP Confidential         Quinton Confidential

<PAGE>

                                                                   Page 44 of 44

            EXHIBIT B: HP CONFIDENTIALITY AGREEMENT FOR DT DOCUMENTS

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